Monthly Archives: August 2010

Hu Tells Kim (Yes, He Was There) To Open Up

Xinhua has confirmed the somewhat badly kept secret that North Korean leader Kim Jong Il was in China last week, if not that his youngest son and presumed heir, Kim Jong Un, was with him, even though seven North Korean officials on the trip were mentioned by name in the report. The visit, the second by the usually stay-at-home Kim senior to China this year, was described as unofficial.

Kim (left) told President Hu Jintao when they met in Changchun on Friday that he was hoping for an early resumption of the stalled six-nation nuclear talks that Beijing has been trying to get going again. Not much detail on how or when that might happen.

Hu did, however, during an orgy of fraternal remarks on both sides, take the opportunity to stress to Kim on the basis of China’s experience the importance of economic development and that opening up to the world was an inevitable part of that. To what extent that fell on receptive ears, it is impossible to say, though from Kim’s reported remarks during the meeting, his world may extend no further beyond the Hermit Kingdom than Jilin and Heilongjiang provinces.

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Russia Looks East To China’s Energy Markets

The oil pipeline from Siberia to Skovorodino on the Chinese border that Russia’s prime minister, Vladimir Putin, opened on Sunday, is a further sign of how Russia, like everyone else, is looking east for its trade as China’s economy becomes the epicenter of Asia’s growth. The line is a short 67 kms spur of the 2,750 kms pipe from Taishet in eastern Siberia to Nakhodka on the Sea of Japan that Russia will use to supply up to 1.6 million barrels a day to the growing Asian market once it is completed in 2012. The picture above shows a pumping station at Skovorodino under construction in April.

Last year, Beijing provided Moscow with a $25 billion loan repayable in oil that will let China import 300,000 barrels a day of Russian oil for 20 years from 2011, one of a series of oil-for-loans deals that Beijing has struck. Ten billion dollars of those loans, made via China Development Bank, are to Transneft, the pipeline operator. (The other  $15 billion went to the oil producer Rosneft). That flow of oil will start later this year, once China has built the 930 kms link from its own oil pipeline network in Daqing to the Skovorodino spur.

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Kim Jong Il Reportedly Back In China

North Korea’s leader Kim Jong Il is reported to be paying his second visit to China this year. South Korean news reports say he arrived early on Thursday by train with his youngest son and presumed heir Kim Jong Un (left, being shown on South Korean TV). They briefly visited a middle school in Jilin that Kim Jong Il’s father, Kim Il Sung, is said to have attended in the late 1920s, underlining the lineage from Great Leader to next Leader. Where they went after that is not known.

Kim was in China in May, and this latest visit — and its purpose — is unlikely to be confirmed by either side until it is over, as is custom. The ailing North Korean leader might be seeking aid following the recent devastating flooding in his impoverished country, seeking medical aid for himself or having discussions about China’s attempt to restart the six-nations’ talks on North Korea’s nuclear program, though the presence of his son would suggest the succession might be on the agenda ahead of a rare meeting of North Korea’s ruling Workers’ Party in September to elect a new leadership.

One curiosity is that the trip comes when former U.S. President Jimmy Carter is in Pyongyang seeking the release of an American sentenced to eight years hard labor for entering the country illegally. (Update: Carter succeeded.) Kim’s absence from the country during Carter’s visit would be a bizarre and inexplicable breach of diplomatic etiquette, though bizarre and inexplicable is a phrase never far from events in North Korea.

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China’s Rains Will Abate By November, But A Harsh Winter Is Close Behind

The U.N. Office for the Coordination of Humanitarian Affairs (OCHA) has just updated its Asia regional map of natural disasters it is monitoring, including its weather forecast into November. Snapshot below; full map here. Heavier than normal rainfall is expected to continue into November in north, central China. The good news is that the area forecast to be affected is much smaller than when OCHA last forecast (into October) about a month back and the rains will be less intense.

Above Average Rain Forecast To November

After the spring’s droughts and summer’s floods, winter will be severely cold, according to Jiao Meiyan, deputy chief of China Meteorological Administration. He told Xinhua that China has been experiencing weather this year much like that in 1998 when the El Nino and La Nina climate systems in the Pacific combined in a distinctive way known as the Southern Oscillation that stalls weather systems around the world. Wikipedia has a more detailed explanation, and a discussion about whether it is caused by global warming.

The salient point is that historically that combination of El Nino and La Nina, which occurs every three to seven years, is associated with severe droughts and floods around the world, as we have seen this year from the eastern U.S., to Russia, Pakistan and Eastern Europe as well as China.

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Cracking Down On Illegal Land Use: The BYD Case

A deadline is drawing near in a case of illegal land use involving BYD, the fast-growing compact automaker in which American investor Warren Buffett has a 10% stake, and which is being widely watched for a potential shift in policy.

In July, the Ministry of Land and Resources said it would rule by Sept. 30 on what to do about the company building seven factories on 49 hectares of land bought from an economic development agency in Shaanxi, 45 hectares of which was zoned for agriculture.

It is not unknown for local officials to turn a blind eye to such zoning violations in the drive for economic growth. Companies want to bring new production capacity on stream without waiting for all the red tape to be dealt with, while officials themselves are  judged on their promotion of local economic growth and local governments have become hooked on land sales for their revenue.

The ministry has said that 7,800 hectares of land had been used illegally in the first half of this year, a 14% increase over the same period last year. That reversed the trend of the figures of the past three years. They had shown the issue was shrinking, but that may just have reflected lax enforcement and reporting. The country’s farmland has continued to be eaten up by industrialization and urbanization. It has shrunk by 6% over the past decade to 122 million hectares, barely above the minimum arable land the ministry reckons China needs to be self-sufficient in food. The summer’s floods and the drought earlier in the year in some parts of the country have reduced that margin further.

The ministry has hit five companies so far this year for illegal land use, following a tougher inspection regime launched in February that found examples of illegal land use in more than half the 13 cities examined in an initial spot check and officials cooking the books in four. In those cases buildings were ordered to be demolished, land taken back, executives imprisoned and officials reprimanded.

None of the companies sanctioned were as high profile as BYD. How tough will the ministry be this time? And what sort of signal will it want its ruling to send?

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Filed under Economy, Environment, Industry, Politics & Society

New Flood Surge Threat To Three Gorges Dam

The recent heavy rain in the upper reaches of the Yangtze River is posing a second flood surge threat to the Three Gorges Dam.  On Tuesday, the water level in the dam was more than 7 meters higher than the 145-meter flood alarm level, according to the Yangtze River Flood Control and Drought Relief Headquarters. Water levels reached 158 meters in July, just 17 meters below maximum capacity. Shipping through the Three Gorges was again suspended on Monday evening.

Update: The peak surge has passed without mishap, CCTV reports.

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A Doozy Of A Traffic Jam

Road works and accidents cause traffic jams the world over, and motorists in China are no strangers to traffic congestion, but Xinhua is reporting a jam that has lasted nine days over a 100 kilometer stretch of National Expressway 110, the highway between Beijing and Huaian in Heibei and Jining in Inner Mongolia. Traffic is moving at such a slow place that local hawkers are selling truck drivers food, and reportedly overcharging handsomely for it. Four hundred traffic police have been dispatched to keep order. With the road works not due to be completed until mid-September, there is little expectation that the congestion will ease soon.

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