Atlantic Council

China postponed a summit with the EU scheduled for next Monday in France because of planned visits between the Dalai Lama and European heads of state, the FT reported:

"The Chinese government requested the meeting be postponed because several EU leaders, including President Nicolas Sarkozy of France, were planning to meet the Dalai Lama, Tibetan spiritual leader, the EU said in a statement.

The bloc said it regretted China’s decision to call off the summit, due to take place in the French city of Lyon, given the financial and economic crisis spreading around the world.  'The EU, which had set ambitious objectives for the 11th EU-China summit takes note and regrets China’s decision.  The EU will continue to promote a relationship of strategic partnership with China, particularly at a moment when the global economic and financial situation calls for very close co-operation between Europe and China.'"

In December, the Dalai Lama will meet with Sarkozy in Poland as well as visit the Czech Republic and the European Parliament in Belgium.  Tensions between the EU and China have been particularly pronounced this year:

"Chinese anger over European leaders willingness to meet the Dalai Lama has put severe strain on its relationships with several capitals, including London, Berlin and Paris.

Relations between China and France, holder of the EU’s rotating presidency, have been especially fraught this year.  There were violent protests in Paris against the parading of the Olympic torch en route for Beijing following the repression of riots in Tibet.  Anger over French criticism prompted a boycott of French businesses and goods by Chinese consumers.  Mr. Sarkozy threatened to boycott to the games’ opening ceremony unless Beijing entered a dialogue with the exiled Tibetan leadership."

Reuters also noted increased strain on EU-China relations, especially over trade disputes:

"At a meeting between Asian and EU leaders in Beijing last month, the EU side backed a greater say for China in global financial bodies but urged China to use its clout to help to resolve the global crisis.  The mood for that meeting was strained by a decision a day earlier by the European Parliament to award its annual human rights prize to Hu Jia, a Chinese dissident jailed for subversion after testifying to the assembly last year.

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This month Brussels imposed anti-dumping duties on Chinese-made candles and non-alloy steel products and added tariffs to imports of some citrus fruits products.  China routinely denies it breaks trade rules and says Europe resorts to protectionism against its low-cost advantage."

Sarkozy intends to move ahead with plans to meet the Dalai Lama, a French official said.

Medvedev and Brazilian president Luiz Inacio Lula da Silva called for a summit of the emerging market BRIC countries (Brazil, Russia, India, and China) to take place in Russia in 2009.  Reuters reported:

"The BRIC nations, a popular acronym for Brazil, Russia, India and China, have hastened moves to take a greater say in world affairs and the global economy in response to the world financial crisis emanating from the United States.

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The countries -- the world's four largest emerging markets -- met as a group for the first time at a G20 gathering of finance ministers in Sao Paulo this month and put out a joint statement calling for a greater say in world affairs and the global economy.

'BRIC is an important force in discussing global problems. We have high expectations from the BRIC summit,' Lula said. 'We, the developing countries, should not allow the crisis to harm our development. We must jointly with India, China and Russia help the world to get out of the crisis.'"

The two countries also signed agreements on military technology cooperation.  Whether China and India are on board still remains to be seen.  However, the prospect of the BRIC countries acting as a unified economic bloc seems doubtful.

"Max" Yu Tsung-chi, a senior fellow at the Atlantic Council, published an editorial in today's Taipei Times entitled "Taking National Defense Seriously."

Retail sales in China rose at nearly their highest pace in nine years, Bloomberg reports.  Despite the global financial crisis and a slumping Chinese housing market, year-on-year sales for October grew 22 percent to $148 billion.  September's year-on-year figure was an even higher 23.2 percent.

The data quickly follow news on Sunday of Beijing's $586 billion fiscal stimulus package that will focus largely on infrastructure.  Although Beijing is not expected to participate in any coordinated financial rescue packages or reforms with the West, the unveiling of the Chinese bailout certainly answers doubts over whether China would take more than marginal action in dealing with the global financial crisis.

Furthermore, the recent jump in retail sales seems to run against speculation that China would not reorient its economy toward domestic demand.  Although its fundamental economic model will almost assuredly remain export-driven (as is evident by the record $32.5 billion trade surplus clocked in October), the country's leadership does seem to be warming to the idea of engaging domestic markets.

The Atlantic Council’s Robert Manning recently focused our attention on the October Asia-Europe Summit in Beijing.  We Americans might have missed the significance of the emerging multipolarity and shifts in global power while up to our elbows in election politics and financial woes.

Chinese and Taiwanese officials will sign agreements paving the way for direct flights between the two entities, new cargo routes, and food safety regulations following Beijing's highest level political visit to Taipei in 60 years, Reuters reported.  China's chief negotiator, Chen Yunlin, and his Taiwanese counterpart P.K. Chiang put aside security and sovereignty issues to sign 13 agreements opening flight and cargo routes for the first time ever.  Chen also said he wanted to normalize financial ties with Taiwan.

Taiwan's pro-independence Democratic Progressive Party (DPP) protested the planned arrangements, but cross-strait relations have significantly warmed since Taiwanese President Ma Ying-jeou took office in May, pursing a more conciliatory policy toward China.

Chen Yunlin, China's top negotiator on Taiwan affairs, is to land on the island Monday for talks with Taiwan about possible trade and transit deals, according to Reuters. He will be the highest-level Chinese official to land on the self-ruled island in decades. Since China-friendly Taiwan President Ma Ying-jeou took office in May, relations have thawed with a series of trade and transit deals.

But from Monday night, Taiwan's main opposition party, concerned that Taiwan is getting too close to China, is set to begin a three-day protest sit-in outside the parliament building in Taipei and expand the demonstration on Thursday.

China has claimed sovereignty over Taiwan since 1949, when Mao Zedong's Communists won the Chinese civil war and Chiang Kai-shek's KMT fled to Taiwan. Beijing has vowed to bring Taiwan under its rule, by force if necessary.

According to Bloomberg, the global financial crisis has cut demand for Chinese exports, causing the country's manufacturing output to reach a record low since data began being recorded in 1992.  Also, third quarter growth clocked it lowest rate since 2003 at 9 percent, further sparking concerns that China's economy may slow.

China's food crisis continues to widen, with a new report showing that the industrial chemical melamine has leeched into animal feed supplies, IHT reports. This announcement comes on the heels of last week's finding that the egg supply is contanimated and the weeks-long milk scare.  As correspondent David Barboza notes, "The cases are fueling global concerns about Chinese food. In Hong Kong, food safety officials announced this week that they would begin testing a wider variety of foods for melamine, including vegetables, flour and meat products."  Aside from international concerns, of course, there's the matter of feeding 1.3 billion plus Chinese.

AFP, quoting a China Daily report, says tigher regulation is on the way.  "The ministry will tighten its supervision of the feed industry and crack down on producers who add melamine to their products," Wang Zhicai, head of the Agriculture Ministry's livestock division, promises.  He adds, "Anyone who adds melamine into feed is acting against the law, we must resolutely combat this."

AP, however, reports that the scandal may be overblown.  They cite Peter Dingle, "a toxicity expert at Murdoch University in Perth, Australia," as saying that, "aside from the tainted baby formula that killed at least four Chinese infants and left 54,000 children hospitalized just over a month ago, it is unlikely humans will get sick from melamine" because the levels found in eggs, bacon, and other products are quite low.  Still, he acknowledges that the Chinese government should have cracked down much sooner.

China has released the names of eight alleged terrorists who are accused of threatening the Beijing Olympics in August, the Australian reported.  All eight are said to be members of the East Turkestan Islamic Movement (ETIM), an ethnic Uighur group that seeks to establish the independence of China's northwest Xinjiang region, home to some 8.3 million Uighurs.  The ETIM is listed as a terrorist organization by the U.S., the UN, and China.

The announcement follows news earlier this week that Beijing is moving to strengthen its power in the region.  However, some Uighur and human rights groups claim China is using the threat of terrorism to justify harsher measures for the region, which officially maintains an autonomous status.