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China faces tough year, Wen rejects pressure on yuan

China warns Google not to stop filtering web searches
Beijing (AFP) March 12, 2010 - China on Friday warned Google it would face "consequences" if it stopped filtering its search results, after the firm threatened to leave the country over cyberattacks and web censorship. The comments from the minister of industry and information technology, Li Yizhong, came after the US Internet giant said it was prepared to leave the world's largest online market if Beijing continues to insist on its censoring its web searches. "We support (Google) to expand its business and market share in China," Li told reporters at a briefing on the sidelines of the annual session of the National People's Congress, the country's parliament. "But if (it)... violates Chinese laws, it would be unfriendly and irresponsible and (the company) will definitely be responsible for the consequences," he said.

Beijing tightly controls online content in a vast system of censorship often called the "Great Firewall of China", removing information it deems harmful -- including pornography and violence, but also politically sensitive material. Google threatened in January to abandon its Chinese-language search engine and perhaps leave China altogether over what it said were cyberattacks aimed at its source code and at the Gmail accounts of Chinese human rights activists. The company has since continued to filter results on Google.cn and posted ads for dozens of positions in China, which has 384 million web users. Google has said it was currently in talks with the Chinese government on its future in the nation. "Google is firm in its decision that it will stop censoring our search results for China," Google vice president and deputy general counsel Nicole Wong told the US House of Representatives Foreign Affairs Committee this week.

"If the option is that we'll shutter our .cn operation and leave the country, we are prepared to do that," she said at a hearing on the relationship between Internet technology and aiding democratic activists around the world. The company has not given a time frame for ending its filtering. Li, the Chinese industry minister, said Google's withdrawal would not generate much of an impact on the country's Internet market. "If it decides not to withdraw and stay in China, we will welcome it and it will benefit China's Internet development," he said. "If it decides to leave... China's Internet market will continue to develop fast and will not be impacted too much."

Taiwan cabinet OKs investment by Chinese financial firms
Taipei (AFP) March 12, 2010 - Taiwan's cabinet has approved a proposal to let Chinese financial institutions invest in their Taiwanese peers and set up branches on the island, an official said Friday. The Financial Supervisory Commission, the island's top financial regulator, is expected to brief parliament before the new measures can take effect, an official at the said commission without elaborating. The move follows a financial memorandum of understanding signed between Taiwan and China last year aimed at paving the way for closer cooperation in banking, insurance and securities. The United Daily News said the measures will be effective as soon as next week although the two sides will decide how many mainland banks will be able to invest on the island during upcoming talks on a planned major trade pact. About five banks, two brokerage firms and five insurance companies from the mainland are likely to be qualified for investing in Taiwan, the report said. Taiwan hopes to sign the pact, known as the Economic Cooperation Framework Agreement, with China in May or June to help boost economic growth and employment. The first round of negotiations on the pact took place in January.
by Staff Writers
Beijing (AFP) March 14, 2010
China faces a difficult year as it works to maintain economic growth and spur development, but will not be bullied into changing its exchange rate policy, Premier Wen Jiabao said Sunday.

In a wide-ranging press conference at the end of China's annual session of parliament, Wen said Beijing was not ready to withdraw stimulus measures put in place in late 2008 to pull the world's third-largest economy out of crisis.

He also warned Beijing would not bow to foreign pressure to boost the value of its currency, nor allow the United States to push it too far on the thorny issues of Taiwan and Tibet.

"This year is going to be the most complicated year for the economy," Wen told hundreds of reporters gathered at the Great Hall of the People for his only formal press conference of the year.

"We will maintain the continuity and stability of our macroeconomic policies," he said, adding that as circumstances changed, Beijing would make its policies "more flexible".

The Communist government launched a 586-billion-dollar stimulus package in late 2008 to boost domestic demand as a way to make up for falling exports, which plummeted when US and European markets tumbled into recession.

Beijing has since returned to double-digit growth -- a blistering 10.7 percent in the fourth quarter of 2009 -- prompting fears of economic overheating and asset bubbles that could lead to a bust.

Inflation rose for the fourth straight month in February while new lending slowed sharply, official data showed last week, leading analysts to predict Beijing could wait a bit longer before implementing tough tightening measures.

Wen said China's focus remained on consolidating its economic recovery, adding that "the main global economic problems have not completely disappeared."

China's trade partners have repeatedly called for Beijing to allow the yuan to appreciate, saying it is kept artificially low to boost exports.

President Barack Obama last week called on China to adopt a "market-oriented" exchange rate policy, which he said would make an "essential contribution" to rebalancing the world economy after the crisis.

But Wen rejected those calls, saying the currency's value was not to blame for foreign trade deficits.

"We are opposed to the practice of engaging in mutual finger-pointing among countries or taking strong measures to force other countries to appreciate their currencies," he said.

The premier said China had made "strong efforts" since the outbreak of the international financial crisis to keep the yuan at a "stable level".

The value of the yuan has become a major sticking point in relations between China and the United States, which are badly strained over a number of issues including trade disputes, Tibet, Taiwan and Internet freedom.

Wen also said US arms sales to Taiwan and Obama's meeting last month with the Dalai Lama, Tibet's exiled spiritual leader, violated China's sovereignty and it was up to Washington to repair the damage.

He reiterated the government's resolve to tackle a widening rich-poor gap increasingly seen as a threat to social stability.

China's "economic and social development must from now on pay attention to the poor and the disadvantaged as they are the majority," he said.

The parliament pledged during its session to widen the nation's much-criticised social safety net, increase representation from the peasant countryside and take other measures to spread wealth more evenly.

Calls have been mounting for the government to address a disparity that has seen rural regions largely left behind in China's economic boom and is increasingly viewed as a potential spark for unrest.



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