NAPSNet Daily Report
wednesday, june 23, 1999

I. United States

II. Republic of Korea III. People's Republic of China IV. Latest NATO Nuclear Flash
Latest Policy Forum:
The Kumchangni Inspection and Perry's Visit to North Korea

Bulletin of Atomic Scientists Cover Story on DPRK Windpower Project

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I. United States

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1. Trilateral Consultations on DPRK

US State Department Spokesman James Rubin ("U.S., REPUBLIC OF KOREA, AND JAPAN TO MEET IN WASHINGTON, DC JUNE 25," Washington, USIA Text, 06/22/99) issued the following press statement: "U.S., Republic of Korea (ROK), and Japan officials will meet in Washington beginning June 25 for trilateral consultations regarding North Korea. State Department Counselor Ambassador Wendy Sherman will lead the U.S. delegation. The R.O.K. delegation will be led by Deputy Foreign Minister Jang Jai-ryong. Foreign Ministry Director General Ryozo Kato will lead the Japan delegation. In April, the U.S., R.O.K., and Japan agreed that an effective policy toward the D.P.R.K. must be a closely coordinated effort and established a Trilateral Coordination and Oversight Group (TCOG) to institutionalize the process of consultation and policy coordination. The June 25 meeting is a continuation of that process and follows up trilateral discussions that took place in Tokyo and Seoul May 24 and 29, respectively."

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2. DPRK-US Talks

The Associated Press (John Leicester, "N. KOREA, S. KOREA TALKS IN LIMBO," Beijing, 06/23/99) and Reuters (Matt Pottinger, "U.S., NORTH KOREA OPEN TALKS; SEOUL WAITS," Beijing, 06/23/99) reported that US special envoy Charles Kartman opened talks with DPRK Vice Foreign Minister Kim Gye-gwan in Beijing on Wednesday. Kartman stated, "We have good communication and we've been able to cover a lot of different topics." Although the US stressed that Kartman was at a routine meeting to discuss the inspections of the underground site at Kumchangri, Kim said the DPRK was ready discuss anything.

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3. DPRK-ROK Talks

The Associated Press (John Leicester, "N. KOREA, S. KOREA TALKS IN LIMBO," Beijing, 06/23/99) reported that the vice-ministerial talks between the ROK and the DPRK were still in recess on Wednesday. ROK Unification Minister Lim Dong-won indicated that the DPRK's refusal to discuss family reunions could scuttle the talks. According to ROK Embassy spokesman Wi Keyei-chul, a DPRK official in Beijing advised the ROK officials by phone that the DPRK delegation was awaiting instructions from Pyongyang. Wi added that there was "almost no possibility" talks would resume on Wednesday.

Reuters (Matt Pottinger, "U.S., NORTH KOREA OPEN TALKS; SEOUL WAITS," Beijing, 06/23/99) reported that, according to an unnamed source, the DPRK backed off when the ROK tried to steer the talks toward reuniting families at Tuesday's vice-ministerial meeting. He stated, "The South wanted to sit and talk more. It seemed the North wasn't really prepared." He also said that, although the DPRK's official Korean Central News Agency reported that the DPRK demanded an apology from the ROK as a precondition for continuing the bilateral talks, the DPRK made no such demand at the meeting.

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4. ROK Aid to DPRK

The Associated Press ("S KOREA WARNS IT WILL STOP SHIPPING FERTILIZER TO N KOREA," Seoul, 06/23/99) reported that, according to ROK Unification Minister Lim Dong-won, the ROK will stop shipping fertilizer to the DPRK if it continues to refuse to allow the reunion of separated families. Lim stated, "If the North does not keep its promise, we have no intention to follow through on our part of the deal." According to an unnamed government official, it was agreed that the first 100,000 tons of fertilizers were to be shipped if the DPRK agreed to talk about family reunions and the second 100,000 tons would be sent only if the DPRK agreed to such reunions.

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5. ROK-US Military Exercises

The Associated Press ("TWO U.S. NAVY CRUISERS TO TRAIN WITH S KOREA NAVY NEXT WK," Seoul, 06/23/99) reported that two US-guided missile cruisers, the USS Vincennes and the USS Mobile Bay, will train with ROK navy vessels next week. Lieutenant Commander Gil Mendez, a spokesman for the US Naval Forces in the ROK, stated, "The two ships will conduct joint training with the Republic of Korea navy. But I cannot disclose specifics such as exactly when and where the training will take place." Mendez said that the ships will make a port call at Pusan on Thursday and will begin the joint training exercise after leaving the port on June 28.

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6. Detained ROK Tourist in DPRK

Reuters ("N.KOREA MOVES DETAINED S.KOREAN TOURIST TO HOTEL," Seoul, 06/23/99) reported that, according to a Hyundai Group spokesman, the detained ROK tourist, Min Young-mi, in the DPRK has been moved to a hotel, but is still undergoing interrogation. The spokesman stated, "The North Korean side told our employees in Changjon that Ms. Min had been moved to a nearby hotel and was continuing to be questioned there." He also said that DPRK officials had informed Hyundai that Min was in good health. He added that there was still no word on when Min might be released. The spokesman said he could not confirm whether any of the tourists in Min's group had overheard her remarks, but said it was possible that Min had made the remarks. He said, "The tourists are all told on the ship that they should not say anything that alludes to North Korea's beliefs. But it's so easy to forget you are in North Korea once you arrive because they all speak Korean and they all look like us."

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7. US Aid to DPRK

US House of Representatives International Relations Committee Chairman Benjamin A. Gilman ("A LETTER FROM BENJAMIN A. GILMAN TO DAVID M. WALKER COMPTROLLER GENERAL OF THE UNITED STATES," 05/11/99) issued a letter requesting that the US General Accounting Office examine the issue of distribution of international aid in the DPRK. The letter reads: "Unfortunately there have been reports of both food aid being provided as humanitarian relief and fuel oil intended for heating and electricity production being diverted to other than their intended purposes or recipients.... Therefore, I am requesting that the General Accounting Office examine the following issues: 1. Whether adequate controls have been established for the distribution, monitoring, and safeguarding of food aid provided by the United States and whether these controls are consistent with those applied to other WFP food aid programs. 2. Whether adequate controls have been established to prevent the diversion of heavy fuel oil being provided in exchange for a freeze on North Korea's existing nuclear facilities and its promise to eventually dismantle the facilities and comply with its obligations under the Nuclear Nonproliferation Treaty."

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8. US Policy toward DPRK

The Los Angeles Times carried a commentary by Tom Plate ("GETTING TO PERMANENT PEACE ON THE KOREAN PENINSULA," Los Angeles, 06/23/99) which argued that the US, Japan and the PRC should play a more substantial role in achieving peace on the Korean peninsula. According to Plate, the US Congress should propose a way to end the economic embargo of the DPRK, Japan must rally Japanese public opinion behind the ROK's sunshine policy, and the PRC should help produce a demilitarized Korean peninsula, "with the DPRK and the ROK moving toward their own brand of one-country, two-systems relationship." Plate also pointed out that one important prerequisite for overall peace on the peninsula is a promise from the US that someday its troops will leave the ROK once there is a neutral, de- nuclearized Korea. Plate concluded, "In effect, then, America must follow a policy so visionary that its eventual military withdrawal not only is inevitable but can be clearly foreseen. Above all else, it must avoid being be so stuck in the cement of the status quo that it unwittingly helps to reinforce conditions that require it to become even more militarily involved over the long run."

The Christian Science Monitor carried a commentary by Michael J. Green, Olin Fellow for Asian Security at the Council on Foreign Relations ("NEW DIPLOMACY WITH N. KOREA," 06/23/99, 10) which argued that, although it is unlikely that the DPRK will suddenly change its ways, there are signs that the DPRK might be ready to approach a policy of opening and engagement. Green noted, "The odds of transforming the regime in the North are long, to be sure; but as long as the US, Japan, and South Korea maintain a robust deterrent, it is worth testing the possibility." According to Green, a bipartisan independent task force sponsored by the Council on Foreign Relations agreed in a report last summer, which stated, "Stability on the Korean peninsula will only come with a combination of strong defense preparedness coupled with active steps to end the isolation of the DPRK regime." The report also recommended that the US President use his constitutional authority to lift some sanctions on the DPRK to pave the way for a larger deal to reduce the dangers of war. Green concluded, "Congress could be brought along with such a policy if convinced the administration is serious about forming a long- term policy to reduce the North Korean threat. US Envoy to the DPRK William Perry's proposal began to build that case; now the administration must follow through."

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9. Japanese Hijacker Arrested

The Associated Press (Busaba Sivasomboon, "COUNTERFEIT SUSPECT ACQUITTED," Chonburi, Thailand, 06/23/99) reported that a Thai provincial criminal court on Wednesday acquitted, Yoshimi Tanaka, a former member of the Japanese Red Army terror group of counterfeiting charges. Tanaka is also wanted in Japan for allegedly hijacking a Japanese jetliner to the DPRK in 1970 while he was with the Red Army. The Japanese government has asked Thailand to turn over Tanaka, and the Thai Foreign Ministry said it would comply. Tanaka stated, "I'm very happy. I want to go back to Japan to explain to the Japanese people about the hijacking."

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10. PRC View of US

Reuters ("CHINA SAYS U.S. WANTS TO BECOME "LORD OF EARTH"," Beijing, 06/22/99) reported that a commentary in the PRC state-run People's Daily on Tuesday compared the US to Nazi Germany and said NATO's bombing of Yugoslavia reflected US's ambition to become "Lord of the Earth." The commentary read, "If you ask which country wants to become the 'Lord of the Earth' as the then Nazi Germany had tried to, there is only one answer. It is the hegemonism-pursuing United States."

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11. PRC-Taiwan Relations

Reuters ("TAIWAN'S LEE OFFERS TO PLAY GOLF WITH CHINA LEADER," Taipei, 06/22/99) reported that Taiwan President Lee Teng-hui on Tuesday offered to play golf with the leader of the PRC in a bid to ease tension between the two sides of the Taiwan Strait. Taiwan's state-funded Central News Agency (CNA) quoted Lee as saying during a meeting with Taiwan businessmen investing in the PRC, "Leaders of the two sides can meet through golf games in the future." Lee asked the business executives to convey his message to PRC leaders, saying such a meeting could help "improve the atmosphere across the Taiwan Strait and increase harmony between the sides."

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12. PRC-Russian Relations

Reuters ("CHINA'S LI SAYS PLEASED BY SINO-RUSSIAN TIES," Beijing, 06/22/99) reported that PRC Parliament Chief Li Peng met with Oleg Korolyov, vice-chairman of Russia's Federation Council, who is visiting the PRC. Li stated, "China is pleased to see Sino-Russian exchange and cooperation in politics, economy, culture and other areas have been growing constantly. The two countries have forged an equal and mutually trusting partnership of strategic cooperation geared towards the 21st century." Li added that the PRC parliament was ready to advance ties with Russia's Federation Council and State Duma to push forward bilateral relations.

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13. PRC-Japan Relations

The Los Angeles Times ("CHINA, JAPAN DIVIDED BY A SHARED HISTORY," Tokyo, 06/23/99) reported that, according to analysts, although Japanese Prime Minister Keizo Obuchi will be visiting the PRC on July 8, the outlook for the Japan-PRC summit does not look promising. Analysts have said that although Obuchi will voice support for the PRC's entry into the World Trade Organization (WTO), Japan and the PRC will find much less on which they can agree on foreign policy and defense. Shiro Sadoshima, director of Chinese and Mongolian affairs at the Japanese Foreign Ministry, stated, "We believe it would be a good time for us to explain our defense policies, and also our position on the Taiwan issue, at a high level." Younger Japanese analysts think that there are limits to how far the Japanese government should go. Referring to Japanese nationalist Shintaro Ishihara, governor of Tokyo prefecture and the author of "Japan that can Say No," Keio University professor Ryosei Kokubun stated, "We are not all Ishihara-sans. But in some ways, we understand what he means."

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14. PRC View of Kosovo

The Associated Press ("CHINA WANTS KOSOVO INVESTIGATION," Beijing, 06/22/99) reported that PRC Foreign Ministry spokeswoman Zhang Qiyue said on Tuesday that an investigation is needed to prove whether ethnic cleansing occurred in Kosovo. Zhang stated, "Whether this ethnic cleansing has happened or what is the concept of ethnic cleansing, a conclusion can only be drawn after a serious investigation." Zhang also said that the United Nations (UN) should discuss how the investigation should proceed. Zhang insisted that PRC position has not changed. She also said NATO countries should help Yugoslavia rebuild regardless of whether Slobodan Milosevic remains in power.

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15. US Arms Exports

The New York Times carried a commentary by Oscar Arias, the former President of Costa Rica, ("STOPPING AMERICA'S MOST LETHAL EXPORT," San Jose, Costa Rica, 06/23/99) which argued that the US should stop giving away military secrets in the form of high-tech arms exports. Arias, who also won the Nobel Peace Prize in 1987, wrote, "By selling advanced weaponry throughout the world, wealthy military contractors [in the US] not only weaken national security and squeeze taxpayers at home but also strengthen dictators and worsen human misery abroad." Arias said that while the US arms industry profits, people throughout the world suffer, and stated, "Americans are hurt when the defense budget squanders money that could be used to repair schools or to guarantee universal health care. Overseas, American-made arms are often turned against civilians or used to strengthen dictators." Arias suggested that to insure "real national security," the US should stop exporting arms instead of producing more sophisticated weapons. Arias also suggested that the US should set more realistic defense budgets, including allocations for arms acquisitions. Arias concluded, "The United States should strongly support an international code of conduct on arms transfers. This initiative, which is being promoted by a commission of 17 Nobel Peace laureates, would insure that weapons are not sold to countries that violate human rights or suppress democracy. By adopting tough controls on arms exports, they [the US Congress] can advance peace and democracy worldwide."

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16. US Missile Defense

The Los Angeles Times carried a commentary by James H. Anderson, Defense Policy Analyst at the Heritage Foundation ("CHINA WITH NEW TECHNICAL POTENTIAL?" 06/22/99) which argued that the PRC could build weapons that could penetrate the missile defense system proposed by US President Bill Clinton's administration. Anderson pointed out that the missile defense system is inadequate, and even if the system were able to intercept missiles, "deadly fallout from a nuclear, chemical or biological weapon would occur." Anderson stated, "To counter this threat, the U.S. should develop defenses to identify, track and shoot down hostile missiles shortly after liftoff, when they are most vulnerable to interceptors and before they can release their payload. By developing this 'boost-phase' intercept capability, the U.S. will offset the ability of China, or any other country, to endanger Americans with ballistic missiles." Anderson concluded that the US should begin enhancing the proposed missile defense system by upgrading the antimissile capability of the US Navy defense system.

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17. Kashmir Conflict

Reuters ("PAKISTAN HEIGHTENS SECURITY ON WAR FEARS," Karachi, 06/23/99) reported that, according to Pakistani officials, Pakistan has intensified security at key installations amid fears of war with India over the disputed Kashmir region. The officials said that anti-aircraft guns and missiles had been deployed at strategic points in the country's biggest city, Karachi, including the main international airport, two refineries, Pakistan Steel Mills, power stations and the city's port. An unnamed Pakistani military official stated, "These are preliminary steps and precautionary measures against possible (Indian) air attack." Another official stated, "This is part of phase-one preparations," adding that more stringent security measures would be taken if necessary.

Reuters (Himangshu Watts, "INDIA RATTLES SABRE AS KASHMIR BATTLES RAGE," New Delhi, 06/23/99) reported that India on Wednesday raised the possibility of its forces crossing into the Pakistan-held part of Kashmir. India's Interior minister said that the India should be prepared for an all-out war. Indian Army Chief of Staff Ved Prakash Malik said that crossing the Line of Control could become an option, but it would need the approval of the government. Malik stated, "We review the situation all the time and I believe that if it becomes necessary to cross the Line of Control in the supreme national interest, the matter will be taken up in the cabinet." Pakistan's military, however, said that it did not see full-scale war as imminent.

The Associated Press ("INDIA CONTINUES KASHMIR OFFENSIVE," Dras, 06/23/99) reported that Indian soldiers made final preparations on Wednesday to clear Islamic guerrillas from the last peak overlooking a northern highway in Kashmir. India's Home Minister L.K. Advani said that he could not rule out a third, full-scale war over the Himalayan territory. Advani stated, "Pakistan is a rogue state having several centers of power. I cannot say there could not be a war."

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18. US Policy on Kashmir Dispute

The Associated Press ("U.S. GEN. ZINNI TO MAKE SURPRISE VISIT TO PAKISTAN WED," Islamabad, 06/23/99) reported that the US Foreign Ministry issued a statement, which said that US General Anthony Zinni, who is also a commander in chief of the US Central Command, is making a visit to Pakistan. According to the statement, Zinni will be accompanied by Gibson Lanpher, deputy assistant secretary of state. The statement read, "General Zinni will be briefed by concerned authorities on India's military escalation on the line of control and reports on widening conflict. He will also be informed about Pakistan's initiatives and positive moves for defusing the situation and revival of the dialogue in the spirit of the Lahore Declaration."

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19. UK Policy on Kashmir Dispute

Reuters ("BRITAIN BACKS INDIA, RAPS PAKISTAN ON KASHMIR," New Delhi, 06/22/99) reported that British envoy to India Rob Young said on Tuesday that the UK backed India's stand against infiltrators in Kashmir. Young stated, "We have sympathy for India's position. The U.K. and other countries have given some tough messages to the Pakistan government and we will continue to do so, while calling on India to exercise restraint." Young added that India should not risk jeopardizing the international support it has won and also should not cross the Line of Control.

II. Republic of Korea

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1. DPRK-ROK Talks

The Korea Herald (Shin Yong-bae, "SOUTH, NORTH COVER LITTLE GROUND IN FIRST ROUND OF BEIJING TALKS," Seoul, 06/23/99) and Joongang Ilbo (Shim Shang-bok, "HIGH-RANKING TALKS BETWEEN RIVAL KOREAS ENDS WITHOUT FRUIT," Seoul, 06/23/99) reported that the inter-Korean vice-ministerial talks opened on Tuesday. The ROK chief delegate, Vice Unification Minister Yang Young-shik, said that the talks ended with little progress as both sides repeated their basic positions on family reunions and the naval skirmish. "The two sides just exchanged opinions on family reunions, the implementation of the Inter-Korean Basic Agreement and the incident in the West Sea," said Yang. On the reunion issue, the ROK proposed to discuss concrete ways to allow families to find out if their relatives are still alive, exchange letters, and reunite. The ROK delegation also demanded that the ROK and the DPRK establish liaison offices as stipulated in the 1992 Inter-Korean Basic Agreement on reconciliation, non-aggression and cooperation. Yang refused to make public how the DPRK delegation reacted to those proposals. The two sides also discussed the armed clash between the ROK and DPRK navies.

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2. Detained Tourist in DPRK

Chosun Ilbo (Yoon Young-shin, "TOURIST STILL NOT RELEASED," Seoul, 06/23/99) reported that the ROK government and Hyundai Group announced on Tuesday that they negotiated with the DPRK for the release of thirty-six year old housewife Min Young-mi, a tourist on the Kumgang Mountain trip, but came to no agreement. The DPRK is saying that Min is a "trained instigator of defection" and refuses to release her. The ROK government and Hyundai continue to work for Min's safe return on the basis that the DPRK committed a breach in the personal safety agreement made on the behalf of the Kumgang tours.

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3. Mt. Kumgang Tour

The Korea Herald (Kim Ji-ho, "MT. KUMGANG TOUR SUSPENDED; P'YANG DENOUNCES SEOUL FOR DISPATCHING SPY," Seoul, 06/23/99) reported that the inter-Korean tour project is on the verge of interruption with the DPRK rejecting the ROK's call for the immediate release of an ROK tourist. As Min Young-mi has been held for three days, the Hyundai Group suspended further operation of all its three cruise liners. While demanding that the DPRK authority guarantee the security of tourists, Hyundai banned some 540 tourists on board the Kumgang from leaving the ship until it receives the DPRK's assurance, an official at the Hyundai Merchant Marine Co. said.

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4. Sunshine Policy

The Korea Times (Son Key-young, "SUNSHINE POLICY COMES UNDER FIRE FROM OPPOSITION AGAIN," Seoul, 06/23/99) reported that the sunshine policy of the ROK government has come under fire from the opposition camp again, following the DPRK detention of an ROK tourist at Mt. Kumgang on Monday. The ROK Grand National Party (GNP) immediately blamed the engagement policy for the incident, saying, "It is the result of the government's experimentation with the policy, even risking tourists." The GNP also called for immediate suspension of all inter-Korean projects until the DPRK releases the tourist. Representative Lee Hoi-chang, president of the GNP, urged, "For early return of the tourist, the government should make every effort, including suspension of the fertilizer supplies."

III. People's Republic of China

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1. DPRK-ROK Talks

People's Daily ("DPRK, ROK HOLD VICE-MINISTERIAL TALKS," Xu Baokang, Beijing, 6/23/99, A4) reported that vice-ministerial talks between the DPRK and the ROK were held at the Kempinski Hotel in Beijing on the morning of June 21. During the talks, the two sides expressed their basic positions and exchanged their views on the issues of the reunion of separated family members, the implementation of the 1991 agreement, and the recent naval confrontation. The report said that when the head of the DPRK delegation, Park Young-soo, went into the meeting room, his ROK counterpart Yang Yong-shik, who arrived there earlier, stepped forward and shook hands warmly. The report said that the two sides hope that the talks will reach positive achievements. The two sides decided after consultations that the date of the next round of talks will be fixed by phone, the report said.

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2. DPRK-US Talks

People's Daily ("DPRK, US HOLD GENERAL-LEVEL TALKS AGAIN," Zhao Jiaming, Pyongyang, 6/23/99, A6) said that according to reports from the Korean Central News Agency, the DPRK's People's Army and US Forces-ROK held talks again in Panmunjom on June 22. They discussed the naval confrontation between the DPRK and the ROK, the report said. However, as the two sides' views were largely divergent on this issue, the talks still did not reach any achievement, the report said.

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3. DPRK-PRC Relations

People's Daily ("DPRK-CHINESE FRIENDSHIP HIGHLY PRAISED," Zhao Jiaming, Pyongyang, 6/21/99, A6) said that the DPRK's official newspaper Rodong Shinbum published an editorial on its front page on June 20, speaking highly of the achievements reached by a DPRK delegation's visit to the PRC. The editorial noted that the traditional DPRK-Chinese friendship is unvanquishable. The editorial said that Kim Yong-nam's visit to the PRC was an important event. The visit made great contributions to the strengthening of the traditional friendship and cooperative relations between the two parties, two countries, and two peoples. It will exert far-reaching influence on the situation in Northeast Asia, including the Korean Peninsula, and the world, the editorial said.

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4. Bombing of PRC Embassy

China Daily ("CHINA DOESN'T ACCEPT US EXPLANATION," 6/18/99, A1) reported that in Beijing on June 16, US envoy Undersecretary of State Thomas R. Pickering presented to the PRC Government a US Government report on the results of its investigation into the US-led NATO's attack on the PRC Embassy in the Federal Republic of Yugoslavia (FRY). The US investigation showed that multiple factors and errors in several departments of the US Government were responsible for the "tragic mistaken bombing" of the PRC Embassy, Pickering said. However, PRC Foreign Minister Tang Jiaxuan said that the US explanation was "unconvincing," and therefore the Chinese Government and people cannot accept the conclusion that the "bombing was a mistake." First of all, the report said, it was impossible for the US side not to know the accurate location of the PRC Embassy in FRY. Second, everything points to the fact that the US side knew full well the overall layout of foreign missions in Belgrade. Third, the US claim of locating the Yugoslav Federal Directorate for Supply and Procurement (FDSP), an intended target for an air strike, by employing a method that is used in the field by the Army, is not logical. Fourth, the US target databases are updated frequently with a clearly distinguished target list and a no-hit list. The US argument that the PRC Embassy was mistakenly fed into the databases as the FDSP does not hold ground. Fifth, the explanation given by the US side that its review process failed to detect and correct the intelligence errors is inconceivable. The PRC side pointed out that the attack on the PRC Embassy constituted an act of international unlawfulness on the part of the US, the report said. The PRC side demanded that the US Government should take full compensation responsibility and make prompt, adequate, and effective compensations for the Chinese loss of lives, injuries, and loss of property, it reported.

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5. Japanese Loans to PRC

Business Weekly ("BANK DENIES REPORT ON JAPAN LOANS," 6/20-26/1999, A1) reported that officials from the Export-Import Bank of Japan told the newspaper last week that the bank is not changing its PRC-targeted unconditional loan policy, since this is part of a long-term strategy of the Japanese Government. A report in the June 7 issue of the Sankei Shimbun daily said the Export-Import Bank of Japan had decided to cancel its preferential loan terms for the PRC. It said that the PRC for a long time had been given much lower interest rates compared with those offered to other countries. However, Munetaka Horiguchi, deputy chief representative of the bank's Beijing office, said, "Our bank has never given especially favorable interest rate treatment to China." "Although we are not aiming to make profits, as a bank we have to keep a balance; therefore, the interest rates for our loans are decided on the basis of our fund-raising costs," he said. "We will not make money-losing loans," Horiguchi added. According to Hidekoshi Nakahara, representative assistant of the Export-Import Bank's Beijing office, the bank is expected to surpass the World Bank in the scale of its lending after it combines with the Overseas Economic Cooperation Fund of Japan to become the Japan Bank for International Cooperation on October 1. "There will be no change in our loan policy to China after the merger," said Nakahara.

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6. PRC-Russian Relations

China Daily ("SINO-RUSSIAN BORDER TRADE BOOMS," 6/22/99, A1) reported that a senior Chinese lawmaker said on June 21 that enormous potential exists for Sino-Russian border economic and trade cooperation. Zou Jiahua, vice-chairman of the Standing Committee of the National People's Congress (NPC), made the remark at a Sino-Russian seminar on regional cooperation oriented toward the 21st century, which opened in Beijing on June 21. He said that joint efforts made by local government leaders and entrepreneurs of the two countries will ensure that border area economic and trade cooperation will continue to develop. Statistics indicate that five PRC provinces and autonomous regions--including Heilongjiang, Jilin, Liaoning, Inner Mongolia, and Xinjiang--increased trade volumes with Russia by a total of 30.1 percent on an annual basis last year, the report said.

People's Daily ("LI PENG MEETS RUSSIAN GUESTS," Beijing, 6/23/99, A1) reported that the PRC's top legislator, Li Peng, said on June 22 that the PRC is pleased that Sino-Russian exchanges and cooperation in politics, economics, culture and other areas are enjoying continuing growth as the two countries have forged an equal and mutually-trusting partnership of strategic cooperation geared towards the 21st century. Li, chairman of the Chinese National People's Congress (NPC) Standing Committee, made his remarks during a meeting with Oleg Korolyov, vice-chairman of Russia's Federation Council, who is in Beijing for a two-day seminar on Sino- Russian regional cooperation. Li briefed the Russian visitors on the NPC's operations and said the NPC is ready to further advance its friendly ties with Russia's Federation Council and State Duma, to increase mutual understanding and push forward the healthy development of Sino-Russian relations.

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7. Shipment of Plutonium to Japan

China Daily ("PLUTONIUM SHIPMENT THREATENED," Seoul, 6/23/99, A11) reported that international and ROK environmental activists threatened on June 22 to take action against a shipment of weapons-grade plutonium destined for Japan. Greenpeace International and the Korean Federation of Environmental Movements (KFEM) made the threat amid growing concern over the 440 kilograms of plutonium aboard two ships. Greenpeace said the shipment was due to leave France and Britain as early as July. One ship will deliver more than 220 kilograms of plutonium to Takahama, a nuclear power plant in Fukui, western Japan, as early as mid-September, it said. The other ship is to carry the rest of the plutonium to a nuclear power plant on the east coast, the report said.

IV. Latest NATO Nuclear Flash

The following is the table of contents for the latest NATO Nuclear Flash. The flash is available online at:

1. Russian Forces Practice Defense Against "Blue" Forces.
2. U.S. And Russia To Attempt New Nuclear Talks.
3. Russian Ratification of START II Before START III Talks Is "Preferable," White House Says.
4. "This Treaty Must Be Ratified."
5. No Shift Seen in Pakistan's Nuclear First Strike Strategy.
6. France Closes Nuclear Missile Base.
7. No First Use Is Out of the Question and Nuclear Bombs Stay in Europe, NATO Officials Tell IPPNW.
8. Planning Arms Control and Defense Modernization.

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Timothy L. Savage:
Berkeley, California, United States

Wade L. Huntley:
Berkeley, California, United States

Lee Dong-young:
Seoul, Republic of Korea

Hiroyasu Akutsu:
Tokyo, Japan

Peter Razvin:
Moscow, Russian Federation

Chunsi Wu:
Shanghai, People's Republic of China

Dingli Shen:
Shanghai, People's Republic of China

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