NAPSNet Daily Report
monday, october 20, 2003

I. United States


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I. United States

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1. DPRK Missile Test

The Associated Press (Soo-Jeong Lee, "NORTH KOREA TEST-FIRES ANTI-SHIP MISSILE," Seoul, 10/20/03) reported that the DPRK test-fired an anti-ship missile off its east coast Monday as President Bush and other leaders opened an Asian summit, the DPRK's latest military exercise amid tensions over its nuclear program. The ROK's Joint Chiefs of Staff declined to further identify the type of missile, but said the DPRK has fired the same type two or three times this year. US officials are more concerned about the DPRK's efforts to develop a missile that could reach the US. "The land-to-ship missile North Korea test-fired today is seen as part of its annual exercise," said a spokesman for the Joint Chiefs of Staff in Seoul, speaking on customary condition of anonymity. The test came as Bush, meeting in Bangkok, Thailand, promoted a plan in which the US, China, Russia, Japan and South Korea would jointly give the DPRK written assurances it wouldn't be attacked, in exchange for its promise to dismantle its nuclear program. Senior Bush administration officials, also speaking on condition of anonymity, said they'd concluded the missile test was a deliberately provocative action intended to grab attention. The DPRK test-fired two short-range anti-ship missiles in late February and early March. In those tests, the DPRK fired the missiles at targets about 70 miles off its east coast.

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2. US on DPRK Security Declaration?

The Washington Post (Mike Allen and Glenn Kessler, "BUSH SAYS PACT WITH N. KOREA POSSIBLE," Bangkok, 10/20/03) reported that US President Bush said Sunday that he is willing to commit to a written guarantee not to attack the DPRK in exchange for steps by the country toward abandoning its nuclear weapons programs. Bush's aides said he wants to have a proposal ready for the DPRK to consider by year's end, when administration officials hope to restart the six-nation nuclear talks with the DPRK that began haltingly in August. The new approach constitutes a change for a White House that had resisted offering any concessions to the DPRK before it fully ends its pursuit of nuclear weapons. The CIA estimates the country already possesses one or two nuclear weapons. Some analysts believe it has added to its stockpile in recent months. Bush ruled out the idea of a formal non-aggression treaty, which the DPRK has insisted must be part of an agreement involving nuclear concessions. "We will not have a treaty," Bush said during Sunday's photo session with Thailand's prime minister, Thaksin Shinawatra. "That's off the table." Bush said he would sign a security declaration if it were a joint agreement with the four other countries participating in the talks with the DPRK - the PRC, Japan, Russia and the ROK. A senior administration official said Bush had ruled out a bilateral agreement on the principle that if the DPRK violated a multiparty pact, "they would not only be dismissive of the US, but they would also be dismissive of the other parties that participated in the assurance." Although Bush aides said allies have encouraged the new approach, the immediate public reaction was restrained.

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3. US-Japan Summit

Agence France-Presse ("BUSH PRAISES 'VERY STRONG LEADER' KOIZUMI," 10/18/03) reported that US President George W. Bush warmly praised Japanese Prime Minister Junichiro Koizumi for pledging billions of dollars to rebuild Iraq and helping to secure the passage of a United Nations resolution on the war-torn nation's future. Both leaders, all smiles during their brief public appearance, left the door open to further contributions from Tokyo to post-war operations in Iraq, either financial or in the form of Japanese troops deployed in noncombat roles. "He's a good friend. A very strong leader. And the relationship between Japan and the US is very good," Bush said after the two dined at the Akasaka State Guest House. "And the meal was great." "Really frank. Meaningful. And interesting. Fantastic," a grinning Koizumi said of their closed-door meeting as he posed for photographs with Bush and First Lady Laura Bush. Neither leader wore a necktie. Bush was in Japan on the first leg of a whirlwind six-nation tour of Asia and Australia that US officials said would largely focus on trying to get more help for stabilization and reconstruction efforts in Iraq. Koizumi had been expected to reassure his guest that Tokyo will send troops to Iraq, following a promise of 1.5 billion dollars earmarked for reconstruction projects through 2004. "He didn't specifically say 'I'm going to get boots on the ground' or anything like that," said a top Bush aide, who requested anonymity. "The way the president put it is, we warmly welcome what you have done and we will welcome that which you can do in the future." Koizumi, who earlier had ruled out contributing to an occupation force in a combat area, "did not mention assistance or the dispatch of troops in concrete terms at all," said a top Japanese foreign ministry official. "But he stressed that Japan would do whatever it should do for the good of world peace," the official told reporters.

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4. ROK-US DPRK Joint Statement

Agence France-Presse ("BUSH LAUNCHES NORTH KOREA PUSH WITH ROH," 10/21/03) reported that US President George W. Bush and ROK President Roh Moo-Hyun urged the DPRK to accept a compromise aimed at reviving efforts to defuse the crisis over Pyongyang's nuclear arms program. In a joint statement released after they met here, the two leaders also called for a new round of talks with Pyongyang "at an early date" and urged the DPRK to shun any action that could "exacerbate the situation." Shortly afterwards, ROK Joint Chiefs of Staff said the DPRK had test-fired a surface-to-ship missile, but downplayed the move as a "routine" part of its annual military exercise. Bush on Sunday ruled out inking a non-aggression treaty with the DPRK but for the first time endorsed some form of written security assurances backed by Washington's partners in six-party talks aimed at ending the standoff. Meeting with Roh on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum a day later, Bush said Monday he was "making good progress on peacefully resolving" the year-old standoff. Through an interpreter, Roh praised the US president for his efforts to resolve the "very critical" issue through six-party talks. In the joint statement with Roh, Bush reiterated that the "US has no intention of invading North Korea," and the two leaders warned "they will not tolerate nuclear weapons in North Korea and that they are committed to a peaceful resolution of the issue."

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5. PRC on Japan-DPRK Abductions

Xinhua, "NKOREA KIDNAP ISSUE A BILATERAL MATTER, CHINA TELLS JAPAN," Bangkok, 10/20/03) reported that PRC President Hu Jintao told his Japanese counterpart Junichiro Koizumi that the abduction by North Korea of Japanese citizens was a bilateral matter and should be resolved between the two countries. "Hu's statements on this issue are very clear," said PRC foreign ministry spokesman Kong Quan. "First he expressed that it is an historical issue. On this issue he expressed sympathy and understanding -- sympathy to the Japanese victims and understanding on what they went through. "But it is still an issue between Japan and North Korea. President Hu said he hopes the two countries will resolve this issue through dialogue in a bilateral framework." Japan has been trying to drum up support at the APEC summit for a statement condemning Pyongyang. Japan wants the abductee issue placed on the agenda of six-nation talks over North Korea's nuclear program.

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6. PRC Hu on Japan Chemical Weapons

Agence France=Presse ("CHINA'S HU TELLS KOIZUMI JAPAN MUST REMOVE CHEMICAL WEAPONS," 10/20/03) reported that PRC President Hu Jintao told Japanese Prime Minister Junichiro Koizumi Japan must remove chemical weapons left behind by retreating Japanese soldiers at the end of World War II. "President Hu Jintao mainly expressed that the war ended more than 60 years ago, but the leftover chemical weapons are still harming PRC people. This problem should be resolved as soon as possible," PRC foreign ministry spokesman Kong Quan quoted Hu as saying. Hu was speaking during a bilateral meeting with Koizumi on the sidelines of the Asia Pacific Economic Cooperation (APEC) summit which opened in Bangkok Monday. The meeting was only the second by the two men since Hu became president in March. "(Hu) also noticed that recently China and Japan achieved an agreement (on the weapons). He hopes that can be implemented as soon as possible," Kong said. "And he also said Japan should step up the pace of removing the chemical weapons, not only in Qiqihar (city), but on the whole." Hu did not raise the issue of Koizumis plans to pay more visits to the Yasukuni Shrine, which honors Japanese soldiers, including wartime criminals, but he reminded the Japanese leader it was important that Tokyo remembers its wartime history, Kong said.

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7. APEC on DPRK and Terrorism

The Associated Press (Dirk Beveridge, "TERROR, NORTH KOREA DOMINATE CONFERENCE," Bangkok, 10/20/03) reported that terror and security threats overshadowed pressing global economic issues at the Asia-Pacific summit on Monday as the leaders of the US and the ROK went behind closed doors over a new initiative to break the divided peninsula's nuclear standoff. And, as President Bush used the annual gathering to promote his war on terror, other leaders pressed ahead with the 21-member grouping's core theme - promoting free trade. Some complained the meeting had gone off track. "We are putting obstacles in the way of advancement of our economies," said Mexican President Vicente Fox, who wants the World Trade Organization to restart international global trade talks that collapsed last month when many developing nations walked out. "We should go back to the table, but we should go back with a political will to overcome this problem." Others said it was a mistake to change the focus of the Asia-Pacific Economic Cooperation forum. "We know, of course, that security is a very important matter, and we admit that, but it should be discussed in the other forums," Malaysia's Prime Minister Mohamad Mahathir was quoted as saying in Kuala Lumpur's The Star newspaper. APEC members are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, US and Vietnam.

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8. US on PRC SARS Plan

Agence France-Presse ("US SEEKS COORDINATED HEALTH STRATEGY WITH CHINA ON AIDS, SARS," 10/20/03) reported that the US sought to collaborate more closely with the PRC on the fight against HIV-AIDS and Severe Acute Respiratory Syndrome (SARS), while urging Beijing to become more transparent with its health regime. US Secretary of Health Tommy Thompson also urged PRC leaders to become more visible in a simmering HIV-AIDS epidemic in the PRC, which according to PRC health officials killed up to 200,000 people last year while more than one million PRC were infected with HIV. Thompson also announced the opening of an HIV-AIDS office to be run by officials from the US Center for Disease Control (CDC) in Beijing following the approval of some 36 million dollars in funding aid from different US health agencies. Speaking to journalists, Thompson said he came away from a meeting with his PRC counterpart Gao Qiang very encouraged that China would be more forthcoming with domestic health epidemics like HIV-AIDS and SARS, both of which have histories of being covered up the government. "In the discussion with Minister Gao... I was impressed by his candor and forthrightness on this particular subject, we had, I wouldn't say heated, but a very direct exchange on this subject."

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9. US on PRC Space Flight

Agence France-Presse ("BUSH CONGRATULATES CHINA ON SPACE FLIGHT," 10/20/03) reported US President George W. Bush formally congratulated the PRC on the successful completion of its first manned space flight. "This mission was an historic triumph for the PRC people and a milestone in the continued exploration of space," Bush said in a formal letter to PRC President Hu Jintao which the White House released after they met here. "On behalf of the American people, I congratulate you and the PRC people on the successful completion of China's first human space mission. I was pleased to learn that Lieutenant Colonel Yang Liwei returned safely to earth," he wrote. "The US of America warmly welcomes the People's Republic of China's achievement in becoming only the third country to launch an astronaut into space, and wishes you continued success in this endeavor," he said. Bush, who came to office having branded the PRC a "strategic competitor" of the US, said in an interview released Saturday that he did not view Beijing's space program as a threat. "No, it's an interesting development," he told Channel News Asia in an exchange taped earlier this week in Washington. "I don't necessarily see it as a threat." "I think it's a country that's now beginning to emerge as a sophisticated country. And it's got great potential," said Bush. "I hope that they are able to make discoveries in space, like we did, the technology that will come out of that will help mankind."

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10. PRC Exchange Rate

Agence France-Presse ("HU INSISTS CHINA'S EXCHANGE RATE, ECONOMIC GROWTH WILL BENEFIT WORLD," 10/19/03) reported that in a rare speech to an international audience, PRC President Hu Jintao vowed to maintain the stability of the PRC's currency, insisting the exchange rate and the nation's rapid economic growth are beneficial to the world. "China follows a market-based, single and managed floating exchange rate system, which is consistent with the current stage of China's economy, its level of financial regulation and the sustainability of its enterprises," Hu said at the opening of the APEC CEO summit. "Keeping the exchange rate of the RMB (Renminbi) stable serves the PRC's economic performance and conforms to the requirements of economic development in the Asia Pacific region and the whole world." Hu suggested the PRC would not give in to rising pressure from the US to end its currency peg which has been at 8.28 to the dollar for the past nine years, but is blamed by Washington for US job losses and export woes. "We will maintain the basic stability of the RMB exchange rate at a reasonable and balanced level while further improving the rate-forming mechanism amid deeper financial reform," Hu told the audience of mostly Pacific Rim business leaders ahead of the October 20-21 APEC summit. However, China's central bank governor said Sunday it was willing to widen the band in which the PRC yuan is pegged to the US dollar, while adding that the free float of the currency will take "a relatively long time." State press quoted People's Bank of China (PBOC) governor Zhou Xiaochuan as saying the bank was willing to widen the range to between 8.3-8.7 yuan to the dollar if a regional consensus was reached. "However, views on this issue are different, and many neighboring countries and economists believe that it is not the right time to make such a move," he said.

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11. Japan Emperor Health Status

Agence France-Presse ("JAPAN'S EMPRESS WANTS LIGHTER WORKLOAD FOR EMPEROR AS CANCER FEARS PERSIST," 10/20/03) reported that Japan Empress Michiko used her 69th birthday to make a plea for a reduction in Emperor Akihito's public duties, after blood tests suggested he may still have cancer despite surgery in January. "I hope that the Medical Supervisor for the Imperial Household and the court physicians, as well as those involved at the Imperial Household Agency, in accordance with His Majesty's wishes and to the extent that it is possible, may progressively lighten His Majesty's workload," she said. The empress made the comment in a written reply to reporters' questions marking her 69th birthday. It followed an announcement by the Imperial Household Agency last week that the recent blood tests on the emperor, 69, suggested some cancerous tissue may have survived the surgery to remove a cancerous prostate gland in January.

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12. DPRK Refugees in ROK

Agence France-Presse ("NKOREAN REFUGEES HOLED UP IN BEIJING ARRIVE IN SEOUL," 10/20/03) reported that a group of 21 DPRK refugees, previously holed up in the ROK consulate in Beijing, has arrived here, the National Intelligence Service (NIS) said. The nine men and 12 women arrived in Incheon Airport, west of Seoul, on Sunday via a third country, the NIS said in a statement. The group was among more than 100 North Koreans who had taken shelter in the ROK consulate in Beijing, forcing it to temporarily shut down. The NIS, Seoul's main spy agency, said the latest arrivals increased the number of DPRK defectors reaching the ROK this year to 984. The PRC let some of the DPRK refugees crowding the ROK consulate to leave the PRC on Saturday to allow the diplomatic mission to resume operations. A notice posted outside the ROK mission in Beijing said consular services would resume on Monday.

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13. Japan-ROK Free Trade Talks

Agence France-Presse ("JAPAN AND SOUTH KOREA ANNOUNCE START OF FREE TRADE TALKS," Bangkok, 10/20/03) reported that Japanese Prime Minister Junichiro Koizumi and ROK President Roh Moo-Hyun agreed at a meeting to start formal negotiations this year toward a free trade agreement, a Japanese official said. "Both sides confirmed their agreement to begin negotiations on an FTA (free trade agreement)," the official said. Negotiations would start this year and aim to wrap up in 2005, according to a joint statement released after the leaders met on the sidelines of the 21-nation Asia Pacific Economic Cooperation (APEC) meet. The ROK is Japan's third largest trading partner, while Japan comes second in importance for the ROK, with trade of about 45 billion dollars in 2002, a joint study released this month showed. The study also found that a free trade pact would benefit both countries in the long-term -- with the ROK's gross national product rising by up to 8.67 percent and Japan's by up to 10.44 percent as a result. "This is a big step toward fruitful and closer economic relations for both Japan and South Korea," Koizumi told Roh, a Japanese official said. Currently Japanese citizens can go to the ROK for a short period without a visa, but there is no reciprocal arrangement. There are also no regular flights from Tokyo's Haneda airport to Kimpo in the suburbs of Seoul. The short-term impact of a free trade deal on the ROK's 14.7-billion-dollar trade deficit with Japan in 2002 would be severe, the joint study said. It would widen by between 3.9 and 6.1 billion dollars initially but ease in the long-run as foreign investment rose, the study said. "Given the difference in the average tariff rate and the economic size of the two countries, the impact of the JKFTA (Japan-Korea Free Trade Agreement) on Korea's industries would be more serious than that on Japan's industry in general," the report said, noting that "appropriate measures need to be considered in this respect." It also noted sensitivity in the agriculture sector, but said both countries shared similarities, "including the small scale of production and low rate of self-sufficiency."

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14. Japan-Russia Oil Pipeline Talks

Reuters (Bayan Rahman, "JAPAN AND RUSSIA TO SPEED UP PIPELINE TALKS," Tokyo, 10/20/03) reported that Junichiro Koizumi, Japan's prime minister, on Monday agreed with Vladimir Putin to fast-track talks on the feasibility of a $7bn oil pipeline in east Russia with a view to concluding the study by mid-December. Koizumi and the Russian president, talking at a meeting of Asia Pacific Economic Co-operation countries in Bangkok, said that the pipeline was of mutual benefit. "They agreed that the pipeline would increase the interdependence of the two countries and to expedite the expert-level talks towards the visit to Japan of Prime Minister Mikhail Kasyanov (of Russia) in mid-December," a senior Japanese trade ministry official said. The agreement bolsters Japan's hopes of persuading Moscow to build a pipeline from Angrsk to Nakhodka, on Russia's Pacific coast facing Japan, ahead of a pipeline between Angrsk and Daqing in north-eastern China. The PRC plan has been under discussion for 10 years but the Japanese official said that the PRC had not submitted a detailed design package. Japan and Russia have yet to sign a post-second world war peace treaty, partly because of four disputed islands lying north of Japan. "In the past, Japan didn't have such a (high level) mechanism to discuss these matter so I think this is one step ahead for us," said an energy industry analyst close to the Japanese government. The two countries have glossed over the disputed islands to pursue their strategic needs.

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Kim Young-soo:
Seoul, Republic of Korea

Hibiki Yamaguchi:
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Saiko Iwata:
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Peter Razvin:
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Wu Chunsi:
Shanghai, People's Republic of China

Dingli Shen:
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