Quick Graft Probe Urged
The top leadership has asked investigators
to try to wrap up their investigation into China's biggest
smuggling and corruption scandal since 1949 by the end
of next month, a Guangzhou newspaper says.
Hundreds of anti-graft police from
the Central Discipline Inspection Commission are still
investigating the Yuan Hua smuggling scandal in Xiamen,
Set up by Lai Changxing, a Fujian
migrant based in Hong Kong, the Yuan Hua group of companies
is reported to have smuggled billions of yuan in goods,
including diesel, telecommunications equipment and cars
into the mainland in the past decade.
A report carried on the Guangzhou
Daily website says investigators are trying to wrap
up their investigation by the end of February. It also
says that some of the suspects had been referred for
prosecution. Zhang Maodong, former director of the Fujian
Post and Telecommunications Bureau, was reportedly tried
last week for helping to smuggle US$300 million worth
of telecommunication equipment. Meanwhile, the Xiamen
leadership will undergo a major reshuffle.
At the Fujian People's Congress,
senior provincial and city officials have been briefed
about the planned switches.
"Officials were ordered to ensure
that anti-smuggling operations could be effectively
carried out," a Fujian official says. "We were told
that the investigation would be closed soon to minimize
the negative impact on the normal operation of the Government,"
the official adds.
The Guangzhou Daily report says Qinghai
Vice-Governor Jia Xitai will be transferred to Fujian,
where he will serve as vice-governor, while Fujian Vice-Governor
Zhu Yayan will become mayor of Xiamen.
Chen Bingfa, president of Xiamen
Intermediate People's Court, is set to join the city
party's standing committee and be in charge of the anti-corruption
It is reported that Beijing has asked
Interpol to trace Lai, who is said to have fled overseas.
Also believed to be on the run from police are Xiamen
Vice-Mayor Lan Fu and his wife.
Three Gorges Graft Scam
Corrupt officials have embezzled
RMB5 billion (US$600 million) set aside to relocate
people out of the path of China's Three Gorges Dam project,
state media reports.
"Five billion yuan for resettlement
of residents in the Three Gorges Dam area was embezzled.
Fourteen people were involved," the People's Daily says,
giving no further details.
The huge scam - revealed by auditor
general Li Jinhua as part of the RMB125 billion of state
funds embezzled last year - represents around 12 percent
of the budget of RMB40 billion set aside to relocate
1.2 million people at the dam site. It is the first
time that details of corruption ensnaring the huge project
have been revealed. The report also shows that the Ministry
of Water Resources, which is in charge of the dam project,
"illegally raised" RMB3 billion which was later "misused."
The RMB200 billion (US$27 billion)
dam project - destined to become the world's largest
hydroelectric dam when it is completed in 2009 - has
been beset by a series of financial, environmental and
social problems. Many people living in the area are
reluctant to leave the banks of the Yangtze River to
make way for the 632-square-kilometer (252-square-mile)
reservoir, while experts have questioned the financial
logic of the project and warned of the damaging impact
on the environment.
Sina IPO Delayed
Beijing's Sina.com, which hoped to
list its stock on the American Nasdaq exchange at the
start of this year, has completed all the preparations
needed to do so.
However, because China's Ministry
of Information Industry (MII) has not expressed its
position on this stock listing, Sina.com will postpone
its initial public offering.
This case has forced other Chinese
Internet companies wanting to list their stock abroad
to adopt a wait-and-see attitude, Hexun Caijing (Homeway
Financial News) reports.
Sources say recently that the brokers,
China International Capital and Morgan Stanley Dean
Witter & Co., have completed all preparations to list
Sina.com on Nasdaq, and that the China Securities Regulatory
Commission has given its approval in principle. But,
MII, the ministry in charge of China's Internet sector,
has yet to voice its opinion.
According to the newspaper, the relevant
parties reportedly will seek the support of higher authorities,
such as the State Council, to resolve this issue as
quickly as possible.
Industry observers note that MII's
current policies on Internet service providers (ISP)
and Internet content providers (ICP) are not explicit,
and that there are no clear regulations or limits on
foreign firms' participation in these sectors.
Many foreign companies are already
participating secretly in the operations of Chinese
ICPs and ISPs, which is why the MII has not yet clarified
its position on Sina.com's listing. Sina.com currently
also has foreign investment.
According to other sources, MII believes
that Internet stocks' global upsurge is a "bubble."
It therefore is adopting a cautious policy concerning
listings of Chinese Internet stocks.
The newspaper says China's officials
fear the impact on the country's industrial structure
if many Chinese enterprises hurry to launch Internet
stocks and list them abroad.
China Limits Internet News
China's press regulators will introduce
new regulations this month that explicitly control the
release of news over the Internet. These new regulations
reportedly prohibit Chinese websites from releasing
news and permit them only to quote news reports published
in domestic newspapers, the Hong Kong Ming Pao newspaper
China's Internet companies are currently
not allowed to hire reporters. The government has established
a RMB1 billion (US$120.9 million) fund to help members
of the traditional mass media establish their own websites.
An official in charge of the Propaganda
Department of the Communist Party of China's (CPC) Central
Committee recently emphasized that China's small newspapers
and online sources of news must be well supervised.
Last year, high-ranking officials
from the CPC Central Committee's Propaganda Department
and the State Council's Press Office frequently reviewed
the Internet editions of central government newspapers.
These officials emphasized repeatedly that press reform
should be accelerated and the mass media's Internet
presence should be strengthened.
People in Chinese Internet circles
say the predominant content of many Chinese websites'
is news and information services, and that these Internet
content providers' major source of income is from advertising
and providing value-added news services. These observers
also say if the government's new regulations prohibit
these sites from releasing news, this will greatly restrict
Many national Chinese newspapers
are actively preparing to launch websites focused on
news and information services.
Chinese Internet observers are concerned
that the traditional mass media's web presence will
accelerate and that Internet companies not permitted
to release news will lose their competitiveness. By
the end of 1998, more than 120 traditional Chinese mass
media companies had established themselves on the Internet.
By mid-1999, this number had more than doubled.