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Beijing Scene, Volume 5, Issue 21, August 13 - 19


What If I Were Real?
In Zhengzhou City, Henan Province, a man named Meng Qingsan had no work and stayed at home thinking of how to get rich. Suddenly one day he got an idea, went out and arranged to have a letter forged in the name of the Henan Provincial People's Procuratorate.

In the middle of March this year, Meng Qingsan took the forged reference letter from the Henan Provincial People's Procuratorate and went to Yingyang City where he sought out the head of the local transportation department. Meng Qingsan announced, "I am from the Henan Province People's Procuractorate and I am here to investigate an alleged case of corruption withi a n this city's transportation department!" Meng took the fake letter and showed it to the head of the transportation department as evidence of his authority to investigate the alleged case.

The head of the transportation department believed that the letter was for real and immediately panicked. That same day, the head of the transportation department immediately invited Meng Qingsan to the up-market "Fancy Food City Restaurant" for lunch. After lunch the head of the local transportation department slipped Meng Qingsan an envelope with RMB 5000 inside describing the payment as "an activity expense account because you are so tired having come here to work hard."

Meng Qingsan ran off with the money. Four months later Meng was arrested for fraud. It has not been reported yet what happened to the head of the transportation department in Yingyang City, who obviously must have had some corruption problem otherwise he would not have offered Meng so much in a bribe so quickly! (Baokan Wenzhai).

Chinese Cyberwarriors
The Chinese military hopes to develop the capability of engaging in warfare over the Internet. The Liberation Army Daily, a mouthpiece of China's Peoples Liberation Army (PLA), recently called for the development of this capability. The paper says that, by recruiting civilian hackers and training "cyberwarriors" at Army schools, China could be prepared for an Internet war.

The call was made in response to several hacking incidents in the United States and China after NATO's bombing of China's Belgrade Embassy. The Army paper reported that a "battle" was fought on the Internet between US and Chinese hackers.

In May, Chinese hackers infiltrated various U.S. Government sites including the Department of Energy (DOE), the Department of the Interior (DOI), the US Embassy in China, and the Naval Communications Command. Nearly a thousand US civilian sites were broken into in the two days following the bombing, sources say.

According to the Chinese military paper, US hackers responded by "counterattacking" several civilian sites in China.

More recently, the Chinese Government has been accused of waging a cyber war against the outlawed Chinese sect, Falun Gong. Webmasters in Canada, the United States, and the United Kingdom have reported that their sites, hosting or linking to the sect's sites, were sabotaged or brought down by hackers traced to Chinese domains.

Billions on Golden Celebration
Beijing plans to spend RMB 4.5 billion to celebrate the 50th anniversary of the People's Republic of China on October 1.

A parade on National Day will cost RMB 2.5 billion, and a facelift of the capital city is estimated at RMB 2 billion. To avoid social unrest, Beijing also ordered local governments not to levy additional fees on farmers and laborers for the special occasion.

A new theme is currently being promoted: the construction of a socialist spiritual civilization, and a new China under three leaders: Mao Zedong, Deng Xiaoping and Jiang Zemin.

Dirty Water
A study of drinking water indicated that only 23 percent of water samples in large cities satisfy the national health standards, reports the Xinmin Evening News, a Shanghai-based newspaper.

According to figures released by China's Academy of Preventive Medicine, the study did not cover drinking water samples from townships and villages. That means that the potential failure rate can be much higher.

The academy pointed out that tap water in cities often lacks clarity, has an unacceptably large content of iron and manganese, and shows high counts of coliform bacteria when tested. Foul odor contamination is also a big problem. The study further criticized excessive use of chlorine additives by water authorities during water treatment, which is blamed as the main cause for high occurrences of stomach and intestinal cancer in China.

Chinese Yellow Pages Online:
A Chinese search engine published the Chinese web-site yellow-pages jointly with China Electronics Publishing House. With over 30,000 web-sites, the yellow-pages are divided into five sections: Comprehensive, Commercial/Economic, Computers/Science/Games, Culture/Education, and Entertainment/Life. The number of Chinese Internet surfers has reached 6 million and it is expected to climb to 15 million in the upcoming three years.
Communication Weekly July 3, 1999

Debt Recovery Details
China will soon set up three more asset-management companies to take over the non-performing loans of its state-owned commercial banks, officials say.

The three firms will be named the Huarong, Changcheng and Dongfang Asset Management Companies (AMCs), says Wang Wanbin, deputy director at the State Economic and Trade Commission.

The three new AMCs will take over the non-performing loans of the Industrial and Commercial Bank of China, Agricultural Bank of China and Bank of China respectively, he says.

"The AMCs are state-owned sole-proprietorship financial enterprises. They will do their jobs independently and the government will refrain from interfering," says Wang.

Debt-to-equity conversions would start in the second half of 1999, so that AMCs which have taken over the non-performing loans can convert the debts owed to the banks by state-owned enterprises into shares, he says.

As shareholders of the debtor enterprises, the AMCs will earn dividends and can take part in decision-making at the firms concerned, but they will not be allowed to interfere in the enterprises's normal business activities, he says.

"After the economic situation of the enterprise has taken a turn for the better, the shares controlled by the AMC could be returned to the enterprise, either by listing the company, transfer or buy-back by the enterprise concerned."

The enterprises would "independently" decide which route to take, he says.
"These enterprises which we are going to apply (for debt-to-equity conversions) are those with high asset-liability ratios, which have resulted from the lack of recapitalization by the state in the past year,"says Wang.

"So long as the asset-liability ratios are reduced, they could have a better economic performance."

Such debt-to-equity swaps would also be a win-win situation for both the state-owned enterprises and the AMCs, Wang says.

It would speed up the recovery of non-performing loans for the commercial banks and increase their liquidity, while enabling the modernization and increased profitability of state-owned enterprises.

Foreign investors could also take part in the process by trading the shares of state-owned enterprises which were listed on both domestic and international stock exchanges, he said.

China's first asset-management company to take over non-performing loans in the banking sector was set up in April.

Cinda AMC, a test case for the rehabilitation of the banks, had registered capital of RMB 10 billion (US$1.2 billion) provided by the Finance Ministry.

The firm took over a portfolio of non-performing loans assets from China Construction Bank, one of the big four state commercial banks.
The other three AMCs were to get approximately the same amount from the Finance Ministry, vice minister Lou Jiwei says.


  Previous Briefs...

August 6 - 12, 1999

July 30 - August 5, 1999

July 23 -29, 1999

July 16 -22, 1999

July 9 - 15, 1999

July 2 - 8, 1999

June 25 - July 1, 1999


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