In a bid to maintain relations with Libya, China on Thursday demanded the country cut all its official ties with Taiwan.

"We are strongly dissatisfied with Libya and have lodged solemn representations with them," Chinese Foreign Ministry spokesman Liu Jianchao told the regular briefing.

Despite China's strong opposition, Libya permitted Taiwan leader Chen Shui-bian to make a transit stop in Tripoli, capital of Libya, Wednesday. The Libyan government also held talks with Chen on mutually establishing representative offices.

"This is a serious violation of Libya's long-term commitment to the one-China policy and will exert a negative impact on China-Libya relations," Liu said.

"We demand that Libya live up to its commitment and immediately cease all official exchanges with Taiwan in whatever forms so as to maintain overall China-Libya relations," he added.

Liu also called for the United States to take substantive action to display adherence to the one-China policy, three Sino-US joint communiques and their commitment to opposing "Taiwan independence".

His remarks came after the US Deputy Secretary of State Robert Zoellick said Wednesday that the US did not support "Taiwan independence" and that US forces would become involved if?? independence was declared.

"In particular the United States should end sales of advanced weapons to Taiwan and military exchanges," Liu said.

US report--China not manipulating currency

When commenting on the contents of the newly-released US report relating to China, Liu said it was appreciated that China was not listed as a currency manipulator.
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He said the report, released by the US Treasury Department on May 10, gave recognition to China's efforts in establishing a more flexible foreign exchange market and stepping up financial reforms.

The exchange rate of the RMB against the US dollar had appreciated 3.4 percent by May 10 since the currency reform was introduced last year, according to Liu.

He said the exchange rate of RMB against the US dollar could fall or rise, adding that the two-way floating exchange rate and the increased flexibility of RMB had reflected fluctuations of major international currencies. Exchange rates were adjusted with reference to a package of currencies and based on market supply and demand.

Liu said China was furthering its economic reforms, increasing domestic demands and adjusting the economic structure. It would better manage its floating currency mechanism which accorded with statements made by President Hu Jintao during his US visit in April.
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UN Secretary-General to visit China

UN Secretary-General Kofi Annan will pay an official visit to China from May 19 to 23 at the invitation of the Chinese government, Liu told the press. He explained this would be Annan's seventh visit to China since he took office.?

Chinese President Hu Jintao, Premier Wen Jiabao and State Councilor Tang Jiaxuan will meet with him and exchange views on international and regional issues of common interest and the cooperation between China and the UN, said Liu.

Quick return to six-party talks

China was making every effort for an early resumption of six-party talks on the Korean Peninsula nuclear issue, Liu said.

He pinpointed the key obstacle as being the difference between the Democratic People's Republic of Korea (DPRK) and the US on the financial issues concerning the DPRK.

He declined to elaborate on the financial issues but asked interested parties to take a flexible and pragmatic approach to assist in removing the barrier. The talks involve China, the DPRK, the US, the Republic of Korea, Russia and Japan.

Both China and the US agreed to solve the nuclear issue through dialogue via the six-party talks, to establish a nuclear-weapons free Korean Peninsula and maintain peace and stability, he said.

The multi-lateral talks got underway in 2003. The first phase of the fifth round was held in Beijing last November and a date for the next stage has yet to be identified.

Peaceful solution to Iranian nuclear issue

Liu urged all parties to keep up diplomatic efforts for a peaceful solution to the Iranian nuclear issue. China hoped that those involved would remain patient and show restraint and sincerity in resolving the difficulty, he said.

"China hopes all parties can start a new round of diplomatic efforts to resolve the Iranian nuclear issue in a peaceful manner through negotiations," said Liu.

He explained China's position as firm support for the current international non-proliferation system and seeking peace and stability in the Middle East.

Asked to comment on a statement by a US official that China would agree with the proposed sanctions on Iran, Liu explained that China did not support threats of sanctions or force in resolving international disputes.

Youth exchanges with Japan

When asked to comment on a Japanese invitation to 1,000 Chinese students to visit, the spokesman said China would cooperate to promote such exchanges and communication between young people to improve and develop bilateral ties. "China appreciates the Japanese efforts in promoting youth exchanges," he said. The first 200 students will leave next week.

China always supported non-governmental exchanges with Japan which were intended to enhance mutual-understanding and friendship, Liu said.

"I myself hosted some Japanese students who were in Beijing for an exchange program when I was still a postgraduate at university," said the 42-year-old spokesman.

The present difficulty in Sino-Japanese relations was rooted in the repeated visits by some Japanese leaders to the Yasukuni Shrine where World War II criminals were honored, Liu said.

In a bid to improve bilateral ties, Liu noted, the two sides were "in contact" to arrange meetings between the two foreign ministers.

"China always makes efforts to overcome difficulties and improve and develop relations with Japan," Liu said. "We hope the Japanese will understand our sincerity."

(Xinhua News Agency May 12, 2006)