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VOICE OF INDOCHINA

VOICE OF INDOCHINA

(VOC)

China’s “String of Pearls” strategy around India in tatters

May 11th, 2009 

The Chinese “String of Pearls” strategy around India appears to be have broken. By definition, the “String of Pearls” describes the manifestation of China’s rising geopolitical influence through efforts to increase access to ports and airfields, develop special diplomatic relationships, and modernize military forces that extend from the South China Sea through the Strait of Malacca, across the Indian Ocean, and on to the Arabian Gulf (USAF Lieutenant Colonel Christopher J. Pehrson, “string of Pearls: meeting the challenge of china’s rising Power across the asian littoral” July 2006, Strategic Studies Institute, United States Army War College).

Around India, the Chinese pearls include Myanmar, Bangladesh, Nepal, Sri Lanka, Maldives, Mauritius, Seychelles and Pakistan.

Currently there might be no comprehensive policy by the current Indian government to contain it, but, a mix of luck, some policy, some internal and external events seem to have worked in favour of India.

Myanmar ( Burma): Sittwe Port, Coco Island, Burma Hianggyi, Khaukphyu, Mergui and Zadetkyi are the main names associated with Chinese interest in Myanmar. India shares a border of more than 1,600 kms with Myanmar. Myanmar also serves as a gateway to South East Asia and ASEAN and is supposed to be the Eastern Flank to the Bay of Bengal.

“Look East” policy by former Indian Prime minister, Father of Modern India, Hon. PV Narasimha Rao, had brought Myanmar in Indian sights. Subsequently, India had toned down its criticism of the junta, supplied Myanmar with military spares, joint action on rebels in each others borders and offered economic co-operation. Vice Senior General Maung Aye visited India from 2 to 6 April 2008. During his visit, The Kaladan Muti Model Transit Transport Project agreement was signed which saw India gaining access to Sittwe. India also signed Double Taxation Avoidance Agreement with Myanmar. India and Myanmar are engaged in various sectors like cross-border developmental projects, trade, IT, Telecommunication, hydrocarbon etc.

Myanmar does not lean towards China or India. It makes best of the competition between China and India which are competing for Myanmar’s resources.

Bangladesh: Bangladesh currently has an India friendly government and army. Before this Bangladesh had an anti-Indian government and Army. China had taken full advantage of it.

Nepal: China and India are currently locked under a tussle over Nepal. China can do little but has increased considerable influence with the Nepali Maoist. India is not expected to loose its clout in Nepal.

Sri Lanka: This is another area where China is trying to influence. Hambantota port is being developed by China and China is a supplier of military wares to Sri Lanka. Indian influence in Sri lanka is not expected to be lost.

Maldives, Mauritius and Seychelles: china is trying, but, it is not successful in getting ports or bases in these countries due to Indian objections.

Pakistan: Pakistan is currently involved in counter insurgency in its own country and has a very heavy US influence. Pakistan proxy is not currently available to China due to US influence. Gwadar port, which was built with Chinese assistance is under the management of Singapore based company. Chinese have not been able to complete central Asia - Gwadar link due to US influence and Indian friendly government in Afghanistan.

There are two more countries that are within the Chinese String of Pearls strategy, i.e, Thailand and Cambodia. Thailand has a proximity with Indian Andaman and Nicobar Island. India needs to work on relations with Thailand. Cambodia is currently of less direct significance to India.

For china, the fight for dominance over these regions is not yet over as it needs to secure its energy and trade route with Middle East and Africa. India needs a strategy to keep these gains and discourage Chinese dominance within Indian Ocean.

 

EZEKIEL 25 17

The path of the righteous man is beset on all sides by the iniquities of the selfish and the tyranny of evil men. Blessed is he who, in the name of charity and good will, shepherds the weak through the valley of the darkness. For he is truly his brother's keeper and the finder of lost children. And I will strike down upon thee with great vengeance and furious anger those who attempt to poison and destroy my brothers. And you will know I am the Lord when I lay my vengeance upon you.

 

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FSOC CHICOM REPORT

Three Chinese institutions were among the world's top four banks at the end of 2007 at a time when the market capitalisation of Western banks was suffering from a global financial crisis, a study showed Wednesday. The number one spot in the rankings, compiled by the Boston Consulting Group, was occupied by the Industrial and Commercial Bank of China, with market capitalisation of nearly 340 billion dollars (218 billion euros). In second place was China Construction Bank, followed by HSBC of Britain, Bank of China, Bank of America and Citigroup of the United States. The study found that banks in North America and Western Europe had suffered a loss of 695 billion dollars in market capitalisation at the end of 2007 while their counterparts in emerging market countries Brazil, Russia, China and India had seen their market capitalisation increase by 753 billion dollars. Major US and European banks have suffered losses and asset writedowns stemming from the near collapse of US subprime -- high risk -- mortgage sector, which undermined the value of billions of dollars' worth of their mortgage-backed securities.

This is another reason why the US government shouldn't be spending borrowed money to finance extra-constitutional spending. The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation. Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (?658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies. Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels. It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds. When the federal government is asked to do things the Constitution doesn't tell it to do, and when more and more money flows through it, and with that more and more power, it's hard to stop spending. And with that comes borrowing. And with that comes slavery. The same thing could happen even if spending were kept in the context of the Constitution, but once you escape its limits, there is then no limit. The rich rule over the poor, and the borrower is servant to the lender. - Proverbs 22:7 (NIV)

China's oil giant Sinopec Group has signed a US$70 billion oil and natural gas agreement with Iran, which is China's biggest energy deal with the No. 2 OPEC producer. Under a memorandum of understanding signed Thursday, Sinopec Group will buy 250 million tons of liquefied natural gas over 30 years from Iran and develop the giant Yadavaran field. Iran is also committed to export 150,000 barrels per day of crude oil to China for 25 years at market prices after commissioning of the field. Iran's oil Minister Bijan Zanganeh, who is on a two-day visit to Beijing pursuing closer ties, said Iran is China's biggest oil supplier and wants to be its long-term business partner. Official figures show that China imported 226 million tons of oil in2003, about 13 percent of which coming from Iran. Beijing expects to secure foreign energy supplies by the deals for its economy, which has turned China into a major oil importer but suffers severe power shortages.A former KGB officer said to be close to President Vladimir Putin was selected at a shareholders meeting Monday to head Transneft, the state-owned monopoly pipeline operator. Nikolai Tokarev had run state-owned oil exporting firm Zarubezhneft since 2000, the year Putin became president. He previously had served a brief stint at Transneft as vice president. Tokarev will replace Semyon Vainshtok, who was picked to head the state-run corporation overseeing construction of sports facilities and infrastructure in Sochi for the 2012 Winter Games.

The choice of a former KGB officer to run Transneft, which is 75 percent state owned, comes ahead of parliamentary and presidential elections in Russia and fits a Kremlin pattern of putting trusted people in key government and corporate positions. "This is part of the configuration around the presidential succession," said Vladimir Pribylovsky, a political analyst.Bulgaria and Russia signed a deal Friday to build a natural gas pipeline that would undercut a rival project backed by the U.S. and European Union and strengthen the Kremlin's dominance over EU energy supplies.The agreement came after visiting Russian President Vladimir Putin pushed hard to secure Bulgaria's crucial participation in the projected South Stream pipeline, which would cross from Russia under the Black Sea to Bulgaria and then branch off for delivery deeper in Europe. Putin brushed off concerns about Russia's increasing influence, saying after the signing ceremony that the pipeline agreement and other deals would "seriously increase the energy security of the Balkans, Europe as a whole and, of course, Bulgaria." The deal required last-minute negotiations, amid tough bargaining by Bulgaria and wariness about Russia's clout. The Bulgarian Cabinet approved the agreement at an extraordinary meeting only a few hours before it was signed.Bulgaria's interests are fully protected, because the company which will be set up to construct and run the pipeline on Bulgarian soil will be with 50 percent Bulgarian and 50 percent Russian ownership," Bulgarian Prime Minister Sergei Stanishev said. Russia's state-controlled gas monopoly, OAO Gazprom, had previously been offering a minority stake in the part of the pipeline that would run through Bulgaria.

"Until yesterday, the Russian side insisted on holding a 51-percent stake," Stanishev said. He said Putin himself deserved most of the credit for the progress in the late-night negotiations. But despite the concession, the imminent deal was a victory for Putin and Russia, which is already Europe's dominant gas and oil supplier and is seeking to increase its control over westward routes for its energy supplies from the former Soviet Union. "It's very important that the parties have shown their ability to compromise, and the draft that has been was prepared reflects a balance of interests," Gazprom chairman Dmitry Medvedev, who is likely to succeed Putin after the March 2 presidential election, said after meeting with Stanishev. He said agreements on South Stream "will work for decades and make it possible to ensure stable conditions for future energy deliveries for Bulgaria, Russia and EU nations."

Gazprom has set up a parity joint venture with Italy's ENI SpA to develop a feasibility study for the 900-kilometer (550-mile), $10 billion pipeline. The project is a direct rival to the Nabucco pipeline, sponsored by the United States and the European Union, which would also come through Bulgaria. Taking advantage of the clashing pipeline offers, Bulgaria has bargained with the Kremlin. On Thursday, Bulgarian President Georgi Parvanov underlined his nation's support for the EU's efforts to diversify energy supply routes -- and for Nabucco -- in a speech at a ceremony marking the opening of a Russian cultural festival in Bulgaria. After Parvanov had spoken, a clearly annoyed Putin, standing next to him, said Bulgaria was free to chose its direction but warned it to make sure it "works to its benefit." ENI CEO Paolo Scaroni played down the rivalry between South Stream and Nabucco following meetings with Gazprom CEO Alexei Miller, saying both would be needed because of growing demand. But South Stream would undercut Nabucco and dash the European Union's hopes of reducing its growing reliance on Russia, which now supplies up to 40 percent of Europe's gas and up to a third of the oil imports of some European countries. South Stream would have an estimated annual capacity of 30 billion cubic meters (1.15 trillion cubic feet), roughly equivalent to 60 percent of the natural gas consumed annually in The Netherlands. The Kremlin's plans have upset opposition parties and non-governmental organizations in Bulgaria, who fear the former Soviet satellite's increasing dependence on Russian energy supplies and criticize Moscow's human rights record. With Putin and Parvanov looking on, officials also signed a $5.9 billion contract to build Bulgaria's second nuclear plant near the northern town of Belene.

Also signed was an agreement for a joint company, also including Greece, to build the Burgas-Alexandroupolis oil pipeline, which will channel Russian oil from the Black Sea to the Aegean, bypassing Turkey's busy Bosporus. As part of its energy blitz, Russia has promised to extend South Stream into Serbia and build a huge gas storage facility there -- moves that would turn the Balkan nation into a major hub for Russian energy supplies to Europe. Miller said Gazprom and Serbian officials were close to a final agreement on a deal that would envisage a South Stream branch reaching Serbia, and would also foresee Gazprom taking a controlling stake Serbia's state oil company NIS. Belgrade has turned increasingly away from the West and toward Russia, which has supported Serbia in the debate over independence for Serbia's Kosovo province.

With the official launch of the Chinese Investment Corp, China's new financial juggernaut will be both a formidable opportunity and challenge for the west. The Chinese Investment Corp. (CIC) has been officially launched, and with an initial endowment of US$200 billion the new state-controlled company is tasked to invest abroad China's huge foreign reserves. In the shopping bag there will be natural resources from developing countries as well as foreign technologies, research and development (R&D) establishments and brand names from developed economies. For the west, China's new financial juggernaut will be a formidable opportunity, and a formidable challenge. After various announcements, on 27 September, the Chinese authorities officially unveiled the CIC. Under the direct supervision of the State Council, the nation's cabinet, the CIC is mandated to invest abroad the huge reserves accumulated by Beijing over the last years. China's forex topped US$1.33 trillion at the end of June and are expected to reach US$1.5 trillion by the end of the year, the largest in the world. Lou Jiwei, a deputy-secretary general of the State Council and former finance minister, will be the director of the new company.

China's investment corporation has been under preparation for some time. At the conclusion of the annual session of the National People's Congress in March, the Chinese government announced that it would set up a State Foreign Exchange Investment Company (SFEIC) aimed at improving the yield of the country's foreign exchange reserves and generating the largest returns possible. In May, the new company, while still in preparation, invested US$3 billion of its reserves in non-voting shares of the Blackstone Group, the New York-based private equity firm that recently went public. With the establishment of the CIC at the end of September, the contours of China's investment strategy have become clearer. The CIC strategy
The CIC is modeled on the Singapore investment company, Temasek Holdings. Temasek is an investment firm incorporated in 1974 and headquartered in Singapore. Its portfolio spans various industries including telecommunications and media, financial services, real estate, transportation and logistics, energy and resources, infrastructure, engineering and technology as well as bioscience and healthcare. The Chinese sovereign wealth fund will also be a private equity vehicle, operating on a flexible investment horizon with the option of taking concentrated risks. Lou Jiwey, the CIC's director, declared that the new company would "invest, manage and add value to the Chinese portfolio" as an owner of its assets and investments. Beijing currently holds its reserves in US treasury bonds and other safe but low-yielding, instruments. According to Chinese sources, the CIC will likely be "equity-heavy." Analysts at Morgan Stanley also expect the Chinese company to hold a substantial share of its assets in equities, not sovereign bonds. "The company's principal purpose is to make profits," Li Yang, director of the finance research institute at the Chinese Academy of Social Sciences (CASS), told ISN Security Watch. The CIC has an initial capital of US$ 200 billion, but presumably the amount will be increased according to the investments that the company will support. In practice, the CIC will issue RMB-denominated bonds and sell these bonds on the market to buy foreign exchange funds from the central bank. It will then use the foreign exchange funds for investment. In June, China's legislature approved a special issuance of RMB 1.55 trillion (US$200 million) in treasury bonds for the new investment company. The CIC will operate in both the domestic and global markets. Internally, the investment channels of the new vehicle will include another Chinese state-owned company founded in 2003, the Central Huijin Investment Corp., which has been merged into the CIC as a wholly owned subsidiary company. Central Huijin holds shares in China's four leading commercial banks and in 2005 injected US$60 billion into three of them. While Central Huijin will be one of the financial vehicles adopted as the central bank's investment arm to improve the balance sheets of Chinese state-owned banks, the CIC will be more of a strategic investment fund focused on industry and private equity. Internationally, the CIC will be Beijing's investment arm in a range of sectors and countries. Its initial endowment and future prospects make it one of the biggest in the world.

According to a report by Chatham House published in September, the CIC soon will be the number two in the world, behind the Adia, the sovereign wealth fund of the United Arab Emirates, but ahead of both the Gic, the Singaporean fund, and the Norwegian Government Pension Fund. The central question is therefore where and in which sectors the CIC will invest its capital. According to sources, China's international investment strategy will take two directions. One the one hand, it will invest in natural resources in developing countries. On the other hand, it will concentrate on the acquisition of foreign technologies, R&D establishments and brand names in advanced economies. According to Li Rongrong, director of the China State Asset Management Commission (the agency that oversees government assets), the CIC may also help major state-owned companies expand overseas.

Taking the world by investment
Since the mid-1990s, the search for natural resources has continued to gain momentum as a result of China's high economic growth, with increasing emphasis on oil and industrial raw materials. In its 2006 World Investment Report, the United Nations Conference on Trade and Development (UNCTAD) indicated that China's outward foreign direct investment had more than quintupled in the first half of this decade, to reach US$11.3 billion in 2005. South-East Asia, Latin America and Africa have become the prime targets. For instance, in 2002, the China National Offshore Oil Corporation became the largest foreign oil producer in Indonesia after its takeover (for US$585 million) of Repsol Indonesia. In Africa, China's investment strategy has been directed mainly at sourcing natural resources, including oil. Moreover, increasing numbers of Chinese companies have recently established production bases to supply local markets with cheap products highly compatible with local demand and purchasing power. As a result, total trade between China and Africa nearly quadrupled in six years, from US$10.8 billion in 2000 to nearly US$40 billion in 2006. China is today Africa's biggest trading partner and the second most important investor. China's new investment company will further boost these trends. At the same time, China will invest more and more in developed countries, where its presence is often welcomed for the jobs, cash and infrastructure that it brings. In Australia, for example, China has become the biggest foreign investor in the mining sector. The CIC will place more emphasis on the acqui?sition of advanced technologies, R&D establishments, managerial know-how, distribution networks and brand names. China's investment strategy will likely take the form of profitable participation in private equity funds as well as strategic participation in foreign investment companies running businesses considered of importance for China. While normally in the first case, the CIC would hold a minority stake or give up voting rights for the entitlement of a higher return (as in the Blackstone investment fund), in the event of acquisitions of strategic assets, China's investment company would presumably detain the majority of shares or in any case full control of the company. It is in this scenario that questions of corporate governance, transparency and strategic considerations will be unavoidable.

Eye on Europe: challenge and opportunity
While in the US protectionist tendencies may create difficulties for China investing in key strategic sectors, Europe is emerging as the most attractive place for China's technology-seeking shopping spree. China is eyeing Europe's IT, aerospace and defense sectors as investment opportunities, both in terms of profitable returns on its foreign reserves and in terms of acquisition of advanced technologies needed for China's industrial (and military) modernization. Chinese investments in European companies would be helped by the fact that EU-China relations are characterized by the conspicuous absence of issues that could provoke a confrontation between the two sides - such as the Taiwan question. Unlike the US and Japan, Europeans look at China almost exclusively in terms of business opportunities and not as a possible military competitor. Some EU policy makers - such as the Italian minister for the economy, Tommaso Padoa-Schioppa - have openly invited the CIC to invest in Europe. At the same time, French President Nicolas Sarkozy and German Chancellor Angela Merkel have called for a European "golden share" to protect industrial strategic assets from unwanted takeovers from sovereign wealth funds (SWFs). EU Economy Commissioner Joaquin Almunia added that "the EU might restrict investments by government funds unless they disclose more about what they invest in and why." The CIC will thus be, on the one hand, a great opportunity for some industrial sectors, as it will offer fresh money into tight markets after the sub-prime mortgage crisis. On the other hand, the Chinese investment vehicle could well succeed in gaining control of western assets and advanced technology that could be turned into military might in a situation where there could be future tensions in US-China relations, especially over Taiwan. In sum, for the west, the new Chinese investment corporation will be a great economic opportunity, but also a formidable strategic challenge to watch.

Extracting oil from sand is still a laborious, time-consuming task although improved technology has significantly lowered costs. From his perch behind the wheel of a heavy-hauler truck in Fort McMurray, Alberta, Lucas Crisby peers out over a seemingly limitless moonscape of black, sticky sand. Oil has been good to Crisby. With his US$62,000 (HK$483,600) annual salary, he has bought a US$338,000, four-bedroom house a few doors from where he grew up. That's a significant achievement for a 20-year-old without a college degree and only a few years of work experience.Now, with Chinese companies pouring hundreds of millions of dollars into the vast northern Alberta oil sand deposits, Crisby and others at Fort McMurray - a former Hudson Bay trading post - believe the good days have just begun.

Crisby says he doesn't care who harvests the oil sands, as long as the paychecks keep rolling in.''It's a free market,'' said Crisby, who rocks out to country tunes while hauling 400-tonne truckloads of unprocessed sand for Syncrude, a giant Canadian oil producer.To power its factories and fleets of new cars, China has intensified its search for oil in Asia and Africa. But Beijing's expansion into the United States' back yard demonstrates the risks the Asian economic giant is taking to secure energy supplies.China's venture into Canada has triggered unease in Washington, where some fear it could threaten US energy security and set the stage for clashes.Under the 1994 North American Free Trade Agreement, Canada ensured its role as the dominant supplier for the United States by guaranteeing it would send a portion of its energy south of the border.

Today, Canada provides 17 percent of US oil imports, 16 percent of its natural gas and nearly all its imported hydroelectric power.Karen Harbert, assistant secretary for policy and international affairs at the US Energy Department, said Washington didn't believe it should tell other countries where - or with whom - they could do business.``Is China's investment into Canada's energy sector good for the North American energy market? Ultimately, it will be up to the Canadians to figure out which way they want to go and what's in their best interest economically and security-wise,'' she said.In the past two months, China's three largest oil firms have struck major deals in Canada, including a 40 percent stake in a US$3.6 billion pipeline project.The promise of a big new player in Alberta's oil sands has intensified a boom in the province. Since 2002, Fort McMurray's population has expanded by 20 percent to 56,000, mostly young Canadian men seeking their fortunes.

Oil companies are beginning to import labor from as far away as Venezuela and China, which has sparked job-loss concerns among labor unions and indigenous leaders. But many Canadians, including Crisby, simply view China as another major player in an industry that has long been a global game.Although the Canadian government owns the vast majority of the country's energy resources, more than half of Alberta's oil deposits are being developed by US companies, including Chevron, Exxon Mobil and Oklahoma City-based Devon Energy. The French, Dutch and Japanese have also invested in the oil sands.Thanks in part to aggressive marketing by its political leaders, Canada has also been a big beneficiary of China's economic growth.

COMMUNIST China is now Canada's second-largest trading partner, and Chinese is the third-most widely spoken language in Canada, after English and French. More than a million people of Chinese descent have immigrated to Canada in the last century.The latest influx of Chinese funds into energy and mining has prompted the Canadian government to look more closely at the national-security effects of foreign investment.COMMUNIST Canada is closely watching the debate in Washington over competing bids for Unocal by Chevron and China's CNOOC, a majority of whose stock is held by government-owned China National Offshore Oil Corp. US critics say a Chinese buyout of the California company would put scarce energy resources in the hands of a potentially hostile government.

Wenran Jiang, a China expert at the University of Alberta, said a US rejection of the CNOOC bid would make Canadians more cautious about striking energy deals with the Chinese.Energy analysts say Canada must balance its desire for investments from China with the need to satisfy its best customer, the United States, which buys 80 percent of Canada's total exports. When Alberta Energy Minister Greg Melchin visited Capitol Hill recently, he was questioned repeatedly about China's new role in Canada.Melchin said he reassured US officials and others that Canada's oil sands were a ``sunrise industry'' with lots of room for development, and that the United States would remain his province's ``best customer, friend and neighbor.''But many Canadians also view the issue as a way of reminding their powerful neighbor not to take them for granted.

``Our message is it would be in the best interest of the US to pay attention to your largest and best opportunity for long-term energy supply,'' Melchin said. ``You shouldn't take for granted that it will automatically happen.''Oil-industry executives and analysts differ on what China's entry into the Canadian market will mean for the United States. Some say it will have little effect on the price Americans pay for Canadian energy because oil supplies can be acquired elsewhere.But Wilfred Gobert, vice president of Peters & Co, a Calgary investment firm, thinks greater competition for Canada's oil could push up prices, especially if the Chinese are willing to pay more to secure a stable supply.Analysts say an infusion of Chinese funds would speed up development of Canada's oil sands, allowing the extraction of more oil for the United States, as well as China.Although improved technology has significantly lowered costs, extracting the oil from sand is still a laborious, time-consuming task, requiring two tonnes of sand to produce a barrel of oil.

Critics say the process is one of the most environmentally destructive ways to squeeze oil from the earth, in part because it emits large amounts of greenhouse gases.To reach the oil, giant pits as deep as 250 feet are being carved out of the northern Alberta forests. The sticky sands are fed through a series of machines that crush and separate out bitumen, which is processed into crude oil.If Canada's output more than doubles by 2010, as projected, the oil sand producers will need new pipelines to get the crude to their customers. That's why China is a key factor in the competition between Calgary-based Enbridge and another Calgary firm, Terasen Pipelines, to develop a pipeline from northern Alberta to the coast of British Columbia in the west.Whichever company secures a Chinese commitment for long-term contracts will have the edge in financing its pipeline, said Steven Paget, a research analyst for FirstEnergy Capital, a Calgary-based investment bank.

But getting there won't be easy, said Richard Bird, group vice president of Enbridge. He said China's big energy firms aren't ``willing to buy long-term supply without more direct investment into the oil sands,'' meaning they want to help produce oil and share in profits.Canadian executives said Chinese firms were more willing than Western companies to invest ``patient capital'' in projects that might not reap immediate profits, to gain a foothold in promising markets.With the surge in oil prices, the biggest Canadian oil sand producers are being courted heavily and can afford to be choosy about their partners.Thomas d'Aquino, chief executive of the Canadian Council of Chief Executives, a group of Canada's leading firms, said he opposed any efforts to restrict China's participation in the North American energy market, as long as its acquisitions are legal and transparent.But he said Washington and Ottawa should think about what they would do if there was a global energy shortage and Beijing controlled a large share of Canada's oil.``What would it mean if China owns those resources and said, `No, we need them for us, we can't send them to you'?''

China says nine countries have offered it financial incentives to invest in oil and gas projects as it continues its global hunt for energy resources. Government officials said Kuwait, Qatar, Oman, Morocco, Libya, Niger, Norway, Ecuador and Bolivia would offer China tax breaks and other sweeteners. China already has a similar arrangement with 20 other countries. China is increasingly dependent on imported oil and gas as it tries to sustain its rapid economic growth.

Beijing has agreed a host of energy deals with other countries in the past year, including Venezuela and Malaysia, and is currently negotiating with Iran over gas imports. China has been particular active in Africa, prompting criticism that it is exploiting the continent's resources for its own benefit and setting aside concerns about poverty reduction and human rights abuses. Chinese oil companies already have interests in Niger, while Libya is looking for external partners as it opens up its energy sector to foreign investment. China imported 47% of its oil supplies last year as its domestic supplies dwindled. New supplies are regarded as vital if the country is to continue its swift economic expansion. Separately, a government official said China would continue to rely on domestic coal production for most of its energy needs but was also looking to step up investment in renewable industries. Zhao Xiaoping, head of the National Development and Reform Commission's energy bureau, told Money China magazine its goal was to source 10% of energy from renewable sources by 2010. Beijing is under pressure to embrace more environmentally-friendly energy supplies to reduce pollution levels across the country and set a lead in the global fight against climate change.

They operate from a bare apartment on a Chinese island. They are intelligent 20-somethings who seem harmless. But they are hard-core hackers who claim to have gained access to the world's most sensitive sites, including the Pentagon. In fact, they say they are sometimes paid secretly by the Chinese government -- a claim the Beijing government denies."No Web site is one hundred percent safe. There are Web sites with high-level security, but there is always a weakness," says Xiao Chen, the leader of this group."Xiao Chen" is his online name. Along with his two colleagues, he does not want to reveal his true identity. The three belong to what some Western experts say is a civilian cyber militia in China, launching attacks on government and private Web sites around the world.If there is a profile of a  CHICOM HACKERS, these three are straight from central casting -- young and thin, with skin pale from spending too many long nights in front of a computer.

One hacker says he is a former computer operator in the PLA another is a marketing graduate; and Xiao Chen says he is a self-taught programmer."First, you must know about the Web site you want to attack. You must know what program it is written with," says Xiao Chen. "There is a saying, 'Know about both yourself and the enemy, and you will be invincible.'"WE decided to withhold the address of these hackers' Web site, but Xiao Chen says it has been operating for more than three years, with 10,000 registered users. The site offers tools, articles, news and flash tutorials about hacking.Private computer experts in the United States from iDefense Security Intelligence, which provides cybersecurity advice to governments and Fortune 500 companies, say the group's site "appears to be an important site in the broader Chinese hacking community."Arranging a meeting with the hackers took weeks of on-again, off-again e-mail exchanges. When they finally agreed, SOMEONE was told to meet them on the island of Zhoushan, just south of Shanghai and a major port for China's navy.The apartment has cement floors and almost no furniture. What they do have are three of the latest computers. They are cautious when it comes to naming the Web sites they have hacked.

But eventually Xiao Chen claims two of his colleagues -- not the ones with him in the room -- have hacked into the Pentagon and downloaded information, although he wouldn't specify what was gleaned. "They would not publicize this," he says of someone who hacks the U.S. Defense Department. "It is very sensitive."This week, the Pentagon said ULTRA TOP SECRET PENTIGON COMPUTERS in the United States, Germany, Britain and France were hit last year by what they call "multiple intrusions," many of them originating from China.At a congressional hearing in Washington last week, administration officials testified that the government's cyber initiative has fallen far short of what is required. Most alarming, the officials said, there has never been a full damage assessment of federal agency networks."We are here today because we must do more," said Robert Jamison, a top official in the U.S. Department of Homeland Security. "Defending the federal system in its current configuration is a significant challenge."U.S. officials have been cautious not to directly accuse the Chinese military or its government of hacking into its network.

But David Sedney, the deputy assistant secretary of defense for East Asia, says, "The way these intrusions are conducted are certainly consistent with what you would need if you were going to actually carry out cyber warfare."Beijing hit back at that, denying such an allegation and calling on the United States to provide proof. "If they have any evidence, I hope they would provide it. Then, we can cooperate on this issue," Qin Gang, a spokesman for the Chinese Foreign Ministry, said during a regular press briefing this week.But Xiao Chen says after the alleged Pentagon attack, his colleagues were paid by the Chinese government. Again, CNN has no way to independently confirm if that is true.His allegations brought strenuous denials from Beijing. "I am telling you honestly, the Chinese government does not do such a thing," Qin said.But if Xiao Chen is telling the truth, it appears his colleagues launched a freelance attack -- not initiated by Beijing, but paid for after the fact. "These hacker groups in my opinion are not agents of the Chinese state," says James Mulvenon from the Center for Intelligence Research and Analysis, which works with the U.S. intelligence community."They are sort of useful idiots for the Beijing regime."

He adds, "These young hackers are tolerated by the regime provided that they do not conduct attacks inside of China."One of the biggest problems experts say is trying to prove where a cyber attack originates from, and that they say allows hackers like Xiao Chen to operate in a virtual world of deniability.And across China, there could be thousands just like him, all trying to prove themselves against some of the most secure Web sites in the world.

CHINA MILITARY BUILDUP IS A WORLD THREAT

Taiwan's President Chen Shui-bian warned in a national address Wednesday that China's military build-up was threatening world peace, and urged it to halt military exercising targeting the island. In a National Day speech ahead of a parade aimed at underscoring Taiwan's defence capabilities, he also called on China to withdraw ballistic missiles that are aimed at the island. "With China's rapid rise and relentless military build-up, the 'China threat' is no longer confined to confrontation across the Taiwan Strait. In fact, it has already seriously impacted world peace," he said. Chen called on urged the international community to "strongly demand that China immediately withdraw missiles deployed along its southeastern coast targeted at Taiwan, stop military exercises simulating attacks on Taiwan."

The independence-leaning Chen accused Beijing of ignoring peace overtures and using "ever more belligerent rhetoric and military intimidation." He said the tactics were "aimed at denigrating our nation, marginalizing it in the world, cultivating the perception that Taiwan is a local region of China, delegitimizing its government, and undermining its sovereignty." "Only the people of Taiwan have the right to decide their nation's future," he added. "Taiwan and the People's Republic of China are two sovereign, independent nations, and neither exercises jurisdiction over the other. This is a historical fact. This is the status quo across the Taiwan Strait." Taiwan and China split in 1949 after the end of a civil war, but Beijing still regards Taiwan as part of its territory awaiting reunification, by force if necessary.

"A geostrategic issue of crucial importance is posed by China's emergence as a major power. The most appealing outcome would be to co-opt a democratizing and flee-marketing China into a larger Asian regional framework of cooperation. But suppose China does not democratize but continues to grow in economic and military power? A "Greater China" may be emerging, whatever the desires and calculations of its neighbors, and any effort to prevent that from happening could entail an intensifying conflict with China. Such a conflict could strain American-Japanese relations -- for it is far from certain that Japan would want to follow America's lead in containing China -- and could therefore have potentially revolutionary consequences for Tokyo's definition of Japan's regional role, perhaps even resulting in the termination of the American presence in the Far East.

However, accommodation with China will also exact its own price. To accept China as a regional power is not a matter of simply endorsing a mere slogan. There will have to be substance to any such regional preeminence. To put it very directly, how large a Chinese sphere of influence, and where, should America be prepared to accept as part of a policy of successfully co-opting China into world affairs? What areas now outside of China's political radius might have to be conceded to the realm of the reemerging Celestial Empire?" - Zbigneiw Brzezinski

In 1997, Zbigneiw Brzezinski, wrote "The Grand Chessboard - American Primacy and it's Geostrategic Imperatives", which called for the American Dominance over Eurasia.  As it is believed, "Those who control Eurasia control the Planet", and to accomplish this, the US would have to Prevent China from Acquiring Supremacy in Eurasia...... which means War......

In 1998, Two senior PLA Air Force colonels, Qiao Liang and Wang Xiangsui, wrote "Unrestricted Warfare" in Direct response to The Grand Chessboard.  Throughout this book, it is described how it would be feasible for Low Tech to Overcome High Tech, which could be used to Destroy America.

.... and Unrestricted Warfare, goes as far as mentioning Bin laden and the World Trade Center in the same Sentence.   After 9-11-01, Qiao Liang and Wang Xiangsui were hailed as Hero's in China.  On the Anniversary of 9-11, this book was given new cover art...... a Snapshot of 9-11

(on a little side note, Chinese Premier Zhu Rongji jokes publicly about the September 11 attacks)

I know that many of you are already thinking that "just because it's in a book, doesn't make it true"..... which is why I ask that you try reading them before dismissing this whole theory I'm about to type.... I also Tried to reference everything I could with Documents from the most Reliable Sources I could Find

It is Inevitable that the US and China would fight each other

Within these 2 books, is a basic format of how to acquire the goal of being the Hegemonic Country that carries the Planet through the 21st Century....... and it seems these books are being followed quite closely.

The Grand Chessboard, states that the only way America would be able to be the Dominant Power in Eurasia, would require a "Pearl Harbor Styled Attack" to give the US Government the ability to change it's Foreign Policy towards Dominance...... which is Exactly what happened with George Bush's National Security Strategy for the United States it states that "as a matter of common sense and self-defense, America will act against such emerging threats before they are fully formed' and `to forestall or prevent such hostile acts by our adversaries, the United States will, if necessary, act preemptively"

and according to the CHINA SECURITY REVIEW COMMISSION - REPORT TO CONGRESS OF THE U.S. - JULY 2002, in -Chapter 7 - Proliferation and Chinese Relations with Terrorist-Sponsoring States......... (China, is Considered a Threat)

....... The Axis of Evil......

Using September 11th, the United States began their conquest of the Middle East, starting with Afghanistan, Iraq, and soon to be Iran...... as these three countries are necessary for holding a Geostrategic Influence over the Middle East. (which, if you read the link to "the Grand Chessboard" you'll understand)

Each of these, Important to China..... will China let America threaten it's National Interests? Such as..... Iraq being the Biggest Supplier of Oil to China (refer to 1997 China-Iraq Oil deal)

In comes North Korea

N. Korea is a Chinese Wild Card...... a country that's nuclear capable, ICBM's that can potentially reach Chicago, and has a leader that's threatened to Nuke America.  China uses N. Korea to Launch Nukes at America....or American Interests, like Japan, S. Korea, Taiwan, Guam...... Who would America retaliate against...... N. Korea or China?

Then there's the "List of 60+ other countries" that the President Bush considers as "Terrorist Harboring or Sponsoring States" (though the full list has never been disclosed)

but it would almost be safe to say that Within the "List of 60", America has created a Half Circle around China........ leaving the Russian Border Open...... Russia will be the deciding factor, and I believe whoever allows a blind eye to be turned to the expansion into some of their old Satellite Countries, will be who Russia sides with...... and as it stands, Russia is against this War in Iraq....  to the point, they were giving Iraq Military Equipment after America had already been in Iraq for Days.  So, it's not looking good, if America wants Russia as an Ally, for a War against China....... read the Russia page if you want to know more..... now back to China

China, more then any other country since 9-11-01, has remained fairly silent in the World of Politics, they've just been sitting back watching what America does......even after the US has repeatedly tried "Provoking" China..... the EP-3 Spy Plane Incident, the Bombing of the Chinese Embassy, the "Spy Bugs" on President Zemin's Boeing..... and now PreEmptiveness against many of China's Economic Partners?

China's response to each incident?...... China disassembled the EP-3 Plane and shipped it back to America...... China, though did nothing through action, they refuse to believe any excuse we have to offer, for the Bombing of their Embassy....... and Silence upon the Bugged Plane incident (which almost prevented the Bush-Zemin meeting in February of 2002)......... China asked the United States to Halt the War against Iraq Immediately.

So far, China has shown that they are taking a Passive Route, but that could very easily change

.... and we think that their efforts will bear no fruit, if they attempt anything......

"Since the 7 May 1999 bombing of China?s embassy in Belgrade, China?s leaders reportedly have been discussing ways to offset US power, to include accelerating military modernization, pursing strategic cooperation with Russia, and increasing China?s proliferation activities abroad. However, none of these options is likely to improve fundamentally Beijing?s position." - China Report to Congress - Pursuant to the FY2000 National Defense Authorization Act

China's Offensive Move against the United States would be Taiwan and the N. Korean Wild Card, but Taiwan, would be a Last Resort, as "Unrestricted Warfare" offers a Variety of ways to Destroy America without a Serious Military Match Up, but does not leave that subject undiscussed.  Which China has been Preparing for, within the past 5 years, according to their "Stated Budget Reports"

 China is already a significant regional power and is likely to entertain wider aspirations, given its history as a major power and its view of the Chinese state as the global center.

The choices China makes are already beginning to affect the geopolitical distribution of power in Asia, while its economic momentum is bound to give it both greater physical power and increasing ambitions. The rise of a "Greater China" will not leave the Taiwan issue dormant, and that will inevitably impact on the American position in the Far East.

"The exercise of American global primacy must be sensitive to the fact that political geography remains a critical consideration in international affairs. Napoleon reportedly once said that to know a nation's geography was to know its foreign policy. Our understanding of the importance of political geography, however, must adapt to the new realities of power.

For most of the history of international affairs, territorial control was the focus of political conflict. Either national self-gratification over the acquisition of larger territory or the sense of national deprivation over the loss of "sacred" land has been the cause of most of the bloody wars fought since the rise of nationalism. It is no exaggeration to say that the territorial imperative has been the main impulse driving the aggressive behavior of nation-states. Empires were also built through the careful seizure and retention of vital geographic assets, such as Gibraltar or the Suez Canal or Singapore, which served as key choke points or linchpins in a system of imperial control"
- Zbigneiw Brzezinski

China, knowing that attacking Taiwan prematurely, will bring a repercussion of massive US Military Force, they will watch America for awhile..... "The Blind Man and the Elephant"

Bush Administration already pledged to do "whatever it takes" to defend Taiwan, in accordance to the Taiwan Relations Act

With the US Military Occupied in the Middle East, Trying to Protect Taiwan, and Dealing with the N. Korean Wild Card, China has a variety of options that open for them.

Try to use Diplomatic Processes to halt the US War...... Assist (Arms & Finances) those that the US is Attacking (Proxy Wars)....... Take Taiwan, and go to War with America.

Through the Diplomatic Process, China could use a Call for Peace, as a way to unite the world to pressure the United States to Stop their Conquest, which could have extremely positive effects for China, if they play their cards right.

Assisting those that the US are Fighting, could allow China to increase their Military Industrial Complex on an Exponential Factor, which would obviously hinder the US War Plans and create a US vs China style Vietnam, that many are expecting this war to eventually come to........

While, "Unrestricted Warfare" Supports the creation of a Vietnam Styled Conflict, it is questionable if it would be the best route to take, unless China is wanting a Mass Population Reduction.....which, could be very possible, as they have a population of 1.4 Billion people..... and we already know America's up for Population Reduction...... (or at least some in Congress want "H. CON. RES. 70" passed)

Which brings us to the Option of actually Confronting the US War machine, via Taiwan..... which in all essence would be World War Three.

Now, as I stated earlier, Russia is going to be the deciding Factor in who is the winner for the position of "the Lone Hyper-Power"..... yea, there's some who claim the US is a Lone Super Power, but it is impossible to claim that 1/5th of the World's Population is Not a Super Power.  The Difference between a Super Power and a Hyper Power, is the Super Power has a relatively close Rival to some aspect of the Sphere of Influence of a Nation, be it Military, Economic, Social, or Political....... the Hyper Power has no Rival.

George Bush's National Security Strategy, calls for the US to have No Rivals

Since the Rise of Communism in the bitterness of the Cold War, one of America's Greatest Fear was a Russian-Chinese total peace agreement, and them attacking America...... after the Fall of Soviet Russia, this fear has been close to forgotten, yet is closer then it has ever been. (High-Level Political/Military Visits Between Beijing and Moscow Strengthen "Strategic Alliance" Against U.S./NATO ----- United States Security Strategy for Europe and NATO)

With the US on the path of Conquest, it is Imperative in the National Security interests of China and Russia to have the Presence of the US removed from their Sphere of Influence ....... the question is, as I asked earlier.... what Path to take.

Any Option that is Chosen, means an inevitable end to the US quest for the Status of Hyper Power.

........ The Peace Process.......

If the Diplomatic process is used, this could grant the UN the ability to become effective in their Role as "Peace Keepers" and Strengthen their ability to uphold their Resolutions and position as International Body of Law...... which could in all essence, be the creation of a World Governing Body.

There are many who claim that the UN has shown their Irrelevance and Inefficiencies, which will lead to their demise within the next 10 years, but this could easily not be the case...... This is just the belief that the UN is no longer Relevant to the USA, towards their quest towards Hyper Power Status.

If this were to happen, it would be very possible that the US could lose their position on the Security Council, which I see the US attempting to pull out of the UN if the UN tries to stop it's Quest........ This would obviously cause some havoc in the UN which could destroy the UN, but China, Russia, and the EU could easily make up for the loss of the US and it's Obligations towards the UN.

For the US to block the UN Peace Process and continue the Road to Hyper Power, would require the destruction of the UN, but in a show of Good Faith, the US will wait till the UN acts against them.

Back to the Peace process......

There's close to 200 Countries on this Planet, and in the "Coalition of the Willing" (there has never been a straight and definite number given) is made up of somewhere between 30-45 Countries, which leaves 140+ that don't seem to be "Willing" to assist America's War ( I use 140, since some countries are probably helping the US behind the scenes)

So, these 140 countries that are left, Pressure the US to stop their War and Quest for Hyper Power Status, the US can not survive in it's current state, if it's cut off from the world......... and the US falls like the Soviet Union... but the National Security Strategy will not allow for that...... for us, it's either World Domination or Total Destruction......"We will not tire, we will not falter, and we will not fail" - George Bush Jr.

Already, a few countries have started boycotting American Goods..... Germany, Russia, France...... what if this were to catch on?....... What would happen if the US was cut off from the rest of the world, outside of Pax Americana?

...... The American-Chinese "Vietnam".........

With the Peace Process, seemingly Failed, every possible scenario I could think of, Leads me to wonder what China would do, if they didn't want to Fight the US at first, but instead let them wear out their resources, fatigue their military, and strain their nation (with assistance from potential world wide sanctions from an attempted peace process)

This could cause the Chinese Military Industrial Complex a chance to catch up to the US technologically, as they could just sit back and support guerillas in Iraq, Iran, Afghanistan, Syria, N. Korea ........ which of course, is going to increase their Economy and their "Middle Eastern" Sphere of Influence

If this were to happen, "Terrorism" would increase a thousand fold, throughout the Middle East and the Coalition Countries, pulling the Coalition Countries into a long drawn out War.

During the drawn out war, inevitably the Arabic World would unite, as they will see the Coalition as Occupiers and not Liberators

This war, if it were to happen, it would most likely follow the Unrestricted Warfare's Words, as it has already done before.

 

 CHICOM BACKGROUND INFORMATION

Varity of Department of Defense Articles and Documents on US-China Relations, and perceived threats from China

 

300 short range missiles face Taiwan

DongFeng-31 Missile

China controls the Panama Canal

Chinese Military Power page

General Info on China

Secretary Rumsfeld Outlines Space Initiatives

Annual Report to the President and the Congress, from the Dept. of Defense

The United States Security Strategy for the East Asia - Pacific Region 1998

East Asia Strategy Report 1995

United States Security Strategy for Europe and NATO

A geostrategy for Eurasia by Zbigniew Brzezinski

CHINA - A Country Study (Library of Congress)

King Khan - Alternate Futures for 2025

Defense Issues: Volume 10, Number 109-- U.S. Strategy: Engage China, Not Contain It

State Department - China Page

Russia-China Deal Makes NASA Uneasy

United States Security Strategy for the Middle East - 1995

China expands ties "in all fields" with Iran, Lybia, Syria - Pakistan prepares to buy warships from Beijing

Pentagon warns of China threat - July 17, 2002 - CNN

PRC to quadruple nuke missiles aimed at US by 2015; China helped Pakistan develop nuclear weapons

Chinese military White Paper calls for an "Electronic Pearl Harbor"

Iran-Russia-China axis seeks to limit US power

New China-Iran Pact Enhances Military Cooperation; Chinese Navy Modernizes, US Pacific Fleet Cut 40 Percent

Chinese Military Prepares for War Using Mock US Military Base Built with Knowledge from US-China Military Exchanges

Taipei: PLA air superiority over Strait in 3 to 5 years; Former CIA director warns of Clinton "appeasement"

Beijing Threatens to Attack US Pacific Fleet, Launch Nuke Strikes on US Policy

Pentagon Assessment Warns of China-Dominated Asia in 2025

Beijing describes how to defeat U.S, in high-tech war; Russia-China military technology agreement detailed

China's "Western" Sphere of Influence

PLA Electromagnetic Pulse Bombs Can Destroy US Fleets; PLA Telecommunications Corporations Described

Pentagon Study: PRC Preparing for War vs US (DoD Report from defenselink.mil coming soon)

Chinese Defense Minister in Moscow Forges Anti-US Alliance

China's new ICBM carries decoys to defeat future U.S. missile defense

Defense Minister: PLA preparing for war with U.S

Lax Security Enabled China to Build Neutron Bomb with U.S. Data

China Receives Advanced Kilo-Class Submarine from Russia

China restructures military industries

Jiang Tells PLA of U.S. "Hegemonists" Threat

China plans long-range missile test in late July; PLA commissions "stealth" warship

Moscow Sells 72 Advanced Sukhoi-30 Fighter-Bombers to Beijing

China to Build New Communications Spy Base in Cuba

China sells WMD's to Iran and Pakistan

Pentagon: elite U.S. Special Forces seek to train Chinese commando

China readies for future U.S. fight (CNN - Tuesday, March 25, 2003 )

CHINA'S MILITARY STRATEGY TOWARD THE US

Budget boost for China's military

China's Military Strategy and Security in the Taiwan Strait

PRC Air Force

CHINA'S MILITARY POTENTIAL: Foreword and Summary

China: Military Imports From the United States and the European Union

China's military starts war games near Taiwan -- The Washington Times

Senator Kyl Remarks on China's Military Policy

Halt Encryption Software Sales To China's Military

US Dept. of State - IIP: The United States and China

CHINA: AIRPOWER DEVELOPMENT

Pravda.RU Beijing waiting for US-Iraq war?

Selected Military Capabilities of the People's Republic of China

China and the United States: From Hostility to Engagement

Is China a Military Threat? Video

MILITARY CAPABILITIES OF THE PEOPLE'S REPUBLIC OF CHINA

Military Laws of the People's Republic of China

IV. Military Exchanges Between China and the US

US Military Technology That China Is Believed to Have Acquired

China Condemns US Congressional Acts on Military Cooperation With Taiwan

China Reaffirms Military Ties with DPRK

Ten Obstacles to China Becoming A Strong Military Power

Venezuelan President Hugo Chavez arrived in China on Tuesday to hold talks with his counterpart Hu Jintao and sign a deal for combat aircraft in a visit likely to irk the United States. Chavez will meet with Hu Wednesday afternoon when the two leaders were to oversee the signing of a series of agreements, foreign ministry spokeswoman Jiang Yu told journalists. China was eager to improve relations with Venezuela, Jiang said, while dismissing US concerns that Chavez was seeking to use his growing military and energy ties with Beijing to annoy the United States. "China-Venezuela relations are normal state-to-state relations, (they) are not based on ideology, are not targeted against any third party and will not affect other countries' relations with Venezuela," Jiang said. "Some of you have asked about the US relations with Venezuela. We maintain that different countries should treat other countries equally and improve their relations, which will be good for all of Latin America." Before departing Venezuela on a five-country tour Sunday, the left-leaning Chavez said his nation hoped to purchase combat and training aircraft from China as part of a "strategic" partnership. Chavez, a staunch foe of the US government, confirmed that during his stay in Beijing he would purchase 24 K-8 aircraft. The planes, which can be used for both combat and training, could be part of Venezuela's air force by next year. The president also confirmed that while in Beijing he would arrange the construction of tanker vessels in Chinese shipyards, with the aim of installing a shipyard in Venezuela in the near future. These plans come in addition to the construction of a refinery in China to process oil from Venezuela, and plans to create a bi-national company to install a refinery in the remote oil-rich Orinoco region in eastern Venezuela. Caracas provides 500,000 barrels of oil per day to Beijing, a trade expected to grow to one million barrels a day by 2012. Chavez, who describes China as a strategic ally, will move forward with a six-billion-dollar bilateral investment fund. China will contribute four billion dollars to the fund, and Venezuela two billion dollars. Caracas will use the fund for "socialist productive projects." "Before we had to go to Washington to beg for money. Not now. Now we negotiate with the Chinese," said Chavez. Chavez announced that during his visit to Beijing the investment fund would benefit from an additional four billion dollars for further "development" in Venezuela. According to spokeswoman Jiang, Chavez will also attend a commodity trade fair with China's Vice Premier Li Keqiang on Wednesday morning. Venezuela was China's sixth largest trading partner in Latin America with 5.9 billion dollars in bilateral trade in 2007 and over 6.2 billion dollars in trade during the first seven months of this year, Jiang said. Chavez arrived to Beijing from Cuba as part of the ongoing trip that will also take him to Russia, France and Portugal, before he returns to Venezuela on September 27

CHICOM ALERT

Chinese President Hu Jintao began a Latin America tour with the launch of free trade talks with Costa Rica on Monday, just over a year after the country gave up six decades of ties with Taiwan. Hu's stopover was the highest-level visit by a Chinese official to Costa Rica and came as China expands its diplomacy and investment on the whole continent, with an eye on natural resources and developing markets for manufactured goods and even weapons. Hu arrived in San Jose Sunday, from a G20 summit in Washington, and headed Monday for his second visit to communist ally Cuba, before attending an Asia-Pacific summit in Peru on November 22. "The development of cooperation and friendship between China and Costa Rica meets the fundamental interests of our people and will also support different sectors of our societies," Hu said after announcing the free trade deal with President Oscar Arias. Talks were due to start January 19, 2009, in San Jose and end before Arias leaves office in May 2010. Hu and Arias, who visited China last year, oversaw the signing of 11 cooperation deals, from setting up a Chinese language institute to opening a line of 40 million dollars in credit from China. They agreed to set up a joint venture including China's National Petroleum Corporation to help modernize Costa Rica's state-owned oil refinery, with an investment of up to 1.2 billion dollars. Hu's symbolic visit made the point that Central America was no longer a Taiwanese stronghold, after Costa Rica became the first country in the region to establish diplomatic ties with China on June 1, 2007. Both Taiwan -- a democratic self-ruled island that Beijing considers part of its territory awaiting reunification -- and China have been accused of using so-called "dollar diplomacy" to get nations to ally with them. But Taiwan has lost allies in recent years. Part of China's incentives for Costa Rica's recognition came from its enormous foreign exchange reserves with an offer to buy 300 million dollars in bonds. It also donated more than 100 million dollars to build a new national stadium. Costa Rica is only the third Latin American country to negotiate a free trade deal with China, after Chile and Peru, which may conclude its accord during Hu's visit later this month. A major exporter of computer components, Costa Rica has dismissed fears of an invasion of Chinese products into the country as it seeks to diversify ties amid worldwide financial woes. Its main trade partner is the United States. Arias, a Nobel Peace Prize winner, said the two leaders had not touched on China's widely criticized human rights record. "I used the opportunity to speak of things that are important and urgent for Costa Rica," Arias said. Hu headed to Cuba late Monday, less than two weeks before the arrival of Russian President Dmitry Medvedev. China offered key support to former Cuban leader Fidel Castro when Cuba fell into dire economic straits after the 1991 breakup of the former Soviet Union, forging a divide with Russia.

A Chinese-born physicist Monday pleaded guilty before a US court to illegally exporting American military space know-how to China, US officials said. Naturalized US citizen Shu Quan-Sheng, admitted handing over to Beijing information on the design and development of a fueling system for space launch vehicles between 2003 and 2007, the Justice Department said. Shu, 68, pleaded guilty to violating the Arms Export Control Act by helping Chinese officials based at the space facility on southern Hainan island to develop manned space flight and future missions to the Moon. He also acknowledged he had sent them in December 2003 a specific military document detailing the design of liquid hydrogen tanks crucial to launching vehicles into space, the Justice Department said in a statement. Shu, who is the head of a high-tech company, AMAC International, based in Newport News, Virginia, with offices in Beijing, admitted a third charge of bribing Chinese officials to the tune of some 189,300 dollars. The bribes helped him to secure for an unidentified French company a four-million dollar contract for the development of a liquid hydrogen tank system, awarded to the French firm in January 2007. Beijing is developing a liquid-propelled heavy payload launch facility at Hainan which will eventually send spacecraft into orbit carrying the material needed to build space stations and stallites. Shu bribed three Chinese officials from Beijing's 101st Research Institute, which works at Hainan, along with other bodies including the People's Liberation Army armaments department, the Justice Department said. China sent its first man into space in 2003, followed by a two-man mission in 2005. The Shenzhou VII, China's third manned foray into space, blasted off from Jiuquan Satellite Launch Centre in northwest China in late September. One of the three astronauts on board, Zhai Zhigang, became the first Chinese astronaut to successfully complete a space walk, and the crew was feted with a hero's welcome on its return to Earth. Premier Wen Jiabao told the Chinese mission control's dozens of technicians the mission was "a victory for China's space and technological" programs. "Your historical feat will be remembered by the country and the people," he said. China is now planning to launch two more unmanned craft by 2010, as well as another manned spaceship with a crew of three to start work on a Chinese lab or space station. The charges against Shu arise out of a probe led by the Federal Bureau of Investigation with US trade and customs officials. Sentencing in Shu's case has been set for April 6, 2009. He faces a maximum of 10 years in prison and a million-dollar fine for each of the two violations of the Arms Control Act. He could also be sentenced to a further five years in prison for bribery.

A spy at the heart of Nato may have passed secrets on the US missile shield and cyber-defence to Russian Intelligence, it has emerged. Herman Simm, 61, an Estonian defence ministry official who was arrested in September, was responsible for handling all of his country's classified information at Nato, giving him access to every top-secret graded document from other alliance countries. He was recruited by the Russians in the late 1980s and has been charged in Estonia with supplying information to a foreign power. Several investigation teams from both the EU and Nato, under the supervision of a US officer, have flown to the Estonian capital Tallinn to assess the scope of what is being seen as the most serious case of espionage against Nato since the end of the Cold War. ?The longer they work on the case, the more obvious it becomes how big the impact of the suspected treachery really is,? according to Der Spiegel magazine. A German official described the Russian penetration of Nato as a "catastrophe". Comparisons are being drawn with the case of Aldrich Ames, the former head of the CIA counter-intelligence department who was in effect Russia's top agent in the US. "Simm became a proper agent for the Russian government in the mid-1990s," says the Estonian deputy Jaanus Rahumaegi who heads the country's parliamentary control commission for the security services. On the face of it, the Simm case resembles the old-fashioned Cold War spy story. He used a converted radio transmitter to set up meetings with his contact, apparently someone posing as a Spanish businessman. As in the 1950s and 1960s, it seems that the operation was a husband-and-wife team. His wife Heete ? who previously worked as a lawyer at the national police headquarters ? has also been detained on charges of being an accessory to treason. Mr Simm was ensnared because of blunders that have dogged modern espionage ever since the KGB first pitted itself against the West. First, he bought up several pieces of valuable land and houses including a farmhouse on the Baltic Sea and a grand white-painted villa outside Tallinn. Second, his contact officer got careless and tried to recruit a second agent ? who reported the incident to the security authorities. That is when the Estonian mole-hunters began to reconstruct the movements of the supposed Spaniard and followed the thread back to the agent inside Nato. But Mr Simm was not some relic from the days of Kim Philby or other notorious deep-cover agents. He was at the cutting edge of one of Nato?s most important new strategic missions: to defend the alliance against cyber-attack. Mr Simm headed government delegations in bilateral talks on protecting secret data flow. And he was an important player in devising EU and Nato information protection systems. Estonia ? described by NATO Secretary General Jaap de Hoop Scheffer as "Nato's most IT-savvy nation" ? conducts much of its government and commercial business online. People vote and pay their taxes online, government meetings involve almost no paperwork. As a result, when it angered Russia in 2007, by removing a Soviet war memorial, it became the target of hostile attacks on the internet. Estonia has been lobbying hard to put cyber-defence on the Nato agenda, and has set up a Cyber Defence centre in Tallinn which is supposed to help the Alliance as a whole. Now that project could be compromised. The other important question in the Simm case is whether he was operating alone. A senior Estonian police officer claimed asylum in Britain in the 1990s reportedly telling the authorities that he was trying to escape pressure from the Russian secret service to sell secrets. The Russians, it seems, were keen to buy as many place-men as they could: the prospect of Nato forces hard up against the northern Russian border was too alarming for the Kremlin. Moreover, Mr Simm was for many years in charge of issuing security clearance: he could have nodded through other Russian agents. Mr Simm is likely to be formally arraigned at the beginning of next year after the damage control teams from Nato have completed their work. If found guilty he could face between three and fifteen years in prison. Neither the Simms, nor their defence lawyer, have commented on the charges. Nato too has refused to say anything. But there is no doubting that the case is a serious embarrassment. And though Russia may have lost an agent ? "a gold card operative" according to one Estonian newspaper ? it has achieved a tactical victory by sewing suspicion between western Nato members and the new east and central European entrants.

China is stealing sensitive information from American computer networks and stepping up its online espionage, according to a US congressional panel. Beijing's investment in rocket technology is also accelerating the militarisation of outer space and lifting it into the "commanding heights" of modern warfare, the advisory group claims. The strident warning, which may have a chilling effect on relations between the two Pacific powers, comes in the annual report of the US-China economic and security review commission due today. A summary of the study, released in advance, alleges that networks and databases used by the US government and American defence contractors are regularly targeted by Chinese hackers. "China is stealing vast amounts of sensitive information from US computer networks," says Larry Wortzel, chairman of the commission set up by Congress in 2000 to investigate US-China issues. The commission, consisting of six Democrats and six Republicans, says in its unanimous report that China's military modernisation and its "impressive but disturbing" space and computer warfare capabilities "suggest China is intent on expanding its sphere of control even at the expense of its Asian neighbors and the United States." The commission recommends that the US upgrade its intelligence and homeland security systems protecting computer networks. It quotes the Chinese military strategist, Wang Huacheng, as describing US dependence on space assets and information technology as its "soft ribs". There are 250 hacker groups in China, the report says, including some whose members have been trained at Chinese military academies. "China is aggressively pursuing cyber warfare capabilities that may provide it with an asymmetric advantage against the United States," the commission says. "In a conflict situation, this advantage would reduce current US conventional military dominance ... in 2007 the 10 most prominent US defense contractors, including Raytheon, Lockheed Martin, Boeing, and Northrop Grumman, were victims of cyber espionage through penetrations of their unclassified networks." China's space programme is "steadily increasing the vulnerability of US assets", the report says. Technical improvements in satellite imagery enable China to locate US aircraft carrier battle groups more accurately, faster and from further away. The People's Liberation Army officer and author Cai Fengzhen is quoted as saying that the "area above ground, airspace and outer space are inseparable and integrated. They are the strategic commanding height of modern informationalised warfare". "If this becomes Chinese policy," the report says, "it could set the stage for conflict with the United States and other nations that expect the right of passage for their spacecraft." "China could use laser technology to blind temporarily a US reconnaissance satellite operating over international waters. This action could be viewed by many as purely defensive. However, China also could use its ASAT capability to destroy a US satellite operating over its territory." "China has significant anti-satellite capabilities. The capabilities go far beyond those demonstrated in the January 2007 'test' that destroyed an obsolete Chinese weather satellite. They include co-orbital direct attack weapons and directed energy weapons for dazzling or damaging satellites, both of which currently are under development." Relations between China and the United States are businesslike and have not been under severe strain recently. During the presidential election campaign, Barack Obama said: "China is rising, and it's not going away," adding that Beijing was "neither our enemy nor our friend; they're competitors". Allegations that Chinese hackers penetrate US defence computers have been made before, including reports of attacks on the Pentagon supposedly backed by China's army. US intelligence gave the assaults the codename Titan Rain. In Britain last year, Chinese hackers were said to have breached networks used by the foreign office, the House of Commons and Whitehall departments. China has said it is not trying to undermine other countries' interests and wants to maintain good relations with the US.

The uproar over claims that the People's Republic of China launched a series of network-based cyber attacks earlier this month against the U.K., France, Germany, and the U.S. has died down. But few expect China to back off efforts to gain the upper hand in the battle of bits and bytes. China's own stated military goals include improving the country's ability to wage information warfare. The cyber attacks against the U.S. stand out because security researchers have traced them back to the Chinese government. "Normally it is not possible to attribute the source of an attack, because source addresses can be spoofed," says Alan Paller, director of research at the SANS (SysAdmin, Audit, Network, Security) Institute in Bethesda, Md., which trains and certifies technology workers in cyber security. In China's case, though, analysts tracked a series of 2005 cyber assaults against U.S. computers--dubbed "Titan Rain"--to 20 computer workstations in China's Guangdong province, Paller says. "The precision of the attacks, the perfection of the methods and the 24-by-seven operations over two and a half years, and the number of workstations involved are simply not replicated in the amateur criminal community," he notes. "Amateur cyber criminals do a lot of other things right, but this is an order of magnitude more disciplined than anything I have seen out of the hacker or amateur criminal community." The strikes against the U.S. and its North American Treaty Organization (NATO) allies, as well as others against the Baltic nation of Estonia's information-technology infrastructure earlier this year, provide but a glimpse of the damage that could be inflicted should a full-scale cyber war erupt between countries. Cyber assaults are a particularly dangerous addition to any country's arsenal because of the growing reliance on networks and technology to control critical systems that run power plants and transportation systems. Cyber attacks on banks, stock markets and other financial institutions could likewise have a devastating effect on a nation's economy. In about 50 percent of the cases in which an attacker gains access to a system, it is because the software running on it was poorly designed, loaded or protected, Paller says. Cyber attacks can take many forms. One common type probes an organization's perimeter for a hole in a firewall or other network defenses. This can be accomplished by exploiting a piece of software that is improperly designed, configured or patched to protect against malicious software. Once an attacker gains control of that exploited software, he or she can search for information and leave behind hidden software that can be accessed at a later date. Although the theft of sensitive government data is a major worry, it is not necessarily the greatest one, Paller says, adding, "the bigger concern is that the attackers are planting back doors for future attacks." Other times, cyber attackers use social-engineering tactics that fool computer users into surrendering important information. So-called phishing attacks, in which computer users are sent e-mails requesting that they reply by sending sensitive information, such as bank account or credit card numbers, are a common scam. "They work because the e-mail appears to come from someone who is trusted," Paller says, "and asks them to do something that is reasonable." The recently publicized cyber strikes against Western countries are more about spying and intelligence-gathering than about taking down systems and destroying information. The attacks on Estonia began April 27 and were designed to shut down that technology-dependent country's infrastructure, interfering with citizens' ability to perform financial transactions or even make the most basic purchases of bread, milk or gas. Attackers?the identity of the culprit or culprits is still unknown, though the Russian government was at one point suspected?bombarded Web sites run by the Estonian government with superfluous Web traffic, up to 1,000 times the normal amount passing through the country's Web servers. The attackers used Russian blogs to successfully enlist Russian citizens in the assault, even instructing average computer users on how to attack Estonian Web sites. The attacks included the use of botnets, networks of otherwise benign computers that are broken into and controlled remotely by an attacker. The cyber attacks against Estonia resembled more of a cyber riot by Web users than a singular act of espionage. China's goals are more subtle but no less dangerous. Although the Chinese government has denied involvement in this latest round of attacks, government officials last year published a report entitled "China's National Defense in 2006" that states China is pursuing a three-step development strategy to modernize its national defense and armed forces that includes building "informationized armed forces" capable of winning "informationized wars" by 2050. The potential for information warfare was a key component of the U.S. Department of Defense's report to Congress earlier this year analyzing China's military capabilities. China views the acquisition and effective distribution of data as crucial to its ability to optimize "materials, energy and information to form a combined fighting force" and to apply "effective means to weaken the enemy side's information superiority and lower the operational efficiency of enemy information equipment," the report says. The report asserts that China's People's Liberation Army has established information warfare units to develop viruses to attack enemy computer systems and networks, as well as tactics and measures to protect friendly computer systems and networks. The report charges that China is already engaged in cyber theft and attack against the U.S. and other countries that it perceives as its enemies. "China continues a systematic effort to obtain from abroad through legal and illegal commercial transactions dual-use and military technologies," the report says. In fact, it notes, U.S. Immigration and Customs Enforcement (ICE) officials have rated China's "aggressive and wide-ranging espionage as the leading threat to U.S. technology." "In the United States, we're particularly vulnerable because a lot of our communication infrastructure is owned by the private sector," says Jody Westby, chief executive of security consulting firm Global Cyber Risk and chair of the American Bar Association's Privacy and Computer Crime Committee. "In China and Russia, their infrastructure is in the hands of the government, it's easier for them to coordinate and protect those assets." "For every breach you read about at least five more go unreported," says Jayson Street, the chief information security officer for Stratagem 1 Solutions, a provider of IT security services, and an information technology consultant to the FBI and U.S. Secret Service. "The new Cold War is between China and the Western world."

CHICOM SPYSHIPS BLOCK USA RESEARCH SHIP IN GULF OF TONKIN-2009

Following is a statement from the Chinese embassy in Washington in response to an incident involving Chinese ships and a U.S. naval vessel in the South China Sea on Sunday. The statement was carried by the website of Hong Kong-based Phoenix Television (news.ifeng.com). "In response to U.S. claims that a naval ship was harassed by the Chinese side, the concerned official in China's embassy to the United States stated: The U.S. navy vessel concerned has been consistently conducting illegal surveying in China's special economic zone. China believes this contravenes international laws of the sea and China's relevant laws. China has repeatedly used diplomatic channels to demand the U.S. side cease unlawful activities in China's special economic zone. China's law enforcement authorities have also sent vessels to carry out law enforcement activities. The U.S. claim about operating in high seas is out of step with the facts. This official stressed that China cannot accept the baseless U.S. accusations, that China demands the U.S. cease this kind of illegal surveying activity and do more things beneficial to the stable development of China-U.S. relations. This official also stated that the Chinese government will make a formal statement about this incident."

China said on Tuesday that a U.S. Navy ship involved in a confrontation with its fleet off the southern island of Hainan had violated international and Chinese laws. Washington had urged China to observe international maritime rules after the Pentagon said five Chinese ships, including a naval vessel, harassed the USNS Impeccable in international waters on Sunday. "The U.S. claims are gravely in contravention of the facts and confuse black and white and they are totally unacceptable to China," Chinese Foreign Ministry spokesman Ma Zhaoxu told a regular news briefing. But the confrontation was unlikely to do lasting damage to ties between two countries as they combat the global economic slump, a Chinese analyst in Beijing said. Global oil prices rose 3 percent on Monday and held above $47 a barrel on Tuesday, partly on jitters about tension between the world's top oil consumers. Denny Roy, a U.S.-based expert on Asia-Pacific security, said the confrontation did not appear accidental, and was rather China's way of sending a message to Washington that it wanted respect for its growing military reach in the region. "I don't think this happened spontaneously," said Roy, of the East-West Center in Honolulu, Hawaii, "No doubt it had the endorsement of central leaders in Beijing." The latest row suggests Beijing will take a tougher stance as its naval ambitions grow, said analyst Shi Yinhong. "The United States is present everywhere on the world's seas, but these kinds of incidents may grow as China's naval activities expand," Shi, an expert on regional security at Renmin University in Beijing, said. The Chinese vessels "shadowed and aggressively maneuvered in dangerously close proximity" to the USNS Impeccable, an unarmed ocean surveillance vessel, with one ship coming within 25 feet, a U.S. Defense Department statement said. Tropical Hainan, less than 100 km (60 miles) south of the mainland, hosts a Chinese naval base that houses ballistic missile submarines, according to independent analysts. An unnamed spokesman for the Chinese embassy in Washington earlier denied the Chinese ships had violated maritime rules and said U.S. ships had been conducting illegal surveying, the website of Hong Kong-based Phoenix Television (news.ifeng.com) reported. It said the incident happened 120 km (70 miles) south of the island. Ma said there were laws about scientific research in Chinese waters. The U.S. ship "violated the relevant international laws and Chinese laws and regulations," he said, urging the United States to halt such action. U.S. defense officials said the incident followed days of increasingly aggressive Chinese conduct in the area, including fly-bys by Chinese maritime surveillance planes. It comes just weeks after the two sides resumed military talks, postponed in November after a U.S. announcement of arms sales to Taiwan, a self-ruled island China claims as its own. And it echoes a stand-off in 2001 between U.S. and Chinese military forces after a U.S. spy plane made an emergency landing on Hainan after a collision with a Chinese fighter jet. China released 24 crew after a U.S. expression of regret. GROWING MILITARY BUDGET China's national parliament, now in annual session, is set to approve a military budget increase of 14.9 percent more than spending in 2008, bringing announced People's Liberation Army funds to 480.7 billion yuan ($70 billion). Many foreign experts believe its real budget is much higher. Some of that extra money may go to developing China's first aircraft carrier -- the trophy ship of an ambitious sea power -- senior naval officers have recently suggested. "Go and ask the Americans, ask their embassy," Vice Admiral Jin Mao, former Navy vice commander in chief, told Reuters on the sidelines of parliament when asked about the incident. "Ask their officials what their ship was doing in Chinese waters." The Impeccable is one of five ocean surveillance ships that serve with the U.S. 7th Fleet, based in Yokosuka, Japan. The ships use low-frequency sound to search for undersea threats including submarines, a U.S. military official said. A U.S. Defense Department spokesman said the Chinese vessels had surrounded the Impeccable, waving Chinese flags and telling the U.S. ship to leave. The Pentagon also described accounts of half a dozen other incidents dating back to March 4. Oil prices rose on news of the jostling on Monday and stayed high on Tuesday, although analysts said it was hard to see how the tension could threaten oil supplies or inflate prices. "I can see the geopolitical risk between two producing countries. But the U.S. and China are two major consumers. I don't know why oil prices would rise on that," said Tony Nunan, risk management manager at Tokyo-based Mitsubishi Corp. The confrontation coincides with two sensitive anniversaries in Tibet, making China especially sensitive to outside scrutiny. Analyst Shi said the seas off Hainan were important to China's projection of its influence with a modern naval fleet. "The change is in China's attitude. This reflects the hardening line in Chinese foreign policy and the importance we attach to the strategic value of the South China Sea."

Chinese ships surrounded and harassed a Navy mapping ship in international waters off China, at one point coming within 25 feet of the American boat and strewing debris in its path, the Defense Department said Monday. The Obama administration said it would continue naval operations in the South China Sea, most of which China considers its territory, and protested to China about what it called reckless behavior that endangered lives. At one point during the incident Sunday the unarmed USNS Impeccable turned fire hoses on an approaching Chinese ship in self defense, the Pentagon said. At another point a Chinese ship played chicken with the Americans, stopping dead in front of the Impeccable as it tried to sail away, forcing the civilian mariners to slam on the brakes. "We view these as unprofessional maneuvers" and a violation of international law, Pentagon spokesman Bryan Whitman said. The incident had overtones of spycraft, but the U.S. ship is not, strictly speaking, a spy ship. It maps the ocean floor with sonar, compiling information the Navy can use to steer its own submarines or track those of other nations. The Impeccable was specifically designed to augment the Navy's anti-submarine capability, although military spokesmen would not be specific about the ship's duties when it was surrounded. A Pentagon accounting of the confrontation documents the actions of the startled and cornered American crew as a Chinese vessel closed to within 25 feet. Pictures released by the Navy give a sense of the surreal scene: The Chinese mariners had stripped to their underwear following the blast by the Impeccable's fire hoses. Whitman called that "immature," and said the confrontation was the most aggressive of a series of incidents recently in the same area. Impeccable's crew radioed to tell the Chinese ships that it was leaving the area and requested a safe path to navigate, the Pentagon said. But two of the Chinese ships stopped directly ahead of the Impeccable, forcing it to an emergency stop, the U.S. account said. The Chinese also dropped pieces of wood in the water in Impeccable's path. The incident came just a week after China and the U.S. resumed military-to-military consultations following a five-month suspension over U.S. arms sales to Taiwan. And it came as Chinese Foreign Minister Yang Jiechi was due in Washington to meet with U.S. officials. "We're going to continue to operate in those international waters, and we expect the Chinese to observe international law around that," White House press secretary Robert Gibbs said. A protest was lodged with the Chinese government by the U.S. Embassy in Beijing over the weekend and was repeated to a Chinese defense attache at a Pentagon meeting Monday. In Beijing, Chinese officials did not immediately respond to voicemail messages and e-mail regarding the U.S. allegations. Pentagon officials said the incident followed "increasingly aggressive" acts by Chinese ships against the Impeccable on Wednesday and Saturday and against the USNS Victorious surveillance ship on Thursday while it operated in the Yellow Sea. The Chinese ships included a Chinese Navy intelligence collection ship, a Bureau of Maritime Fisheries Patrol Vessel, a State Oceanographic Administration patrol vessel and two small Chinese-flagged trawlers, officials said. China views almost the entirety of the South China Sea as its territory. China's claims to small islets in the region have put it at odds with five governments - the Philippines, Vietnam, Malaysia, Brunei and Taiwan. Pentagon officials said the close encounter followed these other incidents last week: _On Wednesday, a Chinese Bureau of Fisheries Patrol vessel used a high-intensity spotlight to illuminate the Victorious, an ocean surveillance ship, as it operated in the Yellow Sea, about 125 nautical miles from China's coast, the Pentagon said. The next day, a Chinese Y-12 maritime surveillance aircraft conducted 12 fly-bys of Victorious at an altitude of about 400 feet and a range of 500 yards. _On Thursday, a Chinese frigate approached USNS Impeccable without warning and crossed its bow at a range of approximately 100 yards, the Pentagon said. This was followed less than two hours later by a Chinese Y-12 aircraft conducting 11 fly-bys of Impeccable at an altitude of 600 feet and a range from 100-300 feet. _On Saturday, a Chinese intelligence collection ship challenged Impeccable over bridge-to-bridge radio, calling her operations illegal and directing Impeccable to leave the area or "suffer the consequences." Sunday's incident near Hainan Island is reminiscent of a much more dramatic foreign policy crisis with China that played out in the same area. The forced landing of a U.S. spy plane and China's seizure of the crew in April 2001 came just four months into President George W. Bush's tenure.

Dalai Lama blasts 'brutal crackdown' in Tibet DHARMSALA, India – Chinese rule in Tibet has created a "hell on earth" that has caused the deaths of hundreds of thousands of Tibetans, the Dalai Lama said Tuesday in a speech to mark the 50th anniversary of the failed uprising that sent him into exile. Speaking to thousands of supporters, the Tibetan spiritual leader said Chinese martial law, and hard-line policies such as the Cultural Revolution, had devastated the Himalayan region. "These thrust Tibetans into such depths of suffering and hardship that they literally experienced hell on earth," he said in this Indian hill town, where he and the self-proclaimed government-in-exile have been based since shortly after fleeing their homeland. "The immediate result of these campaigns was the deaths of hundreds of thousands of Tibetans." Tibetan culture and identity are "nearing extinction," he told about 2,000 people, including Buddhist monks, Tibetan schoolchildren and a handful of foreign supporters. The group gathered in a courtyard that separates the Dalai Lama's home from the town's main temple, and monks blowing enormous conch shells and long brass horns heralded his arrival. "Even today, Tibetans in Tibet live in constant fear and the Chinese authorities remain constantly suspicious of them," the Dalai Lama said, blasting the "brutal crackdown" in the region since protests last year turned violent. While his comments were unusually strong for a man known for his deeply pacifist beliefs, he also urged that any change come peacefully and reiterated his support for the "Middle Way," which calls for significant Tibetan autonomy under Chinese rule. "I have no doubt that the justice of Tibetan cause will prevail if we continue to tread a path of truth and nonviolence," he said. After his speech, thousands of young Tibetans took to the streets of Dharmsala chanting, "China Out!" and "Tibet belongs to Tibetans!" About 1,000 more protesters marched peacefully through New Delhi in support of the Tibetans, many chanting "Shame on China!" Still more protested in Seoul and Canberra, the Australian capital, where they scuffled with police outside the Chinese embassy. Four of about 300 protesters were arrested there. While Beijing claims Tibet has been part of Chinese territory for centuries, Tibet was a deeply isolated theocracy until 1951, when Chinese troops invaded Lhasa, the regional capital. Tuesday's anniversary marked March 10, 1959 riots inside Tibet against Chinese rule that led to a crackdown and, later that month, the Dalai Lama's dramatic flight across the Himalayas and into exile. Last year, a peaceful commemoration of the 1959 uprising by monks in Lhasa erupted into anti-Chinese rioting four days later and spread to surrounding provinces — the most sustained and violent demonstrations by Tibetans in decades. This year, China has largely sealed off Tibet to the outside world. Recent visitors to Lhasa have described armed police posted on rooftops. Local governments in Tibetan areas have ordered foreign tourists out, and foreign journalists have been detained and told to leave. Internet and text-messaging services, which helped spread word of last year's protests, have been unplugged in parts of the region. Following the protests, China has stepped up its campaign to vilify the Dalai Lama, accusing him of leading a campaign to split the region from the rest of the country. The Dalai Lama insists, though, that he does not want Tibetan independence, saying he is only seeking greater autonomy for the region to protect its unique Buddhist culture.

Seeking justice, Chinese land in secret jails March 9, 2009 BEIJING: They are often tucked away in the rough-and-tumble sections of the city's south side, hidden beneath dingy hotels and guarded by men in dark coats. Known as "black houses," they are unofficial jails for the pesky hordes of petitioners who flock to the capital seeking justice. This month, Wang Shixiang, a 48-year-old businessman from Heilongjong Province, came to Beijing to agitate for the prosecution of corrupt policemen. Instead, he was seized and confined to a dank room underneath the Juyuan Hotel with 40 other abducted petitioners. During his two days in captivity, Wang said, he was beaten and deprived of food, and then bundled onto an overnight train. Guards who were paid with government money, he said, made sure he arrived at his front door. As Beijing hosts 10 days of political pageantry known as the National People's Congress, tens of thousands of desperate citizens are trying to seek redress by lodging formal complaints at petition offices. A few, when hope is lost, go to extremes, as a couple from the Xinjiang region did last week: they set their car afire on the city's best-known shopping street, injuring themselves critically. In his annual report to the legislature on Thursday, Prime Minister Wen Jiabao said China should use its petition system to head off social unrest in the face of a worsening economy. "We should improve the mechanism to resolve social conflicts, and guide the public to express their requests and interests through legal channels," he said. According to the state media, 10 million petitions have been filed in the last five years on complaints as diverse as illegal land seizures and unpaid wages. The numbers would be far higher but for the black houses, also called black jails, the newest weapon local officials use to prevent these aggrieved citizens from embarrassing them in front of central government superiors. Officially, these jails do not exist. In China's authoritarian state, senior officials tally petitions to get a rough sense of social order around the country. A successfully filed petition — however illusory the prospect of justice — is considered a black mark on the bureaucratic record of the local officials accused of wrongdoing. So the game, sometimes deadly, is to prevent a filing. The cat-and-mouse contest has created a sizable underground economy that enriches the interceptors, the police and those who run the city's ad hoc detention centers. Human rights activists and petitioners say plainclothes security officers and hired thugs grab the aggrieved off the streets and hide them in a growing constellation of unmarked detention centers. There, the activists say, the aggrieved will be insulted, roughed up and then escorted back to their home provinces. Some are held for weeks and months without charge, activists say, and in a few cases, the beatings are fatal. The police in Beijing have done little to prevent such abuses. They are regularly accused of turning a blind eye or even helping local thugs round up petitioners. That raises suspicions that the central government is not especially upset about efforts to undermine the integrity of the petition system. The petition system provides people with the semblance of an appeals process that top leaders hope will keep them off the streets. But for officials at all levels, it seems, the appearance of order — measured by reducing the number of petitions — is an acceptable approximation of actual order. Rights advocates say that black houses have sprouted in recent years partly because top leaders have put more pressure on local leaders to reduce the number of petitioners reaching Beijing. Two of the largest holding pens, Majialou and Jiujingzhuang, can handle thousands of detainees who are funneled to the smaller detention centers, where cellphones and identification cards are confiscated. China's petition system originated in the Ming Dynasty, from the 14th to the 17th centuries AD, when commoners wronged by local officials sought the intervention of the imperial court. Since the Communist Party came to power, the right to petition the central government has been enshrined in the Constitution. With few legal channels available, petitioners come to Beijing, saying it is their only hope for resolving grievances. "I know my life is in danger, but I just can't swallow this injustice," said Wang, explaining why he has made 10 trips to Beijing in recent years, each ending in detention. Chinese Human Rights Defenders, an organization in Hong Kong that recently interviewed more than 3,000 petitioners, has documented what it says is the lucrative business of abduction and repatriation. "When you're taken to a black jail, no one knows where you are and you are totally vulnerable," said Wang Songlian, a researcher. The authorities insist that there is no such system. During testimony to the United Nations Rights Council last month, Song Hansong, a representative of China's Supreme People's Procurate, said, "There are no such things as black jails in our country." But over the past year, rights workers have been gathering evidence of what they say is an underground network of jails, first established in 2005, that was aggressively expanded in the months leading up the Olympics. Alarmed by their unchecked spread, a group of lawyers has taken to organizing citizen raids that seek to free detainees through a show of force. Although they say instances of extralegal detention dropped after the Summer Games, one of the lawyers, Xu Zhiyou, said they had risen sharply in recent days, coinciding with the start of the annual legislative session. He and other advocates say that armies of paid retrievers, euphemistically known as "liberators," have been roaming the city in pursuit of as many as 40,000 petitioners, many of whom swarmed the entrances to the city's main petition centers during much of the week. By Friday, however, the tough-looking throngs of retrievers outside the State Council and supreme court petition offices appeared to outnumber would-be petitioners, whose worn shoes and sacks of paperwork make them easy prey. Wu Lijuan, a seasoned petitioner from Hubei Province, said she helped coordinate more than 10,000 former bank employees who came to Beijing from across the nation last week. She said most of the petitioners, middle-aged women seeking greater compensation for their dismissals, were rounded up outside the main petition office and loaded onto buses. Those who escape the dragnets are often betrayed by employees at the very offices designed to process petitions. Sun Lixiu, 51, a farmer from Sichuan Province, said a clerk at the State Council petition office asked for her ID card, handed back an application form and then tipped off retrievers, who took her to a black jail. "No one can be trusted," said Sun, who is seeking to free her husband from the local police station, where he has been held since July, after accusing town officials of embezzlement. The financial rewards for apprehending petitioners can be irresistible. According to a directive obtained by Chinese Human Rights Defenders, the police in one Hunan Province county are authorized to spend nearly $300 for each successfully detained petitioner. The money ends up in the pockets of the retrievers, corrupt petition clerks, and those who run the black jails. The organization said that officers in one Beijing police precinct demanded as much as $140 for each petitioner they turned over to provincial interceptors. The story of Wu Bowen, 61, a retired shop clerk from Zhejiang Province, is typical. On Feb. 25 she came to the capital to file a petition seeking more compensation for the demolition of her home. The next day, as she sat on the curb, a policeman told her that as an out-of-towner, she had to register at the precinct. Once there, however, the officer phoned the Zhejiang Province liaison office in Beijing. A short time later, a clutch of retrievers escorted her to a hotel not far from the city's main tourist attractions. After nine days of confinement, Wu stole back her cellphone and revealed the hotel's address to her son, who called the offices of The New York Times. When three men reluctantly opened the door to Room 208 at the Zhanle Hotel, Wu cried out for help. Confounded by the presence of foreign journalists, the men seemed unable to prevent Wu from escaping, although they begged her to stay, saying she could not leave until a local county official arrived with their reward money. Out on the street, Wu was shaken but undeterred. Asked if she wanted to be taken to the train station so she could return home, she shook her head. "No," she said. "I'm going to stay in Beijing until I get justice."

CHICOMS USE NORTH KOREA AND BURMA TO FIGHT USA

March 9 2009 North Korea on Monday cut its military hotline to Seoul and put its million-man army at battle stations, ratcheting up tensions as South Korean and US troops began war games that Pyongyang warned could spark open conflict. UN forces last week tried to counter North Korean claims that the exercises were a smokescreen for an invasion by promising to keep the hotline open, giving Pyongyang advance warning of anything that could cause a misunderstanding. North Korea’s official KCNA news agency quoted an army spokesman as saying: “It is nonsensical to maintain the normal channels of communication when the South Korean puppets are in a frenzy about these military exercises, levelling their guns at fellow countrymen in league with foreign forces.” Severing military communications had an immediate effect on workers trying to reach South Korea’s investment zone at Kaesong in North Korea. Some 726 South Koreans could not reach their factories in Kaesong on Monday because all crossings require clearance on the military hotline. The communist state also warned that any attempt to shoot down a rocket it plans to launch soon would be an act of war. Pyongyang argues it is simply planning to blast a satellite into space whereas spies insist this is a ruse for testing the Taepodong-2 long-range missile, which could hit Alaska. South Korea said it deeply regretted North Korea’s moves and sought the immediate resumption of traffic to and from Kaesong. “As we have mentioned several times, the US-South Korean exercises are defensive in nature and are part of annual training,” said Kim Ho-nyoun, spokesman for the unification ministry. Even by its own standards, Pyongyang’s rhetoric has been exceptionally bellicose during recent months. The reclusive state has torn up its non-aggression pacts with the South, vowed not to recognise a tense maritime border and last week said it could not guarantee the safety of South Korean passenger aircraft in its airspace. Kim Jong-il, North Korea’s dictator, is furious that Lee Myung-bak, South Korea’s conservative president, has not courted him in the manner of previous leftwing administrations and has made vital aid to the North contingent on progress in talks about dismantling Pyongyang’s atomic work. Although it tested its first nuclear device in 2006, most military experts do not believe Pyongyang has mastered the technology required to fit a warhead on a missile. On the home front, Kim Jong-il was, as expected, returned to his country’s most powerful body, the Supreme People’s Assembly, with a vote of 100 per cent in Sunday’s elections. Although that result was a foregone conclusion, analysts are eager to see whether one of his sons has also gained a seat. That would be the clearest sign yet that Mr Kim is grooming a successor, following intelligence reports he suffered a stroke last year.

OBAMA SIDES WITH COMMUNISTS-AND TURNS HIS BACK ON THE HMONG

President Barack Obama has removed Laos and Cambodia from a US blacklist, opening the way for loans to companies doing business in countries formerly seen as US adversaries.In brief declarations on Friday, Obama said Cambodia and Laos had each "ceased to be a Marxist-Leninist country," a designation that prevents financial support from the US Export-Import Bank.The move, which must still go through formalities, means US businesses would be eligible for the US government-backed loans and credit guarantees they can receive when operating in most countries."Given the commitment of Cambodia and Laos to open markets, the president has determined that this designation is no longer applicable," an Obama administration official said.But the decision to boost trade ties with Laos came under criticism from campaigners for the Hmong minority, a hill people who supported US forces during the Vietnam War and who claim they suffered retaliatory abuse.A recent report by Paris-based Medicins Sans Frontieres, or Doctors Without Borders, said Hmong who have fled since 2005 to Thailand have said they suffered killings, gang-rape and malnutrition at the hands of Laotian forces.Obama's declaration "is completely shocking and outrageous," said Philip Smith, executive director of the Centre for Public Policy Analysis, which promotes Hmong rights."This is a one-party regime which is closely allied with Burma and North Korea," he said. "This will embolden the Laos government to continue to slaughter and massacre civilians."Many Hmong are still in hiding in Laos. Another 250,000 Hmong have resettled in the United States.The United States established normal trade relations with Laos in 2004, part of an effort under then president George W. Bush to reconcile after years of friction.US relations with Cambodia have been marred by US concerns over accounting for Khmer Rouge war crimes along with corruption. Washington lifted all remaining restrictions on assistance to Cambodia in 2007.The United States still forbids US-backed loans to businesses to operate in six countries - Cuba, Iran, Burma, North Korea, Sudan and Syria.

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Laos: Summary Executions of Hmong Rebels

 

Laos, Vietnam Increase Summary Executions of Hmong Rebels and Civilians: Attacks, Atrocities & Disappearances Continue

 

WASHINGTON, March 8 /U.S. Newswire/ -- The following statement was jointly released today by the Center for Public Policy Analysis, the Lao Veterans of America Inc., the Laos and Hmong Emergency Crisis Task Force and the United Lao-Hmong Congress for Democracy Inc.:

Urgent satellite telephone calls and other communications from ethnic Hmong and Laotian commanders and village headmen trapped in closed military zones and opposition pockets inside Laos have provided grim details of an unfolding human catastrophe involving continued attacks and atrocities by Lao and Vietnamese military and security forces against rebel and civilian minority groups who have recently surrendered or were captured.

"Reliable information that we are receiving on a daily basis from inside Laos continues to detail the horrific plight of hundreds of captured and surrendering Hmong and Laotian civilians and rebels who are being summarily executed, brutally tortured, raped, or are simply disappearing at the hands of Pathet Lao and Vietnamese military and security forces as a result of a recent series of ongoing military offensives directed in at least three provinces in the country," stated Philip Smith, executive director for the Washington, D.C.-based Center for Public Policy Analysis (CPPA). Smith also currently serves as the Washington, D.C., director for the Lao Veterans of America Inc. (LVA), the nation's largest Hmong and Laotian veterans organization. Some of the recent Laotian and Hmong victims have relatives in the United States.

Dr. Jane Hamilton-Merritt -- a Lao and Hmong scholar and author of the highly acclaimed book Tragic Mountains: The Hmong, the Americans and the Secret Wars for Laos -- upon reviewing many of the recent reports and information from inside Laos has indicated that they are consistent with her research and findings regarding this matter and the recent history of military and security force operations in these regions of Laos against the Laotian and Hmong people.

"Reports that Hmong and Laotians who have surrendered to the Lao government in recent days are being treated humanely is clearly a gross distortion since hundreds have been starved to death, shot, tortured or have disappeared after capture or surrender," continued Smith. "Additionally, contrary to official reports, a whole lot more than just propaganda leaflets were dropped on the heads of Laotian and Hmong civilian and rebel opposition groups by the Lao and Vietnamese military to get them to surrender in recent days, these included relentless heavy artillery barrages and repeated strafing by helicopter gunships, plus the military has choked off food and medical supplies to the people for months," stated Smith.

Laotian and Hmong commanders reporting details of the new attacks and atrocities include: Yang Toua Thao, Moua Toua Ter, Chong Va Thao, Chong Vang Her, Cher Tong Thao and many others. Large scale military operations and attacks continued in three major areas especially in the vicinity of Vang Vieng and Route 13 in Vientiane Province, Saysamboune Special Military Zone and Xieng Khouang Province. These, and other areas, are also the focus of a government-sponsored campaign of mass starvation against unpacified civilians and rebel-held areas, especially against minority Hmong and Laotians.

The Geneva-based United Nations Committee on Racial Discrimination and Amnesty International issued reports in the late summer and fall of 2003 detailing the Lao regimes use of military attacks and starvation as a weapon of war against the Hmong and Laotian people. In October of 2003, Rep. Dan Burton (R-Ind.), Rep. Mark Green (R-Wis.), Rep. Patrick Kennedy (D-R.I.) and a bipartisan group of members of the U.S. House of Representatives introduced H. Res. 402, to urge the Lao regime to address address these issues, adopt political reforms and allow election, human rights, and religious freedom monitors into the country.

"Commander Yang Toua Thao, operating along Route 13 in the Vang Vieng area, has reported by satellite phone that his son and many others were recently captured -- and that Hmong civilians and rebels have suffered heavy artillery barrages as well as combined air and infantry ground attacks by Pathet Lao and Vietnamese military forces; many in his group have died of starvation in recent weeks and the daily death toll, which includes many unarmed civilians from outlying jungle and mountain areas, continues to mount," continued Smith. "Every effort should be made to intervene in Laos in an emergency humanitarian fashion, in the closed military zones, as recommended by Amnesty International, the United Nations Commission on Racial Discrimination and the U.S. Congress (H.Res. 402); The international community should seek to stop the killing of Hmong civilians and rebels and provided immediate access for them to the International Red Cross, United Nations and NGO humanitarian aid groups," Smith concluded.

Some of the surviving widows of Hmong males who were summarily executed in the last several days in Laos -- after capture or surrender -- include: Mrs. Neng Chue Vang (husband summarily executed); Mrs. Cher Cha Lee (husband summarily executed); Mrs. Fai Chia Lee (husband summarily executed); Mrs. Nhia Houa Lee (husband summarily executed); Mrs. Mian (husband summarily executed); Mrs. Cha Vang (husband summarily executed); Mrs. Ly Foung Vang (husband summarily executed); Mrs. Bee Xiong (husband summarily executed); Mrs. Chong Seng Thao (husband summarily executed); Mrs. Sai Xue Lee (husband summarily executed); Mrs. Xia Lee (husband summarily executed); Mrs. Va Fong Vue (husband summarily executed); Mrs. Cher Thao (husband summarily executed); and, Mrs. Neng Yee Yang (husband summarily executed).

Some of the Hmong civilians who were recently encircled and starved to death by Pathet Lao security forces implementing their mass starvation campaign in the Saysamboun Special Zone and the Vang Vieng area of Vientiane Province include (name, sex, age of victims): Wa Xia Lo, m., age 60 yrs. (death by starvation); Chee Yang, f., 59 yrs. (death by starvation); Chong Moua Lo, m, 62 yrs. (death by starvation); Teng Yang, m, 49 yrs. (death by starvation); Moua Yang, m. 58 yrs. (death by starvation); Tong Yer Yang, m. 62 yrs. (death by starvation); Thai Yang, m, 64 yrs. (death by starvation); Yia Tho Yang, m. 65 yrs. (death by starvation); Chue Yang, m. 60 yrs. (death by starvation); Houa Yee Her, m. 64 yrs. (death by starvation); Lu Yang, m. 60 yrs. (death by starvation); Mai Moua Yang, f. 62 yrs. (death by starvation); Youa Her, f. 59 yrs. (death by starvation); Chou Vue, f. 65 yrs. (death by starvation); Youa Her, f. 68 yrs. (death by starvation); Me Vue, f. 61 yrs. (death by starvation); Nao Her, f. 62 yrs.

Some of the Hmong civilian and rebel husbands who were captured leaving the wives and families alone in the jungle include: Mr. Pa Hue Thao (captured); Mr. Wa Meng Thao (captured); Mr. Meng Thao (captured); Mr. Chai Thao (captured); Mr. Wa Tou Thao (captured); Mr. Boun Sy (captured); and, Mr. Viang (captured).

Some of the Hmong wives and children who were captured, leaving husbands alone in the jungle include:. Mrs. Za Dang Vue (captured); Mrs. Xai Doua Vue (captured); Mrs. Tong Yia Xiong (captured); Mrs. Chue Kue Yang (captured); Mrs. Neng Chue Vang (captured); Mrs. Cher Cha Lee (captured); Mrs. Fai Chia Lee (captured); Mrs. Nhia Houa Lee (captured); Mrs. Mian (captured); Mrs. Cha Vang (captured); Mrs. Ly Foung Vang (captured); Mrs. Bee Xiong (captured); Mrs. Chong Seng Thao (captured); Mrs. Sai Xue Lee (captured); Mrs. Xia Lee (captured); Mrs. Va Fong Vue (captured); Mrs. Cher Thao (captured); and, Mrs. Neng Yee Yang (captured).

Further details about the recent killing, starvation deaths and brutalities inflicted upon hundreds more captured and surrendering Hmong and Laotian civilians and rebels by Pathet Lao and Vietnamese forces are known and available. The information contained in this release is only a partial listing of the victims of the recent and ongoing campaign of state-sponsored and institutional violence in Laos directed at freedom-loving Laotian and Hmong living in unpacified areas and closed military zones.


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north korea-burma nukes connection

A North Korean ship that the United States is shadowing is likely headed for Myanmar, South Korean television reported on Sunday.YTN channel quoted a South Korean intelligence source as saying the final destination of the Kang Nam looks to be Myanmar, after leaving a North Korean port on Wednesday.North Korea has raised tensions in the region in the past months by test-firing missiles, restarting a plant to produce arms-grade plutonium and holding a May 25 nuclear test, which put it closer to having a working nuclear bomb.Analysts say the North's moves are partly aimed at building internal support for its leader, who is believed to have suffered a stroke last year and appears to be laying the foundation for his youngest son to eventually take over the impoverished nation.A Japanese newspaper said that Kim's third son, Kim Jong-un, has assumed the post of acting defence chief, cementing his position as the successor to his father.U.S. officials have declined to say what the North Korean ship might be carrying but said it was "a subject of interest". North Korea has five similar ships used for weapons trade.Fox News quoted a senior U.S. military source as saying the ship appeared to be heading toward Singapore and that the navy destroyer USS John McCain was positioning itself in case it gets orders to intercept, according to a story on its website. Singapore, a U.S. ally, said it would act "appropriately" if the vessel heads to its port with a cargo of weapons. Singapore has the world's busiest shipping port and is also the world's top ship refuelling hub.The Kang Nam is the first North Korean ship to be monitored under the new sanctions, adopted this month in response to Pyongyang's May nuclear test. The resolution authorised U.N. member states to inspect North Korean sea, air and land cargo.Japan's Mainichi newspaper, citing unidentified sources close to North Korean leadership, said on Saturday the Swiss-educated Kim Jong-un has been working as acting chairman of North Korea's National Defence Commission, supporting his father, who is commission chairman."If something happens to (Kim Jong-il, Jong-un) looks set to move up to the post as chairman," the paper quoted one of the sources as saying.

 

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