China faces surging protests and riots in 2009 as rising unemployment stokes discontent, a state-run magazine said in a blunt warning of the hazards to Communist Party control from a sharp economic downturn.

The unusually stark report in this week’s Outlook (Liaowang) Magazine, issued by the official Xinhua news agency, said faltering growth could spark anger among millions of migrant workers and university graduates left jobless.

“Without doubt, now we’re entering a peak period for mass incidents,” a senior Xinhua reporter, Huang Huo, told the magazine, using the official euphemism for riots and protests.

“In 2009, Chinese society may face even more conflicts and clashes that will test even more the governing abilities of all levels of the Party and government.”

Reuters

China has used its trade surplus with the US to fund its military expansion and to pay for the 10% plus growth it claims for its economy. What happens when the money dries up?

China’s exports have dropped into their biggest decline in a decade.

Exports in December were down 2.8% from the same time last year, a bigger decline than November’s 2.2% drop, the China Daily said.

The numbers provided fresh evidence of a serious trade slump that has caused a wave of factory closures and staff layoffs, analysts said.

The communist leadership has expressed fears of social unrest as economic problems worsen.

BBC

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