Breaking News

U.S. Secretary Of State Hillary Clinton meets Chinese Prime Minister Wen Jiabao in Beijing Saturday.

BEIJING, China (CNN) — U.S. Secretary of State Hillary Clinton met with China’s top leaders Saturday, the last and most crucial stop-over in her Asia trip, signaling the new U.S. administration’s first attempts to lay a foundation towards a China policy.

Clinton met with Chinese President Hu Jintao and discussed the framework for further high-level and mid-level discussions.

“It is essential that the United States and China have a positive, cooperative relationship,” Clinton told a group of reporters.  Earlier on Saturday, Clinton met with Chinese Premier Wen Jibao in Beijing where they discussed what they regard as the new defining Sino-US strategic goals: the world economic crisis, regional security and the environment.

The U.S. and China are the world’s largest emitters of greenhouse gases.

Human rights, a traditional topic in discussions between the two  countries, was broached during Saturday’s meeting between Clinton and Chinese Foreign Minister Yang Jiechi, who agreed to engage on a continuous discussion on the issue.

Clinton said both nations will continue to hold frank discussions on crucial human rights issues, such as Tibet and freedom of expression in China.

However, “human rights cannot interfere with the global economic crisis, the global climate change crisis and the security crises,” said Clinton.

In a welcoming response, Yang said China was willing to discuss the often contentious subject.

“Although differences exist, China is willing to conduct the dialogues with the U.S. to push forward the human rights situation on the premise of mutual respect and noninterference in each other’s internal affairs,” Yang was quoted in the Chinese Xinhua news agency.

On the economic front, both leaders emphasized the importance of working in cooperation as their economy is intertwined.

Yang said that China, the world’s top holder of U.S. debt, wants to ensure liquidity and security in its dealings with U.S. treasury bonds.

“We did use foreign exchange reserves to buy U.S. treasury bonds. Our principle of using reserves is to ensure security and liquidity,” Yang told reporters.

China-U.S. trade volume rose by 10.5 percent in 2008 to $333.7 billion, Xinhua reported.

Beijing is Clinton’s last stop in her Asia trip, her first as Secretary of State.

According to the Council on Foreign Relations, China is North Korea’s largest trade partner. It has taken a leadership position in the six-party talks, a multinational diplomatic effort to denuclearize North Korea.

In Seoul, Clinton did not refrain form harsh words, restating the U.S. position towards North Korea.

“North Korea is not going to get a different relationship with the U.S. while insulting and refusing dialogue with the republic of Korea,” she said.

Mid-level military discussions will resume this month, Clinton announced Saturday. Last October, the Bush administration notified congress of its plan to sell $6.5 billion in arms to Taiwan which caused China to suspend military talks with the US.
advertisement

Clinton told CNN’s Senior Correspondent Jill Doughtery that U.S. policy towards Taiwan will not change.

SEOUL, South Korea – U.S. Secretary of State Hillary Rodham Clinton named a special envoy for North Korea on Friday but warned the communist nation that ties with the United States will not improve unless it stops threatening South Korea.

Amid a disturbing rise in belligerent rhetoric from the North toward the South and signs it may be getting ready to test-fire a ballistic missile, she urged Pyongyang to halt “provocative and unhelpful” gestures and rejoin stalled six-nation nuclear disarmament talks.  “North Korea is not going to get a different relationship with the United States while insulting and refusing dialogue with (South Korea),” Clinton told reporters at a news conference with South Korean Foreign Minister Yu Myung-hwan.

“We are calling on the government of North Korea to refrain from being provocative and unhelpful in a war of words that it has been engaged in because that is not very fruitful,” she said.

Military briefing
Clinton, who also received a military briefing on the situation along the demilitarized zone between North and South Korea and discussed broader issues with South Korean President Lee Myung-Bak, praised Seoul for its democracy and prosperity.

She said that was “in stark contrast to the tyranny and poverty across the border to the North” and commended the “people of South Korea and your leaders for your calm, resolve and determination in the face of provocative and unhelpful statements and actions by the North.”

She declined to comment on intelligence suggesting the North could soon fire a missile but noted such an act would violate U.N. Security Council Resolution 1718, which was passed after Pyongyang detonated a nuclear device in 2006.

“The North should refrain from violating this resolution and also from any and all provocative actions that could harm the six-party talks and aggravate the tensions in the region,” Clinton said.

She demanded that the North follow through on promises it made to dismantle and verifiably disable its nuclear weapons program during negotiations with China, Japan, Russia, South Korea and the United States last year, saying Washington is not willing to engage with Pyongyang until it does so.

Clinton said the new U.S. special representative for North Korea, Stephen Bosworth, a former U.S. ambassador to South Korea, would work with South Korea, Japan, China and others to look at ways to get Pyongyang back to the negotiating table and deal with broader policy.

Bosworth will also deal with North Korean human rights and humanitarian issues, she said, praising him as “a capable and experienced diplomat” who will report to her and President Barack Obama.

Fears of succession crisis
En route to South Korea from Indonesia on Thursday on her first overseas trip as America’s top diplomat, Clinton surprised reporters traveling with her when she spoke candidly about a possible succession crisis in North Korea and its impact on restarting the talks.

Those comments marked a rare, if not unprecedented, instance of a senior U.S. official publicly discussing such a diplomatically sensitive matter.

On Friday in Seoul, Clinton again acknowledged concerns over a potential power struggle to replace ailing North Korean leader Kim Jong Il, but she stressed that the United States was still addressing its concerns to the existing government.

Kim, 67, inherited leadership from his father, North Korea founder Kim Il Sung, in 1994, creating the world’s first communist dynasty. Last year, South Korean and U.S. officials said Kim suffered a stroke and underwent brain surgery in August.

North Korean officials have steadfastly denied Kim is ill but state-run media made no mention of Kim’s public appearances for weeks last fall, feeding fears that his sudden death without naming a successor could leave a power vacuum and spark an internal struggle.

Kim’s father had cultivated a powerful cult of personality that encompassed him and his son, and recent dispatches in North Korea’s state-run Korean Central News Agency have stressed the importance of bloodline and inheritance in what is seen as references to the succession plan.

Kim Jong Il is believed to have at least three sons: Kim Jong Nam, in his late 30s; Kim Jong Chul, in his late 20s; and Kim Jong Un, a son in his mid-20s by another companion.

The eldest is believed to have been the favorite to succeed his father until he was caught trying to enter Japan on a fake passport in 2001, reportedly to visit Tokyo Disneyland.

Last month, the South Korean news agency Yonhap said the youngest, Kim Jong Un, was named Kim’s heir apparent.

And, on Thursday, citing unidentified sources in Beijing, Yonhap said Kim Jong Un had registered his candidacy for March 8 parliamentary elections in a sign the son is poised to become the country’s next leader.

Fueling speculation of possible power struggle, the North’s state-run news agency reported last week that Kim Jong Il had replaced his defense minister and chief of the military’s general staff.

SEOUL, South Korea (CNN) — U.S. Secretary of State Hillary Clinton arrived in South Korea on Thursday on the third leg of her four-nation tour of Asia.  Speaking with reporters aboard her plane en route to Seoul, South Korea, Clinton commented extensively on the increasingly tense relationship between North and South Korea.

She said she will be receiving briefings in Seoul by the U.S. military and their South Korean counterparts on their assessment of the North’s recent actions.  The visit comes at a time of escalating tensions on the Korean peninsula and after U.S. officials cited evidence that North Korea was gearing up for a launch of a long-range missile.

North Korean officials have disputed the claim, saying in the country’s official news agency that Pyongyang was preparing to launch a satellite.

But Pyongyang said Thursday that it was ready for an “all-out confrontation” with South Korea, calling South Korean President Lee Myung-bak a traitor and accusing him of “frantically inciting hostility” toward North Korea and “kicking up … war hysteria,” North Korea’s official Korean Central News Agency said.

Seoul called the North’s statement a repeat of past bluster.

“It’s seen as an attempt by North Korea to increase uneasiness about security and widen the ideological divide within South Korea,” said Kim Ho-Nyun, a spokesman for the South Korean Unification Ministry.

Clinton called the potential launch “a matter of great concern.”

She said she wants to hear directly from the leadership of South Korea and China, which she will visit after Seoul, on what they think should be the next steps in dealing with the North.

“We obviously do have some ideas. … But we do want this to be shared responsibility.”

“Everybody is trying to sort of read the tea leaves on what is happening and what is likely to occur,” she said. There is increased pressure, Clinton added, because of questions over succession issues for the North’s leadership.

North Korean leader Kim Jong-Il has reportedly had a stroke and some observers claim he may not be fully in charge of the country.

“If there is a succession,” Clinton went on, “even if it is a peaceful succession, then that creates more uncertainty. It may also encourage even more provocative action as a way to delegate power within the society.”

“Our goal is to try to come up with a strategy that is effective in influencing the leadership of North Korea at a time when the leadership situation is somewhat unclear.”

The secretary of state said the aim now is to rebuild the commitment by the U.S., Russia, China, Japan and South Korea into a “united front” to deal with the North.

Talks among those nations, she said, have produced some results, “but we are still dealing with the reality of North Korea not only possessing, we believe, some number of nuclear weapons, but showing very little willingness to get back on track.”

Asked about the worldwide economic crisis, Clinton conceded that some countries blame the United States. She said it is important for the member nations of the Group of 20 — a forum of the world’s biggest developed and developing economies — to come up with a positive program to deal with the crisis.

“It’s not like the U.S. saying, ‘You do what we do.’ It’s saying, ‘Here’s what we’re doing to clean up our own mess, and this is an important moment for all of us to act and do what we can.’ “

Clinton wrapped up her stop in Indonesia on Thursday after meeting with President Susilo Bambang Yudhoyono to “discuss the close and growing partnership with Indonesia and perspectives on common interests in Southeast Asia.” China will be the final stop on her first overseas trip as secretary of state, which began on Sunday. Video Watch how Clinton’s China visit could affect economic crisis »

Her trip represents a departure from a diplomatic tradition under which the first overseas trip by the secretary of state in a new administration is to Europe.

Slump in U.S. sales has make country catch up quicker than anticipated

SHANGHAI – Two years ago, China zoomed past Japan to become the world’s No. 2 vehicle market. Now it looks poised to pass up the United States to be the biggest. While car sales in China have slowed lately, they haven’t plummeted like those in the U.S., where January sales tumbled 37 percent from a year ago to 656,976 vehicles, a 26-year low.

Official Chinese auto data comes out next week, but January sales are expected to decline 8 percent to 790,000 units, Zhang Xin, an analyst at Guotai Junan Securities in Beijing, said Wednesday. “This is the first time in history that China has passed the United States in monthly sales,” Mike DiGiovanni, General Motors Corp.’s executive director of global market and industry analysis, said in a conference call late Tuesday. DiGiovanni projects that Chinese auto sales could hit 10.7 million vehicles in 2009, more than his estimate of 9.8 million unit sales in the U.S. this year. Autodata Corp. forecasts 2009 U.S. sales at 9.57 million.

General Motors, which last year surrendered its crown as world’s largest automaker by annual sales to Toyota Motor Corp., has a clear stake in China’s automotive future. GM is already is one of biggest automakers in China, with billions of dollars invested in joint ventures, and a record 1.09 million vehicles sold in 2008, up 6 percent from the year before. Like its global rivals, GM has been counting on the growth in China and other emerging markets to help offset losses elsewhere.

China overtook Japan in 2006 to become the world’s second-largest vehicle market, thanks to strong sales to the country’s fast-growing middle class. With 1.3 billion people, China was bound to catch up with the U.S. — population 300 million — at some point, but the dramatic contraction of the American market could make that happen sooner than expected.

Of course, if U.S. sales recover strongly in coming months, outpacing those in China, the American market would remain the world’s biggest. China’s auto market has cooled after several years of torrid growth, and authorities have implemented tax cuts, subsidies for small-car purchases and plenty of promotions are luring car buyers back into showrooms.

Police officer Zhou Yingbin, newly married and facing a tough commute, recently spent three hours haggling in a Shanghai dealership, and saved himself a few hundred dollars off the price of his new Honda Fit.

‘That’s kind of awkward, isn’t it?’

“It’s worth being patient since I know the salesman really wanted to get the deal,” Zhou said. “In the end, I left with my new Fit in a very good mood.”

The moves to stimulate consumer demand is part of broader attempts by Beijing to counter the plunge in export demand that is dragging on China’s economy.

In the auto market, the government has halved the tax on purchases of cars with engines less than 1.6 liters, to 5 percent, until the end of the year. It is spending 5 billion yuan (about $730 million) on subsidies to farmers replacing their three-wheeled vehicles or outdated trucks with small, 1.3-liter or less vehicles.

The push is to promote more energy efficient vehicles while improving the competitiveness of the country’s highly fragmented auto industry: some 10 billion yuan ($1.5 billion) is going into upgrading automakers’ technology and developing alternative energy vehicles.

So far, the steps seem to be helping somewhat.

“Customers feel it’s a good chance to buy a car for less since the tax cut is temporary. Also with lower gasoline prices, people are less worried about fuel costs,” said Gao Zhiyuan, a salesman at Shanghai Automobile Industry Hudong Sales Co., a Volkswagen dealership. The dealership has been offering free laptops, fuel cards worth hundreds of dollars, and deep discounts on its VW Polos and other economy models.

Last year, China’s domestic auto sales grew 6.7 percent to 9.38 million units — the first time growth has fallen below 10 percent since 1999. And while January’s estimated sales were lower than the monthly record 860,000 sold in January 2008, they were up from 584,600 in December.

Small cars accounted for nearly two-thirds of the vehicles sold in China last year, a trend that is helping both domestic and foreign-brand automakers. Commercial vehicles such as trucks and buses make up a larger chunk of China’s vehicle market than in the U.S. and Japan, causing some observers to say comparing statistics is misleading.

While figures for January were not available, in 2008 passenger cars accounted for 6.76 million, or about three-quarters of total sales, with commercial vehicles accounting for the remaining 2.65 million, according to the China Association of Automobile Manufacturers.

Still, even though China’s auto industry may appear to be weathering the crisis with less of the misery seen in the Detroit and elsewhere, it still has a long way to go to catch up with global rivals by other measures, Zhang, the analyst, cautioned. “Our technology is still weak. We still have to copy or use Western advanced manufacturing systems,” he said. “That’s kind of awkward, isn’t it?”