China's explanation for not attending the 7th Annual Sino-EU Summit, due to start today, was ostensibly because of a planned meeting between French President Nicholas Sarkozy and the Tibetan Dalai Lama, but the postponed meeting may also be due to ongoing unresolved trade issues between China and the EU.

According to researcher Andrew Small in the International Herald Tribune, the summit was already shaping up to be a big failure since both sides were unwilling to compromise.

"Neither side was offering the concessions on trade, security contacts and other issues that the other wanted," said Small who works at the German Marshall Fund policy institute in Brussels.

Small said it's likely Beijing felt that Europe needed more from China than the other way around. China is now the EU's second most important trading partner, and it's largest source of manufactured imports.

The rock band Guns 'n Roses perform at a 2003 concert in California. (Photo by Lucy Nicholson/Getty Images)

The 1980s rock band Guns n' Roses launched their eagerly-awaited album Chinese Democracy yesterday, 15 years after they first recorded it. Not surprisingly, the Chinese are not amused.

A leading Communist Party newspaper called the album an attack on the nation. The Global Times quoted Chinese netizens who said the album was part of a plot to control the world using "democracy" as a buzzword.

Prior to the release, the running joke was that there would be democracy in China before GNR released their album. Jokes aside, there hasn't been a lot of discussion on why the band named the album as such.

One of the band's public relations people told me that singer Axl Rose briefly explained the reasoning behind the title in an 1999 MTV interview with Kurt Loder. Here's an excerpt:

Kurt Loder: You're going to call this album "Chinese Democracy." What is the meaning of that, since there is no Chinese democracy, of course?"

Axl Rose: Well, there's a lot of Chinese democracy movements, and it's something that there's a lot of talk about, and it's something that will be nice to see. It could also just be like an ironic statement. I don't know, I just like the sound of it. Read more...

Stocks of Baidu.com continue to fall following a news report over the weekend by China Central Television that found that the popular Chinese search engine included unlicensed pharmaceutical companies that paid to be included in searches. CCTV also found that the company was excluding those that did not pay.

Baidu founder Robin Li (aka Li Yanghong) apologized for overlooking it's management of advertisements in its fierce competition with Google China, but denied that others that didn't pay were excluded.

Even though the company canceled its paid search listing for companies that were unlicensed, the economic hit to the company was already apparent. Shares of the stock fell by a third, following the report. Yesterday, the shares hit $112 dollars, down from $179 per share last Friday.

Today Baidu announced that it would launch a new advertising system called "Phoenix Nest" that would fix it's competitive ranking system by showing ads on the right of the page instead of in the search. The company also said that it would fire certain employees involved in the scandal.

With the all the news surrounding this, one may overlook an important development in the Chinese press. The fact that the media outlet that exposed this scheme was the State-controlled China Central Television. Kudos to CCTV.

Less than a week after former Taiwanese President Chen Shui-bian was arrested, he was hospitalized Sunday for an irregular heartbeat as a result of a hunger strike.

It was reported that Chen had difficulty breathing and complained of pain on the left side of his chest for refusing to eat for five days running. Chen has said that his arrest is an act of political persecution.

Taiwan's Supreme Prosecutor's Office on the other hand, believes they have enough evidence to indict Chen on money-laundering charges. Chen is accused of falsifying finances and moving millions from his campaign donations to overseas bank accounts. In August, he apologized to the Taiwan people for is indiscretion and resigned from the Democratic Progressive Party.

While the last years of Chen's presidency was mired in corruption allegations that left him with record low-favorability ratings, Chen has gained support following his arrest as a result of recent talks between current Taiwanese president Ma Ying-jeou and representatives from the People's Republic of China, which views Taiwan as a renegade province.

In Chen's career, he has lived a series of firsts. He was Taiwan's youngest lawyer - passing the bar exam as a junior in college, he became the first non-Kuomintang Party politician elected president, and now he is the first former president to be jailed. If indicted, he could face up to five years in prison for money laundering.

Photo by David Sanger/Getty Images

Many China watchers are feeling at least a small sense of relief in an otherwise dreary world economy following China's announcement last night that it would implement at $586 billion domestic stimulus package over the next two years.

While some have compared China's historic policy to the FDR's New Deal in the 1930s, others have criticized the policy, saying that its aims are unclear, and that many of the plan's items had had already been in the works prior to the announcement. Read more...

In the highest-level talks between China and Taiwan in nearly 60 years, leaders from both sides shook hands, talked, and made major trade deals this week, in a historic meeting across the Taiwan Strait.

Taiwanese chief Ma Ying-jeou and Beijing's senior Taiwan envoy, Chen Yunlin, met yesterday in Taipei, amidst a backdrop of hundreds of slogan-shouting pro-Taiwanese independence protesters -- wary of any ties with mainland China.

The meeting was just one of many Chen has had with Taiwanese representatives since Nov. 3. The visit culminated in the signing of several trade and transportation agreements.

One such deal is a new direct airline route that will significantly cut the lengthly travel time that planes currently take to stop in Hong Kong first, before heading to either China or Taiwan.

First an African-American elected President of the United States, and now Chinese and Taiwanese leaders are getting along? What a week!

In congratulation messages to Barack Obama after winning the U.S. Presidential election, both Chinese President Hu Jintao and Premier Wen Jiabao wished the President-elect well -- And of course reminded him of U.S. stance that recognizes the PRC as the only China.

"In the new historic era, I look forward to working together with you to continuously strengthen dialog and exchanges between our two countries and enhance our mutual trust and cooperation on the basis of the three Sino-U.S. Joint Communiques...," Hu said.

Premier Wen Jiabao said pretty much the same thing, but added that he thought that they could make new progress on the China-U.S. relationship.

The three communiques are three statements that both the U.S. and People's Republic of China issued together in 1972, 1979, and 1982. They basically establish diplomatic relations between the two countries; state that the United States recognizes the PRC as the only China, and not Taiwan; and affirm that both nations want to strengthen ties.

Shen Dingli, a professor at Shanghai's Fudan University told the UK Telegraph that Obama is likely to cultivate a sense of greater international cooperation than President Bush did.

One concern China may have is that Obama could institute trade protectionist policies, writes Dune Lawrence of Bloomberg Radio. Obama's campaign promises of stricter labor and the environment regulation and pledge to reduce the U.S. trade deficit could signal protectionist tendencies. The global financial crisis may also cause the U.S. to trade less with other nations out of concern for its own markets and labor force.

But Lawrence notes that both Bush and Clinton were harder on China as candidates for president, than they were as President.

Whether or not President-elect Obama will have a similar approach, will be known after January 20th.

Expatriates and Chinese watch Barack Obama's victory speech at a hotel in Beijing, China. (Photo by China Photos/Getty Images)

The Dalai Lama has recently taking a harder stance towards China, telling reporters that he has little faith that the current negotiations with China will bear fruit.

In response, China issued a harsh criticism of the Dalai Lama, calling him a separatist seeking to split the country with talk of Tibetan independence.

The current talks in Beijing were meant to resolve ethnic conflicts between Tibetans and the Han Chinese who have settled in region. The situation most recently flared up in March 2008, when Tibetans led a series of demonstrations and riots in protest of the anniversary of the failed 1959 uprising in Tibet against Chinese rule.

The riots were violent and when it was over, hundreds of Chinese and Tibetans were injured and there were several deaths reported on both sides.

At the heart of this conflict lies conflicting historical perspectives on who has the right to govern Tibet. Check out this article on the two sides of this debate.

To the Chinese leadership, Tibet is an inalienable part of China's territory and Tibetan affairs are part of the internal affairs of China. To the Tibetans, China is an invading force whose policies have led to a dying out of Tibetan culture.

Based on the recent statements by both sides, the future of the debate seems to be more rhetoric as Tibetan leaders gear up for a more hard-line stance that will only certainly be matched by their counterparts in Beijing.

Chickens feed at a poultry wholesale market in Chengdu, Sichuan Province in 2006. China's state media announced that the compound melamine is often used in animal feed. (Photo by China Photos/Getty Images)

The Chinese newspaper Nanfang Daily reported yesterday that melamine, the organic compound responsible for thousands of illnesses among infants who drank tainted milk, is often used in animal feed to give the appearance of being more nutritious.

An Associated Press report says that the disclosure appears to be "tacit admission by the government that contamination is widespread" in China's food supply since other state media picked up the story.

Nanfang Daily, and its sister paper Nanfang (Southern) Weekend, are both based out of South China's Guangdong Province and are known for their investigative reporting that are at times critical of the government.

According to the Chinese paper, melamine scrap is repackaged into "protein powder" which is sold to feed suppliers. This week four brands of eggs were found to have had melamine contamination, likely through the feed given to hens. So far, no illnesses have been linked to melamine-tainted eggs.

The newspaper also found that chemical plants had previously paid companies to treat and dispose of leftover melamine. Five years ago, the companies started selling it to manufacturers who repackaged the melamine into "protein powder." The feed was first used for fish, then later for poultry and livestock.

"The effect far more exceeds the milk powder scandal," the newspaper said.

The Associated Press has quoted Marion Nestle, a nutrition professor at New York University, who said it was unlikely humans would get sick from eating meat from animals raised on melamine-tainted feed, because the amount of chemical contained in a few servings of meat would not be harmful.

Check out my package on the ongoing melamine scandal for more information.

Chinese cultural leaders have taken a strong objections to an upcoming auction of bronze heads of a rabbit and a mouse by Christie's Auction House.

The statues belonged to fashion designer Yves Saint Laurent and his partner Pierre Berge. China's Lost Cultural Relics Recovery Fund may even attempt to buy them back.

According to the press release, Laurent and Berge displayed the animal heads near the entrance to the first floor of an apartment in their home on Rue Bonaparte in Paris. They had previously belonged to Spanish painter José Maria Sert.

A Christie's press officer told me he did not have pictures of the statues, but a China Central Television article shows them here.

As relics go, the rabbit and mouse heads aren't incredibly special. They date to the Qing Dynasty (1644-1911), the last dynasty of China. Compared to other relics that China's Lost Cultural Relics Recovery Fund has sought, they are relatively new. But they hold significant saving-face value.

The animals were part of 12 animal sculptures representing the Chinese zodiac animals that had decorated the Old Summer Palace in Beijing. The animal heads were stolen by French and British troops who looted the palace in 1860, then burned it down in the Second Opium War.

Over the years, five of the animal heads have been bought back or donated to the Chinese government. Setting aside the mouse and rabbit heads up for auction, there are still five animals remaining: the Dragon, Snake, Sheep, Rooster and Dog.

Christie's expects that the rabbit and rat heads will raise between $10-12 million each. But to relic preservationists in China, they are priceless.