China

Chinese yuan falls sharply ahead of US talks

manoj — Tue, 02 Dec 2008 13:27:28 +0530

China's yuan was being scrutinised ahead of a US-China summit after it fell sharply against the dollar in what experts said on Tuesday could mark a new policy shift aimed at propping up flagging exports.

The yuan's value has been a sensitive issue in the past between China and the United States, which has accused Beijing of deliberately keeping it low to protect the competitiveness of Chinese export prices.

The US and China are holding high level talks Thursday and Friday in Beijing as part of their twice-yearly "strategic economic dialogue."

"It is the best timing for the yuan to start depreciating. The slowdown in China's economy is clearly intensifying, the export sector is suffering the coldest winter in the past five years," Lu Zhengwei, a Shanghai-based economist with Industrial Bank told AFP.

The dollar-yuan central parity rate continued to rise on Tuesday to 6.8527 yuan to one dollar. It rose sharply on Monday to 6.8505 from 6.8349 on Friday.

"I think it could be interpreted as a shift in policy stance and this trend should carry on into mid-2009," Lu said.

However, some experts said Beijing could be trying to gauge the market's reaction before deciding on a weaker yuan policy.

"It's too early to say whether the central bank will shift its policy," Ma Qing, a Beijing-based analyst with the CEB Monitor Group said.

"But internally China does urgently need to devalue the yuan because of the poor manufacturing figures and ailing export sectors," he said.

Chinese experts have said any US move to raise the currency issue at the dialogue could be repulsed by Beijing.

They said China wanted the meeting to focus on containing financial turmoil that first erupted in the United States, and on reigniting global economic growth.

China says 294,000 children fell ill from tainted milk

tejas — Tue, 02 Dec 2008 09:15:47 +0530

China said that a total of 294,000 children had fallen ill from consuming dairy products tainted with the industrial chemical melamine, with 154 of them still in serious condition.

In a statement on its website on Monday, the health ministry also indicated the number of dead may rise from the four previously announced, saying that six deaths since September 10 may be linked to the consumption of melamine-laced milk.

The health ministry's total number of children sickened amid this year's scandal was a more than five-fold rise from the government's previous figure given in September of 53,000.

"The use of Sanlu brand milk powder and other problem milk powders led to urinary tract problems in 294,000 children," the ministry's statement said.

Of those, 51,900 had been admitted to hospital. It said 861 children remained in hospital and that 154 were "serious" cases.

Melamine is a chemical normally used to make plastics, but it emerged in September that it had been routinely mixed into Chinese milk and dairy products to give them the impression of having higher protein content.

The scandal quickly became a global problem, with Chinese dairy products around the world recalled or banned after they were found to be tainted with the chemical. However no melamine-related deaths have been reported overseas.

Melamine can cause kidney stones if taken in excessive levels, and babies in China who were fed tainted milk powder suffered the worst because they consumed so much of the chemical.

China pledges to fight AIDS discrimination

megha — Mon, 01 Dec 2008 15:03:12 +0530

Chinese health authorities and the UN AIDS agency pledged to fight discrimination against people with the disease in China with the unveiling today of a massive red ribbon, the symbol of AIDS awareness, at the Olympic Bird's Nest stadium in Beijing.

Organisers said the fear of being stigmatised at work or in their communities is discouraging many people at risk of HIV infection from being tested. HIV is the virus that causes AIDS.

After years of denying that AIDS was a problem, Chinese leaders have shifted gears in recent years, confronting the disease more openly and promising anonymous testing, free treatment for the poor and a ban on discrimination against people with the virus.

State television today showed Chinese Premier Wen Jiabao visiting a village hit particularly hard by AIDS in eastern China's Anhui province.

Wen, who makes such annual visits to mark World AIDS Day, observed on Dec 1, held hands with children orphaned by AIDS and spoke to patients in beds.

The topic, however, still remains very sensitive and authorities regularly crack down on activists and patients seeking more support and rights.

"About half of all Chinese would not want to share a meal with a person with HIV/AIDS, and a quarter would not want to shake hands," said Dr Bernhard Schwartlander, country coordinator of UNAIDS in China.

"People will not come forward to be tested. They won't benefit from treatment. They won't talk to their partners and colleagues about HIV/AIDS, putting themselves and others potentially at risk for HIV."

Sino-India trade to reach $55 bn

sitansu — Fri, 28 Nov 2008 16:27:13 +0530

Bilateral trade between India and China will reach $55 billion by the end of December, surpassing the $60 billion target for 2010, Chinese Consul-General Mao Siwei said on Friday.

At a seminar organised by the Asiatic Society Mao said, during the visit of Prime Minister Manomohan Singh to China, the two countries had set a trade target of $60 billion which would be surpassed.

Recalling External Affairs Minister Pranab Mukherjee's recent announcement in Guangzhou that China had become India's largest trading partner, Mao said bilateral trade was a driving force behind Sino-Indian relations.

"I believe that the surge in bilateral trade between India and China is not a chance phenomenon, but the logical result of mutual complementaries in the economic strength of our two countries," he said.

Pointing out that Sino-Indian relations saw a thaw since the 80s after the coldness of the 60s and 70s, Mao said a big leap had been made over the past decade.

"My understanding is that the basic consensus that both China and India do not consider each other as a security threat has paved the way for the development of bilateral relations over the last 10 years," the envoy said.

He said, however, some 'outstanding issues' needed to be resolved in further strengthening the Sino-Indian ties.

Blaming the media for maintaining a negative picture of China, he said reports about Chinese incursion into the Indian territory were sensationalised.

"There is a dispute because there is no demarcation of the border," Mao added.

EU, China, US unleash global assault on crisis

wali — Wed, 26 Nov 2008 19:59:27 +0530

The EU proposed a 200-billion-euro stimulus package on Wednesday to jolt Europe's economy out of recession, as China cut its interest rates and the United States poured yet more cash into the economy.

The EU package, worth 259 billion dollars, coincided with new evidence of the social effects of the financial crisis and economic slowdown, and as officials in China reported riots by unemployed workers.

Draft proposals of the package obtained earlier by AFP urged EU members to loosen the purse strings and ease some taxes in the face of the worst economic downturn in decades.

"Only through a significant stimulus package can Europe counter the expected downward trend in demand, with its negative knock-on effects on investments and employment," said the draft document.

While Brussels has been drafting pan-European recovery plans, a growing number of individual EU countries have pressed ahead with their own national packages.

German Chancellor Angela Merkel warned against a "race" between EU states over the size of their economic stimulus measures. Germany -- one of the few European states with strong finances -- was already doing enough, she said.

Countries across the world have launched tax and spending programmes designed to encourage spending and business activity, with a coordinated EU-wide plan seen as more effective than individual country efforts.

China launched a 586-billion-dollar economic stimulus package in early November and the country's central bank on Wednesday announced a further cut of 1.08 percentage points to interest rates to spur growth in the emerging giant.

But hundreds of Chinese workers sacked from a toy factory clashed with police and smashed buildings in the southern province of Guangdong, authorities said, in the latest bout of violent unrest linked to rising unemployment.

Widespread redundancies

In other changes linked to the global slowdown, the number of jobseekers applying to the civil service in Hong Kong has soared amid widespread redundancies by private sector firms hit by the global crisis.

The Civil Service Bureau said it had received more than 24,000 applications for just 400 assistant clerical officer vacancies.

In Washington on Tuesday, the Federal Reserve said it would pump a massive 800 billion dollars more into the economy to try to stabilise the staggering US financial system.

Up to 600 billion dollars will go towards purchases of mortgage securities, and 200 billion dollars to asset-backed securities to help get credit to consumers.

The new efforts are designed to thaw credit markets, promote liquidity and bring down borrowing costs for the housing market, which is at the centre of the economic storm that has dragged down the global economy.

In Argentina, President Cristina Kirchner proposed tax and investment incentives to help cushion the impact of the global financial crisis on the nation and to encourage the repatriation of capital.

She also unveiled a massive public spending plan to pump more than 21 billion dollars into Argentina's infrastructure.

On global stock markets, Asian shares closed mixed, while European markets were under pressure after two days of large gains.

European stocks sank as investors digested the EU plan and the US Federal Reserve's move to unblock credit markets. Frankfurt shed 1.06 percent, Paris dipped 2.15 percent and London lost 1.84 percent near the half-way stage.

"The picture is still very bleak," said Joshua Raymond, Market Strategist at City Index in London.

The Commerce Department reported that the US economy shrank at a pace of 0.5 percent in the third quarter, in a revised estimate for gross domestic product that many analysts say is the start of a steep downturn.

US President-elect Barack Obama, who has also vowed a stimulus package for the US economy, was to name the former chairman of the Federal Reserve Paul Volcker as a senior economic adviser, the Wall Street Journal reported.

On Tuesday a report by the Organization for Economic Co-operation and Development said many rich countries faced their worst economic crisis since the 1980s.

Eight million more people could be thrown out of work by 2010 in the 30-country zone of industrialised nations, said the OECD.

China, EU at loggerheads over Dalai Lama

megha — Wed, 26 Nov 2008 18:36:37 +0530

China has postponed a summit with the European Union next week over a visit to Europe by the Tibetan spiritual leader the Dalai Lama, the EU said in a statement on Wednesday.

"The Chinese authorities have informed the European Union of their decision to request the postponement of the 11th European Union-China summit, scheduled to take place on December 1," the statement said.

"They said their decision was due to the fact that the Dalai Lama will at the same time undertake a new visit in several countries of the Union and will meet on this occasion heads of state and government."

On November 14, China hit out at French President Nicolas Sarkozy's planned meeting with the Dalai Lama in Poland next month, warning it could hurt relations between the two countries. France holds the EU's rotating presidency until the end of next month.

"The European Union, which set ambitious aims for the 11th European Union-China summit, takes note and regrets this decision by China," the statement said.

The bloc said it plans to continue to "promote the strategic partnership it has with China, particularly at a time when the world economic and financial situation calls for close cooperation between Europe and China."

The Dalai Lama and Sarkozy will both be attending ceremonies in Poland to mark the 25th anniversary of the awarding of the Nobel Peace prize to Lech Walesa, the anti-communist union activist who later became president.

The Buddhist leader was also awarded the prestigious prize in 1989.

China and France went through a rough patch this year when Sarkozy said his attendance at the Beijing Olympic opening ceremony was conditional on progress in talks between Beijing and Dalai Lama envoys on the future of Tibet.

He did attend the ceremony, and later declined to meet the Dalai Lama after Beijing warned that such direct contact would have serious consequences for bilateral relations.

Protesters also disrupted the passage of the Olympic flame in several cities - including Paris - following unrest in Tibet, further damaging relations between China and France, although these have since improved.

The Dalai Lama has sought "meaningful autonomy" for Tibet since he fled his homeland following a failed uprising in 1959 against Chinese rule, nine years after Chinese troops invaded the region. China claims he actually seeks full independence.

The Dalai Lama met French Foreign Minister Bernard Kouchner, Human Rights minister Rama Yade and Sarkozy's wife Carla Bruni on a visit to France in August.

Jeev, Jyoti spearhead Asian challenge in China

megha — Tue, 25 Nov 2008 20:04:06 +0530

A formidable Indian team, comprising the in-form Jeev Milkha Singh and seasoned pro Jyoti Randhawa, will spearhead the Asian challenge at the Omega Mission Hills World Cup which begins in China on Thursday.

Jeev has been in sparkling form this year, winning titles on three different Tours, and with Randhawa too showing signs of regaining his touch, the Indians represents Asia's best best this week.

Thai pro Thongchai Jaidee said Asian players like Jeev have proved their mettle in the recent past and there simply cannot be any pre-tournament favourites.

"Asians players are getting strong. Anybody can win tournaments these days," said Jaidee, a two-time Asian number one.

For Jeev, ranked 45th in the world, things could not have been better this season.

The Bank of Australia title on the European Tour was followed by the Nagashima Shigeo Invitational Sega Sammy Cup in Japan before the Indian went on to lift the $5 million Singapore Open, which also assured him of his second Asian Tour Order of Merit title.

Though Jeev finished just outside the top 10 in the Hong Kong Open last week, the 11th place finish there consolidated his place in the top 50 and the seasoned pro has already announced that he is determined to make a mark in his World Cup debut.

"I've always had to defend a tournament or tried to keep my card somewhere. That's why I've never had the opportunity to represent India but now that we've got a direct entry, I am excited at the prospect at playing in the World Cup," he said.

Randhawa, meanwhile, is banking on Jeev's terrific form and said growing up together, they hope their camaraderie would translate into good scores here.

"We're comfortable being around each other, we are regularly having meals together on Tour. He's a funny guy as well and I hope we don't take it onto the golf course! We will certainly focus on our game and I'm looking forward to partnering him," he said.

WB forecasts China economy to slow to 19-year low in '09

sneha — Tue, 25 Nov 2008 12:35:09 +0530

The World Bank said on Tuesday China's economy will grow by just 7.5 percent in 2009, the lowest level in 19 years, as global markets for the nation's once seemingly unstoppable export machine dry up.

The forecast, made in the World Bank's quarterly update on China, is down from a previous estimate of 9.2 percent, and would be the fourth lowest growth rate in the country since the launch of reforms three decades ago.

The last time China's economy saw a similar slowdown was in 1990 -- amid international isolation following the Tiananmen massacre the year before -- when it grew by a mere 3.8 percent.

"The prospects of the world economy are much weaker than six months ago," Louis Kuijs, a World Bank senior economist, told a briefing in Beijing.

"But in addition to that, the deceleration domestically has been more pronounced."

Weakness in the housing sector is a major factor weakening the domestic side of the Chinese economy, he said.

This year, China's economy is likely to grow by 9.4 percent, the World Bank said in its report. In its previous quarterly update, it had predicted 9.8 percent growth for 2008.

That will mark the first time China's economic growth has shrunk below double digits since 2002, and will be well down from 11.9 percent recorded in 2007.

China is already on track to see its trade surplus decline in 2008, and the year 2009 could be little better, the World Bank indicated.

Overall imports to contract

Overall imports by all economies in the world will contract in 2009 for the first time since 1982, it predicted.

"We are going to see coordinated recessions in the United States, Japan and Europe, which creates quite a difficult environment for developing countries," said David Dollar, the World Bank country director for China.

China routinely says it needs annual growth of at least eight percent to create enough employment for the millions of job-seekers hitting the market every year.

Cutting unemployment is a key objective of a four-trillion-yuan ($590 billion) stimulus package the government recently announced, but it can only do so much, the World Bank said.

"One of the key objectives (of the stimulus plan) is to mitigate this, to cushion the blow over here," said Kuijs.

"It's not going to be possible to totally offset all these shocks to the economy."

Among the victims of the global slowdown will be China's 800 million rural dwellers, who could see some recent gains erased, Dollar warned.

"Rural real incomes have been going up by more than 10 percent per year, and there's been very substantial poverty reduction in the Chinese countryside," he said.

"So this global economic recession does create some risks that those gains will backslide."

In particular, China's countryside could see challenges if millions of migrant workers return from the cities, Dollar said.

"Of course if too many people go back into that economic environment, that can create some problems," he said.

Japan seeks China's contribution to IMF

manoj — Sun, 23 Nov 2008 13:26:05 +0530

Prime Minister Taro Aso has asked Chinese President Hu Jintao to follow Japan's commitment to raise funds to the International Monetary Fund (IMF).

The two leaders held talks after dinner with their Asia-Pacific partners on the first day of their annual summit in Lima.

During the talks, Aso noted Japan's announcement of a plan to lend up to $100 billion from its foreign exchange reserves to the IMF to help provide financial lifeline to crisis-hit emerging countries.

"We welcome participation by countries like your nation with ample foreign exchange reserves," Aso told Hu, according to a Japanese government official, who attended the meeting.

Hu replied that his country wants to make an effort to jointly reform the global financial system with Japan, but stopped short of accepting Aso's request, the official said.

At almost $980 billion, Japan has the second largest foreign exchange reserves in the world, after China, as a result of years of market intervention to keep the yen down against the dollar and help exporters stay competitive.

The IMF is expected to extend large loans to countries such as Iceland, Hungary and Ukraine to help them weather the current financial crisis.

During the talks, Aso said he hopes to increase communication between the two leaders, the official said.

Aso, Chinese Premier Wen Jiabao and South Korean President Lee Myung-Bak will hold a three-way summit in the western Japanese city of Fukuoka on December 13.

It will be the first such summit to be held separately from multilateral international forums. The three countries have met previously on the sidelines of the Association of Southeast Asian Nations Plus Three summit.

The meeting was scheduled for September but postponed following the sudden resignation of then-Japanese Prime Minister Yasuo Fukuda.

The three countries are also members of a six-nation forum which is trying to persuade North Korea to scrap its nuclear programme in return for aid and diplomatic benefits.

Japan and China have been repairing relations since 2006 after a long freeze caused in part by friction of wartime memories.

China dismisses UN report on torture

megha — Sun, 23 Nov 2008 11:03:33 +0530

China has dismissed a UN report on allegations of widespread torture in the country, accusing those who compiled it of using false information.

"It is a pity that some of the committee members responsible for compiling the concluding observations, due to their prejudice towards China... used some fabricated information," foreign ministry spokesman Qin Gang said.

"They included a lot of slander, false information, acted unfairly and unobjectively, and we resolutely oppose this," Qin said in a statement on the ministry's website on Saturday.

The United Nations Committee Against Torture called on China to probe rights abuses and investigate the crushing of the 1989 pro-democracy movement in Tiananmen Square.

"The committee remains deeply concerned about the continued allegations, corroborated by numerous Chinese legal sources, of routine and widespread use of torture and ill treatment of suspects in police custody, especially to extract confessions or information to be used in criminal proceedings," it said in a report released on Friday.

Qin said China continued to "make every effort to safeguard human rights" and that it opposes torture.

Dalai Lama warns Tibetan exiles against failure

megha — Sun, 23 Nov 2008 10:32:27 +0530

The Dalai Lama warned Tibetan exiles of possible failure within the next two decades if leaders are not prudent in their plans. The exiled spiritual leader squashed rumours of his retirement and vowed dedication to the Tibetan cause.

The Tibetan spiritual leader said, "the next twenty years, if we are not careful, if we are not prudent in our plans there is a great danger. It could lead to the danger of failure."

The Dalai Lama spoke on Sunday to more than 500 delegates gathered in the north Indian hill town of Dharmsala for a rare meeting of Tibetan exiles.

He appeared to be speaking about the larger Tibetan cause, which many exile leaders believe is at a crossroads.

The meeting's delegates have reaffirmed support for the Dalai Lama's "middle path" of measured compromise to gain autonomy for the Himalayan region. But the group also said it is time to end talks with China.

UN criticises China over torture allegations

megha — Sat, 22 Nov 2008 10:59:41 +0530

A UN body has expressed deep concern over allegations of widespread torture in China and called on the country to fully probe rights abuses.

The United Nations Committee Against Torture, meeting in Geneva, also revisited the 1989 Tiananmen Square protests, urging the government to grant reparations and investigate the crackdown.

"The committee remains deeply concerned about the continued allegations, corroborated by numerous Chinese legal sources, of routine and widespread use of torture and ill treatment of suspects in police custody, especially to extract confessions or information to be used in criminal proceedings," it said in a report released on Friday.

It hit out at "continued reliance on confessions as a common form of evidence for prosecution, thus creating conditions that may facilitate the use of torture and ill-treatment of suspects," quoting the case of dissident and human rights militant Yang Chunlin.

The committee also criticised China's handling of its relations with the Tibetan Autonomous Region, noting there had been "longstanding reports of torture, beatings, shackling and other abusive treatment, in particular of Tibetan monks and nuns."

No inquiry had been carried out into the arrests, firing on crowds of peaceful demonstrators, torture or cruel, inhumane and degrading treatment during the recent repression in Tibet, the experts noted.

Regarding the Tiananmen Square protests and crackdown, the committee said China "should conduct a full and impartial investigation" of the events.

It added that Chinese authorities should "provide information on the persons who are still detained from that period" as well as "offer apologies and reparation as appropriate and prosecute those found responsible for excessive use of force, torture and other ill treatment."

More generally, the committee pointed to "reports of abuses in custody, including high numbers of deaths. Re-education through labour for individuals who have never had their case tried in court, nor the possibility of challenging their administrative detention," and secret detention facilities.

The UN experts expressed concern about the fate of Hu Jia, like other human rights backers the victim of harassment and violence committed by thugs who were unofficially recruited by the authorities.

The Committee Against Torture mentioned allegations of removal of organs from members of the Falun Gong sect for transplant.

The special UN rapporteur on torture Manfred Nowak was quoted as saying that "an increase in organ transplant operations coincides with the beginning of the persecution of (Falun Gong practitioners)."

The committee was also concerned about the fate of North Korean refugees who were turned back at the border despite the risk that they would be subjected to torture in their own country.

Finally, the committee said it was worried about the conditions of people on death row who were chained day and night and whose organs could be removed for transplant after their death without their prior consent, according to information received by the experts.

Earlier this month, the committee's chief rapporteur Felice Gaer had accused the Chinese of not providing sufficient information.

Chinese foreign ministry spokesman Qin Gang denied this and said earlier this month that "it is China's consistent stance that we oppose torture."

Gaer had said China had been unwilling to release data on individual cases by invoking its State Secrets Act to withhold information.

Japan, Peru ink investment deal

manoj — Sat, 22 Nov 2008 09:44:33 +0530

Japan and Peru on Friday signed a treaty to encourage investment and agreed to consider starting talks on a broader free-trade accord.

Japanese Prime Minister Taro Aso inked the deal ahead of this year's Asia-Pacific Economic Cooperation (APEC) summit in Peru, which has also used the occasion to seal a trade pact with China.

The accord with Japan aims to create a better environment for investment in each country by getting rid of unnecessary red tape and giving investors most-favoured trading nation status, Japanese officials said.

Japan started negotiations on the deal in March. It is Japan's second such treaty with a South American country after a broader free-trade accord - which includes sharp tariff reductions - with Chile.

During talks, Aso told Garcia that his government would "positively" consider starting negotiations with Peru on a broader free-trade agreement, the Japanese official said.

"I hope to begin negotiations when I visit Japan in February," Garcia replied.

Japan and China have increasingly been seeking natural resources in emerging economies such as Peru, which logged nine per cent growth last year on the back of its booming mining sector.

Chinese President Hu Jintao on Wednesday finalised negotiations on a free trade deal with Peru, which also agreed on Friday to start talks on a trade pact with South Korea.

Garcia has sought to improve relations with Japan, which were tense for years due to Japan's refusal to extradite former Peruvian president Alberto Fujimori.

Fujimori, who holds Japanese nationality because of his ancestry, fled to Tokyo in 2000 and resigned the presidency by fax as he faced with a corruption scandal. He was arrested in Chile in 2005 and extradited to Peru.

Bush bows out, China assertive at APEC summit

megha — Sat, 22 Nov 2008 07:39:43 +0530

US President George W Bush began on Friday his last scheduled foreign trip, meeting the leader of increasingly important China ahead of a summit aimed at containing a spiraling financial crisis.

Bush and 20 other leaders from the Asia-Pacific Economic Cooperation forum were arriving in Peru's capital Lima for two days of talks under a backdrop of unending gloom in the world economy as more companies slash jobs.

"APEC is an important meeting this time, particularly given the financial situation in the world," Bush told Peruvian television before arriving.

"I've worked hard on a lot of fronts," Bush said as he prepares to hand over the White House to Barack Obama. "I have given it my all."

Some 1,000 leftist protesters took to the streets of Lima for Bush's international swan song, accusing him of triggering the global financial crisis through the Iraq war and his advocacy of free trade.

Bush headed straight to talks with Chinese President Hu Jintao, who has aggressively sought opportunities from his trip, including holding a rare meeting Friday with a senior official of rival Taiwan.

China has been patching up with Taiwan since the latter elected a pro-Beijing president earlier this year. Until now, China had refused international meetings with the island it claims as its own.

"It is very significant for old friends to meet far away from Asia," Taiwan's former premier Lien Chan, an advocate of reconciliation with Beijing, told reporters after meeting with Hu.

The White House said that Bush would press China to arrange a new round of talks on ending North Korea's nuclear program, a key priority for the unpopular president as he prepares to hand over the reins to Obama.

Bush could have a much more tense meeting on Saturday with Russian President Dmitry Medvedev, who has warned the United States not to station a missile defense shield near its borders.

Nearly 40,000 police patrolled Peru's capital Lima for the two-day summit starting Saturday, which will take place in a tightly guarded army compound that had been used to torture prisoners in the 1980s.

Foreign and trade ministers of APEC - which accounts for half of world trade - set the stage for the summit by launching a joint appeal Wednesday against protectionism.

New Zealand's Prime Minister John Key, who headed here just one day after taking office, called for the APEC summit to be flexible in crafting solutions.

"Not since the Great Depression has the world experienced such a serious financial crisis as we have seen in recent months," Key, who swept to power on the back of economic anxieties, told business leaders.

"The implications for the real economy are likely to be profound and widespread," he said.

Despite Obama's soaring popularity around much of the world, some Asian exporter nations worry he will take a tougher trade stance faced with the financial crisis.

Japan's trade minister, Toshihiro Nikai, voiced hope that the Obama administration would carry on the trade policies of the Bush years. "To achieve that goal, it is important for us to coordinate well," Nikai told reporters.

The APEC ministers also urged a resolution by the end of the year of a key roadblock holding up the so-called Doha Round of the World Trade Organization liberalization talks.

Amid the stalemate in global trade talks, nations have increasingly been seeking deals among themselves.

Australia and Peru on Thursday joined the United States in a budding free trade group that would slash tariffs across the Pacific rim, bringing the nations in the group to seven.

China's Hu and Russia's Medvedev have seized APEC as a chance to seek new trade deals and alliances across resource-rich Latin America, once considered the United States' backyard.

US Congress warned of Chinese cyber, space threats

manoj — Fri, 21 Nov 2008 10:17:22 +0530

China has developed a sophisticated cyber warfare program and stepped up its capacity to penetrate US computer networks to extract sensitive information, a US congressional panel has warned.

"China has an active cyber espionage program," the US-China Economic and Security Review Commission said in its annual report to the US Congress. "China is targeting US government and commercial computers," it adds.

In its 393-page report, the panel also criticized Beijing for exercising "heavy-handed government control" over its economy and "continuing arms sales and military support to rogue regimes" such as Sudan, Myanmar and Iran.

The commission also issued a warning about China's space program. "China continues to make significant progress in developing space capabilities, many of which easily translate to enhanced military capacity," it said.

"Although some Chinese space programs have no explicit military intent, many space systems - such as communications, navigation, meteorological, and imagery systems - are dual use in nature," the commission said.

The commission, which was established by Congress in 2000 to analyze the economic and national security relationship between the two nations, said China was investing heavily in cyber warfare.

"Since China's current cyber operations capability is so advanced, it can engage in forms of cyber warfare so sophisticated that the United States may be unable to counteract or even detect the efforts," the commission said.

It said that Chinese hacker groups may be operating with government support.

"By some estimates, there are 250 hacker groups in China that are tolerated and may even be encouraged by the government to enter and disrupt computer networks," the commission said.

It quoted Colonel Gary McAlum, chief of staff for the US Strategic Command's Joint Task Force for Global Network Operations, as saying China has recognized the importance of cyber operations as a tool of warfare and "has the intent and capability to conduct cyber operations anywhere in the world at any time."

"China is aggressively pursuing cyber warfare capabilities that may provide it with an asymmetric advantage against the United States. In a conflict situation, this advantage would reduce current US conventional military dominance," the commission said.

The commission recalled that unclassified US military, government and government contractor websites and computer systems were the victims of cyber intrusions in 2002 codenamed "Titan Rain" and attributed to China.

The commission made 45 recommendations to Congress including possible "additional funding for military, intelligence and homeland security programs that monitor and protect critical American computer networks."

On the economic front, the commission said "China relies on heavy-handed government control over its economy to maintain an export advantage over other countries."

"The result: China has amassed nearly two trillion dollars in foreign exchange and has increasingly used its hoard to manipulate currency trading and diplomatic relations with other nations," it said.

"Rather than use this money for the benefit of its citizens -- by funding pensions and erecting hospitals and schools, for example - China has been using the funds to seek political and economic influence over other nations," said Larry Wortzel, chairman of the commission.

Beijing's "continuing arms sales and military support to rogue regimes, namely Sudan, Burma, and Iran, threaten the stability of fragile regions and hinder US and international efforts to address international crises, such as the genocide in Darfur," the commission added.

The commission acknowledged some progress by China, specifically its adherence to non-proliferation agreements and involvement in the six-party talks to dismantle North Korea's nuclear weapons production capacity.

But it criticized China's use of prison labor to produce goods for export and an "information control regime" that it said regulates the print and broadcast media, Internet, entertainment and education.

The Commission also warned that fish imported into the United States from Chinese fish farms "pose a health risk because of the unsanitary conditions" and recommended greater powers for the US Food and Drug Administration.

The report is available on the commission's website at www.uscc.gov.

Hu seeks deeper ties with Latin America

manoj — Fri, 21 Nov 2008 09:17:39 +0530

Chinese President Hu Jintao called on Thursday for a new era of cooperation with Latin America, saying the world's biggest developing country and the large developing region were a natural fit.

In an address to the Peruvian congress during a state visit, Hu said China intended to add further momentum to already rapidly growing economic and other ties with South America and the Caribbean.

"China and South America have already become extremely good friends and partners," Hu said.

"On behalf of China's government and people, I would like to express that China is willing to work together with South American and Caribbean countries toward an equal, mutually beneficial, total cooperative partnership," Hu added.

Peru is the last stop on Hu's three-nation swing through Latin America culminating on Saturday and Sunday with a 21-member Asia-Pacific summit in Lima.

Beijing, which has reached out aggressively to resource-rich African nations in recent years, now appears to be setting its sights on the emerging economies of Latin America as China's energy and mineral needs soar.

Hu, who finalized negotiations on a free-trade agreement with Peru the day before, signaled China's interest in Peru's mineral wealth, in which Chinese companies have already heavily invested.

Peru was the world's top producer of silver in 2007 and the second biggest producer of copper and zinc, achieving record exports of the minerals last year on increased Asian demand, a government report released Thursday said.

"China and Peru have strong complementarities in the mining sector and there is massive potential for cooperation," Hu earlier told a breakfast with Peruvian and Chinese business leaders.

China's state-run Xinhua news agency reported this month that exports to Latin America grew 52 percent in the first nine months of 2008 to $111.5 billion.

China released a policy paper in early November calling for closer ties on trade, energy and minerals with Latin America and the Caribbean, and Hu's current trip has underscored Beijing's growing influence in the region.

In Cuba this week, Hu handed its communist ally millions of dollars in aid and promises of closer future trade ties.

Earlier, in democratic Costa Rica, he launched talks on a free trade agreement with President Oscar Arias and signed business deals including one in which China will help modernize Costa Rica's state-owned oil refiner.

The Taiwan factor

Hu's travels also symbolize China's rising influence in a region long considered a diplomatic stronghold of Beijing's rival Taiwan.

Costa Rica last year became the first Central American country to break off Taiwan ties in favor of China, a step that led to the bilateral free-trade talks.

China has steadily won over former Taiwan allies over the years as its growing economic and diplomatic power trumps Cold War alliances.

Taiwan's Economics Minister Yiin Chii-Ming on revealed some frustration over China's inroads, saying the island also would welcome a free trade pact with Peru but indicating Lima had been unresponsive.

"We hope that Peru will engage to reach a free trade agreement with us," he told a news conference in Lima.

During his address, Hu also called for China and Latin America to work together to reshape global finance rules in the wake of the global financial crisis.

China has repeatedly championed greater representation by developing nations on world economic bodies like the International Monetary Fund to ensure the interests of such countries are protected.

Hu also gave assurances that the fundamentals of the Asian giant's economy remained strong, despite a slowdown caused by the global economic turmoil.

US not okay with China-Pak nuke cooperation

manoj — Fri, 21 Nov 2008 08:26:41 +0530

The United States has already communicated its "position clearly" to Islamabad and Beijing that the proposed cooperation between the two countries to construct two more nuclear reactors in Pakistan should not move forward, the State Department has said.

The Department also said that any new nuclear cooperation between Pakistan and China would require consensus approval by the NSG for an exception to the guidelines.

"Although Pakistan's energy needs are real and increasing, we believe Pakistan's proliferation record would make NSG consensus difficult were China to request an exception," State Department Assistant Secretary for Legislative Affairs Matthew Reynolds said in a letter to Congressman Edward J Markey.

Markey had written to the State Department in October making the argument that the process of Indo-US nuclear deal has sent wrong signals to China and Pakistan.

Reynolds also said that the US has sought and continue to seek clarification from Islamabad and Beijing on this matter.

Following Pakistani President Asif Ali Zardari's October trip to Beijing, reports emerged that Pakistan and China had agreed to expand bilateral civil nuclear cooperation at the Chasma complex, to include the construction of two additional reactors.

"We have communicated our position clearly to our Chinese and Pakistani interlocutors at multiple levels in Washington, Beijing, and Islamabad, and have made plain our view that proposed cooperation on Chasma III and IV should not move forward. We also have been in contact with other NSG members, a number of whom have expressed similar concern at the recent reports," the State Department said in the letter, which was made public on Thursday.

"We have sought and continue to seek clarification from Islamabad and Beijing on this matter. In our discussions, both Pakistan and China have defended their long and well-known civil nuclear cooperation," the senior State Department official told Markey.

"Both countries have also affirmed that any new China-Pakistan cooperation would be conducted under International Atomic Energy Agency safeguards and would be consistent with their international commitments," he added.

The US position is that cooperation on the construction of two new reactors, Chasma III and IV, would be inconsistent with the commitments China made at the time of its adherence to Nuclear Suppliers Group (NSG) guidelines in 2004.

At that time, China's representatives detailed in a statement China's ongoing nuclear cooperation with Pakistan that would be "grandfathered" upon China's adherence; nothing in that statement permitted construction of reactors beyond Chasma I and II, the senior official maintained.

On the possible financial implications of a nuclear deal with China, the State Department has said that the IMF may be in the final stages of negotiating a new development funding package with Pakistan, an important step in assisting Islamabad's efforts to ward off a serious fiscal crisis.

"Given Pakistan's crucial position in the ongoing global effort to thwart extremism and transnational terrorism, it is important that the international community come together to aid in Pakistan's development and economic security. This includes helping Pakistan address its chronic energy shortages," the official said.

"We have encouraged the Chinese government to play an active role in the "Friends of Pakistan" group , which we believe can become a useful mechanism in coordinating international assistance to Pakistan," he added.

Consult India, China for solution to financial crisis: Merkel

tejas — Fri, 21 Nov 2008 08:20:50 +0530

Emerging economies such as India and China must be consulted in forging a solution to the world economic crisis, German Chancellor Angela Merkel said on Thursday.

Speaking at the same conference in Frankfurt, World Bank President Robert Zoellick warned that more action was needed to prevent the world financial crisis from turning into a human crisis.

The conference, the 10th German World Bank Forum, was devoted to "The Asian Century" now beginning.

"It's important that rules apply to everyone, that there are no blank zones," Merkel said, referring to efforts to reform the world financial system.

"That will only happen if Asia, and its big emerging economies such as India and China are involved."

Merkel added, "I can only hope that in this crisis we achieve more open trade, fair world trade, and that we don't collapse into protectionism."

Zoellick told the conference, "We must remind ourselves that the poorest countries have faced the most serious difficulties as a result of the crisis."

He said the moves launched by the weekend summit of the world's 20 major economies in Washington for a reshaping of the international financial architecture had been encouraging.

"But we have to do more if we want to avoid a human crisis," the World Bank chief said.

With this in mind, he called on the G20, which includes the Group of Seven leading industrial nations as well as China, Russia, India, Saudi Arabia and Brazil, to be expanded to include more nations from Africa.

"It's worth looking into whether you add a representative or representatives from the poorer countries" to the G20, Zoellick said.

"It is important that poorer nations come and speak for themselves," he said.

China announces tax cuts to help textile industry

manoj — Thu, 20 Nov 2008 12:25:27 +0530

The Chinese government has announced a series of tax cuts aimed at helping the country's textile industry through the global financial crisis.

"Textiles are a traditional and an important industry in China," Premier Wen Jiabao told a government meeting on Wednesday, according to a statement on the government's website.

Export tax rebates on textile products will be raised to 17 percent as part of the decision, the state-run 21st Century Business Herald newspaper reported on Thursday. It did not say when the specifics of the hike would be announced.

The government said a tax cut would "reduce pressures on the cost of production," along with other measures to help exporters and the elimination of a variety of other unspecified taxes.

Beijing also plans to increase access to credit for small and medium-sized businesses in the textile sector and offer support for those wishing to modernise.

The same meeting decided to offer subsidies for farmers buying home appliances, in a bid to tap rural consumption potential.

"In recent months the textile industry has had to face a serious and unprecedented situation due to economic changes at home and abroad," the government statement said.

In the first quarter of this year, before the financial crisis truly started to unfold, exports of textiles and clothes fell by 11 percent to $81.86 billion.

The drop has been blamed on increasing competition from other Asian countries and a rise in the value of the yuan, coupled with an increase in production costs.

The announcement of deeper tax rebates comes a month after China increased export tax rebates for the sector to 14 percent from 13 percent on more than a quarter of the goods in the Customs' tariff list.

China's labour-intensive manufacturing sectors have been hit by a combination of rising labour costs, rising materials costs and the appreciation of the Chinese currency, along with the downturn in demand from the ailing US.

Employment situation critical in China

manoj — Thu, 20 Nov 2008 11:40:21 +0530

China warned on Thursday that it was facing serious unemployment problems due to the global economic crisis, amid signs it was increasingly concerned about social tensions across the country.

"Currently, the employment situation is critical, and this impact (of the financial crisis) is still unfolding," Yin Weimin, China's social security minister, told reporters in response to a question on recent labour unrest.

Yin announced a series of measures to try to stave off unemployment - predicted to rise next year - and to help those who have lost their jobs, particularly among the more than 200 million rural migrant workers.

The trouble has been most acute in southern Guangdong province, China's manufacturing heartland, where one-fifth of factories in major cities are expected to close by January alone, according to industry estimates.

Thousands of workers have recently gathered outside shuttered factories there, demanding unpaid wages and forcing local authorities to intervene.

Experts have warned labour unrest could spike as more migrant workers lose their jobs.

Yin said measures included helping the migrants find a job when they come to urban areas, for example by giving them information about available positions, and providing extra training for those returning home.

Unemployment in China stands at 4 percent, and Zhang Xiaojian, vice minister of social security, said the government expected to hit 4.5 percent by the end of the year.

"But next year the registered (official) unemployment rate will certainly increase," Zhang said.

The official unemployment rate does not include the millions of migrant workers who are not registered in the place they live in.

Zhang added that demand for workers in 84 cities across China in the third quarter of this year had fallen 5.5 percent - the first third-quarter drop in "many years."

China's stance on Tibet clouds exile talks

megha — Tue, 18 Nov 2008 16:53:54 +0530

With Tibetan exiles now considering whether to push for independence, China on Tuesday reaffirmed it's hard-line stance on the future of the Himalayan region, saying that any move to separate Tibet from China was "doomed."

The comments from Foreign Ministry spokesman Qin Gang came as more than 500 Tibetan exile leaders in India held all-day closed door discussions on Tuesday as part of a weeklong meeting, the first major re-evaluation of their strategy since the Dalai Lama in 1988 outlined his Nobel Peace Prize-winning "middle way," which pushes for autonomy but not outright independence for the Himalayan region.

The meeting in the northern India hill town of Dharmsala, the base of Tibet's self-proclaimed government-in-exile, was called by the Dalai Lama, the exiled Tibetan spiritual leader.

It comes after he expressed frustration over years of fruitless talks with China and follows this spring's uprising by Tibetans across western China that was aggressively put down by Beijing.

"Any attempt to separate Tibet from Chinese territory will be doomed. The so-called Tibet government in exile is not recognized by any government in the world," Qin told a news conference on Tuesday.

Similar statements in the past from China have led the exiled leaders to question their own methods.

"The middle way approach has failed, it has not produced any results," said Karma Chophel, speaker of the exile Parliament. "In that light, the Tibetan public should come out with an opinion about what to do."

China insists Tibet has been part of its territory for 700 years, although many Tibetans say they were effectively independent for most of that time. Chinese forces invaded shortly after the 1949 communist revolution and the Dalai Lama fled to India in 1959 amid an unsuccessful uprising.

Large numbers of Tibetans remain fervently Buddhist and loyal to the Dalai Lama. If the exiles choose a more confrontational approach, Tibetans living under Chinese rule would bear the brunt of any government response.

Much of the debate is expected to boil down to two main choices: whether to continue pursuing the politics of compromise or to begin a long-shot independence movement - a move almost certain to end talks held intermittently with Beijing since 2002.

Some factions are urging more protests, angrier protests, or more pressure on Western nations, with one very small group even pushing for sabotage of China's infrastructure.

Samdhong Rinpoche, the exile prime minister, told the meeting Monday there would be an "open and frank discussion." He said the meeting may not lead to a new approach, and that any new path needs to have "the clear mandate of the people."

The Dalai Lama was not expected to attend; he said he did not want to tilt the debate.

Any deviation from current policies was almost certain to scuttle the tenuous ties with Beijing, which has long accused the Dalai Lama of fomenting an independence movement. Analysts said a strong anti-Beijing sentiment could play into China's hands.

"It seems to be a possible Chinese strategy to make the radical section much stronger," said Robbie Barnett, an expert on Tibet at Columbia University. "It would mean no contacts with China and make contacts with the international community very difficult."

That would be fine with some delegates. "We can't live with China," said Lobsang Phelgye, 55, who came to Dharmsala from the exile community in Nepal.

The Dalai Lama's envoys to the recent talks with Beijing said in a statement Sunday that they had presented China with a detailed plan on how Tibetans could meet their autonomy needs within the framework of China's constitution.

The plan calls for the protection for the Tibetan language and culture, restrictions on non-Tibetans moving into Tibet and the rights of Tibetans to create an autonomous government.

But China apparently rejected the plan. Chinese officials said no progress was made in the talks two weeks ago, calling the Tibetan stance "a trick" and saying it lacked sincerity.

Tibetan envoy Lodi Gyari said the Chinese failed to respond to "our sincere and genuine attempts." China has dismissed this week's meeting as meaningless, saying the participants do not represent the views of most Tibetans.

Chophel, the parliament speaker, said more than 8,000 of 17,000 Tibetans recently surveyed in Tibet said they would follow any decision by the Dalai Lama. More than 5,000 said they wanted Tibetan independence — more than twice the number who wanted to continue with the current approach, he said.

The survey almost certainly was done secretly. There was no way to independently verify the results.

After the March uprising in western China, Chinese forces set up camps near major monasteries and important towns, and many monks were expelled from the clergy. Those controls have been heightened recently, according to accounts from recent travelers to the region.

"The people inside Tibet may say as quick as possible a solution is better, anything that will get the Chinese off our backs," Barnett said.

Hu looks to boost ties with Cuba visit

manoj — Tue, 18 Nov 2008 08:37:35 +0530

China's President Hu Jintao traveled to Cuba to boost ties with the government of President Raul Castro, as the slowly-opening communist island also reaches out to Russia.

Hu's two-day visit to Havana follows a G20 summit in Washington and a 24-hour stopover in Costa Rica, where he launched free trade talks and a string of cooperation deals.

Hu's Latin America tour, which also includes an Asia-Pacific summit in Peru, comes as China expands its diplomacy and investment on the whole continent, eyeing natural resources and developing markets for manufactured goods and even weapons.

Chinese exports to Latin America grew 52 percent in the first nine months of 2008 to $111.5 billion, according to the state-run Xinhua news agency.

China was Cuba's second business partner, after Venezuela, in 2007 with $2.7 billion of combined trade, and one of its main creditors.

The two communist countries have increased ties since the fall of the Soviet Union in 1991.

"This visit is an expression of the excellent existing links between both parties and governments," said a statement published in Cuba's official government paper Granma on Monday.

Hu's visit comes less than two weeks before the arrival of Russian President Dmitry Medvedev, in another Russian bid to fortify relations with outspoken US adversaries in Latin America on the back of a trip to Venezuela.

China offered support to former Cuban leader Fidel Castro when Cuba fell into dire economic straits after the former Soviet Union collapsed, forging a divide Russia has recently sought to reduce.

Hu first visited Cuba in 2004 - again shortly after a US election - to oversee the signing of 16 cooperation agreements, which he was expected to build on this time.

Current deals include Chinese oil prospecting and extraction in Cuba - onshore and offshore - and the development of Cuban eye hospitals in China.

Since Raul Castro officially assumed power in February, taking over from his ailing brother Fidel, analysts suggest he is moving toward China's market economy model, although authorities still underline support for Cuba's state controlled economy.

Raul Castro recently sought foreign investment for the prospection and exploitation of gold, silver, zinc and copper deposits.

China already invests in nickel, Cuba'a main export, and hydrocarbons on the island, which produces the equivalent of 80,000 barrels of oil and gas per day.

Granma on Monday lauded the Chinese model but underlined "an unequal distribution of wealth in the country, marked difference between city and countryside and the erosion of the environment."

Fidel Castro, who still influences the island's politics from his sickbed, ruled out a transition to capitalism in an article published on Saturday, and on Monday criticized leaders at a recent G20 summit for accepting US "demands."

It was unclear whether Hu would meet with Fidel, who has met with several foreign leaders in recent months including Venezuelan President Hugo Chavez and Brazilian President Luiz Inacio Lula da Silva.

China not sending troops to Afghanistan

sneha — Mon, 17 Nov 2008 20:43:50 +0530

China has no intention of sending troops to Afghanistan, state media said on Monday, downplaying recent reports quoting British Prime Minister Gordon Brown as saying Beijing could do so.

"Except the United Nations peacekeeping operations approved by the UN Security Council, China never sends troops abroad," the official Xinhua news agency quoted Foreign Ministry spokesman Qin Gang as saying in a statement.

"The media reports about China sending troops to participate in the ISAF in Afghanistan are groundless," it quoted him as saying.

Qin was responding to reports that Brown suggested China could contribute to the International Security Assistance Force (ISAF), Xinhua said.

According to reports last week, Brown told the Council on Foreign Relations in New York that China could one day contribute troops to ISAF.

The international force includes nearly 50,000 troops, working to help stabilise the country and fighting insurgents from the Islamist Taliban regime.

Originally mandated by the United Nations Security Council, ISAF was placed under NATO command in August 2003.

In addition to ISAF, a separate US-led contingent of several thousand mainly American troops operates in the country as part of Operation Enduring Freedom and is also involved in training the Afghan security forces.

Tibetan exiles gather to discuss autonomy row

megha — Mon, 17 Nov 2008 10:10:52 +0530

Several hundred Tibetan exile leaders gathered in northern India on Sunday for a landmark meeting widely expected to determine the direction of the movement that has struggled for decades to win autonomy from China.

The weeklong meeting that begins on Monday was called by the Dalai Lama, the Tibetan Buddhist spiritual leader, saying that new ideas were needed following the repeated failure of talks with China.

On Sunday, the Dalai Lama's envoys to the last round of talks with Beijing issued a statement saying they had presented China with a detailed plan on how Tibetans could meet their needs of autonomy within the framework of the Chinese constitution.

But China had apparently rejected the plan and recent "Chinese statements distort the position and proposal we have outlined in our paper," the statement said. Chinese officials said no progress had been made in the talks two weeks ago, calling the Tibetan stance "a trick" and saying it lacked sincerity.

"The Dalai Lama or the Tibetan government-in-exile cannot be held responsible for the failure of the Chinese to respond to our sincere and genuine attempts," said Lodi Gyari, one of the two envoys of the Dalai Lama who has participated in all eight rounds of talks since 2002.

"The Chinese leadership keeps on saying that the doors to a dialogue are always open but they haven't shown any willingness to take any step, however small, forward," he said.

It was the first time the envoys had commented on the talks, saying they had not wanted to make statements ahead of this week's special meeting. The Dalai Lama told Tibetans ahead of the meeting that there was no set plan.

"It must be clear to all that this special meeting does not have any agenda for reaching a particular predetermined outcome," the Dalai Lama said. "We can be proud at this moment when the Tibetan people themselves are ready and able to take responsibility for Tibet."

China has dismissed the meeting as meaningless, saying the participants do not represent the views of most Tibetans. Beijing says the Dalai Lama and his followers are seeking outright independence from Chinese rule.

China insists Tibet has been part of its territory for 700 years, although many Tibetans say they were effectively independent for most of that time. Chinese forces invaded shortly after the 1949 Communist revolution and the Dalai Lama fled to India in 1959 amid an unsuccessful uprising against Chinese rule.

A senior Chinese official said in comments broadcast Friday that Beijing is open to further talks with the Tibetans.

The Dalai Lama voiced his impatience with China last month and appeared to give up hope of achieving a form of autonomy from Beijing that would allow Tibetans to freely practice their culture, language and religion.

"As far as I'm concerned I have given up," he said.

Hu to embark on key Latin America visit

manoj — Sat, 15 Nov 2008 10:42:59 +0530

Chinese President Hu Jintao begins a Latin America tour on Monday, taking in Costa Rica, Cuba and Peru, as China tightens economic ties and the region hopes for help in tougher times.

The Asian giant has increased diplomacy and investment in Latin America in recent years, with an eye on its natural resources and developing markets for manufactured goods and even arms.

Many in Latin America hope for an investment boost to help ride out the economic crisis.

Exports from the continent to China include soya and iron ore from Brazil, soya from Argentina, copper from Chile, tin from Bolivia, and oil from Venezuela.

The trade is still only a small percent of the continent's total, but it is growing.

China's state-run Xinhua news agency reported this month that exports to Latin America grew 52 percent in the first nine months of 2008 to $111.5 billion.

Hu will visit San Jose and Havana between a G20 meeting on the global crisis in Washington on November 15 and an Asian Pacific Economic Cooperation forum summit in Peru on November 22.

China and Cuba have remained all-weather friends for decades, their Marxist Socialist past a driving force in relations.

The Chinese leader visited Cuba four years ago to sign bilateral deals, and China was Cuba's second business partner, after Venezuela, in 2007.

Hu's visit to Costa Rica, meanwhile, is the highest-level visit by a Chinese official to the first Central American country to break off Taiwan ties in favor of China, in June last year.

Taiwan is now left with only a small circle of 23 international supporters, most of them tiny, poor nations, while Beijing commands the support of 171 nations.

"It's more than just symbolic that Hu Jintao has decided to come, because it is clearly making the point that it is no longer a Taiwanese stronghold," said Costa Rican analyst Luis Guillermo Solis.

'Dollar diplomacy'

Both Taiwan and China have been accused of using so-called "dollar diplomacy" to get nations to ally with them.

But China's economic might is hard to compete with, especially in tough economic times.

Part of China's incentives to Costa Rica came from China's enormous foreign exchange reserves with an offer to buy $300 million in bonds.

Many wonder if Costa Rica's neighbors will be tempted to follow its move.

"I can't see any changes in recognition back from China to Taiwan. Basically it's been bit by bit, countries going from Taiwan to China," said Kerry Brown, a senior fellow at Chatham House thinktank in London.

Costa Rica, a major exporter of computer components, is now prepared to negotiate a free trade deal with China, the foreign trade minister said here this week, dismissing fears of an invasion of Chinese products into the tiny Costa Rican market.

China has expanded its high level missions to the whole continent in recent years, making investments and agreements with such oil producers as Venezuela, Ecuador, Colombia, Argentina, Brazil and Mexico.

"The fact is that China has been locked out of a lot of countries for energy deals" in the past, Brown said. "It's going to be going into these areas more and more."

China has also advanced to economic assistance and direct investment, sometimes taking over from the region's main commercial partner and neighbor, the United States.

The teaching of Chinese in schools and universities and scholarships to China, as in Costa Rica's deal, add to a charm offensive.

And although Latin American economies are in a stronger position to withstand financial setbacks than in the past, a strong economic partner such as China is more attractive than ever.