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SINGAPORE: China and the United States plan to set up a defense hotline aimed at improving military relations, a top Chinese general said over the weekend. Zhang Qinsheng, deputy chief of the general staff of the People's Liberation Army, made the remarks at the plenary session of a three-day security summit known as the Shangri-La Dialogue. He said the issue of the hotline between the Chinese military and the US Defense Department would be settled when he visits the United States in September for the ninth Sino-US defense talks. Zhang also told the summit that China's defense budget is authentic. As the Chinese military gradually modernizes, some have raised questions over "military transparency", and voiced suspicions on China's defense budget. So it is necessary to clarify the matter, Zhang said. "In China, defense budgeting must follow a set of strict legal procedures, and the published budget is true and authentic," he said. He added that the increased proportion of the defense budget is mostly used to make up for inflation, improve the welfare of military personnel and logistics support. "Given the multiple security threats, the geo-political environment, the size of the territory, and per-capita expense, the Chinese defense expenditure is small by any yardstick," he added. He stressed that "China is gradually making progress in military transparency following the principles of trust, responsibility, security and equality". The annual Shangri-La Dialogue, named after the Singapore hotel at which the event has been held since its launch in 2002, and organized by the London-based International Institute for Strategic Studies, opened on Friday. It gathered defense ministers and top officials from 26 countries and regions in the Asia-Pacific region and Europe to address major regional security issues and defense cooperation. Also at the meeting, the US and China turned down the heat on a dispute over Beijing's military build-up, with US Defence Secretary Robert Gates expressing optimism about future relations. Gates downplayed past US rhetoric on China's military might. "As we gain experience in dealing with each other, relationships can be forged that will build trust over time," Gates said. China Daily - Agencies

Wuhan -- China's first bank-invested trust company is officially set up in Wuhan, capital of central China's Hubei Province, on Sunday.The new trust company is held by the Bank of Communications (BOCOM), China's fifth largest lender, and Hubei provincial finance department, which control 85 percent and 15 percent of the total shares respectively.The BOCOM invested 1.2 billion yuan (about US0m) to buy the shares of the Hubei international trust and investment company, the first commercial bank investment in a trust company approved by the China Banking Regulatory Commission.Jin Dajian, chairman of the new company named "jiaoyin-guoxin", or BOCOM-International Trust, said the company would focus on "professional wealth management".Jin called the establishment of the new trust company "a breakthrough for China's trust industry", given that the country's law on commercial banks, effective since 1995, did not allow commercial banks to make trust investment.The regulation was not lifted until the end of last year, when the China Banking Regulatory Commission encouraged financial institutions, including commercial banks, to acquire trust companies.The BOCOM, a large state-owned commercial bank, was established in 1908, and the Hubei international trust investment company was founded as a non-banking financial institution under Hubei provincial government in 1981.

A shop assistant checks hundred yuan bank notes at a shop in Xiangfan, central China's Hubei province in this file photo. [Reuters]A senior U.S. Treasury official warned Congress on Thursday that a legislative drive to force China into letting its currency rise in value more quickly could backfire and do damage to the U.S. economy. Deputy Assistant Treasury Secretary Mark Sobel warned a House of Representative trade subcommittee that U.S. lawmakers risked creating a perception abroad that the United States is becoming "an isolationist nation" that does deserve foreign investment. "If the United States adopts currency legislation that is perceived abroad as unilateralist, investors' confidence in the openness of our economy could be dampened, diminishing capital inflows into the United States and potentially putting upward pressure on interest rates and prices," Sobel said. However, Ways and Means Trade Subcommittee Chairman Sander Levin, a Michigan Democrat, objected to the administration's description of congressional proposals as protectionist, and other lawmakers testifying on Thursday argued China's "unfair" trade practices required a strong U.S. legislative response. Two Senate committees have already approved legislation that aims to equip Treasury with new tools to pressure China into letting its yuan currency rise faster in value, which U.S. manufacturers say is necessary to eliminate an unfair price advantage for Chinese-made goods. Rep. Tim Ryan, an Ohio Democrat, said Congress should pass an even stronger bill -- such as one he has crafted with Rep. Duncan Hunter, a California Republican -- that would allow U.S. companies to seek countervailing duties against China's undervalued exchange rate. "Passage of a weak bill will only lead to many more years of inaction by the administration, loss of jobs and loss of critical U.S. manufacturing capability. We need legislation that will lead to action," Ryan said. A Republican committee member, Rep. Thomas Reynolds of New York, said there was bipartisan support for taking a tougher line with China than Treasury has followed so far. "Be ready for the fact that there's a boiling point in the Congress coming from the people of America saying we need to do better than what's happened so far," Reynolds said. After the hearing, Levin told reporters that House leaders would decide when Congress returns in September the best way to proceed with China currency and trade legislation. "I think we will look at all options," including the Ryan-Hunter bill, Levin said. He expressed confidence that Congress could craft legislation that presses China on the currency issue without violating World Trade Organization rules. But Treasury Secretary Henry Paulson has made clear that he does not want the additional legislative tools and that he prefers to seek a faster pace of economic reform in China through discussion, especially in a "strategic economic dialogue" that he initiated with Beijing last December. Sobel's appearance before the House subcommittee was a bid by Treasury to wave off more legislation in Congress, where anger at China has been mounting and has helped fuel the bid to force Beijing into faster currency appreciation. "We appreciate the frustrations of Congress with the slow pace of Chinese reform. Indeed, we strongly share those frustrations," Sobel said. "Yet we continue to believe that direct, robust engagement with China is the best means of achieving progress." Paulson has just returned on Wednesday night from his fourth trip to China since taking over Treasury just over a year ago. Again he was unable to persuade Chinese officials to offer any commitment to speed up currency reforms. Paulson told reporters in Beijing that Chinese officials whom he met, including President Hu Jintao, intended to move ahead with economic reforms including on currency but that the country's economic stability was critically important. The failure to get firm Chinese promises on currency has fed into a sense in Congress that China does not play fair on trade rules. Sobel said Paulson had "conveyed a strong message about the need for far more vigorous action by China to correct the undervaluation of renminbi (RMB), take immediate action to lift the RMB's value and achieve far greater currency flexibility." China's yuan is also known as the renminbi. David Spooner, the Commerce Department's assistant secretary for import administration, echoed some of Sobel's worry that Congress's actions could rebound against the United States because they might violate global trade rules. "I must make clear that the Department of Commerce is deeply concerned that the other legislative proposals that have been advanced to date raise serious concerns under international trade rules," Spooner said, adding that could trigger a global cycle of protectionist legislation. Similarly, the U.S. Trade Representative's deputy general counsel, Daniel Brinza, warned that Congress needed to beware approving legislative proposals that did not comply with rules set by the World Trade Organization. Doing so would undermine U.S. credibility when it tries to persuade others to abide by WTO rulings, Brinza said.

At the end of a dusty narrow path cutting through a stretch of cornfields on the outskirts of Qingyang, an obscure town in Henan Province, looms a 3-hectare ground dotted with green tents, armored cars and bulldozers. Over the past three months, 315 Chinese engineering troops have gone through the rigors of tough day-night training here. And in a month from now, they will travel more than 8,000 km to Darfur in Sudan to be part of a special UN peacekeeping mission.Commander of UN Mission in Sudan Lieutenant General Jasbir Singh Lidder (L) hands over Unit Citations to Chinese peacekeepers for their excellent performance at the base of the Chinese peacekeeping troops on September 12, 2007. [Xinhua]The first international group of peacekeepers to be deployed in Darfur will build barracks, roads and bridges, and dig wells, which form the key to the accession of more UN peacekeepers to the region. The drills the engineering troops, with the UN's blue berets, perform in front a group of reporters from home and abroad show what they are capable of. In about 10 minutes, bulldozers and road-rollers smoothen a potholed path and soldiers use bare hands to move a 40-meter stretch of steel bridge into place over a ditch. In less than that time, another squad builds a cabin with prefabricated aluminum walls and a "UN" symbol on its side. On show, too, are impressive wrestling and battlefield aid performances."The engineering unit is manned by sturdy, versatile soldiers, mainly from the Jinan Military Area," says Lieutenant Colonel Dai Shaoan, deputy director of the Ministry of National Defense's peacekeeping affairs office. "They have wide experience in building roads and bridges and are fully competent for the mission."The Chinese troops are part of the "Annan Plan", a three-phased approach proposed by former UN secretary-general Kofi Annan to end the Darfur crisis. The plan calls for deploying a joint UN-African Union (AU) peacekeeping force in the 500,000-square-km arid Darfur region, plagued by conflicts over limited resources. Their deployment has been made possible after a hard-won diplomatic tug-of-war.Dai says the UN invited China in April to dispatch a multi-functional engineering unit to Dafur. Four months later, the world body requested that the unit be dispatched in early October."We are doing the preparatory jobs in line with the prescribed timetable to guarantee smooth implementation of the peacekeeping operation," says engineering unit head Shangguan Linhong.The force comprises three engineering platoons, a platoon each of well-diggers and 40 guards, a small hospital unit, 145 vehicles including excavators, bulldozers, road-rollers, power generators and armored personnel carriers, Shangguan says. All the vehicles are "brand new" from domestic companies and have undergone strict tests in line with UN standards.Since its formation in mid-June, the engineering unit has attended intensive courses, from emergency aid to simulating heat in Darfur and from studying UN regulations to getting to know Sudanese culture. "Everyone in our unit can communicate in English to a certain extent," Shangguan says.The UN raised the alarm on Darfur in 2003, and began looking for a lasting resolution to the ethnic conflict. The Darfur Peace Agreement (DPA) was signed in May 2006, thanks to intensive diplomatic and political efforts of the UN, AU and other partners. It took more than one year after that to persuade the Sudanese authorities to accept the UN-AU "hybrid" peacekeeping force.President Hu Jintao met with his Sudanese counterpart Omar al-Bashir in Beijing last November and in Khartoum in February, and asked him to be flexible in his stance over Darfur and ensure that humanitarian aid was distributed properly among the refugees. In March, when Sudan and the UN differed over the implementation of the Annan Plan, China sent a special envoy several times to Khartoum to persuade the government to accept the UN resolution."I think the Sudanese government heeded China's advice," China's special representative for Darfur Liu Guijin said at a press conference in early July. Sudan agreed in June to have the "hybrid" force in Darfur after intense diplomatic efforts of the UN and the international community. Besides, China offered million in humanitarian aid to Sudan, with the last installment leaving Tianjin last month.The latest situation in Darfur is a mixture of good and bad. The UN says the mortality rate in the region is now below the emergency level because of the massive humanitarian efforts of the last four years. Also, malnutrition has been halved from mid-2004, when the crisis reached its peak.But in June, the UN Environment Programme reported an "unprecedented" long-term climate change in northern Darfur, saying its impacts are closely linked to the conflict.This is a real challenge for the Chinese engineering troops, but they are not unnecessarily perturbed. In fact, they are ready to overcome all obstacles on the road to peace."The challenges ahead of our peacekeeping troops are obvious," says Dai. Poor living conditions, lack of proper infrastructure and complex security situations are the obvious challenges. "But our army has a glorious tradition of being hard-working, particularly combat-worthy and of playing a contributory role."Major Ma, an officer with the engineering troops, says Chinese soldiers see the UN peacekeeping operation as a glorious opportunity. "Implementing a mission so far from the country and being part of the efforts to maintain peace in the world is a unique experience."All the soldiers in the battalion which Ma used to serve in the Jinan Military Area had applied to be part of the engineering unit for Darfur, and they included 18-year-old recruits, he says, and they had the full support of their families.But is Ma worried about the dangers in Darfur? The major says: "What we think of most is how to do a nice job. Danger and difficulties are normal for servicemen."China's peacekeepers till nowSince dispatching five military observers to the UN Truce Supervision Organization (UNTSO) in 1990, China's People's Liberation Army (PLA) has sent 8,095 military personnel to 17 UN peacekeeping missions. Altogether, 1,648 Chinese officers and soldiers are serving in 10 UN missions and the UN Department of Peacekeeping Operations today.Lieutenant Colonel Dai Shaoan, deputy director of the Ministry of National Defense's peacekeeping affairs office, says China will participate only in those peacekeeping missions that are in line with the UN Charter, which means those operations overseen by the UN Security Council.China has contributed peacekeepers in the shape of engineers and medical and transport units. It has not sent any combat troops for peacekeeping operations.But Dai says China has a "positive" attitude towards sending combat troops for future UN peacekeeping operations.

SHENZHEN: A student at an IT college in Zhuhai, South China's Guangdong Province, ran amok on Tuesday, stabbing six of his classmates, police said Wednesday.One of the victims suffered a deep gash to the neck, which required intensive care treatment, but he is said to be in a stable condition.The 21-year-old attacker, surnamed Chen, was later arrested and is now in custody. He is believed to be suffering from a mental illness, a spokeswoman for the Zhuhai public security bureau told China Daily yesterday.She refused to give any further information, however, as the case is still under investigation.According to a report by the Guangzhou-based Southern Metropolis Daily, the incident happened at about 10:40 am at the start of a new class.Witnesses said Chen pulled out a 15-cm-long fruit knife and "casually" stabbed the two people sitting next to him and in front of him."I saw blood gushing from one boy's throat and another had been stabbed in the right side of his neck," the newspaper quoted one witness, who asked not to be named, as saying.Chen then attacked four other classmates, as they and their teacher attempted to escape the room, the witness said.After the attack, Chen remained in the classroom.A teacher locked the door from the outside and called police, the Guangzhou Daily reported.Police arrived soon after and arrested him.The victims were taken to a nearby hospital. Three of them had been stabbed in the neck while the others had suffered wounds to their arms and wrists, a source from the hospital said.A spokeswoman for the school, surnamed Cui, said the school authorities will issue a formal statement once the police have concluded their investigation.Students and teachers were receiving counseling to help them deal with the incident, she told China Daily.According to the Guangzhou Daily, Chen, who lives in Zhuhai, attacked a classmate while he was at university in Wuhan, in Central China's Hubei Province. He was later expelled.

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