SINGAPORE (Reuters) – The U.S. government, responding to a series of Chinese diplomatic snubs, may make it more difficult for senior Chinese officials to secure visas, the Financial Times reported on Wednesday.

It quoted a U.S. official as saying Washington was responding to China’s cancellation of several bilateral meetings. The cancellations coincide with a crackdown on dissent in China that has drawn criticism from Washington.

“Given the current climate of canceled meetings and canceled U.S. funded programmes in China, we are reviewing our procedures for approving visas for Chinese officials and their families,” the unidentified U.S. official said.    [FULL  STORY]

ATLANTA (Reuters) – As America and China grow more economically and financially intertwined, the two nations have also stepped up spying on each other. Today, most of that is done electronically, with computers rather than listening devices in chandeliers or human moles in tuxedos.

Joel Brenner, former counterintelligence chief for the Office of the Director of National Intelligence and author of a forthcoming book on cyber-espionage tentatively titled ''America the Vulnerable'', reviews his contents page in his office in Washington, March 22, 2011. As America and China grow more economically and financially intertwined, the two nations have also stepped up spying on each other. Today, most of that is done electronically, with computers rather than listening devices in chandeliers or human moles in tuxedos. And at the moment, many experts believe China may have gained the upper hand. Credit: Reuters/Hyungwon Kang

And at the moment, many experts believe China may have gained the upper hand.

Though it is difficult to ascertain the true extent of America’s own capabilities and activities in this arena, a series of secret diplomatic cables as well as interviews with experts suggest that when it comes to cyber-espionage, China has leaped ahead of the United States.

According to U.S. investigators, China has stolen terabytes of sensitive data — from usernames and passwords for State Department computers to designs for multi-billion dollar weapons systems. And Chinese hackers show no signs of letting up. “The attacks coming out of China are not only continuing, they are accelerating,” says Alan Paller, director of research at information-security training group SANS Institute in Washington, DC.    [FULL  STORY]

Chinese state media said ministerial and provincial-level contacts had been suspended, including talks on aviation and coal.

Earlier, a Japanese court extended the detention of the captain, held after the collision in the East China Sea.

The disputed islands are known as Senkaku in Japan and Diaoyu in China.    [FULL  STORY]

China announced that this was not a “convenient time” for Gates to visit. Willard’s talks with Ma in Beijing were part of the second round of the ongoing China-US Strategic and Economic Dialogue. Willard was there as part of the huge US delegation that was headed by Secretary of State Hillary Clinton.

Immediately prior to the dialogue, China had been contemplating two very different expressions of the current state of US-China

relations under the Barack Obama administration. The president’s 52-page US National Security Strategy (NSS) issued in early May, for example, was an engagement-centric, restrained and diplomatic overview. The NSS spoke of US relations with China using carefully crafted words such as “we will encourage China to make choices that contribute to peace, stability and prosperity as its influence rises”. The NSS did not rock the boat and was really not a formal strategy, unless repeating the word “engagement’ more than three dozen times is acceptable as such.

A few days after the NSS was unveiled, however, “AirSea Battle: A Point-of-Departure Operational Concept” (ASB) was presented by four analysts from the Washington DC-based Center for Strategic and Budgetary Assessments (CSBA). It was almost a polar opposite of the NSS in its treatment of China.

The ASB, which was 123 pages long and fell just short of being an actual blueprint for an armed confrontation between the countries, made a case for “offsetting actions” on the basis that “the strategic balance in the Western Pacific will become unfavorable and unstable”. Missions involving US Navy ships, submarines and the US Air Force (USAF) “in the early days of a war”, were examined.

ASB has taken years to evolve, and among other things, ASB is an indicator of the CSBA’s growing influence in Gates’ inner circle. US Navy Under Secretary Robert Work, a former US Marine Corps artillery colonel, is a former CSBA analyst. A participant on Obama’s Pentagon transition team in 2008, Work became the navy’s second-highest-ranking civilian in May 2009. He was recently described by Defense News as “a deeply experienced military strategist and wargamer”.    more …

Some people wonder why the Chinese Communist Party (CCP) cannot devise a national “Sunshine” policy and enforce it. The US has so-called “Sunshine” laws that require that government data be made available to the public. After all, though regions have an increasingly greater say in economic affairs, political power in China is centralized under the CCP’s control.

In reality, however, things are not as simple. Though China is ruled by the CCP and its political power is centralized, this does not guarantee that regions follow Beijing’s word to the letter. In

any society there are privileged people and interests, and China is no exception. Any new policy that affects these interests naturally meets with opposition.

Even with his unchallengeable authority, it was difficult for paramount leader Deng Xiaoping to start the country’s process of economic reform and opening up – nearly every step was a hard struggle. In today’s China, there is no “strongman” like Deng, and there are even more interest groups, due to the economic growth and wealth redistribution of the past three decades.

Given rampant official corruption, one could say that party officials are the largest interest group. Officialdom is also the biggest opposition to plans for a “Sunshine” law that the government proposed last year that would see officials declaring their assets and those of their spouses and children.

The policy was opposed by the CCP’s central committee, and the power center has since tried to “encourage” localities to implement anti-graft policies in the hope of “bottom-to-top” change. Many reforms in the past 30 years started at the grassroots level.

With or without a proper understanding of Beijing’s intentions, some governments at the grassroots have began to introduce transparency measures. The most impressive example is Baimiao township under Bazhou district of Bazhong city, Sichuan province. A township is the lowest-ranking administrative unit in China’s bureaucratic hierarchy.    more …

But Yi Xiaozhun, a vice-minister in the commerce ministry, said he expected the currency to rise in the longer-term.

He accused other countries of trying to force its appreciation now.

There has been speculation that China is preparing to allow the yuan to appreciate before President Hu Jintao arrives in Washington next week.

Mr Yi was speaking at the Boao Forum for Asia, a gathering of senior officials and business figures from across Asia on the southern Chinese island of Hainan.

China’s commerce ministry is close to the country’s exporters, and reports suggest its officials have been lobbying hard against those inside the Chinese government who say the value yuan should now be allowed to rise.

Politicised debate

China, in effect, pegged its currency to the weakening US dollar in late 2008 when the effects of the global economic crisis started to be felt here .

That has given the country’s exporters an unfair advantage ever since, critics say, because when the value of the yuan is artificially low, their goods appear cheaper.

Some American politicians and academics… have politicised this argument
Yi Xiaozhun, Chinese commercy ministry vice-minister

Mr Yi says the crisis is not yet over, and so an increase in the value of the yuan now would hurt China’s economy.

He argues the biggest headache for China is that this is no longer simply an economic problem but has become the focus of relations between the two countries.

“Some American politicians and academics, because of hardship at home, have politicised this argument,” he says.

“They are blaming other countries, including China, for their own problems. This is unreasonable.”

The vice commerce minister refuses to be drawn on what is the appropriate exchange rate for the yuan and the dollar.     more …

TAIPEI (Reuters) – Taiwan President Ma Ying-jeou demanded on Tuesday that China remove missiles aimed at the island before any peace talks, comments that could slow recent momentum in relations, including two-way trade that has reached $109 billion.

Beijing must scrap or move missiles, which Taiwan suspects are piling up in China some 160 km (100 miles) away, to begin any discussion on a peace accord, an idea welcomed by both sides when Ma took office in 2008, the president told a group of U.S. scholars.

“We demand that mainland China scrap or remove missiles aimed at Taiwan,” Ma said, as quoted by Taiwan’s Central News Agency. “Otherwise, Taiwan will not take any further steps to discuss a peace accord with the mainland.”

His uncharacteristically strong remarks are seen helping to build a tough-on-Beijing image for Taiwan’s ruling Nationalist Party ahead of tense year-end local elections against Taiwan’s main opposition party, which generally takes a more anti-China line.    more …

China is accustomed to being accused of not providing accurate information. Jia Yong, a member of the National Committee of the Chinese People’s Political Consultative Conference National Committee (CPPCC), recently described these allegations as “groundless”.

Japan has consistently expressed concerns about China’s military spending. In light of Chinese President Hu Jintao’s 2008 promise that China “would not spark an arms race with its neighbors or pose a military threat”, Asia Times Online asked
several experts to assess the impact of the new defense budget on Japan. We put the question to them twice in somewhat different statements.

An immediate response came from Michael Green, Japan Chair and a senior adviser at the Center for Strategic and International Studies in Washington, DC.

“It is the nature of Chinese deployments and operations rather than the official number that is at issue,” said Green. “But the lower number doesn’t hurt China’s image!”     more …

China has accused Britain of putting on a political show after a UK review of human rights around the world was highly critical of Beijing.

The report, issued on Wednesday, named China as one of some 20 nations where there was cause for serious concern about human rights.

Burma, Zimbabwe and North Korea were also named as countries of concern.

The report said there had been a marked deterioration in some areas of human rights in China.

China’s response was blunt. Foreign ministry spokesman Qin Gang said the fact that all the nations singled out were developing countries showed the report was “simply a political show”.     more …