The problem with political bloviating on China

U.S. presidential candidates love to harp on the world's most populous nation. But once they're in office, they quickly start singing a different tune U.S.-China relations are as strained as they have been in more than a decade. The U.S. is suddenly turning its attention back to East Asia after 10 years of war in Afghanistan and Iraq (the so-called "pivot"), only to find that China has been steadily advancing its territorial claims and asserting itself as the preeminent regional power it believes it ought to be. Chinese assertiveness regarding territorial disputes with Japan, Vietnam, the Philippines, and others has driven its neighbors firmly to the side of the U.S. 

Unfortunately, this has encouraged Washington's instincts to deepen military ties with other states in the region. China perceives that as an effort at containing Chinese power. It has also fed a new round of China-bashing and overhyping of the potential threat from China. It almost doesn't matter which presidential candidate wins in November. Tensions between the U.S. and China seem more likely to increase in the years to come unless something major changes.

SEE MORE: China's economic growing pains

Fortunately, most campaign rhetoric about China tends to give way to practical realities.

While Obama administration foreign policy has mostly been characterized by trying to accommodate the interests of regional powers, its policy towards China over the last two years has been very different. From the dispute over the Senkaku Islands and Chinese claims in the South China Sea to U.S. ties to China's neighbors, Obama has generally taken a harder line with the Chinese government than his predecessor did, and the administration shows no signs of backing off from intensifying military cooperation with regional states as diverse as Australia and Vietnam. Despite all of this, Mitt Romney, Obama's likely rival in the general election, faulted the administration for originally being a "near supplicant to Beijing," which could become a problem for Obama in the general election if it is repeated often enough. It will likely force Obama to emphasize his hawkishness on China during the campaign, which will place added strain on the relationship.

SEE MORE: Hacked: How China is stealing America's business secrets

But the most egregious recent example of China-bashing came in a Wall Street Journal op-ed by Republican presidential candidate Mitt Romney. He effectively pledged to start a trade war with China once in office. Further, he warned absurdly of possible Chinese global hegemony and a "Chinese century" if Mitt's recommended policies weren't followed. 

Romney paired his antagonistic trade policy with the promise of maintaining a military presence designed to counter "the long-term challenge posed by China's build-up." That promises to fuel unnecessary and costly security competition for both states and America's allies. This cannot be separated from Romney's insistence on a massive expansion of the U.S. Navy to increase our maritime presence in the western Pacific. Romney presented his China policy purely in terms of increased confrontation and provocation. While he may not think his proposals are an "invitation to conflict," his policies would worsen relations and make the eruption of accidental conflict more likely. 

SEE MORE: China's 'Year of the Dragon' baby boom: A guide

Fortunately, most campaign rhetoric about China tends to give way to practical realities. The most memorable example of this was Bill Clinton's election-year lecturing of the elder President Bush for "coddling dictators" in Beijing. Clinton then spent the next eight years greatly expanding U.S.-China ties. Every challenger likes to position himself as a critic of the supposedly morally obtuse incumbent when it comes to China policy, but once in office, the challenger usually adopts most if not all of the incumbent's practices. Voters shouldn't totally ignore what Romney says about China, but it is hardly likely that he would be able to follow through on his riskiest proposals.

One possible opportunity for improving U.S.-China relations in the coming year is the promotion of a new Chinese president. Vice President Xi Jinping is expected to succeed Hu Jintao, and during his recent visit to America he gave clear indications that he is interested in building a deeper, constructive relationship with the United States. As he said, "China welcomes the United States playing a constructive role in promoting the peace, stability and prosperity of the Asia-Pacific region," but he also added that "we hope the U.S. side will truly respect the interests and concerns of countries in the region, including China." A change in leadership obviously doesn't eliminate disagreements based on divergent interests, and its significance should not be exaggerated. But Xi's ascension can be an occasion for reducing tensions between our governments that should not be neglected.

SEE MORE: Why Apple builds iPhones (and everything else) in China

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Recalling Nixon in China, 40 Years Later

Archival footage of President Richard M. Nixon landing in China in 1972 from a documentary.

It was a moment in history, of a kind that those of us in the resident foreign press corps knew we would probably not see the likes of again: the morning 40 years ago on Tuesday, when Richard Nixon touched down to be greeted by the Chinese premier, Zhou Enlai, at the airport in what Westerners in those days still called Peking.

As if it were yesterday, I see the crisp blue and white of Air Force One, “United States of America” emblazoned on its fuselage; the flutter of the Chinese and American flags in the winter wind; the band of the People’s Liberation Army playing a somewhat toneless version of “The Star-Spangled Banner”; the historic handshake at the foot of the gangway.

Premier Zhou was immaculate in manner as always, while Nixon was heavily masked by television makeup, in what seemed like a parody of the lessons he learned from that 6 o’clock shadow moment in his televised debates with John F. Kennedy. And me: in my 20s, so seized with it all, so nervous, that all I managed were a few largely illegible scribbles in my notebook.

Not that it mattered, for that sky-blue day is as clear in its detail now as it was then. How often since have I cherished the note of mischief that the Chinese smuggled into that solemn moment. Plain as could be, inscribed on a large posterboard at the rim of the airport apron that overlooked the cockpit of Air Force One, picked up by the television cameras relaying images of that famous handshake, were Mao Zedong’s words in Chinese, set in white on a red background in the manner of the “big character” posters of the Cultural Revolution: “Make trouble, fail; make trouble again, fail again, until their doom. This is the logic of all imperialists and reactionaries the world over, and they cannot go against it. This is Marxist law.”

If the board had been bigger, the inscription might have added these still blunter words from the same passage: “When we say ‘imperialism is ferocious,’ we mean that its nature will never change, that the imperialists will never lay down their butcher knives, that they will never become Buddhas, till their doom.” But the Chinese, ever economical in their dealings with foreigners, must have felt that they had made their point with sufficient clarity. Even many in the press corps traveling with the president failed to notice the implicit message: that China, too, was a great and proud nation, welcoming the leader of the world’s most powerful country as an equal, unminded to bow its knee even modestly, or moderate its polemics, as the price of ending a generation of estrangement.

I was then the Peking correspondent of The Globe and Mail of Toronto, the only Western newspaper at the time with a correspondent based in China. The posting was the product of an arrangement made more than a decade earlier, when China — trading for Canadian wheat in massive quantities to compensate for the widespread famine that followed Mao’s disastrous Great Leap Forward in the 1950s — suggested that The Globe open a bureau in Peking, in exchange for a small but symbolic North American foothold in Canada for the official New China News Agency, which functioned then as an outpost of the Chinese state intelligence apparatus.

If the arrangement was The Globe’s passport to China, it proved, in time, to be my passport to The New York Times. Lacking its own correspondent in China until the Nixon visit began the wider accommodation between Washington and Peking, The Times had been publishing by syndication some of The Globe’s stories from China.

To be a “local” correspondent, in the sense of not being part of President Nixon’s traveling press corps, was to some extent a disadvantage. To be sure, we were on hand when the president visited the Forbidden City, the Great Wall, the idyllic lakeside city of Hangzhou, and finally, for the farewell banquet in Shanghai, an event awash in heads-back, swallow-it-whole toasts — with the maotai firewater favored by the Chinese on such occasions — that left Nixon, audibly that night, somewhat the worse for wear.

But, as also happened during Henry Kissinger’s follow-up trips to China, we who were based in China were in coach class, professionally speaking, a step or 10 lower on the rungs of access and privilege than the Barbara Walterses, the Dan Rathers and, not incidentally, the Max Frankels. Then The Times’s Washington bureau chief and later a generous and far-seeing mentor as the paper’s executive editor in the 1990s, Max won a Pulitzer Prize for his coverage of the trip.

Still, there are worse things for a reporter than being an outsider, and being forced by circumstance to resort to improvisation, shoe-leather energies and end-around plays, all invaluable when confronted with the unyielding resistance that the Chinese bureaucracy, like so many others, display when challenged by those waving copies of the First Amendment.

On the evening of that first day, the “locals” were seated so far from the table in the Great Hall of the People where Premier Zhou hosted Nixon with a state banquet that we had to stand on our seats with binoculars to glimpse what American television viewers were seeing close-up. In my frustration, I waited until the banquet ended, then raced through the madding crowd of guests to the top table. There, I made a close inspection of the gold-embossed menu cards, along with the similarly gilded place cards (“Richard Milhous Nixon, President of the United States”) and ivory chopsticks where the two principals had been sitting.

A felonious thought occurred: How about simply taking all of it, and hiding it in my pocket, as a matchless souvenir? The stern-faced Chinese security official, statue-straight in his Mao suit, seemed to counsel against it, but just then one of those improbable things happened, proving again that a reporter pushing the boundaries can make his own luck. The security man turned his head for a moment, and winked. And off I went with my guilty booty.

But I hadn’t reckoned — and there were many in our profession who made this error — with the inimitable Helen Thomas, stalwart of United Press International, dean of the White House press corps, a newswoman so ferocious in pursuit of a story that her cohorts used to say it was a brave man who would presume to step between her and a telephone. As we tripped down the red carpet to the main doors of the Great Hall, she asked me what it was she had seen me looting. And I told her. Within 24 hours, a telegram was delivered to my Peking flat — “Mr. John Burns, China” — from a New York curio dealer offering me $25,000, as I remember it now, for the entire suite of mementos, about two-thirds of my annual income at the time.

Naïve as I then was to the ways of the world — or principled, as I would like to think — I cabled a rejection, saying I could not stoop to making a profit from my work, or more properly put, from my light-fingered diversion. Some years later, as I was preparing to leave Peking for a new job as a reporter on The Times metro desk in New York, George H. W. Bush, then head of the American Liaison Office in China, a quasi-embassy that grew from the Nixon visit, and also my doubles tennis partner, offered over our last game together to send them in the diplomatic bag to Nixon. He was then disgraced, after his resignation, and living in San Clemente, Calif. When last I heard, they still resided there in the Nixon presidential library, along with the letter I wrote to the former president wishing him well. But that’s another story.

What was accomplished in those days of February 1972 is so well known, so thoroughly rehearsed in the histories and biographies of that era, as well as in John Adams’s terrific opera, that it needs little in the way of further commentary by me. As Nixon said in the handwritten letter he sent thanking me for the return of the purloined pieces, it was the high point of his presidency, and, he hoped, the accomplishment for which he would be remembered after the scandal of Watergate dimmed.

The visit brought about the rapprochement between the two great nations that continues to develop today, in awkward fits and starts, and occasional eruptions of distemper, just as that big-character poster at the airport suggested it might. And it put me on the path to the terrific years, 35 and counting, that I have spent as a foreign correspondent for The Times. I’ve often said that it’s a life of adventure and reward, in terms of the extraordinary people and places and events that are part of the fabric of a foreign correspondent’s life, that I would have chosen to live unpaid had I been born the grandson of a John D. Rockefeller or a J. Pierpoint Morgan. But little that I have seen has been quite so momentous, or quite so exhilarating, as that far, fierce hour watching the arrival of Richard Nixon in Peking.

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China Blocked Access to White House News Conference With Xi, Reporter Says

Zhao Yan, a Chinese journalist and dissident living in New York, said on Friday that he was prevented by Chinese officials from entering a room at the White House for a news conference on Tuesday with President Obama and the likely future leader of China, Xi Jinping.

In an interview with The Lede, Mr. Zhao said he had been granted access by the White House to cover the event for Boxun.com, a Chinese-language news site based in the United States. But once inside, he said, officials from China’s delegation identified him and asked that he be barred from the room where the two leaders were delivering prepared remarks.

Mr. Zhao said through an interpreter that he wanted to ask Mr. Xi whether he would do more to support human rights in China than his predecessors have.

The White House disputed his account, saying that the incident was the result of a miscommunication and that Mr. Zhao was simply not among the limited number of American and Chinese pool reporters approved for the small event. He had been granted entry into the White House only for the daily briefing, later that afternoon.

In 2005, Mr. Zhao, then a researcher for The New York Times in its Beijing bureau, was jailed in China as part of an investigation into the sources used for a Times article about the Chinese leadership. He was acquitted of the main charge of revealing state secrets, but spent three years in jail on unrelated charges and subsequently left China for the United States.

At the later press briefing with the White House spokesman, Jay Carney, he posed his question and it appeared as part of the transcript published on the White House site:

Q I’m a political journalist and political analyst from China. I have been here for two and a half years, and I have always seen the American government, the Obama government, place much more importance on the appreciation of the renminbi.

MR. CARNEY: On the appreciation of the renminbi?

Q Yes, place much more importance on the appreciation of the renminbi. Our readers are very concerned whether the U.S. government is much less interested in the human rights situation in China. And our readers are also interested to know whether the U.S. government will center on the human rights issue and policy between Middle East region and China. Can you talk to our readers about these two issues?

MR. CARNEY: Well, I would simply say that we have, in our relationship with the People’s Republic of China, a whole host of issues, as I was saying before. And we always raise human rights concerns at the highest levels when we have meetings with senior members of the Chinese leadership, and we will continue to do that. It is simply not the case that we emphasize one aspect of our relationship over the other. They are all important — both the areas where we agree, and the areas where we disagree. And we certainly express ourselves openly when we have concerns about human rights issues, as we do in this case.

President Obama is very aware of that issue, as is Vice President Biden and Secretary of State Clinton and others.

Mr. Zhao provided an e-mail chain between himself and the White House press office that documented his application to cover the event and its approval. “All set, thanks!” read the last message, signed, “The White House Press Team.”

Mr. Zhao captured video on his iPhone in which a White House press officer can be heard telling him that he would only be allowed to cover the later press briefing. “There are very strict numbers for this,” the man can be heard saying.

The editor of Boxun, an independent news site run out of North Carolina, confirmed that Mr. Zhao had gone to the White House as its representative. He said that if Mr. Zhao was in fact stopped, it could have been because of his association with the site or his own history of dissident activities. “If the person there recognized him as he says, it’s likely he was blocked for himself,” the editor, who goes by the pseudonym Wei Shi, said in a telephone interview. “He has a face that is recognized.”

Mr. Zhao said on Friday that if he had been allowed into the room with Mr. Xi, and had not been formally allowed to ask a question, “I would have stood up anyway and asked.”

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Hacked: How China is stealing America's business secrets

Sen. John Kerry is fed up with China's penchant for looting technology from U.S. businesses — up to $400 billion worth of data each year. When will it stop? Chinese Vice President Xi Jinping, slated to be the next leader of the world's most populous nation, is getting an earful from U.S. officials over China's shady business practices. During Xi's first official tour of the U.S. this week, Sen. John Kerry (D-Mass.) accused a Chinese company of bankrupting a U.S. competitor by ransacking its software. And that's just the tip of the iceberg, alleges Kerry, implicating China in "cyber-attacks, access-to-market issues, espionage [and] theft." And, indeed, a flurry of recent reports indicate that Chinese hackers, backed by the government, are stealing business secrets from the U.S. Here, a guide:

What's going on?
American companies are the victim of an "onslaught of computer network intrusions that have originated in China," according to a report by the U.S. government's National Counterintelligence Executive (NCE). The report says China is trying to "build" its economy on U.S. technology, research and development, and other sensitive forms of intellectual property.

SEE MORE: China's mysterious, 'bewildering' Octomom

How is the technology stolen?
Consider the company Kerry cited: Wind-energy experts American Superconductor. Its biggest client used to be China's Sinovel — until Sinovel allegedly bribed an American Superconductor employee to steal his employer's software and give it to Sinovel. In the case of cyber-attacks, Chinese hackers may leave malware inside the computer systems of American firms, where the nefarious programs can go undetected for years, slowly bleeding companies of information.

Is the Chinese government involved?
Many experts suspect so, though China denies the charges. U.S. officials reportedly believe that a dozen Chinese groups are responsible for the bulk of cyber-attacks on U.S. companies, and that they receive direction from the Chinese government or military. 

What impact does the theft have on U.S. companies?
It can be devastating. Some say China is stealing $400 billion worth of sensitive information a year. The NCE report cited the case of paint company Valspar, which lost $20 million, or one-eighth of its annual profit, after its proprietary information was stolen by a Chinese rival.

Are there national security concerns?
Definitely. Some hacked companies have contracts with the Defense Department and other U.S. government agencies, putting classified information at risk. For nearly a decade, hackers had access to the computer network of telecommunications company Nortel Networks. If, as suspected, China was behind the breach, it likely gained valuable insight into the internet and telephone systems that government agencies, banks, and other businesses rely on.

What has the U.S. done about this?
Surprisingly little so far. Cyber-security experts are urging the government to show China that such acts will have serious repercussions. In the meantime, the NCE says China continues to be an "aggressive and capable" hacking threat.

SEE MORE: China's economic growing pains

Sources: Associated Press, CNN, The New York Times (2), The Wall Street Journal

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Why China should bail out the eurozone: 3 theories

The EU is practically begging for a financial lifeline from the world's most populous nation. China isn't eager to get involved — but maybe it should be As the European debt crisis lurches into its third year, super-rich China finds itself with cash-strapped European suitors lining up on its doorstep. With $3.2 trillion in foreign exchange reserves, China appears to be in prime position to provide a lifeline to the debt-beleaguered continent. Prime Minister Wen Jiabao recently pledged China's aid, but his vague promise didn't entail any firm commitments, and many Chinese officials are still wary of exposing the country to risky bonds from Greece and other debt-burdened European nations. But maybe they should think again. Here, three reasons why China would be wise to rescue Europe:

1. If Europe falters, it would cripple China's economy 
China's economic growth could be cut in half if the eurozone enters a recession, warns the International Monetary Fund. With annual trade valued at 560 billion euros ($730 billion), Europe is China's largest trading partner. In addition, Chinese business investments in Europe more than doubled from 2010 to 2011. Propping up Europe now could forestall a far-more-expensive economic collapse down the road.

SEE MORE: Will debt downgrades doom the eurozone recovery?

2. China could gain political leverage over the West
In "desperate need of financial support," Europe might be willing to make big political concessions to China, writes Thomas H. Naylor at CounterPunch. For instance, as a prerequisite for aid, China demand that the West quit threatening Iran over its nuclear program. Such a move would "effectively checkmate" the U.S. and Israel. "All of this makes Washington very nervous," and the U.S. "does not relish the thought of the EU becoming financially dependent on Beijing."

3. China could also bolster its clout at the IMF 
China should "pony up," writes Wayne Arnold at Reuters, but buying European bonds directly is "too risky." Instead, China should funnel its aid through the IMF — and thereby earn a "bigger role at the world's currency watchdog." The U.S. dollar is still the world's reserve currency, which leaves China vulnerable to the whims of U.S. monetary policy. China views the IMF as the "best counterbalance to such tides," and winning more influence at the powerful organization ought to be a "no-brainer."

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Why Republicans should lay off China

Pete Hoekstra sparked a media firestorm with his racist "yellowgirl" ad. Sadly, he's hardly the only Republican trafficking in xenophobic Beijing-bashing Earlier this month, lucky Michigan viewers of Superbowl XLVI were serenaded with a political attack ad that is, to borrow a word from the ever poetic Mitt Romney, "severely" stupid. It takes the game of China-bashing to a new level, just as Chinese President-Select Xi Jinping arrives in the United States for a friendly visit.

The 30-second ad, put out by Michigan Republican Senate candidate Pete Hoekstra (who hopes to take on incumbent Democrat Debbie Stabenow in the fall), opens with a Fu Manchurian clang of a gong, followed by a young Chinese woman riding a bike leisurely down a narrow dirt path lined by rice paddies. Sashaying to a stop, she delivers a beguiling Anna May Wong smile, and speaks in a sweet voice peppered with just enough grammatical errors to bite like salt on a fresh wound: "Thank you, Michigan Senator Debbie Spend-it-now. Debbie spends so much American money. You borrow more and more from us. Your economy get very weak. Ours get very good. We take your jobs. Thank you, Debbie Spend-it-now." The scene then cuts to an avuncular Hoekstra summarizing the moral of this tale about faraway places: "I think this race is between Debbie Spend-it-now and Pete Spend-it-not." Zing.

SEE MORE: China's 'Year of the Dragon' baby boom: A guide

America has plenty of problems that need fixing. Pretending they're the fault of some menacing Red threat won't help us solve them.

For decades, Michigan has sadly watched the decline of its prized auto industry — a loss that has led to racially-driven anger and sledgehammers smashing Japan-made cars. It all culminated in the tragic death of Vincent Chin in 1982. Chin was beaten to death with a baseball bat by a Chrysler plant superintendent, after being mistaken for someone of Japanese heritage (as if that would have made it okay). Considering that history, the racial insensitivity of running this ad in Michigan of all places, and dubbing it "yellowgirl" in the HTML code on Hoekstra's campaign website, is simply beyond the pale.

SEE MORE: China's 'amazing' construction of a 30-story building in 360 hours

What Hoekstra didn't realize, apparently, was that the setting and costume used in the ad is identifiably Vietnamese, not Chinese. Indeed, the ad has drawn attention in China not for its Sinophobic content, but for its comical misidentification. 

Of course, the "yellowgirl" ad is not a single, standalone incident of China-bashing, but one of the many we have seen and will continue to see in political campaigns as well as media coverage. The disturbingly long list includes the infamous "Chinese professor" ad put out by Citizens Against Government Waste during the midterm elections in 2010, Rush Limbaugh's ridiculous mimicry of the Chinese president's speech ("ching chong, look see"), and countless attack ads in state-level elections that flash an opponent's unflattering headshot with the words "China" and "jobs" looming in the background.

SEE MORE: China's economic growing pains

Among the many perils of China-bashing is that it leaves voters misinformed. But it also unfairly and xenophobically blames the "other" for America's abundance of self-inflicted problems. Case in point: As a member of Congress, Hoekstra voted for the $700 billion bailout of the financial system in 2008. He voted again and again for budgets with big-time deficits — trillions of dollars worth, over time. That's not exactly the fault of our "yellowgirl." Forget "Pete Spend-it-not." This big-spending Republican is more like "Pete Hoe Extra."

SEE MORE: The $1.2 million Rolls-Royce that's selling out in China

The truth is, blaming China or any other country for the loss of American jobs focuses on symptoms rather than disease. In our global economy, capital, given its greedy nature, flows to wherever it can reap the best profit. It is incumbent upon national governments to create attractive environments for investment. As for trade imbalance, the root cause is not currency manipulation, but economic ideology. As long as our national economic life is fixated on finance — and Americans are more focused on buying mutual funds than on growing apple orchards in their backyards —the traditional mode of production will take a backseat. Take GM. Prior to the banking crisis, the financial arm of the company, GMAC (now Ally Financial), had grown so big that its revenue exceeded the actual car-making business. When an automobile company makes more money in finance than in manufacturing, should we really be surprised to see the flight of manufacturing jobs?

The miraculous turnaround of GM — it rose from near bankruptcy to become the No. 1 auto company in the world — is not only a powerful testament to the importance of government and industry working together to create jobs. It also sheds light on the futility and irresponsibility of politicians who continue to bash China. It wasn't politically-motivated scapegoating of foreign automakers that fixed GM.

SEE MORE: Is China really on the verge of surpassing the U.S.?

But look at the GOP presidential field. Mitt Romney wants to wage a trade war with China. Not to be outdone, Rick Santorium simply wants to go to war with China: "I don't want to go to a trade war, I want to beat China. I want to go to war with China." Newt Gingrich has a bold plan for a moon colony, a pipe dream strongly motivated by the Cold War era desire to beat the Chinese. When Jon Huntsman withdrew from the race, Republicans lost the only candidate who had any credibility or capability of dealing with China as effectively as the Obama administration has.

The Obama approach is two-fold: On the one hand, he welcomes the rise of China, acknowledging its benefit to the United States and the world. On the other hand, he continues to chide and pressure China to play by the rules and to improve its human rights record. Criticism and competition are healthy. Bashing and warmongering are not. You can't blame a country for continuing to loan you money, buying up your Treasury bills to sustain your lavish lifestyle of deficit spending. You can't criticize a country for having a poor human rights record when your own companies, such as Apple and Cisco, are helping to fuel the rise of poor, exploitive working conditions at Chinese factories, or assisting to modernize the surveillance technology of Chinese police departments that crack down on the people.

SEE MORE: Xi Jinping: The 'mystery man' in line to lead China

It's time to lay off China. America has plenty of problems that need fixing. But pretending they're the fault of some menacing Red threat won't help us solve them.

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Xi Jinping: The 'mystery man' in line to lead China

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China urges closer cooperation from Iran in nuclear standoff

BEIJING (Reuters) - China has urged Iran to cooperate more closely with the global nuclear watchdog and rejoin talks on its nuclear program that has caused a rift with the West.

Assistant Foreign Minister Ma Zhaoxu said the purpose of his two-day visit to Tehran, which began Sunday, was to "candidly discuss" the Iran nuclear issue with Deputy Secretary of Iran's Supreme National Security Council Ali Baqeri.

"China is willing to ... push forward the early resumption of six-nation talks with Iran, and encourage Iran to strengthen cooperation with the International Atomic Energy Agency to ensure the Iran nuclear issue moves forward on the proper course of dialogue," Ma said in a statement on the ministry's website (www.mfa.gov.cn).

Iran says its nuclear program is peaceful and intended to meet its energy and medical needs. Western nations suspect it is planning to build nuclear weapons capability.

Major powers signaled in late January that they were willing to reopen talks on curbing Iran's nuclear program but said Tehran must show it is serious about any negotiations.

The group, known as the P5+1, includes Britain, China, France, Germany, Russia and the United States.

That push for diplomacy follows weeks of rising tensions between the West, which has upped sanctions on Iran, and Tehran, which had threatened to close the Strait of Hormuz, through which almost one-fifth of oil traded worldwide flows.

Ma's call is a familiar refrain for China, which has repeatedly voiced its concerns over new sanctions on Iran, and is one of the largest users of Iranian oil, buying around 20 percent of total exports.

(Reporting by Michael Martina; Editing by Nick Macfie)

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China paper says country does not want to "buy up" Europe

BEIJING (Reuters) - China has no intention of "buying up" or "controlling" a debt-ridden Europe that it still has confidence in, and any help Beijing may offer will be for purely economic reasons, a top state-run newspaper said on Monday ahead of a China-EU summit.

While Chinese leaders have repeatedly expressed confidence in European nations, they have also refrained from making firm financial commitments, urging Europe first to take further steps on its own.

Premier Wen Jiabao, meeting German Chancellor Angela Merkel in Beijing earlier this month, said China was considering increasing its participation in the rescue funds aimed at resolving the debt crisis, though he gave no explicit pledges.

In a suggestion of the tone China wishes to strike at its summit with senior EU officials on Tuesday, Communist Party mouthpiece the People's Daily said in a front page commentary that China's interests lay in selflessly helping Europe.

"China has no appetite or ability to 'buy up Europe' or 'control Europe' as some European commentators have said," wrote Feng Zhongping, director of the Institute of European Studies at the China Institute of Contemporary International Relations.

"China has from the beginning strongly supported the EU and the euro, in clear contrast to the 'talking down' of Europe in the international community," Feng wrote in the piece, carried in the paper's overseas edition.

China has promised not to link helping Europe in the debt crisis with issues such as the EU recognizing China as a market economy or the EU's arms embargo on China, Feng added.

"This is the best example of China's proactive stance on the EU," he wrote.

Any Chinese economic assistance to resolve the debt problem, whether via the International Monetary Fund or the EU's own systems, would be a purely economic decision, Feng said.

"There is thus no such thing as 'the poor person saving the rich person'," he added.

The Beijing summit, which was postponed from December, will bring together Premier Wen and President Hu Jintao with European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy.

The European Stability Mechanism, a 500-billion-euro ($665 billion) permanent bailout fund due to become operational in July, is expected to replace the European Financial Stability Facility (EFSF), a temporary fund that has been used to bail out Ireland and Portugal and will help in the second Greek package.

The euro zone must agree and approve a 130-billion-euro ($170 billion) bailout package with Greece before February 15 to allow time for complex legal procedures involved in the bond swap to be completed in time for a March 20 bond redemption.

Failure to strike a deal risks pushing Athens into a chaotic debt default that could threaten its future in the euro zone and worsen the crisis.

(Reporting by Ben Blanchard; Editing by Richard Pullin)

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China city suspends plans to ease property controls: report

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China tells banks to roll over local govt loans: report

SYDNEY (Reuters) - China has told its banks to start a huge roll-over of loans to local governments, the Financial Times reported, aiming to give itself more time to deal with a $1.7 trillion debt hangover from the global financial crisis.

The move underscores China's determination to contain its 10.7 trillion yuan debt mess and forestall a potential loan crisis in the world's No. 2 economy, analysts say.

As early as June 2011, the Chinese government had vowed to clean up its local debt either by shifting 2-3 trillion yuan of debt off local governments, forcing state banks to take some bad debt losses and selling select projects to private investors, sources told Reuters earlier.

Investors worry that China's banks would suffer billions of bad loan losses and hobble the world's growth engine at a time of anaemic global economic growth.

China's mountain of local debt piled up after the 2008-09 financial crisis when Beijing ordered local governments to spend massively on infrastructure projects to buoy economic growth, which they did by borrowing heavily.

Analysts say Chinese banks are already rolling over or restructuring troubled loans to cash-strapped local governments unable to repay their debt. But the amount of loans being rolled over is not known as banks -- and Beijing -- are tight-lipped.

Worse, analysts say Chinese banks are hiding troubled loans by adamantly refusing to mark them as non-performing loans in financial statements before restructuring them, as per global best practice.

"This is bad regulation but I don't think we are going to get a bank crisis," said a bank analyst in Hong Kong.

In some cases, loans are being restructured by extending their maturities by as much as four years, the Financial Times said, citing bankers and analysts familiar with the matter.

Not all local government loans would be rolled over, the paper said, citing a person with knowledge of the plan.

Banks would determine if there was real demand for the investment. Continued funding for the construction of highways would be approved but less important projects, like massive city squares, might be cut off.

Banks would also consider whether investments were consistent with the government's five-year plan for industrial upgrading and cleaner growth.

China has said that about half of the 10.7 trillion yuan of loans will mature over the next three years.

(Reporting by Richard Pullin in MELBOURNE and Koh Gui Qing in SINGAPORE, Editing by Dean Yates & Kim Coghill)

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