NAPSNet Daily Report
monday, october 6, 2003

I. United States


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I. United States

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1. ROK on DPRK Nuclear Talks

Agence France-Presse ("ROK LEADER EXPECTS NEW ROUND OF NUCLEAR TALKS SOON," 10/07/03) reported that another round of talks to resolve the DPRK nuclear crisis is expected to be held soon, ROK President Roh Moo-Hyun said. He said the six-party talks in August had opened a road to a peaceful solution of the nuclear issue. "I expect that the second round of talks will be held in the near future and I hope good results will be forthcoming," Roh said in a speech to a business conference on the sidelines of the Association of Southeast Asian Nations summit in Bali. "If North Korea gives up its nuclear project, we will cooperate with the international community in extending unreserved support to help North Korea come onto the path of reform and openness," the president said. "I call on the ASEAN economic leaders to support us and continue to have interest in our endeavors to find a peaceful solution to the DPRK nuclear situation." Roh said "military tension and confrontation" on the Korean peninsula threatened the stability and prosperity of all of East Asia. "The North Korea nuclear issue should be resolved quickly and it must be resolved peacefully."

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2. ROK-DPRK Relations

Asia Pulse ("S KOREAN DELEGATION VISITS N KOREA FOR GYMNASIUM OPENING," Seoul, 10/06/03) reported that about1,100 South Koreans traveled to Pyongyang this morning to attend the opening ceremony for a gymnasium built by the Hyundai Group in the DPRK capital. The 12,309-seat gymnasium is a gift that was promised by the late Chung Ju-yung, Hyundai's founder, before he died in 2001, and is named after him. Chung hoped that it would help promote inter-Korean sports exchanges and reconciliation. Some 800 people, including Hyun Jung-eun, widow of the late Chung Mong-hun, the former chairman of Hyundai Asan who jumped to his death from Hyundai headquarters in August, and other members of the Chung family, traveled to the North on 30 buses. Mong-hun, the fifth son of the late Hyundai founder, headed Hyundai Group until his death. The delegation also included the ROK basketball team, which will play an inter-Korean friendly match at the gym, and the press. They crossed the military border on the Gyeongui-line land route for the first time in half a century, stopping by the city of Kaesong near the border in the DPRK, before going to Pyongyang. ROK broadcaster SBS plans a live telecast of the opening ceremony and an inter-Korean basketball game, and dispatched 270 broadcasting personnel earlier on Wednesday and Sunday. As a special gift from Hyundai group to commemorate the dedication of the gym, the DPRK will receive 1,000 head of cattle that were sent to the North on Monday. This will be Hyundai's third donation of cattle to the DPRK, a symbol of cooperation between the conglomerate and the DPRK. Hyundai has so far invested nearly US$1 billion in tourism and other projects in the DPRK.

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3. ROK US Troop Realignment

Agence France-Presse ("SOUTH KOREA, US OPEN MILITARY TALKS ON ALLIANCE," 10/06/04) reported that US and ROK military officials opened talks on the proposed realignment of US troops stationed here for five decades to deter war on the Korean peninsula. The three-day meeting is the fifth and last round of its kind to fine-tune positions ahead of a high-level security meeting to be held between the ROK and the US from October 25. US Defense Secretary Donald Rumsfeld is to attend the annual security conference in Seoul. The security meeting comes as the 50-year-old US-ROK alliance is under strain from differences over the handling of the DPRK nuclear crisis and a US request to send ROK troops to Iraq. The US request has triggered a new wave of anti-US sentiment by ROK activists and anti-war groups. Yonhap news agency said this week's meeting would cover the US request for troop dispatch. The Defense Ministry declined to confirm the report but a ministry official said the two sides could take up "various security issues." President Roh Moo-Hyun has said he would take his time in responding to the US request. Opinion polls show most South Koreans are opposed to the troop dispatch. The two military allies have reached broad agreement on the US troop realignment though many details have yet to be worked out. The most controversial element of the plan concerns the proposal to pull back the US 2nd Infantry Division, made up of more than 15,000 troops, from camps near the demilitarized zone that separates the DPRK and the ROK to bases south of Seoul. The US believes it can deter the DPRK more effectively with long distance precision firepower and at the same time lighten a ground presence that has been the source of political controversy in the ROK. However, South Koreans have expressed concern about the speed of the changes and want to delay the US troop relocation in view of public concern over security and financial costs. During a meeting in Hawaii in July, both sides agreed that South Korea should take over control of the inter-Korean border village of Panmunjom from US-led troops by late 2004. They also reaffirmed previous agreements to relocate a main US military base out of Seoul by 2006 and deploy US forces away from the border with DPRK south of the Han River. The US has proposed the transfer of some missions to ROK forces as part of the plan to pull US ground forces back from the border. The American military presence in South Korea was thrust into the spotlight last year by massive anti-US protests following the deaths of two girls in a road accident involving a US military vehicle. The US plan calls for a redeployment of frontline American forces south of the Han River in two phases.

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4. Australia-PRC-US Relations

Agence France-Presse ("AUSTRALIAN PARLIAMENT TO HEAR ADDRESSES BY US, PRC LEADERS," 10/05/03) reported that US President George W. Bush and PRC President Hu Jintao will address a special sitting of the Australian parliament within a day of each other later this month, Prime Minister John Howard said. Howard said Bush would address a joint sitting of federal parliament on October 23, followed by Hu the next day. "So in successive days we will have addresses to the two houses of our national parliament by the president of the US and the President of China," Howard told Channel Nine. Howard said it was a logistical challenge to have the two leaders in Australia within two days of each other, but the opportunity had arisen because of their trips abroad coinciding with the Asia Pacific Economic Cooperation forum summit in Thailand from October 18 to 21. White House briefing notes quoted by an Australian radio station last week said Bush's address will focus on "Australia's friendship with the US and on their role in the Asia-Pacific in combating terrorism."

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5. DPRK Currency Devaluation

Reuters ("NORTH KOREA MAY HAVE DEVALUED ITS CURRENCY: ASAHI," Tokyo, 10/05/03) reported that the DPRK recently devalued its currency as part of a fresh push for economic reforms, a Japanese newspaper said yesterday. The report follows this week's comments by a senior ROK official, who said that the DPRK seems committed to economic reforms. The famine-stricken communist dictatorship had launched some reforms in July last year in what appeared to be the first major changes to the centralized, closed system in half a century. The DPRK this summer began exchanging the won using an official rate of about 900 won to the US dollar, down sharply from a rate of 150 won fixed after a devaluation last year, and also switched to floating exchange rates, the Asahi Shimbun said. New currency exchange offices have been set up in various areas of the capital Pyongyang and are manned by central bank personnel, the Asahi said in a story from Beijing quoting a source knowledgeable about the DPRK. Diplomats in Pyongyang had said in August last year that the DPRK had devalued the won to 150 per dollar from around 2.15 per dollar as part of a series of reforms designed to introduce more market driven prices. The DPRK decided on the latest steps due to a widening disparity between official and black market rates, Asahi said. ROK's Unification Minister Jeong Se-hyun said "This is clear evidence that North Korea is really interested in economic reform and that they have decided to pursue economic reform."

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6. Japan Financial Role in Iraq Reconstruction

Agence France-Presse ("JAPAN MAY SHOULDER 10 PERCENT OF IRAQ RECONSTRUCTION COST," 10/04/03) reported that Japan is considering shouldering 10 percent of an estimated 55 billion dollars needed to rebuild Iraq, a daily said, as another report said Tokyo's aid for 2004-2005 would exceed 1.5 billion dollars. The Japanese government has started arranging the contribution package for the share of about 10 percent in the light of past practice and the current fiscal situation, the Asahi Shimbun said, without naming sources. Japan's contributions to help rehabilitate war-torn countries range from 11 percent for Afghanistan to 25 percent for East Timor. Tokyo plans to offer grants for 2004 and then introduce yen-denominated low-interest loans from 2005 on, the Asahi said, adding the government hopes Iraq would repay the debt with its oil revenue. The Yomiuri Shimbun said the government had begun working out a plan to contribute more than 1.5 billion dollars for 2004-2005, while noting pressure from the US may force Tokyo to increase the amount. With major creditor countries, including Japan and the US, agreeing in principle to freeze Iraq's debt payments until the end of 2004, it will be difficult for Japan to extend loans on condition of reimbursement, it said. The government plans to provide grants-in-aid to Iraq until the end of 2004 and extend full-scale loans beginning in 2005, Japan's best-selling daily said. Japan has been saying it is ready to shoulder a due share of financing the Iraq reconstruction effort. But Finance Minister Sadakazu Tanigaki said Friday Japan would not take the percentage of its contribution to the United Nations, 20 percent, as a benchmark for its share. The World Bank and the United Nations on Thursday estimated that 36 billion dollars would be needed for the reconstruction of Iraq for the period 2004-2007 in 14 priority sectors. A separate study by the US-led Coalition Provisional Authority determined that Iraq would need an additional 20 billion dollars in critical sectors not covered by the UN and World Bank assessment.

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7. PRC Social Displacement

Agence France-Presse ("FLOODING FORCES RELOCATION OF TENS OF THOUSANDS OF PEOPLE IN CHINA," 10/05/03) reported that flooding along the PRC's mighty Yellow River and one of its tributaries has forced 238,000 people to flee their homes in northern PRC, while another 11,000 people in east PRC must be relocated, officials said. Some 300,000 people in Weinan city in north China's Shaanxi province have been relocated as continuous heavy rain since September 27 has caused flooding along the Wei River, a tributary to the Yellow River, said a local anti-flood official. The official said of the people moved, 105,000 people have been relocated in Weinan city's smaller Huayin city, while another 133,000 people have left their homes in Hua county in Weinan city. "The fifth flood crest on the Wei River this season has arrived a few days ago and has not passed yet, but it has stopped raining and the weather is sunny," said another official, Ji Dan, with the Hua county flood control office. "There are no deaths or injuries so far." Ji said the water level on the Wei River was beginning to drop, but that the river flow was still traveling at a rapid and dangerous speed.

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8. PRC Space Travel

Agence France-Presse ("CHINA AIMS TO TOUCH THE MOON: TOP NATIONAL DEFENSE OFFICIAL," 10/06/03) reported that the PRC's space ambitions will not stop at just sending a person into space; the country plans to send astronauts to the moon, a top national defense official said, quoted by PRC media. "China will become the third country in the world to launch manned space flight. In the past, China's 'Shenzhou' (unmanned) spaceships have successfully gone into space to orbit the earth," Wang Shuquan, deputy secretary of the Commission for Science, Technology and Industry for National Defence, was quoted as saying. "China will still continue to develop its space exploration plans. At a future time, China will carry out lunar landing and flight experiments." Wang did not give an exact date for the PRC's first manned space flight, which is expected to take place "right after" a Communist Party Central Committee plenary meeting ending on October 14, the Beijing-backed Wen Wei Po newspaper in Hong Kong cited authoritative sources as saying last week. Wang's comments reflect similar recent comments by PRC officials reported in the PRC media saying sending a man to the moon is part of China's plans for its space program.

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9. PRC Environmental Degradation

Agence France-Presse ("15 TO 20 PERCENT OF ANIMAL, PLANT SPECIES IN CHINA FACE EXTINCTION," 10/06/03) reported that about 15 to 20 percent of animal and plant species in the PRC are in danger of extinction, higher than the world level of 10 to 15 percent, state media reported. According to statistics from the State Forestry Administration, over 300 species of terrestrial vertebrate animals and some 410 species of wild plants are at risk, the Xinhua news agency said. By 2010, the PRC will have a total of 3,000 to 4,000 plants on the brink of being wiped out, the report cited experts as warning. Because of the structure of the food chain, if one kind of plant disappears, there will be 10 to 30 types of organisms which depend on the plant that could die, the China Daily said. Insufficient forest resources, destruction of the natural habitat of wild species, and illicit poaching are to blame, the agency quoted sources from the State Forestry Administration as saying. The PRC has one of the largest numbers of animals and plants in the world. Some 156 species of China's endangered animals and plants are among the world's 640 endangered species listed in the United Nations Convention on International Trade in Endangered Species (CITES), accounting for 24 percent of the total at risk.

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10. PRC-ASEAN Free Trade Agreement

Agence France-Presse ("ASEAN AND CHINA LAUNCH FIRST STAGE OF FREE TRADE PLAN," 10/06/03) reported that Southeast Asian nations and the PRC agreed on a special tariff-busting program to kickstart their grand plan to set up the world's largest free trade area (FTA), officials said. Trade ministers from the Association of Southeast Asian Nations (ASEAN) and the PRC adopted a protocol paving the way for the implementation from January 1, 2004 of a so-called "early harvest program" under the FTA. The three-year program is largely a concession by the PRC to give early benefits to the ASEAN states through tariff reductions on a host of agricultural and manufactured goods while the actual implementation of the FTA begins on January 1, 2005, officials said. "The protocol today fleshed out an early harvest program which provides specific benefits for ASEAN countries pending the adoption of an actual tariff-reduction agreement for the FTA," ASEAN Secretary-General Ong Keng Yong announced. Ong said the early harvest program "allows ASEAN products to be exported to China at a very concessionary rate so that ASEAN countries can actually get benefits of a free trade arrangement even before the agreement is finalized." The PRC and ASEAN states Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam agreed last year to create a FTA covering 1.7 billion consumers with a combined gross domestic product of two trillion dollars. It would be the biggest FTA in the world in terms of population, providing huge opportunities for economies of scale and scope for ASEAN and PRC commerce and industry, Ong said.

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Center for American Studies,
Fudan University, Shanghai, People's Republic of China

International Peace Research Institute (PRIME),
Meiji Gakuin University, Tokyo, Japan

Monash Asia Institute,
Monash University, Clayton, Australia

Brandon Yu:
Berkeley, California, United States

Timothy L. Savage:
Berkeley, California, United States

Kim Young-soo:
Seoul, Republic of Korea

Hibiki Yamaguchi:
Tokyo, Japan

Saiko Iwata:
Tokyo, Japan

Hiroya Takagi:
Tokyo, Japan

Peter Razvin:
Moscow, Russian Federation

Wu Chunsi:
Shanghai, People's Republic of China

Dingli Shen:
Shanghai, People's Republic of China

John McKay:
Clayton, Australia

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