Relations With Hong Kong
On July 1, 1997, the land of Hong Kong was handed over to China
after 156 years of British rule. The new Chief Executive of the land,
Tung Chee-hwa was immediately burdened by problems within the land.
Towards the end of 1997, Hong Kong suffered a wave of illness due to a
strain of avian flu. Six people died from the epidemic, and critics
blamed the deaths on Tung's inaction in government. Hong Kong has also
suffered economic problems from the crisis in Asia. For example, when Asia's
currency was lowered in value, Hong Kong's tourist agency was harmed,
making it more expensive for people to visit the island. This economic
crisis has merited little response from overseas investors, and layoffs
throughout Hong Kong have soared. In January of 1998, Hong Kong's
paramount investment bank, Peregrine Investments Holdings Ltd., filed
for liquidation, which forced many out of jobs. For several months, the
unemployment rate in Hong Kong increased, rising substantially from the
previously reported .4 percent. In May of 1998, Hong Kong's first
elections under Chinese rule commenced, with record breaking numbers of
voters participating. Critics of the Mainland won all of the 20 seats
up for election, but a pro-Beijing business will control a good portion
of Hong Kong's 60-seat legislature.
Relations With Taiwan
Over recent years, Taiwan has relinquished its claim to the Mainland,
though China continues to insist upon its rule over the island. Taiwan
claims that it is a completely separate entity from China and has its
own democratic government. At present, Taiwan is trying to become
included in such organizations as the UN and the
World Trade Organization. In January of 1998, China wanted to begin
political talks with Taiwan about a reunification between the two
countries. The island was very against this action, saying that the
Mainland had not given up on its demand that Taiwan should submit to
the "one China" principle. Nonetheless, in the fall of 1998, talks
began and Chinese President Jiang Zemin met for the first time with the
Taiwanese ruling party official Koo Chen-fu. This was the highest
degree of contact between the two sides since 1949. In July 1999,
Taiwan officially announced that it had abandoned its "one China"
policy. President Lee claimed that the Beijing government was using
the reconciliation as an aid to undermine the island's government.
China reacted by denouncing the Taipei government and called for a halt
to all activities aimed at dividing the Motherland.
While many Asian countries have experienced miserable economic
conditions in recent years, China was able to avoid this depression.
However, not all parts of China's economy have soared. In January of
1999, one of China's most prominent government-backed financial
institutions, the Guangdong International Trust and Investment Corp.
(GITIC), began to suffer and announced that it would file for
bankruptcy. In March of 1999, China also continued at its attempt to join the
World Trade Organization, and offered to lower barriers to foreign goods
in its market in order to add to China's image. United States President William Clinton,
however, decided that China's concessions were not enough.
Negotiations between the United States and China continued into April.
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