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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: Tom who wrote (1333)	2/9/1998 1:35:00 PM
From: ----------	Respond to of 2951

Tom: I remember, I think it was the late 1960's, when the committee changed its name to "internal affairs" or "ministry of truth" or something very P.C. Whatever you want to call it, there is a "big brother". Doug

To: Tom who wrote (1333)	2/11/1998 2:56:00 PM
From: Tom	Respond to of 2951

TAIWAN PARTY MAKES FIRST MAINLAND VISIT [Beijing 2/11/98] Members of an opposition Taiwanese political party and Chinese officials discussed obstacles to reunification between the island and the mainland on Tuesday. Beijing's invitation to the New Party members was believed to be the first for a Taiwanese political party since 1949, AP reported. The discussions between the pro-reunification New Party members and Beijing's Taiwan policy experts appeared largely symbolic but could build momentum for higher-level negotiations. ------------------------------------------------------------------------------------------------------------- See #1224 "...higher-level negotiations." We have yet to hear from the militaries. We must hear something of reunification from, or of, the militaries. Keep your eyes and ears open. Does the PRC believe they need Taiwan so urgently? Will they cede to certain of Taipei's pivotal demands? From all I have read and heard it appears that Beijing knows the window of opportunity is wide open, knowing also for certain socio-economic reasons that it will not remain open for very long. Now is the time. If success isn't in the offing, failure is. A great deal of pressure is being exerted internally, i.e. within the PRC and the Central Committee. There are some people who are genuinely concerned over present circumstances. Should the economy turn down severely it will be years before the Cross-Straits talks can resume. The PRC needs the Taiwanese, and they need them now. The mainland will have successes without a reunification and I'm certain Taipei has made it clear FOR THE MOMENT that they do not require the mainland's resources, but that will not always be the case. And they know it. Better to make their gains now when Beijing knows that progress for China will be so much faster with Taiwan's assistance. Don't think for a moment there aren't those in Taipei who wouldn't relish the thought of winning what controls they are seeking in these negotiations. I expect some serious and positive indications will develop by mid-year 1998. Though there have been several abrupt discontinuances of these talks, that is only as it should be. Negotiating is much different in the East than it is in the West. Often bargaining is either "hot" or "cold." Additionally, there is too much at risk and too little room for ifs, ands and maybes. I would not be discouraged if there was another breakoff in negotiations. One more, that's all. As I say, time is growing short. I would, however, be extremely discouraged were the "high level" talks interrupted. That is why a meeting of the most influential parties will not take place unless some comfortable foundation has been established. Once terms are agreed they can not, and will not, come apart. Yes, I have serious doubts that any deals that are established would ever be countered. It would be an enormous embarassment for one side to mistreat an agreement once it is settled. Also, for that reason, any reunification process must also be executed gradually. A few more points... 1) The telling moment will not be readily apparent. It must be this way. There is a great deal at stake and no man man wants to place his character in such an assailable position until it is clear any agreed processes are working. Yes, again, the issue of "face." 2) The KMT as well as the NP will receive different terms as the PRC plays one against the other. Beijing will make it very clear the enormity of what they have to offer. 3) The ROC's Independence Party may believe they can succeed. Yet should this ever be see as an eventuality, the current regime on the mainland will respond discourteously. 4) If talks on reunification begin anew with positive undertones, they will not tamper with the yuan renminbi. I'm excited about this. There are very good opportunities to be had on both sides of the negotiating table. Both sides have much to gain. Lastly, Taiwan will in all probability require that certain reforms be established prior to a high level meeting that Jiang has said may take place late this year or early next year. That means to me that it will require that long to "establish" certain of the reforms. Need I say, that it would be an excellent indication were SM Lee to re-enter the process. Also, a clean break once any earnest and ongoing negotiating begins would have some very polarizing effects. I'll keep my ear to the ground.

To: Tom who wrote (1333)	2/11/1998 6:47:00 PM
From: Bill Bishop	Read Replies (2) \| Respond to of 2951

Here is a good article from CBS MarketWatch on why the Chinese will likely not devalue the Yuan in the near term: Asian focus turns to China Will Bejing fulfill commitment on yuan? By Rex Nutting, CBS MarketWatch Wed Feb 11 18:11:11 1998 WASHINGTON (CBS.MW) -- While the bond and foreign exchange markets are being whipsawed every day by fresh news out of Jakarta or Seoul, the biggest question mark in Asia remains Beijing. China could set off a new round of competitive currency devaluations if it decides to devalue the yuan, many analysts and policy-makers fear. Beijing's leaders have publicly announced that they won't devalue the yuan any time soon, but some U.S. leaders, especially in Congress, aren't convinced. That's why Treasury Department officials like Secretary Robert Rubin and his deputy, Lawrence Summers, have gone from Senate hearing rooms to House hearing rooms over the past few weeks to reassure the skeptics that China has promised not to devalue. Commerce Undersecretary Stuart Eizenstat told the Senate Finance Committee last week that the commitment extends through 1998. Market share China is under some pressure to devalue from domestic constituencies, who want to maintain the explosive economic growth that has been built on cheap exports.... cbs.marketwatch.com Bill Bishop CBS MarketWatch