This Week in China

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Top Story

A $6.5 billion U.S. arms deal with Taiwan has soured relations between the U.S. and China. In reaction to the deal, which includes the sale of Apache helicopters, Patriot missiles, and F-16 fighter jet parts to Taiwan, China has canceled several high-level visits and military exchanges.

A spokesman for the Chinese Ministry of National Defense called the actions “reckless” and accused the United States of ruining years of Chinese efforts to build mutual trust on military matters. China views U.S. support of Taiwan as meddling in its domestic affairs.

As this AP report points out, though, the deal marks a certain return to normalcy for the U.S.-China-Taiwan military balance. Sales of defensive arms to Taiwan is longstanding U.S. policy. The Bush administration’s eagerness to do the deal had been diminished in recent years by the provocative, pro-indepedence stance of former Taiwan President Chen Shui-Bian. But the election of Kuomintang leader Ma Ying-Jeo, who favors greater cooperation with the mainland, has eased tensions.

On the United States’ part, this paradoxical game of distancing itself when cross-strait tensions rise and providing military support when cross-strait relations are good recalls the Cold War era. But as Taiwan’s economic dependence on the mainland grows, China has probably realized that the most effective reunification strategy will be economic, not military. U.S. leaders may need to reassess their approach accordingly.

General News

A 6.6-magnitude earthquake hit Tibet Monday. At least 10 people are confirmed dead and 191 homes destroyed. Seven hundred rescuers are on the scene.

The central government granted emergency subsidies to dairy farmers last week, who are suffering from a plunge in demand for their products. More arrests have been made in the tainted-milk scandal and regulators have revised the amount of the industrial chemical melamine that is permissible in dairy products.

Chinese citizens celebrated National Day on October 1, marking the 59th anniversary of the founding of the People’s Republic of China. The week-long celebrations are a chance to spend time with family, especially for the millions of laborers who work far from home. Many who missed the Olympics also took the chance to visit Beijing.

Politics

Japan’s new Prime Minister, Taro Aso, plans to meet with Chinese leaders later this month.

The Chinese Foreign Ministry voiced opposition to the prospect of imprisoned human rights activist Hu Jia receiving the Nobel Peace Prize, to be announced Friday.

Pro-Beijing politician Jasper Tsang Yok-sing has been elected president of the fourth term Legislative Council of the Hong Kong Special Administrative Region.

Economy

The People’s Bank of China cut interest rates along with other central banks Wednesday to loosen up lending markets and stimulate economic activity.

Chinese financial firms are snapping up ex-Wall Street professionals.

Science & Environment

After 10 days of filling, the water level behind the Three Gorges Dam has reached a target of 156 meters. During this second phase of the project, the dam’s flood control, power generation, and navigation functions are to be realized. The project will be completed in 2009.

A new study finds that HIV transmission in China has moved beyond cases related to drug addicts and blood transfusions. Gay men and prostitutes are increasingly at risk.

China Moment

In a sign that traditional values may be eroding, a young Nanjing woman adamantly refused to give up her seat on a bus to an elderly woman, citing her affiliation with an online “never give up your seat group.”