The mainland said on Wednesday [January 7 2009] that it will continue pushing forward dialogue and consultation with Taiwan in the new year by “firmly holding the main theme of peaceful development of the cross-Straits relations”.

Yang Yi, spokesman of the State Council’s Taiwan Affairs Office, made the remark at a press conference here.

Yang spoke highly of the recent speech of Hu Jintao, general secretary of the Communist Party of China Central Committee, at a December 31 workshop to mark the 30th anniversary of the mainland’s “Message to Compatriots in Taiwan”.

Hu’s speech summed up 30 years’ experience in developing cross-Straits relations in a comprehensive way, and he made a series of new proposals to develop the relationship, according to the official.

“This important speech is of great significance for us to accomplish Taiwan-related work and open up a new situation in the peaceful development of the cross-Straits relations,” the official said.

Yang discussed progress in developing cross-Straits ties in 2008.

Last year, the ties began entering the track of peaceful development as the pro-independence force failed in a “memorandum” on Taiwan joining the United Nations.

Also, the Taiwan situation showed positive changes, he said, without further elaboration.

Last year, the two sides lifted a decades-long ban on direct trade, mail and transport links; Taiwan compatriots gave selfless support to the quake survivors in the mainland; a pair of pandas arrived in Taiwan as a mainland gift and the mainland announced new measures to deepen cross-Straits cooperation and deal with the global financial crisis, according to the official.

The spokesman said that the mainland has always attached great importance to giving financial assistance to Taiwan-funded companies in the mainland. As of the end of 2007, mainland banks had lent more than 700 billion yuan (102 billion U.S. dollars) to such companies.

Three mainland banks have also agreed to offer 130 billion yuan in new loans to Taiwan-funded companies in the next two or three years.

China Daily

The Chinese National Petroleum Company (CNPC) started work on a $3 billion oil project in Iraq on Friday, the first foreign firm to begin such work since dictator Saddam Hussein nationalised the industry decades ago.

A CNPC delegation formally opened the al-Ahdab oi field project in Iraq’s eastern province of Wasit, officials there said.

“It’s a significant event which signals the first contribution of a foreign company in developing Iraq’s oil fields for three decades,” Wasit governor Latif al-Tarfa told Reuters by telephone.

“The Chinese engineers have located the spot where they will construct a field work site, and all the company’s equipment will reach the southern port of Basra soon.”

Reuters

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Organised crime is on the rise in China, and courts across the country saw a 160% annual increase in gang-related crime in 2007.

“Gang-related crimes have become a threat to our social stability and the economy,” one un-named official from the Public Security Bureau told the China Daily.

“Murder, rape, robbery, kidnapping, assault… they dare do anything,” the official said.

He said the construction, transport and mining sectors were all areas that attracted gang crime, but warned that other industries were also increasingly being affected.

With the economic downturn, Chinese authorities are worried that the problem will get even worse, and the new campaign aims to make sure this does not happen.

The official said the authorities would “keep a close eye” on crime resulting from the slowing economy.

Migrant workers are the backbone of China’s economic success, and these farmers-turned-factory workers have been the first to feel the effects of the economic slowdown.

To make matters worse, more than six million students will try to enter China’s workforce during 2009, half a million more than last year.

As many as 10 million people are expected to lose their jobs, and thousands of factories have already closed, says the BBC correspondent in Beijing, Quentin Sommerville.

The government is expecting trouble during 2009, and China’s huge security apparatus is signalling it is prepared to crackdown on anything that disrupts social stability, our correspondent says.

BBC

The numbers are huge, but in China they are still a small percentage of the overall workforce. That is, if the reports are accurate and not understated. The potential for a civil backlash is growing.

Nearly 5 million migrant workers had returned home by the end of November, accounting for 5.4 percent of rural migrant workers, the Ministry of Human Resources and Social Security said.

Many of them had lost their jobs as the global financial crisis took its toll across the country.

The 4.85 million migrant workers were mainly from 10 provinces including Sichuan, Hebei, Anhui, Jiangxi, Hubei and Hunan.

Meanwhile, employers in the provinces of Guangdong, Jiangsu, Fujian and Shandong, as well as Shanghai, have sacked 2.45 million people, accounting for 5.2 percent of the workforce in these areas, the ministry said.

Shanghai Daily

It is foolish to accept Chinese economic figures at face value. China remains a centralized communist state. It has no incentive to produce honest data on its economy, nor do the people in the trenches have any incentive to report the economic truth up the line to their superiors. Everything about the economy of China should be treated with suspicion.

As the risk of deflation looms large on top of weaker exports and declining private real estate investment, China’s economy may continue to slow down in the quarters immediately ahead but regain growth momentum in the second half of next year, according to a Morgan Stanley report released on Wednesday.

In its China Economics Outlook for 2009, the Hong Kong-based Morgan Stanley Asia forecast China’s baseline GDP growth would be around 7.5 percent next year, with the bull and bear scenarios projected at 9 percent and 5 percent respectively.

The projection came after the country’s economic indicators showed that the impacts from the global financial crisis on China’s tangible economy have become much severer.

The exports totaled $115 billion last month, down 2.2 percent year-on-year in the first monthly decline since June 2001, the General Administration of Customs said on Wednesday. The previous decline, a much smaller 0.6 percent, reflected slumping US demand after the tech bubble burst.

The producer price index (PPI), a measure of inflation at the factory level, decelerated sharply to an annual rise of 2 percent in November. It was also slowest rise for the PPI since May 2006, which prompted worries about the fast-slowing economy and rising deflation risks.

Late last month, the World Bank has revised down its forecast for China’s GDP rise of next year from 9.2 percent to 7.5 percent.

Wang Qing, Morgan Stanley Asia chief economist on the Chinese economy, said that three factors, namely the cooling-down in real estate investment, a massive de-stocking of raw material inputs in the immediate aftermath of the collapse of international commodity prices and the weakening external demand, had caused China’s economy to slowdown rather sharply.

The “triple-whammy impact” however could barely maintain its full force throughout 2009, although the ravage would likely continue to be felt though in the first quarter of next year, he said. “We believe that China’s economic outlook for next year is best characterized as getting worse before getting better, laying the foundation for a firmer recovery in 2010.”

As the fiscal stimulus package came much faster this time than that during the Asia financial crisis, Morgan Stanley expected the effect to be apparent by mid-2009. Besides, the slow recovery of the G3 economies — the United States, European Union and Japan– after the unprecedented monetary and fiscal policy actions might have led to an improving external demand by the second half of next year and thus would contribute to a modest recovery of the Chinese economy.

China Daily