Dispatches
1 June 2007
China Economic Review - Industries Updates

It's obvious to anyone crossing from western China into Kazakhstan or Kyrgstan that you're entering another world. The traffic jams, billboards and smooth highways are replaced on the Kazakh side by long queues at immigration and little sign of economic activity on the bumpy road to Almaty, the commercial capital. Central Asia's problems are many. Government remains stuck somewhere in between the centralized economies of the Soviet era and a free market system which can efficiently exploit the region's mineral and other wealth for the benefit of its people. They have so far seen little profit from the region's much talked-of oil and gas.

Next door, China is booming - and some believe this growth can spread.

The UN Development Program's Beijing-based Silk Road Initiative (SRI) wants to rebuild the old road which brought Chinese goods to Europe, with a view to sharing China's prosperity with its western neighbors. Central Asia would contribute natural and human resources in return.

Space-age skills Aside from oil and gas, Central Asian states have a workforce that is well trained compared to poor masses in western China. This is largely due to the space and nuclear research facilities that peppered the far flung steppes of Kazakhstan and Uzbekistan in the Soviet era, which has forged a legacy of science and engineering in the region.

By shifting production over the border or attracting skilled Central Asian labor to western Chinese cities like Urumqi, the SRI suggests that Chinese business can develop high-value manufacturing in regions such as Xinjiang, which have so far relied on agriculture and energy extraction.

Among the most serious obstacles to any such development are mutual suspicion and bad roads.

Central Asian governments remain oriented to Russia. The older generation of leaders in the region was handpicked by Moscow and Russian habits die hard. In Central Asia, this has unfortunately come to mean an authoritarian, state-centered approach to economics with plenty of cronyism attached.

Kazakhstan, the region's star performer, is still a long way behind acceptable norms in government accountability and transparency. It is said that up to 80% of the economy is controlled by the extended clan of President Nazarbaev. Neighboring Kyrgzstan has been more democratic, even deposing a president, but it remains hampered by bureaucracy and official corruption.

Border procedures remain drawn out, with an idiotic requirement for a visa for travel between states which are culturally and economically homogenous. What private business there exists is either slowed down here or suffocated by a pervasive bribe-seeking culture among police and government officials.

Limited outreach China too bears some of the blame for the obstacles to increased economic integration with Central Asia. Closed roads, border disputes and a lack of trade exchanges during the decades-long Sino-Soviet split remain hard to undo.

One remarkable Chinese initiative, the Shanghai Cooperation Organization, has thus far delivered on security issues for China.

It has secured Central Asian cooperation in shutting down cross-border cells of Uyghur fighters seeking to wrest Xinjiang province from Beijing's control. Today it's much harder for militant Uyghurs to seek refuge in Central Asian states, with whom they share religious and cultural affinities.

With that task accomplished, the SCO needs a sharper focus on economics. Beijing can extract oil and gas but the overall well being of its neighbors is important in giving China the stability it needs for its own economic growth. However, the organization has been distracted recently by Iran and India seeking membership and diluting the emphasis on integrating China and its Central Asian neighbors.

The Silk Road Initiative and the SCO both offer China a basis for a new, mutually beneficial relationship with Central Asia. Either could end up looking like the EU, which through trade integration and better infrastructure has turned poorer member states like Ireland and Spain (and now, Poland) into economic tigers.

Better roads, less bureaucracy and more cohesion in economic development policies could deliver similar benefits to China and Central Asia.

ANTI-TERRORISM LAW ON CARDS, EXPERTS CLAIM
By Zhu Zhe
31 May 2007
China Daily

China is looking to introduce an anti-terrorism law to combat threats from both home and abroad, experts have said.

Zhao Bingzhi, president of the criminal law research committee of the China Law Society, who has been involved in discussing the draft law, said: "China has been very active in the establishment of an anti-terrorism legal framework and authorities are busy drafting a separate law to better fight terrorism."

He told the Workshop on the Global Legal Framework Against Terrorism yesterday in Beijing that the draft will take into consideration the terrorism situation China currently faces and all relevant international conventions.

Zhao did not reveal a timeframe for the draft law.

However, the latest legislative plan of the Standing Committee of the National People's Congress (NPC), the country's top legislature, has said that an anti-terrorism law might form part of its next five-year plan, which starts next year.

Earlier media reports said the law would define terrorist activities, the responsibilities and obligations of anti-terrorism authorities and how to fight terrorism both at home and abroad, all of which lack clarity in existing laws.

Li Qinglin, vice-president of the China Law Society, the co-host of the workshop, said growing terrorist forces worldwide pose a serious threat to all countries, including China, and it is crucial to improve legislation to provide a legal footing for anti-terrorism activities.

In January, police in Northwest China's Xinjiang Uygur Autonomous Region said they had killed 18 terrorists and arrested 17 others during a raid on a training camp run by the East Turkestan Islamic Movement, or ETIM, which the United Nations labeled a terrorist organization in 2002.

ETIM, which is believed to be connected to Al-Qaida according to the Xinhua News Agency, plotted more than 200 violent incidents including explosions, assassinations, arson attacks, poisonings and assaults in Xinjiang and overseas between 1990 and 2001, killing 162 people and injuring 440, official data shows.

Jean-Paul Laborde, chief of the terrorism prevention branch of the United Nations Office on Drugs and Crime, said: "Terrorism is an international concern and no country is 100 percent safe."

He said China had always played a crucial role in the negotiations and adoption of the Global Counter-terrorism Strategy, which the UN adopted last year, and the country had also made good progress with its national anti-terrorism legislation.

In December 2001, three months after the September 11 terrorist attack on New York, China amended its Criminal Law and added more than 10 crimes of terrorism "to deal more harshly with the criminal acts of terrorists".

In October, it also adopted the Anti-Money Laundering Law to help combat the financing of terrorism.

Report: China drafting anti-terrorism law to combat threats from home and abroad
31 May 2007
Associated Press Newswires

BEIJING (AP) - China is drafting an anti-terrorism law to safeguard against domestic and international threats, state media reported Thursday.

The decision comes as "growing terrorist forces worldwide pose a serious threat to all countries, including China," the China Daily newspaper cited Li Qinglin, vice-president of the China Law Society, as saying.

"China has been very active in the establishment of an anti-terrorism legal framework and authorities are busy drafting a separate law to better fight terrorism," Zhao Bingzhi, head of the society's criminal law research committee, was quoted as saying at a legal workshop on fighting terrorism. The report said Zhao has been involved in discussions about the law.

The newspaper did not elaborate on what were considered domestic or international threats. No other details on the measure or when it will be introduced were given.

Wang Hui, a press officer at the National People's Congress, China's legislature, said she had "no idea" about the proposal. Telephones were not answered at the offices of the China Law Society.

The Beijing leadership has faced simmering separatist movements in its border provinces and has tried to link a rebellion in its heavily Muslim Central Asian region of Xinjiang to al Qaida-connected groups.

Beijing has accused one group, the East Turkestan Islamic Movement, of killing nearly 200 people in Xinjiang since 1990.

Foreign experts and diplomats, however, have criticized Beijing for using the war on terror as an excuse to crack down on peaceful pro-independence activism.

They say many of the deaths were not separatist-related and that most bombings and other anti-government violence are carried out by individuals or small groups, not an organized movement.