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NEW YORK - The overheating of the Chinese stock market is a structural problem that will be resolved by developing more financial products and cracking down on illegal activities, a Chinese securities regulatory official said Thursday. Hu Bing, deputy director-general of the market supervision department at the China Securities Regulatory Commission, said at a conference in New York that authorities are seeking to roll out more products to broaden investors' options, such as real estate investment trusts, or REITs, as well as listed infrastructure funds. Other eventual offerings will include derivatives products such as stock-index futures and warrants. These products will be launched "when conditions are ready," Hu said at a China Investment Forum sponsored by Merrill Lynch and Institutional Investor. He said he couldn't provide a clearer timeline for when those products would be ready. Hu acknowledged a "liquidity surplus problem" that is contributing to the overheating of the Chinese stock market and noted that hot-money inflows coming in through illegal channels are exacerbating the problem. Tackling the liquidity issue is a long-term project that "cannot be resolved just by (raising) the interest rate," Hu said. "So the structural problem has to be resolved using structural measures." Earlier this week, the Chinese government tripled its stamp tax on stock trades in an effort to rein in the equity market. The Shanghai Composite Index more than doubled in 2006 and is still up around 50 percent so far in 2007. Hu said China's capital markets are still young and face a "golden opportunity" to develop their depth and breadth. The majority of individual investors rely on rumors or inside information to make their decisions, leading to speculative gains in stocks, he said. Hu said authorities are stepping up efforts to crack down on insider trading, "but because this is a transitioning society in an emerging market, it will take a long time."

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Beijing - China is turning the site of a prison camp run by Japanese forces during World War Two into a war museum, the Xinhua news agency said on Sunday. More than 2,000 prisoners from the United States, Britain, the Netherlands and Australia were imprisoned at the camp in Shenyang, a Manchurian city formerly known as Mukden, between November 1942 and August 1945. More than one in 10 of them died, Xinhua said. Many Chinese believe Japan has yet to apologize properly for its invasion and occupation of China in the years leading up to and during the war. The 54 million yuan (US million) museum in Shenyang will include a two-storey brick building, three bungalows and a water tower, all original camp buildings in the Dadong district, Xinhua said. Two walls in a square will be inscribed with the names of the prisoners of war. China has a museum in Nanjing commemorating the slaughter of the citizens of that city, formerly known as Nanking, by invading Japanese troops 70 years ago. Nanjing has become the focal point for Japanese ultra-nationalists who dispute the Chinese estimate that 300,000 died or even that any massacre occurred. An Allied tribunal after the war put the death toll at about 142,000 men, women and children.

HANGZHOU -- China needs to "free itself from conservative ideas" if it wants to further open the country to the world, a gathering of foreign affairs officials concluded at meeting held in East China's Zhejiang Province on Tuesday.Officials in charge of foreign affairs at both the provincial and municipal levels agreed on future policies to open up their respective regions wider to the world."We need to free ourselves from conservative ideas, seek new ways to expand economically and have culture exchanges with other cities and regions in the world," said a statement issued at the meeting.The officials agreed that foreign affairs departments at local levels were facing great challenges which also offer great opportunities. They discussed the ways to implement the guidelines of the 17th National Congress of the Communist Party of China (CPC) in their foreign affairs work, the statement said.Opening wider to the world will contribute to China's drive to build a moderately prosperous society in all respects, realize peaceful development and create a harmonious world, it said.Chinese Foreign Minister Yang Jiechi also addressed the meeting on China's foreign policies and international relations.

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XI'AN -- Lawmakers in Northwest China's Shaanxi Province enacted a law on Saturday that is intended to improve protection of the Qinling Mountains, a habitat of endangered giant pandas.The law, which will take effect on March 1, is aimed at preserving biodiversity, preventing soil erosion (which averages 84 million tons a year) and promoting harmony between man and nature in the mountain range, which is a divide between China's north and south.It requires all future development projects in the Qinling Mountains to be assessed for their possible impact on the ecology and bans real estate projects and polluting industries in nature reserves, where the ecology is more vulnerable.The law also bans mining and resource exploration in nature reserves and forest parks.Local governments must ensure immediate demolition of existing projects that are potentially harmful to the ecology, it says.The Qinling range, which largely spans Shaanxi Province, covers more than 50,000 square kilometers.The range is home to approximately 300 Qinling pandas, a sub-species of giant pandas on the verge of extinction, and many other rare animals under state protection, such as golden monkeys, the red ibis and antelopes.

BEIJING - China welcomed Sudan's acceptance of a joint African Union- United Nations peacekeeping force for the country's troubled Darfur region. A Sudanese diplomat in Ethiopia confirmed on Wednesday that Sudan has accepted the mission after receiving assurances that a "hybrid" AU-UN force of 17,000 to 19,000 troops will not be open-ended and Sudan will remain in control of its borders. "China welcomes the deployment of a hybrid AU-UN force in Darfur and the joint statement," Foreign Ministry spokesman Qin Gang said in a statement posted on the ministry's Web site late Wednesday. "The facts have shown that dialogue and equal negotiation is an effective approach to political solution of the Darfur issue, and the consultation between AU, UN and Sudan is an effective mechanism," Qin said. China recently appointed a special representative for Africa to focus on Darfur, and has publicly urged Khartoum to give the UN a greater role in trying to resolve the conflict. The Darfur conflict began in 2003 when local rebels took up arms against the Sudanese government, accusing it of decades of neglect. Sudanese leaders are accused of unleashing the pro-government Arab militia, the janjaweed, to fight them - a charge they deny.

The growth of the services sector should be accelerated and opened wider to private and foreign investors, the State Council has said. Market access for such sectors as telecommunications, railways and civil aviation - by far largely State-owned - will be increased and more competition encouraged to diversify investment, the Cabinet said in a document released yesterday. The country will establish an "open, fair and rule-based" market access system, according to the document, which urged local governments and departments to encourage foreign investment and improve the legal framework in the sector. Private investors are encouraged to "raise the proportion of non-State output in the national services industry". No domain should be off-limits as long as the law does not forbid the entry of non-State investors, the document said. The State Council said the services trade should be encouraged to change the foreign trade growth pattern, which comprises mainly exports of low-end manufactured goods. Some local governments were criticized for tilting toward heavy industries and ignoring the services sector, which made up 40.2 percent of China's gross domestic product (GDP) last year. It generally accounts for about 70 percent in developed economies.The sector is important for China as it makes efforts to change its economic growth pattern, reduce consumption of energy and resources and create jobs, the document said. Given those benefits, "developing the services sector is imperative for China," Liu Xiahui, an economist with the Chinese Academy of Social Sciences, told China Daily. "But for the moment, it still has to rely on the industrial sector to generate more tax revenues and achieve a high rate of economic growth." Liu said while the general services industry, such as the catering trade, has grown fast, many regions are not developed enough to accommodate high-end value-added services, such as finance. "We cannot ignore our economic reality." "But I do hope the country can make bigger strides in developing the services sector, which is in line with China's future needs," Liu added. As one of the steps, the State Council urged more input into sectors oriented toward people's livelihood, such as real estate, non-State nursing homes for the aged and culture. The cabinet put special emphasis on the services industry in rural areas, urging an increase in farmers' incomes and a relaxation of the urban household registration system.

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BEIJING -- Strong economic growth means that fiscal revenues for 2007 will far exceed forecasts made at the beginning of the year, according to a report by the State Council to the top legislature here on Saturday .The extra money will be used to improve people's livelihood with education, health care, social security on top of the government work agenda, the report said.Central government fiscal revenue is expected to total 2.84 trillion yuan (about 389.5 billion U.S. dollars), or 401.1 billion yuan above the budget forecast.In the first 11 months, central government fiscal revenue was 2.68 trillion yuan, up 37 percent over the same period last year, statistics from the Ministry of Finance showed.Local governments will get a windfall too, with their extra fiscal revenue expected to reach 300 billion yuan, the report said."The huge extra fiscal revenue reflects China's stable, rapid economic growth," the report said.By the end of the third quarter, most major economic indicators had already outstripped 2007 targets: industrial output, total fixed asset investment, retail sales, realized company profits and foreign trade.Tax revenues derived from those activities also expanded rapidly in the first nine months. Value-added tax, import tax and individual income tax collections rose 9.9, 10.8 and 12.9 percentage points, respectively.Corporate income tax, business tax and deed tax collections were up 39.2 percent, 29.7 percent and 38.4 percent year-on-year, respectively. Those gains were 24.2 percentage points, 16.7 percentage points and 28.9 percentage points above target, respectively.According to the State Council, the extra fiscal revenue will be used to improve people's livelihood with education, health care, social security to top the agenda.The central government will use 40 billion yuan to subsidize farmers to raise fine breeds of livestock and plant improved variety of crops, and to renovate agriculture infrastructure such as roads, bridges and reservoirs, the report said.The central government will give 21 billion yuan to subsidize the compulsory education, 40 billion yuan to social security, 31.8 billion yuan to medical care, 29 billion yuan to scientific and technological development and 1.1 billion yuan for cultural causes, the report said.The central government will use the extra revenue to offset fiscal deficit by 45 billion yuan and keep the deficit of this year at 200 billion yuan.The State Council required the local governments to focus the use of their 300 billion extra revenue on improving people's livelihood too.

GENEVA -- China on Tuesday got its first judge on the  World Trade Organization (WTO)'s highest court, six years after the country joined the Geneva-based body.Zhang YuejiaoChinese lawyer Zhang Yuejiao was formally appointed by the WTO Dispute Settlement Body (DSB) as a member of the seven-person Appellate Body, which issues final rulings in trade disputes, WTO sources said.Jennifer Hillman of the United States, Lilia Bautista of the Philippines and Shotaro Oshima of Japan were also appointed as new members of the top court at a DSB meeting on Tuesday.The appointments were made according to the Dispute Settlement Understanding which stipulates that the Appellate Body shall " comprise persons of recognized authority, with demonstrated expertise in law, international trade and the subject matter of the WTO agreements generally," a WTO statement said.The WTO said Hillman and Bautista would formally join the top court next month, while Zhang and Oshima would join in June. They can serve up to two four-year terms.Zhang, 63, is professor of law at Shantou University in China. She is also an arbitrator on China's International Trade and Economic Arbitration Commission and practises law as a private attorney.Zhang once held positions at the Chinese Ministry of Commerce as well as at the Asian Development Bank.

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Chairman of the US Joint Chiefs of Staff Marine Gen. Peter Pace inspects the guard of honor during a welcome ceremony at the Defence Ministry in Beijing March 22, 2007. [Reuters]"Clearly, both the United States and China have enormous military capacity, but equally clearly neither country has the intent to go to war with the other. So absent of intent, I don't find threat," General Peter Pace, chairman of the Joint Chiefs of Staff said. "We should not focus on how to fight each other but how to prevent military action. That is what my government is focused on, and that is what my Chinese counterparts here have said their government is focused on." Pace arrived in Beijing Thursday for a four-visit which as he said is aimed at boosting military ties Pace said he had discussed the sensitive topic of Taiwan with the Vice Chairman of the Central Military Commission, Guo Boxiong, Defence Minister Cao Gangchuan and Foreign Minister Li Zhaoxing. "It is not surprising that in each of the meetings, the issue of Taiwan came up. It is clearly a fundamental issue with China," he said. Asked about the possibility of a conflict over Taiwan, he said: "I believe there are good faith efforts among all the leadership to prevent that." Pace said he had repeated US President George W. Bush's position that the US leader "would not support Taiwan independence" and that Washington wanted the issue to be handled peacefully. Pace's visit follows a US announcement last month that it plans to provide over 400 missiles to Taiwan.China's military is proposing officer exchanges and other confidence-building measures with the US Army and may be inching closer to setting up a "hotline" for emergency communication with Washington, according to Pace. Pace said he immediately agreed to study the proposals put forward Friday by Gen. Liang Guanglie, chief of the PLA's General Staff Department. "To me this was a very good, open discussion and one that I found very encouraging," Pace told reporters in Beijing. Liang's proposals included sending Chinese cadets to the Army academy at West Point as well as participating in joint exercises and humanitarian and relief-at-sea operations "that might be able to build trust and confidence amongst our forces." Military exchanges were largely suspended following a collision between a US spy plane and a Chinese jet fighter over the South China Sea in 2001.  Pace said the sides agreed to keep discussing setting up a "hotline" between either military or civilian leaders that would help ease any future friction. "The Chinese military understands as well as I do that the opportunity to pick up the phone and talk to somebody you know and smooth out misunderstandings quickly is a very important part of relations between two countries," Pace said.

SHANGHAI -- A train designed to run at a speed of 200 km per hour left east China's Shanghai for Suzhou early Wednesday morning, ushering in a high-speed era for the world's fastest growing economy. Brand new homemade high-speed trains CRH are seen at a railway station in Jinan, east China's Shandong Province, April 12, 2007. The CRH trains which could run at least 200km per hour, will serve on high speed routes between major cities after the sixth nationwide railway speedup from April 18. [Xinhua]Nationwide, 140 pairs of high-speed trains with a speed of 200 km per hour or a faster speed will begin to hit the railways on Wednesday. The number will increase to 257 by the end of this year. Numbered D460, the train left Shanghai at 5:38 a.m. and is expected to arrive in Suzhou 39 minutes later. Wednesday marks the the beginning of the sixth "speed boost" of Chinese railways, which has been hard-pressed to cope with the country's hunger for bigger transport capacity. Chinese railway officials said last year, China fulfilled a quarter of the world's total railway transport volume on railways accounting for only 6 percent of the world's total length. "The sixth speed lift will boost passenger capacity and cargo capacity by over 18 percent and over 12 percent respectively," said Hu Yadong, vice-minister of railways.

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