Extracts. China's NMD Stand Not Changed: FM Spokesman. China's stand on the National Missile Defense (NMD) remains unchanged after the US was attacked, says Zhu Bangzao, Foreign Ministry spokesman on a news briefing September 13. When asked " Don't you think the NMD under studies is of no use after the happening of the terrorist attacks?" Zhu answers that we have consistently opposed to international terrorism and our stand on NMD is explicit and remains unchanged. **** China Reiterates One China Principle. Chinese Permanent Representative Wang Yingfan Friday said the attempt by a small number of countries to raise the issue of "Taiwan's participation in the United Nations" in this year's U.N. General Assembly session constitutes a violation of the purposes and principles of the U.N. Charter and a relevant General Assembly resolution. In his statement at the General Committee of the 56th Session of the General Assembly, Wang said it is an indisputable objective reality and legal fact widely recognized by the international community that there is only one China in the world and Taiwan has been an inseparable part of China's territory since antiquity. To date, more than 160 countries in the world have diplomatic relations with China, recognizing that Taiwan is an inseparable part of China's territory and the Government of the People's Republic of China is the sole legal government representing the whole of China, he said. Wang said that the historic Resolution 2758, adopted by the 26th session of the U.N. General Assembly in 1971, has solved once and for all in political, legal and procedural terms, the issue of China's representation at the Unite Nations. As of the day when the legitimate rights of the People's Republic of China were restored at the U.N., "the Government of the People's Republic of China has rightfully represented all Chinese, including our compatriots in Taiwan, in the United Nations and all organizations related to it," he said, adding that this has fully safeguarded the principle of universality of the United Nations. Thus, he said, there is simply no such issue as the so-called " Taiwan's representation in the United Nations." Wang Yingfan also said that as part of China, Taiwan is already covered in China's representation at the U.N. and is thus not eligible to participate on its own, in any other name or under any pretext in the work or activities of the U.N. or its specialized agencies. He said that the General Committees of the successive sessions of the General Assembly since 1993 have all flatly refused the request to include the issue of the so-called "Taiwan's participation in the United Nations" in the agenda of the General Assembly and this year's proposal by a small number of countries is doomed to fail as before. **** Taiwan's Military Exercises Are Aimed at the Mainland. On September 2, shortly after the conclusion of the exercises conducted by our Army on Dongshan Island, the Taiwan authorities immediately mobilized almost all the armed forces on the Island to start a two-week military exercises for "vanguard war preparations" with which to greet the US military advisors delegation then coming to Taiwan to test the province's military strength. All these actions aroused the close concerns of the whole world and the entire Chinese people! According to Hu Chen-pu, Taiwan's "vice-minister of defense" in charge of operations, the number of military exercises conducted by Taiwan's three services has increased from 47 each year in the past to over 140 at present. The military exercises can be classified into seven categories on the basis of their nature: *Anti-Landing Joint Exercise Anti-landing joint exercise is the main item of exercise by Taiwan's military forces in recent years, this content infiltrates almost every important exercise. But what is the most influential and takes in the greatest energies is the "Han Kuang exercise" that takes place once each year. "Han Kuang exercise" is the special term used by Taiwan's three services for combined operational exercise. It is an exercise in Taiwan three services'combined offensive-defensive operational series conducted by Taiwan military annually, which is of the highest level, the most complicated setting, the greatest participating military force, of the strongest nature of antagonism, with the most complete subjects and of the largest scale. Since the "Han Kuang No.1" was held on June 23, 1984, this exercise has been held once every year with the mainland as the assumed target. On August 29 last year, Taiwan military conducted a six-month "Han Kuang No.16" military exercise which gave prominence to and took anti-missile, anti-landing, anti-airborne landing and anti-air raid as the focus of operation, as well as mechanization, automation and three-dimensions as the target. >From March 26 to April 28 this year, Taiwan military conducted the "Han Kuang No.17" exercise, which was on a higher stage in terms of content and subject, in which the newly organized information operational unit was used for the first time, and F-16 fighter-launch "fish fork" missile, air-to-ground calf missile, sparrow missile, and side-winder missile were employed for the first time, and a massive anti-landing training was held on the west coast for the first time.. What is worthy of note is that in the exercise, Taiwan army employed the new method of operation in which helicopter was used for the first time to attack surface war vessels and amphibious tanks. The exercise fully showed that Taiwan military, in the anti-landing operation, employed various means, including the use of the three services in a joint fire assault *Anti-airborne Landing and Anti-air Raid Exercise According to Taiwan military, anti-airborne landing operation has been playing an increasingly big role in Taiwan's defense operation. According to estimation by Taiwan's "defense ministry", there are more than 90 places suitable for airborne landing in Taiwan Island, including 23 airports. Given this, Taiwan military pay special attention to anti-airborne landing and anti-air raid drill in military exercise. It is reported that currently Taiwan military has marked out anti-airborne landing responsibility zones in line with war zone, division and brigade units and defense area. In the anti-airborne landing drill held in September last year, emphasis was placed on the involvement of reserve force. Taiwan Army has begun to consider inclusion of anti-airborne landing into the important items of the annual "Wan'an exercise". Beginning from 1978, "Wan'an" exercise" has been held once every year, with the focus placed on the Island's army-police-civilian anti-air raid drill. Between August 1 and 17 last year, seven "Wan'an 23" anti-air raid exercises were held successively in seven places of Taiwan. On July 4 this year, Taiwan military again carried out the "Wan'an No.24" exercise in seven sites in which 30,000 military, police and civilians were mobilized to participate. Amphibious Landing Exercise Amphibious landing exercise is an important item in Taiwan military's exercise over the past years, which is held several times each year in line with needs. Before the "general election" held in the first half of last year, Taiwan military, with a view to strengthening war preparations, held the "Lienhsing No.81" amphibious landing operational exercise in Pingtung County, southern Taiwan. "Lienhsing" amphibious landing operational exercise is held about three times a year. To cater to the need of Taiwan military's new strategic adjustment, Taiwan military has successively conducted "Lienhsing 82" and "Lienhsing 83" landing exercises. In order to intensify the purposefulness of exercise, Taiwan navy has turned the 131 Fleet into the "imaginary enemy fleet" to study our Army's tactics and methods of operation. *Computer Virus Offense-Defense Exercise As one of the largest computer software and hardware producing bases in the world, Taiwan has the tremendous potential for computer network war. In the past, in information war simulated confrontation, Taiwan military focused on strengthening its own defense against virus. In the "Han Kuang No.16" exercise held in August last year, Taiwan military for the first time made actual use of computer virus for mutually offense-defense drill and used more than 1,000 kinds of computer virus. Reports say that in recent year, Taiwan military has all along been using the Island's computer resources, engaged in constant study of information war and has developed nearly 2,000 kinds of computer virus. Computer virus offense and defense war will occupy quite an important position in Taiwan military's information warfare. Currently, Taiwan has civilian and military computer communication networks. *Anti-blockade Exercise Taiwan has a small territory, a shallow strategic depth, a scarcity of resources and a poor war sustaining capacity, so it is most afraid of blockade. For this reason, Taiwan military, in its operational guidelines, has always attached importance to anti-blockade operation. In April-May last year alone, it had twice conducted anti-blockade drills. It is said that "Seagull"-class missile speedboat is the main force of Taiwan's navy for offshore defense and speedy assault. Because its tonnage is small (a fully loaded speedboat is only 56 tons), it is easy to make use of geographical advantages and nighttime to seize favorable offshore strategic position and wait for a chance to launch a surprise attack on the incoming fleets; and it can swiftly get away after launching attacks, thus making it the main force for the navy to employ "guerrilla tactics". *Anti-submarine Operational Exercise In recent years, in light of the special geographical environment of Taiwan, Taiwan military has made improvement of its anti-submarine operational capability as the focus of study, listed it as a key line in anti-blockade operation and put forward the idea that the strategic goal of its navy is putting anti-submarine operation first. Currently, Taiwan military forces' anti-submarine operational exercise is made up mainly of air, surface and underwater anti-submarine operations. Between April 6-22, Taiwan navy and Singapore navy jointly held anti-submarine operational exercise in water regions stretching from southwest to southeast of Taiwan Island, Singapore navy sent out two warships to participate in the exercise. Later in June and July of the same year, Taiwan navy again twice conducted exercises. Focus of the exercises was placed on war preparation, leaving ports, formation of ships and aircraft and flexibility, tactical confrontation between navy and air force, war vessel and airplane engage in coordinated search of and attack on submarines, mine-laying and mine-sweeping, electronic war, fire support by warship artillery, etc. At present, Taiwan military, with a view to strengthening its anti-submarine operational capacity, is vigorously developing anti-submarine weapons and equipment, the group of 12 P-3C anti-submarine helicopters the United States sold to Taiwan in the previous stage were regarded as the future anti-submarine operational "core force" by Taiwan navy. *Reserve Force Mobilization Exercise In recent years, Taiwan military has attached great importance to the reserve force mobilization construction, Every year, "concentric exercise" centered on the mobilization of human resources and "self-improvement exercise" focused on the mobilization of military supplies industry are held each year. Reserve force mobilization exercise is especially prominent after Chen Shuibian took office. On September 17 last year, Taiwan's "defense ministry" issued a mobilization exercise order through various news media. According to arrangements for the exercise, a total of 7,000 reserve-duty soldiers and more than 200 vehicles and heavy-duty machines were assembled for a week-long educational training. In May this year alone, the Taiwan military again twice conducted exercises involving items such as the assemble of vehicles and the purchase of military supplies and other materials. Additionally, the Taiwan military, in various exercises, gave prominence to urban offensive-defensive exercise, anti-nuclear and bio-chemical exercise, new weapon and army-formation exercise, etc. From these highly purposeful military exercises, it is clear that Taiwan's military exercises have become military explanatory notes on the many political moves taken by "Taiwan independence" force and military tools for guiding foreign forces in their interference in the great cause of China's reunification. Such being the case, there have been frequent reports and comments on the military activities of the Taiwan Army, this has further exposed the vicious intention of the Taiwan authorities to carry out political confrontation with the mainland, attempt to "resist reunification by force" and gain popular support by fraud. **** Taiwan's U.N. Bid Doomed to Fail: Chinese Representative. Even after the Taiwan authority spent more money this year luring support from other countries, its U.N. bid is doomed to fail, Chinese Ambassador to the U.N. Wang Yingfan said Friday. "Notably, the Taiwan authority has spent much more money this year buying support from other countries, but the result is clear to us all even before the debate," Wand said after the U.N. General Committee decided not to consider the issue of the so- called "Taiwan's participation in the U.N." A total of 67 out of 91 representatives made clear their countries' position on One China policy, many stressed that the issue of "Taiwan's participation in the U.N." has already been solved by Resolution 2758 at the 26th U.N. General Assembly session and there is no need for further debate. **** China and Mexico Conclude Negotiations on China's Accession to WTO . China and Mexico concluded bilateral negotiations on China's accession to the World Trade Organization (WTO) Thursday in Geneva. The bilateral agreement was signed by Sha Zukang, ambassador of the Permanent Mission of China to the United Nations Office in Geneva, and Uardo Perez Motta, Mexican ambassador to the WTO. Long Yongtu, China's chief negotiator and head of the Chinese delegation, said, "Today is an important day. The signing of the bilateral agreement marks the completion of all bilateral agreements with WTO members in China's WTO accession process." He said that at the ongoing 18th session of the working party on China's accession to the WTO, members of the working party are making their final efforts toward China's accession to the WTO so as to conclude the negotiation which has already lasted for 15 years. China's accession will strengthen the economic and trade cooperation between China and all other developing countries, including Mexico, said Long. After joining the WTO, China looks forward to cooperating closely with developing countries in a joint effort to establish a new international economic order. Motta said at the signing ceremony that the bilateral agreement demonstrated fully the goodwill of the Mexican government to promote Mexican-Chinese economic and trade relations. He expressed his hope that China will become a WTO member in the near future. The ongoing 18th working party session, which is originally scheduled from September 11 to 13, is postponed to September 17 due to the terrorist attack on the United States Tuesday. The meeting is expected to approve all the documents including the China working party's report, the protocol on China's access to the WTO and its annex, and conclude all the work of the working party on China's accession. EU: Terrorist Attacks in US Won't Influence China's WTO Entry Process A spokesperson with EU said September 12 that China's WTO entry process is not suspended, but only the US delegation could not continue the discussion according to timetable. When asked whether September 11's terrorist attacks in the US could influence China's WTO entry process, the spokesperson said that World Trade Organization did not halt China's accession process in any form. However, China's 15-year quest to join the World Trade Organization (WTO) is clouded with new uncertainties. The WTO China working group, scheduled to have concluded its work and wrapped up the legal documents on China's accession yesterday, decided to extend its meeting to Monday. The US disaster has made it impossible for negotiators, and especially US officials, to focus on technical talks on the legal documents. Speculation was rife among Chinese experts and officials that the WTO ministerial meeting, scheduled for Doha of Qatar in November, would also be a casualty of the suicide hijackers, who tore into the World Trade Center and the Pentagon. Wang Zhile, a researcher with the Chinese Academy of International Trade and Economic Co-operation under the foreign trade ministry, said that many countries, especially the US, would be reluctant to go ahead with the gathering because of security fears. However, some others felt there should be no change to the Qatar meeting, or at least that it is premature to talk about such a possibility. If the ongoing 18th meeting of the WTO China working group finalizes legal documents on the country's accession, as at first expected, China should be formally approved as a member at the November Doha meeting and become a formal member early next year, at the latest. The last issue to be settled is a United States and European Union dispute over access to the Chinese insurance market. Overall, Chinese officials said what are left are but technical issues, such as checking and reviewing the legal documents on China's accession, including a multilateral agreement and the China working team's report. **** US Economist on Economic Impact of Terrorist Attacks. It is impossible right now to assess with any degree of certainty the broad economic impact of Tuesday's terrorist attacks on the United States <http://www.peopledaily.com.cn/english/data/usa.html> , an economist said Thursday in a statement. But given the weakness in the economy in August heading into the negative impacts of the World Trade Center attack, said Gail Fosler, chief economist at the Conference Board, the prospect of a significant recovery in the U.S. economy is pushed farther into the future -- possibly to early next year. Moreover, added Fosler who had been one of the most optimistic economists, the deterioration in important long-lead indicators, such as corporate profitability, business costs and wage rates, suggest that recession risks remain high. Prior to the event, she said, there were good reasons to believe that an economic turnaround is occurring even though a number of important indicators suggest that August was weaker than expected. She added that there are likely to be significant distortions in the reported data for September that, while probably on balance negative, will not reflect the underlying direction of the U.S. economy. "Clearly, consumers' reactions to these events represent an important key," Gail said. Consumers can react swiftly and negatively to heightened uncertainty, she explained, "What seems to be more important is whether the initial reaction is validated by ongoing economic risks." Thus, she said, how financial and labor markets react over the next several weeks and the behavior of gasoline prices, the real estate markets and other economic forces that touch people's lives will drive consumers' reactions. **** U.S. Industrial Production Falls 0.8 Percent in August - U.S. industrial production fell 0.8 percent in August, the 11th consecutive monthly decline, the Federal Reserve reported Friday. The 0.8 percent drop in the industrial production came after a 0.1 percent decrease the month before. Economists had projected the industrial production would fall only 0.2 percent in August. Year-on-year, industrial production in August was 4.8 percent below its level in August 2000. Manufacturing output, which was unchanged in July, fell 1 percent in August and was 5.5 percent lower than in August 2000. Manufacturing has been the part of the economy hardest hit by the more than yearlong slowdown in economic activity. The government said last week that the manufacturing lost 141,000 jobs in August, bringing the total jobs cuts to more than 1 million in the past year. Output at mines fell 0.4 percent in August after a 1.1 percent decline in July. Production at utilities, however, increased 1.6 percent in August, compared with a 0.7 percent drop the month before. The report said the declines in production left U.S. industry operating at just 76.2 percent of capacity in August, 0.7 percentage point lower than the 76.9 percent in July. That marked the weakest performance since July 1983. Seeking to stave off a recession, the Fed has cut interest rates seven times this year, totaling 3 percentage points, driving down the borrowing costs to the lowest level in more than seven years. Many analysts say the Fed is likely to cut rates again even before its next scheduled meeting on October 2. In a separate report, the Commerce Department said Friday that retail sales rose 0.3 percent to a seasonally adjusted 293.1 billion U.S. dollars in August, reflecting the fact that consumer spending is still holding up. The 0.3 percent rise in retail sales followed a 0.2 percent increase in July. Year-on-year, retail sales in August were up 3.5 percent. The increase in retail sales was led by a 1.4 percent rise in sales at gasoline stations, a jump that in large part reflected higher pump prices. Sales at department stores rose by 0.4 percent while sales at restaurants and bars rose an even larger 1.2 percent. Auto sales declined 0.2 percent in August, following a 0.6 percent increase in July. Excluding auto sal _________________________________________________ KOMINFORM P.O. 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