SCHWEIZER BOTSCHAFT IN BEIJING
EMBASSY OF SWITZERLAND IN BEIJING
AMBASSADE DE SUISSE EN CHINE

Der wöchentliche Presserückblick der Schweizer Botschaft in der VR China
The Weekly Press Review of the Swiss Embassy in the People's Republic of China
La revue de presse hebdomadaire de l'Ambassade de Suisse en RP de Chine
  6-10.5.13, No. 474  
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Table of contents

DPRK and South Korea

Mongolia

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Bilateral Issues

Air China launches Geneva service (Xinhua)
2013-05-07
Air China on Tuesday announced its launch of a service from Beijing to Geneva, marking the first direct route from Asia to the Swiss city. The new route will further promote economic and cultural exchanges between the two cities, said Fan Cheng, general secretary of Air China's Party committee. It will also provide more convenience for transit passengers from Tokyo, Seoul, Hong Kong, Bangkok and Manila, the company said. Air China is China's largest airline offering flights to Europe, with 12 European cities as destinations including London, Paris, Frankfurt, Rome and Madrid. ^ top ^

 

Foreign Policy

India and China withdraw troops from Himalayan face-off (SCMP)
2013-05-06
India and China simultaneously withdrew troops from camps a few metres apart in a Himalayan desert on Sunday, apparently ending a three-week stand-off on a freezing plateau where the border is disputed and the Asian giants fought a war 50 years ago. The two sides stood down after reaching an agreement during a meeting between border commanders, an Indian army official said, after the tension threatened to overshadow a planned visit by India's foreign minister to Beijing on Thursday. But it was not immediately clear how far China's People's Liberation Army (PLA) soldiers had withdrawn – Delhi had claimed they were 19 kilometres beyond the point it understands to be the border with China, a vaguely defined de facto line called the Line of Actual Control, which neither side agrees on. Defence and foreign ministry spokesmen did not immediately respond to requests for comment. [...] New Delhi often appears insecure about relations with its powerful neighbour, despite slowly warming relations between Asia's largest countries. China is India's top trade partner, but the unresolved border sours the friendship. India's opposition and much of the media has been critical of the government's handling of the stand-off, drawing parallels with a 1962 war which ended in its humiliating defeat. On Friday, parliament was adjourned after members shouted: “Get China out, save the country.” India says Chinese troops intruded into its territory on the western rim of the Himalayas on April 15. Some officials and experts believe the incursion signalled Chinese concern about increased Indian military activity in the area. [...]. ^ top ^

FM wraps up tour on note of stability (China Daily)
2013-05-06
China attaches great importance to its ties with neighboring countries and places ASEAN at a prioritized position in its relations with surrounding neighbors, Foreign Minister Wang Yi said on Sunday before wrapping up a five-day visit. China and members of the Association of Southeast Asian Nations have reached a consensus that the two sides are fully capable of maintaining peace and stability in the region, including in the South China Sea, Wang said in a joint interview with Chinese media outlets. During the trip that started on Tuesday, Wang stressed Beijing's pledge to build up respective bilateral ties and determination to ensure regional stability in his four stops, which included Thailand, Indonesia, Singapore and Brunei. Wang's visit not only reaffirmed the consistent policy of the Chinese government in its ties with ASEAN as well as the South China Sea issue, but also revealed the fruitful consensus reached during the trip for pragmatic cooperation, and enhanced China's image as a constructive player in the region, observers said. […] During his stopover in Brunei on Saturday, Wang and his counterpart agreed to intensify exchanges, increase mutual trust and advance cooperation, thereby contributing to the prosperity and development of the region. This year marks the 10th anniversary of the establishment of the strategic partnership between China and ASEAN. The trip was made amid ups and downs of maritime disputes regarding China and some ASEAN members. […] In Singapore and Thailand, Wang and leaders from the countries pledged to further expand and deepen the strategic partnership between China and ASEAN, as the latter works on establishing an ASEAN "community" and accelerates regional integration. As for China's position on South China Sea issues, Wang stressed in the news conference after meeting his Indonesian counterpart Marty Natalegawa that the Chinese government has a clear, steadfast and consistent resolve in safeguarding state sovereignty and territorial integrity. […] Manila claimed on April 26 that an international arbitration court had set up a tribunal to which it took the South China Sea dispute for a verdict in January. China rejected the Philippine move, demanding the country withdraw all its nationals and facilities from the islands and reefs that are "illegally occupied". "The Philippines' drive for international arbitration has run against the spirit of the DOC (Declaration on the Conduct of Parties) because the declaration requires contending parties to resolve territorial issues through bilateral negotiations," said Wu Shicun, director of the National Institute for South China Sea Studies. However, there is no major trouble in communication between China and ASEAN members because they have a series of dialogue channels in place, including the ASEAN Regional Forum and the 10+1 grouping, Luo said. China has always remained open to discussions on the Code of Conduct in the South China Sea, Wang said at the news conference on Thursday. ^ top ^

Xi proposes four-point plan to resolve Palestinian issue (SCMP)
2013-05-07
President Xi Jinping gave visiting Palestinian Authority leader Mahmoud Abbas a full state welcome in Beijing yesterday as Israeli Prime Minister Benjamin Netanyahu made a lowkey landing in Shanghai before flying to Beijing tomorrow to meet Chinese leaders. Xi made four suggestions on the Palestine-Israel conflict in talks with Abbas, a week after a top Chinese envoy said Beijing would be willing to help broker peace talks. Analysts said it was a clear sign that China wanted to play a bigger role in Middle Eastern affairs as it sought more resources and markets in the region, from which it has traditionally remained distant. "The arrangement of overlapping visits by the leaders of both Palestine and Israel, even by accident, suggests China's new leaders' increasing interest in Middle East affairs and its willingness to play a bigger role in mediating the long-stalled peace talks," said Professor Xiao Xian, director of Yunnan University's Institute of Western Asian Studies. Foreign Ministry spokeswoman Hua Chunying said last week that "if the Palestinian and Israeli leaders want to meet each other in China, we will happily provide the necessary assistance." Abbas' three-day trip is the first by a Middle Eastern leader since Xi took office in March. He is due to leave Beijing tonight, with Netanyahu due in the capital at about noon tomorrow. Xi called for an independent Palestinian state and the peaceful co-existence of Palestine and Israel. He also said negotiations were the only way to peace between Palestine and Israel, principles such as “land for peace” should be firmly upheld, and the international community should provide important guarantees of progress in the peace process. “It is an inalienable right of the people of Palestine to build an independent state, with Jerusalem as the capital and based on the 1967 boundaries, with full sovereignty, which is the key to the settlement of the Palestinian question,” Xinhua quoted Xi as saying. Xi added that Israel's right to exist and its legitimate security concerns should be fully respected. Abbas later met Premier Li Keqiang, who pledged Beijing would encourage more businesses to invest in Palestine, help with infrastructure, train more people and strengthen people-to-people exchanges. Last week special Middle East envoy Wu Sike said China was willing to make efforts leading to the resumption of the Israeli-Palestinian peace talks and Chinese leaders would try to bring Abbas and Netanyahu together for such talks. But analysts said that while China was getting more active in Middle East diplomacy, its role in Israeli-Palestinian peace talks would be limited. […]. ^ top ^

China wants to chair G20 talks, Xi Jinping tells Hollande (SCMP)
2013-05-07
China hopes to host and chair the G20 summit in 2016 to gain a bigger say in international economic affairs, French foreign minister Laurent Fabius said in Hong Kong yesterday. […] Fabius said that as China's economic influence grew, it needed to play more prominent role in international affairs. "When we were in Beijing, the Chinese president told us that the hope of China is to be able to preside over the G20 summit in 2016," Fabius said. He dismissed concerns that if China chaired the summit, it would give Beijing undue influence. […] During Hollande's visit to China last month, the French president and Xi pledged to promote a new international order, one not dominated by any single superpower. […] They had also vowed to deepen economic ties, and witnessed the signing of a number of deals and co-operation agreements, including China's purchase of 60 Airbus planes. Fabius said France and China see each other as "global strategic partners" and that the stability of the world depends on China, the United States and Europe, along with other powers such as India. Global problems could not be resolved without China, and France had to look at Asia for economic growth, he added. […] Fabius said he did not believe the "China is going to buy the world" theory, and added that China's development would create jobs in Europe and France. Fabius also said France welcomed more Chinese investment, saying "the euro zone is in a better shape today than it was just six months ago". ^ top ^

Chinese defense minister calls for practical cooperation in boosting ties with ASEAN (Xinhua)
2013-05-07
Chinese Defense Minister Chang Wanquan on Tuesday highlighted practical steps and optimized mechanisms in advancing regional cooperation in East Asia during a meeting with his ASEAN counterparts. The ASEAN-China Consultative Meeting took place on the sidelines of the 7th ASEAN Defense Ministers Meeting (ADMM), during which the ministers pledged to intensify their works towards ASEAN Community building and strengthening ASEAN centrality through the role of ADMM. To effectively cope with complex security challenges, China and ASEAN should "promote comprehensive security, common security and cooperative security, setting practical cooperation as the key note, gathering positive momentum and reducing differences through cooperation," Chang said during the 90-minute meeting. China-ASEAN bilateral trade volume exceeded 400 billion U.S. dollars in 2012, making China the largest trading partner of ASEAN for the fourth year and ASEAN the third largest trading partner of China. Chang said China is willing to work with ASEAN countries to further enrich the content of cooperation, expand the scope and innovate the norms of the cooperation while conducting practical cooperation in the fields of military education, personnel training, joint exercise and training and acquisition. In recent years, regional defense cooperation such as ASEAN+1, ASEAN+3, ADMM-Plus have been well underway. [...] ASEAN defense ministers spoke highly of Chang's speech and considered the consultative meeting a good platform for enhancing China-ASEAN exchanges of defense policies and for boosting mutual understanding between the two sides. [...]. ^ top ^

China spying on US to develop defence, says Pentagon (SCMP)
2013-05-08
China is using cyberspies to boost its defence industry and military planning by gathering information about US defence programmes, a Pentagon report claims. The annual US Defence Department report on China also devotes considerable space to territorial disputes between China and its neighbours in the East and South China seas. "China is using its computer network exploitation capability to support intelligence collection against the US diplomatic, economic and defence industrial base sectors that support US national defence programmes," the nearly 100-page report to the US Congress says. "The information targeted could potentially be used to benefit China's defence industry, high technology industries, policymaker interest in US leadership thinking on key China issues, and military planners building a picture of US defence networks, logistics and related military capabilities that could be exploited during a crisis." In Beijing, foreign ministry spokeswoman Hua Chunying said the Pentagon's accusations were "groundless" and "not beneficial to US-China mutual trust and co-operation". [...] At a news briefing in Washington, David Helvey, America's deputy assistant secretary of defence for East Asia, said it was the first time the annual report had mentioned China was targeting US defence networks. [...] Dr Richard Bitzinger, a senior fellow at the S. Rajaratnam School of International Studies at Singapore's Nanyang Technological University, said the Pentagon was being blunter in its accusations of PLA-backed cyberspying and hacking. "There has been a huge increase in cyberattacks on various US institutions - not only military computer networks but those of various think tanks and policy organisations," he said, referring to previous reports that said 90 per cent of cyberattacks on the US originated from PLA-backed organisations in China. Unlike last year's Pentagon report, this year's also devoted more space to the impact of the Chinese military's increasing presence in the East and South China seas, where Beijing has been involved in territorial disputes with Japan, a close ally of the US, and other countries. [...]. ^ top ^

China cuts ties with North Korea's main forex bank (SCMP)
2013-05-08
The Bank of China has closed the account of a North Korean lender accused by the United States of helping finance Pyongyang's controversial nuclear weapons programme. The Foreign Trade Bank, North Korea's main foreign exchange bank, was notified of the closure and ending of fund transfers related to it, a Bank of China spokeswoman said yesterday. No reason was given for the closure, which comes amid growing frustration in China over North Korea's nuclear weapons and ballistic missile projects. The action by the state-controlled bank may signal that Beijing is using economic measures to deter provocations by Pyongyang. As the regime's closest ally and biggest trading partner, China's involvement is crucial to the success of any measures against North Korea's nuclear weapons programme. [...] Premier Li Keqiang told visiting US Secretary of State John Kerry last month that provocations on the Korean peninsula would harm the interests of all sides, and likened the consequences to "picking up a rock, only to drop it on one's feet". [...] Trade between China and North Korea dropped more than 7 per cent to US$1.3 billion in the first three months of this year, with China's imports from North Korea rising 2.5 per cent to US$590 million but exports down 13.8 per cent to US$720 million - excluding fuel, food or other aid by Beijing. [...]. ^ top ^

India demolishes Himalaya outpost to end China stand-off (SCMP)
2013-05-08
India has agreed to a Chinese demand to demolish a remote army position near their de facto border in the Himalayas, Indian sources said, as part of a deal to end a stand-off that threatened to scupper slowly improving relations. [...] Details of the deal have not been made public and there were differing versions about what had been dismantled. A source with direct knowledge of the decision making in New Delhi said India agreed to take down a temporary metal-roofed shelter in the Chumar area, further south along the disputed border. The source said the dismantled shelter had been erected in Chumar shortly after China set up camp on the plateau. However, an official from the Indian army's northern command said India had taken down more permanent structures from Chumar. “The bunkers in Chumar were dismantled after we acceded to Chinese demand in the last flag meeting. These bunkers were live-in bunkers,” the army officer said on Tuesday. [...] India has been beefing up its military presence for several years on the remote Ladakh plateau, building roads and runways to catch up with Chinese development across the border in a disputed area known as Aksai Chin. The decision to agree to the Chinese demand followed heavy criticism of the Indian government over its handling of the incident by the opposition. An official in India's Defence Ministry said on Monday the deal to end the stand-off was “quid pro quo” and said China had also demanded India take down listening and observation posts in the Chumar area, which is close to a Chinese road through Tibet. The source in New Delhi denied India was dismantling anything more than the border shelter. ^ top ^

Daily publishes challenge to Japanese sovereignty over Okinawa (SCMP)
2013-05-09
People's Daily yesterday published a call for a review of Japan's sovereignty over the island of Okinawa, home to major US bases, with the Asian powers already embroiled in a territorial row. The article in the Communist Party mouthpiece argued China may have rights to the Ryukyu chain, which includes Okinawa. Agreements between allied forces during the second world war mean the ownership of the Ryukyu Islands may be in question, the researchers argued in a commentary. Asked if China considered Okinawa part of Japan, Foreign Ministry spokeswoman Hua Chunying said scholars had long studied the history of the Ryukyus and Okinawa. "It may be time to revisit the unresolved historical issue of the Ryukyu Islands," wrote Zhang Haipeng and Li Guoqiang, of the Chinese Academy of Social Sciences. Okinawa is home to major US air force and marine bases as well as 1.3 million people, nearly all of whom are Japanese nationals and speak Japanese. The authors of the article said the Ryukyus were a "vassal state" of China before Japan annexed the islands in the late 1800s. "Unresolved problems relating to the Ryukyu Islands have reached the time for reconsideration," they wrote, citing post-war declarations that required Japan to return Chinese territory. In Tokyo, Chief Cabinet Secretary Yoshihide Suga dismissed the article as "injudicious". […] Questions over Japan's right to Okinawa were probably aimed at raising the stakes in the East China Sea dispute, said Willy Lam, an expert on Chinese politics at Chinese University. […] Some Chinese see the historical ties as a basis for sovereignty and dismiss Japan's possession of the islands as a legacy of its aggressive expansionism that ended in defeat at the end of the war. Beijing has not made such claims, but state media occasionally questions Japan's authority. ^ top ^

China and Israel set up task force to boost trade (SCMP)
2013-05-09
China and Israel set up a task force yesterday to deepen economic co-operation and boost trade as Beijing seeks to expand its influence in the Middle East. The agreement was reached during talks between Premier Li Keqiang and Israeli Prime Minister Benjamin Netanyahu in Beijing. Li and Netanyahu then presided over the signing of five deals covering the aerospace industry, agricultural research, financial co-operation, science and technology, and Chinese language instruction. Details were not immediately provided. Netanyahu, who arrived in Beijing yesterday after a stop in Shanghai, is on a mission to strengthen ties with his nation's third-biggest trade partner and press for tougher action against Iran and Syria. China's imports from Israel totalled US$5.3 billion last year and its exports to Israel reached US$2.8 billion, says Israel's Central Bureau of Statistics. Li vowed to deepen co-operation with Israel in four areas - trade, technology transfer, agriculture and public works - and said China would encourage Chinese companies to participate in Israeli public works projects. [...] Li did not mention Abbas in his talks with Netanyahu, but he did say that negotiations were the only way to settle disputes between Palestinians and Israel, and called on each side to accommodate the other. [...]. ^ top ^

Chinese president meets Israeli PM, pledges efforts for peace in Middle East (Xinhua)
2013-05-09
President Xi Jinping met with visiting Israeli Prime Minister Benjamin Netanyahu on Thursday and pledged to make more efforts to realize peace in Middle East. […] Xi said peace, stability and development are the common aspirations of countries in the Middle East, adding that resolving disputes through political means is a strategic option that is in the interests of all sides concerned. He said all nations in Middle East, including Israel, are equally entitled to life and development. [...] Realizing a peaceful coexistence between Israel and Palestine, as well as all other Arabian countries, is a goal that everyone should strive for, Xi said. Earlier this week, Xi held talks with visiting Palestinian President Mahmoud Abbas and made a four-point proposal to resolve the dispute between Palestine and Israel. Xi said an independent Palestinian state should be established and a peaceful coexistence between Palestine and Israel should be realized. "Establishing an independent state that enjoys full sovereignty on the basis of borders specified in 1967 is an inalienable right of the Palestinian people and the key to the settlement of the Palestinian question. At the same time, Israel's right to exist and its legitimate security concerns should also be fully respected," Xi said in his proposal. "(We) hope that Israel and Palestine will make joint efforts and take credible measures to build mutual trust step by step, as well as resume peace talks at an early date," he told Netanyahu during Thursday's meeting. China will continue adhering to an impartial stance in order to facilitate talks, make contributions to resolving problems and realize peace and stability in the Middle East. During the meeting, Netanyahu said he appreciates China's commitment to the peace process in Middle East, adding that Israel is willing to communicate with the Chinese side on the issue. Israel longs for peace and hopes to achieve peace through negotiations, he said. [...] Hailing the smooth development of bilateral ties since the establishment of diplomatic relations 21 years ago, Xi said he hopes the two sides will expand interaction, boost practical cooperation and increase cultural and people-to-people exchanges. Netanyahu lauded China's development in recent years and said that Israel will treat bilateral ties strategically in order to boost cooperation between the two countries. ^ top ^

China brushes off Japan protest over Okinawa (SCMP)
2013-05-10
China has dismissed a diplomatic protest by Japan over a commentary in a state-run publication that challenged Tokyo's ownership of Okinawa, home to major US bases. The latest angry exchange could further strain tense relations between Asia's two largest economies, which are involved in a stand-off over a group of uninhabited islands in the East China Sea, called the Senkakus in Japan and the Diaoyus in China. The People's Daily, the Chinese Communist Party's mouthpiece, published a commentary on Wednesday, which said ownership of the Ryukyu islands - of which Okinawa is the biggest - should be re-examined, prompting Japan to lodge the diplomatic protest. "China cannot accept Japan's so-called negotiations or protests," Foreign Ministry spokeswoman Hua Chunying said yesterday. "The relevant scholars' academic articles reflect attention and research paid by China's populace and academia to the Diaoyu Islands and related historical problems," Hua said. Japan's Chief Cabinet Secretary Yoshihide Suga said the islands were Japanese territory. "Japan lodged a stern protest that we can by no means accept the article in question if it reflects the Chinese government's stance," Suga said. In the commentary, the scholars, Zhang Haipeng and Li Guoqiang from a top government think tank, the Chinese Academy of Social Sciences, called the Ryukyu Islands a "vassal state" of China's Ming (1368-1644) and Qing (1644-1911) dynasties before they were annexed by Japan, suggesting China had a historical claim to the island chain. "Hanging in the balance of history, the unresolved problem of the Ryukyus has finally arrived at the time for reconsideration," the scholars wrote. Analysts in Japan have branded China's efforts to assert sovereignty over the scattered islands of the Ryukyus as "ridiculous" - but equally warned that the claim may be Beijing's opening move to seize the Diaoyus. [...] Go Ito, a professor of international relations at Tokyo's Meiji University, agrees Beijing's claim to the territory is "quite simply ridiculous". "If Italy applied the same logic, it could claim that pretty much all of Europe is sovereign Italian territory because it was once under the control of the Roman Empire," he said. It was not the first time mainland media had challenged Japan's sovereignty over the Ryukyus from a historical perspective. Last week, World Affairs, a Foreign Ministry semi-monthly, published a similar commentary written by Fudan University professor Lei Yuhong. It said that according to the Okinawa Reversion Treaty signed between Washington and Tokyo in 1971, the US only handed administrative rights over Okinawa to Japan, not its sovereignty. Mainland-based experts said the point raised in the two articles was targeting the US. Professor Wang Hanling, a maritime expert at the Chinese Academy of Social Sciences, said Beijing had no intention of taking over Okinawa, "but those articles carried by official media show that we cannot tolerate what Japan and the US have done to us recently". He said the Pentagon's reiteration of Japan's administrative rights over the Diaoyus in its latest report on China had also made Beijing unhappy. [...]. ^ top ^

Border row put aside as Indian foreign minister arrives in Beijing (SCMP)
2013-05-10
Indian Foreign Minister Salman Khurshid kicked off his two-day visit to China yesterday, laying the groundwork for the Chinese premier to visit India. Khurshid held talks with his Chinese counterpart, Wang Yi, and today will meet Premier Li Keqiang, who is due to visit India on May 20. Khurshid's trip came after Sunday's end to a three-week stand-off over a disputed area in the Himalayas, with both sides pulling back troops. [...] Foreign Ministry spokeswoman Hua Chunying said leaders of the two nations would exchange views on ties and co-operation on international affairs. "We are willing to take a constructive … attitude, and utilise the existing mechanism to maintain constant communication for keeping the peace and stability of the border area." Sun Shihai, an expert in South Asia affairs at the Chinese Academy of Social Sciences, said neither nation would let the border disputes derail ties but it was unlikely they would fully see eye to eye on the dispute. [...] Ties are clouded by mutual suspicions that erupted after a 1962 border war in the Himalayas. But relations have improved amid booming trade, which reached US$69 billion last year. Still, Indian officials are expected to call on China to address a trade imbalance, as the latest trade figures show China's imports in April were down 24 per cent from a year earlier. [...]. ^ top ^

 

Domestic Policy

Kunming residents rally against chemical plant (SCMP)
2013-05-05
One of two rallies in the southwest in protest at controversial chemical plants went ahead yesterday, but a second was thwarted. Hundreds protested in Kunming, Yunnan province, but a march in Chengdu, Sichuan province, was prevented by police. The rallies were timed to coincide with the anniversary of the May 4 student demonstrations in Beijing in 1919. More than 1,000 people gathered in the centre of Kunming to oppose plans to build a petrochemical plant in the satellite city of Anning where China National Petroleum Corp (CNPC), the nation's largest oil producer, plans to build a refinery to process more than 10 million tonnes of crude oil a year. Officials have assured local residents that environmental protection and safety will be their priority but many protesters fear that once the refinery opens, production of potentially hazardous paraxylene (PX) will follow. Watched by police, protesters gathered in a central street wearing masks and holding placards with slogans such as "PX … Get out of Kunming". A witness said the protest broke up without incident. Protesters planning to demonstrate in Chengdu and nearby Pengzhou, the site of a planned PX plant, were thwarted after authorities pre-emptively sealed off several landmarks including Tianfu Plaza and Jiuyan Bridge. Police claimed their large presence was part of an earthquake drill. […] "The authorities are playing a contemptible trick, in the name of an earthquake drill and assisting earthquake rescue," Chen Ji, a local journalist, said. "But what they did was just to fool and scare the public." Angry protesters instead voiced their discontent on the Sina Weibo microblog site yesterday. The words "Pengzhou" and "Tianfu Plaza" were blocked to searches through social media. "The billion-yuan project will give officials their high gross domestic product, but will bring only pollution and cancer for residents," Chen said. "We love our home and will never give way - like the people of Ningbo." In October, construction of an oil and petrochemical complex was suspended in Ningbo, Zhejiang province, after thousands of residents clashed with police for a week. ^ top ^

Reduced red tape to boost economy (China Daily)
2013-05-07
China's cabinet announced detailed plans on Monday to deepen economic reform, cutting government interventions that hinder robust growth. It will cancel or delegate power to lower levels for 62 items previously subject to central government administrative approval, after similar approaches removed 71 items last month, according to a statement released after an executive meeting of the State Council chaired by Premier Li Keqiang. China must launch more concrete reforms to "maintain steady economic growth, control inflation and dissolve risks," according to the communique from the meeting. The State Council said it expects new reform efforts to unleash the vigor of society and build up momentum for economic growth.
The initiatives include measures to:
• Make the process of establishing budgets more "open, transparent, standardized and comprehensive";
• Control the risk of local government debt;
• Expand the pilot program for replacing business taxes with value-added taxes. The present tax system on the use of natural resources is to be revised;
• Push forward market-oriented interest rate reform and propose an operational program for making renminbi convertible in the capital account;
• Protect small and medium-sized investors overseas. Capital markets for bonds, stocks and trust investment instruments are to be better regulated;
• Open the railway system to "social capital", including private capital. With guided access, "social capital" is to be allowed to invest in the existing trunk lines;
• Establish a progressive pricing system for the supply of major urban utilities including electricity, water and natural gas;
• Improve efforts to guarantee social security networks and related services, including "the strictest possible" system to monitor and regulate food and drug production and markets;
• Roll out a new city residential permit system to eventually replace the half century-old hukou (household registration) system;
• Develop modern agriculture by providing better legal protection of farmers' land use rights;
• Expand pilot reform programs in all State-endorsed science and technology zones. ^ top ^

Whistleblowers providing bulk of China's corruption clues (Xinhua)
2013-05-07
Clues leading to corruption probes in China have mostly come from whistleblowers in 2012, an official with the Communist Party of China's (CPC) discipline watchdog said on Tuesday. Of all the corruption cases handled by discipline watchdogs in 2012, the public has contributed 41.8 percent of the clues, according to Zhang Shaolong, deputy director of the letters and calls office under the CPC Central Commission for Discipline Inspection (CCDI). People in China can write complaint letters, pay petition visits or dial hotlines to report corruption. The Internet has played an increasingly important role in offering tip-offs in corruption cases, according to Zhang. From 2008 to 2012, about 12 percent of the clues, or 300,100 items, received by the CCDI and the Ministry of Supervision, were collected via the Internet, the official said. ^ top ^

Local governments warned again to stop intercepting, detaining petitioners (Global Times)
2013-05-08
The Central Commission for Discipline Inspection of the Communist Party of China reiterated Tuesday that local discipline authorities are not allowed to intercept or detain petitioners. Zhang Shaolong, deputy director of the letters and calls office of the commission, said disciplinary authorities of all levels should eradicate any wrongful acts to intercept "regular" petitions at "reception venues" and "public places." Zhang also demanded petitioners go to appointed reception venues to ensure social order. "Yet we have our own jurisdiction and cannot handle all petitions. We accept reports of violations to Party discipline, appeals of punishment on oneself, and suggestions to the anti-graft endeavor," said Zhang, adding that controversies including forced demolition, pollution and labor disputes should seek resolution at related agencies. A national conference in January took the crackdown on petition interception as a major goal for the year. Petition interception is a common practice of local authorities aiming to prevent petitioners from turning to higher authorities. Some petitioners suffered violence or were sent to re-education-through-labor centers. However, Zhang's comments left observers wondering if intercepting a petitioner at "non-public places" would be acceptable and could lead to more secret interceptions. "We know this is essentially wrong, but we get so much pressure from superior authorities and would be punished if we allow many petitioners to go to Beijing," an official who joined some interceptions from Mianyang, Sichuan Province, who asked to remain anonymous, told the Global Times earlier. Petitioners also said while they receive a response from central agencies, their cases are often left unsolved or referred back to local authorities. "I was intercepted by local police after petitioning about the delay in my case, and they sent me to the re-education center in 2009 to shut me up," Chen Bo, a former prison guard in Liaoning Province who tried to report the illegal behavior of his warden, told the Global Times. The keys to stopping interceptions are to take away the superior pressure for local authorities and improve the ability of judicial organs, but eventually the mechanism should be canceled, said Yu Jianrong, an expert and professor at the Chinese Academy of Social Sciences. ^ top ^

Maritime law enforcement to double air patrols (China Daily)
2013-05-09
China intends to double its offshore air patrols by 2015, according to a government report released on Wednesday. China's Ocean Development Report (2013), which was released by the China Institute for Marine Affairs under the State Oceanic Administration, emphasizes the importance of offshore air patrols to the country's maritime law enforcement. According to the report, by 2015 the country's marine surveillance force will include fixed-wing aircraft with a range of more than 4,500 kilometers. By 2020, a variety of aircraft with different ranges will be available for different purposes, according to the report. China has undertaken regular patrols of the waters in the East China Sea since July 2006, and conducted regular patrols over the waters of the South China Sea since December 2007. A senior China Marine Surveillance official, who wished to remain anonymous, said more aircraft will increase the frequency of offshore air patrols. Fixed-wing aircraft have higher maximum takeoff weights, which means they will be able to carry more equipment. Offshore air patrols are being beefed up because the most direct maritime security problems are security threats posed by sovereignty disputes over islands. To better meet these threats, the country also plans to unify its four maritime law enforcement agencies into a Maritime Police Bureau under a restructured State Oceanic Administration. The agencies are the China Marine Surveillance under the State Oceanic Administration, the fishery administration under the Ministry of Agriculture, the coast guard forces under the Ministry of Public Security, and the maritime anti-smuggling authorities under the General Administration of Customs. The latest information on the restructuring will be released in a timely manner on the Oceanic Administration's website. [...] Besides offshore air patrols, the report estimates that the gross domestic product involving the country's marine sectors will increase by 15 percent annually until 2030. The GDP involving the marine sectors in 2012 increased 7.9 percent year-on-year to more than 5 trillion yuan ($814 billion), accounting for 9.6 percent of the country's GDP. ^ top ^

 

Beijing

Heavy smog shrouds capital, again (China Daily)
2013-05-07
Heavy smog has returned to the skies of Beijing after a two-month break, with authorities predicting the pollution will linger due to unfavorable conditions. The density of PM2.5, or particulate matter with a diameter of less than 2.5 micrometers that can harm the heart and lungs, reached 400 micrograms per cubic meter early on Monday, well above national and international standards, the Beijing Municipal Environmental Monitoring Center said. The center said due to rising temperatures, lack of wind and other unfavorable conditions, the pollution is unlikely to disperse in the next few days. It also suggested people stay indoors and avoid heavy physical labor. […] However, the center's explanation failed to satisfy the public, with many people saying that blaming the pollution on unfavorable diffusion conditions is just an "irresponsible excuse". […] Song Guojun, a professor at Renmin University of China's School of Environment and Natural Resources, said the government must act promptly to control pollution. "People are powerless against the weather but not pollution discharge control," Song said. "You can't always blame the weather for the pollution." Now that weather forecasting is very developed, the government needs to come up with regulatory measures against weather that can cause pollution, including temporarily shutting polluting enterprises and enacting tougher traffic controls, Song said. […]. ^ top ^

Death of girl at mall triggers large protest (China Daily)
2013-05-09
Demonstrators and police were injured on Wednesday when a protest triggered by the death of a Beijing female sales clerk turned ugly. Yuan Liya, 22, died after plunging from the seventh floor of a mall last week, and police say initial findings point to suicide. However, by Wednesday morning, hundreds of people had gathered outside the Jingwen coat wholesale outlet in the capital's Fengtai district to call for further investigations into the tragedy. The crowd, which waved banners and pictures and chanted for justice, were mostly migrant workers and included several of Yuan's relatives, people from her native Anhui province and other shop workers, according to the Beijing Municipal Public Security Bureau. Authorities said about 2,000 police personnel, including armed officers, were sent to maintain order. Some protesters argued with police, and even assaulted and injured officers, Li Runhua, deputy director of Beijing's public security, said on Wednesday. […] No details were given about whether any protesters were injured, although a China Daily reporter outside Jingwen mall saw at least one man receiving treatment from emergency medical workers while being restrained by uniformed officers. Authorities confirmed arrests were made but did not elaborate on the number. […] Police are now scanning surveillance footage of the protest and "will detain those who severely disrupted social order", according to the public security bureau, which said the owner of the mall, a resident of Wenzhou in Zhejiang province, has also been questioned. Yuan was a migrant worker from Lujiang county of Anhui. Her body was discovered at the exit of the mall's underground garage on Friday morning. The Fengtai police department, which handled the initial investigation, said security-camera footage showed her arriving at the mall alone on the evening of May 2. She committed suicide by jumping from the seventh floor the next morning, officers concluded. "We found no evidence she had been in contact with any strangers before the incident," Zi Xiangdong, a spokesman for Beijing Municipal Public Security Bureau, said on Wednesday. "There were also no suspicious signs discovered in checks at the scene or in the autopsy report." The case is still under investigation, he said. Li Chaogang, Party chief of Fengtai district, said officials were visiting shop owners one by one on Wednesday to talk with them and collect any evidence. […]. ^ top ^

Woman arrested for spreading rumors about migrant's death (Global Times)
2013-05-10
Local police in Beijing said Thursday that a 28-year-old woman, surnamed Ma, has been arrested for spreading rumors about the female migrant worker who plummeted from a market building in the city last Friday. A statement posted on the police's Sina Weibo account also rejected the rumor saying that the 22-year-old woman, surnamed Yuan, had been gang-raped by seven security guards at the Jingwen Market in the capital's Fengtai district, and that local police had refused to accept the case. Ma confessed that she spread the rumor on Weibo after hearing some people discussing Yuan jumping out of the building after being raped. […] Local police confirmed and reasserted that Yuan did not have any personal interaction with others during her stay in the building, after reviewing all the surveillance cameras and interrogating staff in the building. The autopsy results were also rechecked, ruling out the rumor that traces of sperm belonging to six different men had been found in her body. [...]. ^ top ^

 

Shanghai

Not much stomach for mutton over fear of fake (China Daily)
2013-05-06
Following pork, chicken and duck, Zhang Jinmei has erased mutton from her family's menu because of reports that the lamb sold in the city's produce markets may turn out to be rat, fox or mink. Over the weekend, the city's food safety commission office said it will investigate where the fake mutton has been sent after police broke up a criminal ring selling it from uninspected meat in Wuxi, Jiangsu province. The products are believed to have trickled down to markets in Shanghai. Earlier, families in much of China removed poultry from their menu because of the spread of the potentially lethal H7N9 bird flu virus. Pork sales were also briefly hit after more than 10,000 pig carcasses were found floating down the main river through Shanghai in March. […] In the raid, involving more than 200 officers, police in Shanghai and Jiangsu province arrested 63 people from a gang that allegedly sold more than 10 million yuan ($1.6 million) worth of fake mutton over three years, the Ministry of Public Security said on Thursday. The gang passed the meat off as mutton by adding gelatine, carmine, nitrate and other substances, the ministry said. Because of concerns about the quality of mutton, many Shanghai families have stopped buying it and some vendors have stopped selling it. […] Consumers can still find mutton products at big supermarkets, but only a limited cuts, such as mutton ribs and lamb rolls, are available. "We can guarantee the source of our product," Wang Wenjing, a saleswoman at Century Lianhua supermarket, said on Sunday. […] Some of Shanghai's produce markets and hotspot restaurants are involved in the scandal, local media outlets reported. Dai Mei, a popular hotspot chain restaurant in Shanghai, which according to Jiefang Daily served fake mutton, denied on Sunday any wrongdoing. […] The city's food safety watchdog did not release a news briefing about the inspection on Sunday. The industry and commerce administration has issued a circular to increase the frequency of the inspections. ^ top ^

Israel, China expected to perfect tech, manufacturing cooperation: Netanyahu (Xinhua)
2013-05-07
Israel and China can perfect their cooperation in technology and manufacturing, visiting Israeli Prime Minister Benjamin Netanyahu commented during a meeting with Yang Xiong, mayor of Shanghai, on Tuesday. Netanyahu took notes himself at the meeting after he had posed a question on how to strengthen cooperation between Israel and Shanghai in a series of fields including technology, trade, and culture. He also said that all Jews around the world have cherished a special feeling for the friendship with Shanghai. Yang introduced to Netanyahu some ongoing aircraft and aerospace programs and competitive areas in Shanghai including bio-medicine, information technology, and new energy resources as well as architecture. Meanwhile, he also informed the visiting Israeli PM of the city's conditions for attracting foreign investment and welcomed Israeli companies to come to Shanghai. Netanyahu showed interest in cooperation with Shanghai in the mentioned fields as he said Israel has also made achievements in these areas. He said Israel's scientific and technological strength means it can soundly cooperate with China, which has strong manufacturing and access to the international market. Israel hopes to apply its technological achievements to the huge market in China so as to further improve Israel's levels of innovation, he added. [...]. ^ top ^

 

Guangdong

Guangzhou moves to abolish rural hukou (China Daily)
2013-05-10
Guangzhou has taken the lead in Guangdong province to scrap a rural hukou, or household registration system, which is preventing farmers from enjoying many rights and advantages enjoyed by their urban peers. Starting this week, household registration departments under the Guangzhou Public Security Bureau have required local residents to change their residence booklets to identify them as permanent Guangzhou residents, according to a notice on the bureau's official website. "That indicates all the farmers in the southern metropolis will become urban residents after they have changed their residence booklets in the following months," said the notice. "The move will safeguard the employment rights, education and other legal interests of the city's many farmers who are now losing their farmland because of rapid industrial and service-sector development," the notice said. In previous years, farmers have not been entitled to be registered as permanent urban residents of the city in accordance with regulations in cities and towns, a policy created several decades ago. That means farmers who are registered with rural hukou do not have the same status as urban residents in training, education, pension and medical insurance programs. And farmers usually have no unemployment relief payments, like urban residents, if they fail to find jobs in urban areas. "Scrapping the rural hukou will also help speed up the city's urbanization construction drive," the notice said. Zheng Zizhen, researcher and former dean of the Sociology and Population Institute of the Guangdong Academy of Social Sciences, said that merely removing the rural hukou for farmers is not enough. "Scrapping the rural hukou is meaningless if the farmers' social welfare cannot really be improved after they have changed their residence booklets to be registered as urban residents," he said. "City departments should still have to work hard and try to afford farmers the same social welfare, including employment, education, training, housing, pension, medical and social security, after they have changed the new residence booklets," Zheng said. Zheng said that many cities in Guangdong and other parts of the country have also scrapped rural hukou in past years, but the social welfare of the farmers did not improve after they became urban residents. […] "Government departments should do more than just drop the rural hukou to improve farmers' social welfare and status," he added. Lin Chengyao, a Guangzhou office worker, said city departments should remove the city-rural fences and eliminate the differences between rural and urban household registration because those differences are not fair to the farmers. "Many farmers who do not have urban hukou have actually lived in the urban area, or in the city's urban villages, after their farmland has been requisitioned for industrial and service development in past years," Lin said. Guangzhou has a population of more than 12 million according to a 2011 census, including a large number of migrant workers. In a related development, the State Council, China's Cabinet, had planned to introduce a new city residential permit system to replace the current hukou system during a meeting on Monday. The hukou system has brought many difficulties to migrant workers since their children can't enjoy equal education rights in the city with the native residents. There are 252.78 million migrant workers nationwide, the National Bureau of Statistics said in April. ^ top ^

 

Tibet

Britain does not support independent Tibet, says David Cameron (SCMP)
2013-05-09
Britain does not support a Tibetan state independent of China, Prime Minister David Cameron said on Wednesday amid reports of Chinese anger at his meeting with the Dalai Lama last year. Cameron told parliament that Britain respected China's sovereignty and ministers recognised Tibet as part of China. Britain officials deny that Chinese anger at the meeting between Cameron and the Tibetan spiritual leader in May last year could scupper the prime minister's plans to visit China by the end of this year. The Chinese government takes a dim view of ministers from foreign governments meeting the Dalai Lama, whom Beijing accuses of encouraging separatism and violence. Cameron told lawmakers he had spoken to Chinese Premier Li Keqiang and he hoped Britain could build a better relationship with China. He said: “Let us be absolutely clear – this government has not changed the long-standing British policy towards China and Tibet. “We do want to have a strong and positive relationship with China, which I believe is in our mutual benefit. “The Chinese government is aware of our policy on Tibet. We recognise Tibet as part of China. We do not support Tibetan independence and we respect China's sovereignty. “When I spoke to Premier Li recently, we both looked forward to both countries working very closely together in the months and years ahead.” The meeting between Cameron, Deputy Prime Minister Nick Clegg and the Dalai Lama in London was part of the government's approach of seeking “dialogue and discussion and gathering a wide range of viewpoints on issues of importance”, a spokesman for Cameron said on Tuesday. The spokesman added: “It is entirely reasonable for the prime minister to decide who he meets. “The Chinese government always lobbies hard against any meetings between foreign governments and the Dalai Lama. We have made clear in advance to the Chinese government that British ministers will decide who they meet and when they meet them.”. ^ top ^

Exiled Tibet PM Lobsang Sangay 'not challenging' China Communists (SCMP)
2013-05-09
The leader of Tibet's exiled government said on Wednesday he would accept the Chinese Communist Party's rule in the territory, assuring Beijing it faced no threat to its sovereignty if it eases its grip. Lobsang Sangay, who was elected in 2011 to a new position of prime minister in exile after the Dalai Lama gave up political duties, appealed to China for new talks on the grievances that have triggered a wave of self-immolations. On a visit to Washington, Sangay said that the exiled government based in Dharamshala, India, was “not challenging China's sovereignty or territorial integrity” through its repeated calls for greater autonomy. “What we seek is genuine autonomy as per the framework of the Chinese constitution. In short, if the Chinese government implements their own law, we would take that as genuine autonomy,” he said at the Council on Foreign Relations think tank. “That, we think, is a moderate, reasonable solution which is a win-win proposition both for the Chinese government and the Tibetan people.” [...] Sangay expressed hope that Tibetans would assume decision-making positions in the region – notably party secretary – and said he did not oppose the control of China's ruling Communists. [...] Sangay called for greater opportunities for Tibetans, saying that a recent mine landslide in Tibet that killed 83 workers – virtually all of them from China's Han majority – showed how few Tibetans shared the wealth. China says it has brought development to Tibet. It has questioned the sincerity of the government in exile and the Dalai Lama, Tibet's world-revered spiritual leader who fled to India in 1959, accusing them of secretly supporting separatism and violence. More than 110 Tibetans have set themselves on fire since 2009, with most dying of their injuries, in demonstrations against what they view as Chinese oppression. Beijing has accused the Dalai Lama of fomenting the protests. Sangay said the exiled leadership did not encourage self-immolations but shared solidarity with Tibetans driven to such desperation. “The 117 self-immolators, they have not harmed a single soul, not even a Chinese person, not even a Chinese restaurant, not even a Chinese bicycle,” he said. “Even at that particular moment – very painful, tragic, sad moment – they're restraining themselves from hurting anyone. “That much of restraint that Tibetans impose upon themselves is a clear indication and reflection of the fact that we do subscribe to non-violence,” Sangay added. China held nine rounds of dialogue with the Dalai Lama's envoys from 2002 to 2010, but the talks produced no visible results. The slow pace has led some experts and activists to believe that China is trying to draw out diplomacy until the death of the 77-year-old Dalai Lama, hoping that the global movement he inspired would collapse without him. Conscious of his own mortality, the Nobel Peace Prize winner has devolved political power to elected leaders and held open the possibility that Tibetans would break tradition and appoint a successor while he is alive. Despite wide respect for the Dalai Lama, some younger Tibetan exiles have advocated a harder line towards China. ^ top ^

 

Hongkong

Ai Weiwei's new work inspired by milk powder debate (SCMP)
2013-05-10
Dissident artist Ai Weiwei has drawn inspiration from the controversy over infant formula in Hong Kong and on the mainland for his new work, which will be unveiled at an exhibition exploring Hong Kong's identity and anti-mainland sentiment. […] The exhibition - A Journal of the Plague Year: Fear, ghosts, rebels. SARS, Leslie and the Hong Kong story - presented by Para Site art space in Sheung Wan, explored the theme of an epidemic and the fear of otherness it generated, curator Inti Guerrero said. […] "To me, mainland people going to Hong Kong to buy milk powder is a very strange thing. Will people have to go to buy air or even water in Hong Kong in future?" Ai said in an interview with the South China Morning Post. He did not give details of his exhibit as he was still working on it, but he said he'd had the idea for a work about the baby formula issue since the melamine milk scandal was exposed on the mainland in 2008. [...] It created deep public distrust in mainland food safety. With mainland citizens flocking to buy baby formula in Hong Kong, Ai said the issue had not been resolved and he hoped to raise questions with his new offering. [...] He said the issue of milk powder that threatened people's lives reflected the importance of a democratic and lawful society, and that, as an artist, he offered different perspectives. [...] Guerrero said the exhibition would look at the history of epidemics in 19th century Hong Kong and the Sars outbreak in 2003 to explore how epidemics migrate from a health perspective to cultural and political perspectives. He said the Sars outbreak spawned the fear of otherness, and that this fear was renewed by the influx of mainland visitors brought in by the individual traveller scheme. The scheme was an attempt to revive the city's economy which was heavily hit during the epidemic. The vast increase in the number of mainland visitors in Hong Kong had caused tension between the tourists and the locals. And access to baby formula became an issue after products were snapped up and smuggled across the border by mainland shoppers and parallel traders. The exhibition will open on May 17 at Para Site and Sheung Wan Civic Centre Exhibition Hall. ^ top ^

 

Taiwan

Killing of fisherman leads to inquiry call by Taiwan (SCMP)
2013-05-10
Taipei expressed its "grave concern" to Manila yesterday after a Taiwanese fisherman was killed by armed men aboard a Philippine vessel. The incident in waters 164 nautical miles off the southernmost tip of Taiwan came as the Philippine navy intensified its patrols after Beijing reportedly sent one of its largest fishing fleets to the disputed Spratly Islands in the South China Sea. Taiwan's foreign ministry said the death occurred in overlapping economic zones of both the island and the Philippines when an armed vessel, identified as a Philippine ship, suddenly shot at a Taiwan-registered fishing boat operating in the area. The shooting caused serious damage to the boat, which subsequently lost mobility, and killed fisherman Hung Shih-cheng, 65," the ministry said in a statement. It added that the Philippine vessel was unaccounted for after the incident. [...] Three other crew members, including the skipper, were safe, the statement said. The ministry asked Taiwan's representative office in Manila to "express our grave concern to the Philippine government over the incident and demand an immediate investigation of the case", as well as to find and penalise those responsible. [...] Taiwanese media quoted one of the crew members as saying the armed men were aboard a Philippine naval vessel. But the ministry identified it only as a grey vessel with a white hold, which local media said matched that of a naval vessel. [...] Though the incident did not happen anywhere in the vicinity of the highly disputed Spratly Islands, the use of firearms and an alleged Philippine naval vessel further stoked tensions in the South China Sea. [...]. ^ top ^

 

Economy

China takes big step towards fully convertible yuan (SCMP)
2013-05-07
In a move towards internationalising the yuan, the State Council said yesterday it will unveil an operational plan this year to make the currency fully convertible under capital accounts. The plan is likely to include a clear-cut time frame. The cabinet also said it would establish a comprehensive system for individuals' outbound investments, indicating that Beijing would make a renewed effort to relaunch the "through train" scheme allowing mainlanders to directly buy Hong Kong stocks - a plan that was scrapped in 2007. While the yuan is already convertible under the current account, covering trade, the capital account, which covers portfolio investment and borrowing, is closely controlled. The announcement, which followed a meeting chaired by Premier Li Keqiang, indicated the leadership may already have drafted a time frame for a freer capital flow. It had been speculated earlier that full convertibility would come by 2015. The State Council said the decisions at the meeting were in compliance with directives from the Communist Party's Central Economic Working Conference in December chaired by President Xi Jinping. "The statement shows the leadership has attached great importance to the convertibility issue and the operational plan will give the all-clear for liberalisation," said Li Huiyong, chief economist with Shenyin Wanguo Securities. "Global and domestic economic conditions have pushed the leaders to accelerate the pace for reforms." In 2007, Beijing first announced its ambition to internationalise the yuan and promote its use worldwide in step with China's rising economic heft. Liberalisation of the capital account would allow businesses or individuals from home and abroad to freely convert their currencies to buy assets and equities across the border. However, it is likely that, at least initially, the exchange of foreign currencies would still be subject to restrictions by regulators to prevent an entirely free flow of capital. Beijing opened the current account in 1996, allowing companies to exchange foreign currencies for trade deals. The central bank put full convertibility on the agenda in 1996, with 2000 as a target date, but the Asian financial turmoil derailed the plan. As China integrates further into the global economy, with domestic capital seeking fresh markets and foreign funds gravitate to the mainland, an open capital account would facilitate capital flow and investments. "The meeting discussed a lot of issues, but it's not easy to get all of them done," said Industrial Bank chief economist Lu Zhengwei. "The thing that Premier Li is set to do in the near term is to reduce administrative approvals.". ^ top ^

Beijing cracks down on hot money inflows for bets on yuan appreciation (SCMP)
2013-05-07
The mainland's currency regulator has stepped in to restrain corporate borrowing in US dollars and crack down on hot money inflows under the guise of trade as the yuan's appreciation gains momentum. In a circular to commercial banks the State Administration of Foreign Exchange (SAFE) introduced for the first time a minimum net open position in US dollars, restricting banks' capacity to lend in the greenback. After a 1 per cent rise by the yuan against the dollar so far this year, many companies have borrowed in US dollars, converted them into yuan and bought into yuan-denominated assets, waiting for the Chinese currency to strengthen further. The tightening measures also include stricter scrutiny of importers and exporters who channel in money disguised as trade bills. This comes after surprisingly high export figures in the first two months of this year generated suspicion about false trade invoicing. HSBC economists said in a research note yesterday that the measures "suggest a level of tolerance [by the regulator] over the nature of renminbi appreciation has been breached, following a strong run for the yuan". Most of the yuan's gain occurred last month as funds poured in to bet on robust economic growth on the mainland. Interest was further generated after the central bank said Beijing would widen the yuan's daily trading band this year. The yuan fell 0.34 per cent from Friday's close to 6.1768 per dollar at its lowest point yesterday before it recovered to 6.1667. The HSBC economists expect the yuan to hit 6.14 by the end of this year, and "further regulatory changes to slow hot money inflows could not being ruled out". China's capital and financial account surplus ballooned from US$20 billion in the last quarter of 2012 to US$102 billion in the first quarter of this year, highlighting heavy capital inflows. In the first two months of this year the mainland's exports surged 23.6 per cent year on year, much faster than the 11.7 per cent economists expected. Many exporters inflated bills to help channel in foreign exchange to await the yuan's appreciation, mainland media claimed. Guo Jianwei, deputy director of one of the two central bank departments focused on monetary policy, said last week that the People's Bank of China planned to allow individuals to settle trade in yuan this year, the Guangzhou Daily reported yesterday. ^ top ^

Warning on EC solar move (China Daily)
2013-05-08
China has warned the European Commission against taking any risky decisions in its handling of the ongoing multi-billion-euro anti-dumping and subsidies case involving China's solar panel exports to Europe. European Trade Commissioner Karel De Gucht is expected to propose to the commission on Wednesday that it impose anti-dumping duties on Chinese photovoltaic imports, while downstream business representatives in Europe are reported to be strongly against such proposals. The levies are likely to be set at 40 percent or higher and could come into force as soon as June 6, reports have suggested. The duties would be imposed for up to five years. The Alliance for Affordable Solar Energy has warned of severe job losses as a result, and industry insiders have suggested any penalty tariff higher than 30 percent will cause considerable damage to the European and Chinese solar industries. Chinese government officials said they have not been informed by their counterparts in Brussels of the likely decision, but warned if such measures are taken, it will represent a "threat" to China, because of the huge impact on the country's 500 solar panel producers. They added that such a move will also affect those in the global solar panel value chain, with 265,000 jobs in the downstream industry in the EU possibly affected. [...] Last year, the EU announced it will launch anti-dumping and anti-subsidies investigations into Chinese solar panel manufacturers. Jodie Roussell, vice-president of the European Solar Industry Association, warned officials in Brussels that the solar industry is very global and competitive, and that the EC's decisions to increase tariffs may have a direct effect on European jobs. About 1,000 European downstream and upstream enterprises have signed two letters, which have been obtained by China Daily, and sent to De Gucht requesting him to protect European jobs amid tough economic conditions. Some industry sources said China agreed to grant 250 million euros in loans in January to help build dozens of solar power plants in Greece, an initiative that may bring thousands of green jobs to the country. "But China's banks are hesitating (to provide the funds) because of the mounting uncertainties in Brussels," said the representative of one Chinese solar company based in Brussels. [...]. ^ top ^

Trade data shocks market (Global Times)
2013-05-09
Customs data Wednesday revealed that China's export and import growth expanded in April from a year earlier, beating economists' expectations and offering a positive sign that the economic recovery is gaining traction in China. The better-than-expected data also prompted economists to question its accuracy, with some saying the data may have been inflated by Chinese exporters to circumvent capital control on funds they bring into the country. Exports expanded 14.7 percent year-on-year in April, accelerating from the 10 percent pace in March, while imports rose to 16.8 percent, up from March's 14.1 percent growth, the General Administration of Customs (GAC) said on Wednesday. The figure led to an $18.2 billion surplus in trade in April, rebounding from a deficit of $884 million in March. The higher export growth in April could be partly caused by a low base figure from the same period last year, Chen Hufei, a researcher with the Bank of Communications. told the Global Times Wednesday. [...] China's exports have posted robust growth figures in recent months, which is not in line with the weak trade data in other Asian exporter countries and regions. [...] The situation promoted economists to suspect that some Chinese exporters may be overstating their trade flows to bypass capital controls and bring capital into China. "Due to the effective exchange rate appreciation of the yuan recently, overseas capital flows into the country through re-export trade from Hong Kong," Chen said. "There is indeed a large amount of speculative capital flows. Nearly all companies we met admitted that they were conducting some form of interest rate arbitrage on the expectation of further yuan appreciation," Yao Wei, a Hong Kong-based economist with Societe Generale SA told the Global Times Wednesday. "Miscounting of such flows under the trade account makes it difficult for the authorities to gauge the actual strength of China's export sector, thus risking policy mistakes," Yao said. [...] The State Administration of Foreign Exchange (SAFE), the country's foreign exchange regulator, announced Sunday fresh measures to control cross-border capital flows by importers and exporters and impose penalties on companies faking data. Analysts said the announcement may indicate that the practice of faking trade data has already roused concerns of the authorities. [...]. ^ top ^

Yuan reference rate hits high (China Daily)
2013-05-09
The People's Bank of China on Wednesday set the daily reference rate of the yuan against the dollar at 6.1980, the highest in 19 years since China unified the official and market exchange rates at the end of 1993. [...] The daily fixing of the yuan rose 1.41 percent since the beginning of the year against the dollar, as indicators show that capital flows into the world's second-largest economy accelerated in recent months. The yuan is allowed to trade within 1 percent in each direction around the daily reference rate. "Appreciation expectations and onshore demand for the currency still dominate the market as capital inflows continue, and the authorities are working to make the pricing of the yuan more flexible and market-oriented," said Guo Tianyong, a professor at the Central University of Finance and Economics in Beijing. The State Council, China's cabinet, said this week it will draft an operational plan to achieve full convertibility of the yuan and establish a comprehensive system for individuals' outbound investments. Analysts have forecast continuous appreciation pressure on the yuan as major economies announced a new round of monetary easing. On Monday, the central bank of Australia said it will cut interest rates by 25 basis points, following the steps of the European Central Bank and the Indian central bank. China has seen four straight months of net foreign exchange purchases among the central bank and commercial lenders, which suggests continuous capital inflows. The central bank data showed that banks brought in nearly 236.3 billion yuan ($38.25 billion) worth of foreign exchange in March on a net basis, boosting the total yuan holdings for purchasing foreign currency to nearly 27.1 trillion yuan. Apart from international "hot money" inflows, the rising willingness of Chinese companies, especially property developers, to sell dollar-denominated bonds in overseas markets also contributed to increasing cross-border money inflows, said Ding Zhijie, dean of the School of Banking and Finance at the University of International Business and Economics in Beijing. Expectations of the yuan's appreciation have also strengthened as China's band-widening discussions have been rekindled following recent comments from PBOC officials indicating that the yuan trading band will be further widened "in the near future". And the tightening of foreign exchange rules this week could well lay the groundwork for a band-widening move later this year, said Australia and New Zealand Banking Group Ltd in a report. On Sunday, the State Administration of Foreign Exchange rolled out new rules to regulate the banks' dollar net open positions, or NOP, linking their onshore foreign exchange loan-to-deposit ratios with the regulated NOP floor. It also called for stricter scrutiny of foreign exchange transactions by exporters and importers. The new SAFE rules do not alter the fundamental reasons behind yuan appreciation, but rather eliminate the speculative elements seeking to profit from the appreciation, said Li Wei, a senior economist at Standard Chartered Bank. "China's modest external surplus, favorable interest-rate differentials and the role of the yuan appreciation in internationalization continue to favor gradual appreciation medium-term," he said. Ding said that it's still possible that the yuan will go down for a while after this phase of appreciation, as the negative impact of Japanese yen's depreciation on East Asian countries' trade balance will gradually loom large, leading to currency depreciation among these countries. ^ top ^

China's inflation rises to 2.4% in April (China Daily)
2013-05-09
China's consumer price index, a main gauge of inflation, grew 2.4 percent year-on-year in April, up from 2.1 percent in March, the National Bureau of Statistics said Thursday. ^ top ^

 

DPRK and South Korea

North Korea says jailed American Kenneth Bae not a 'bargaining chip' (SCMP)
2013-05-06
North Korea said yesterday it would not use the case of a jailed US citizen as a "bargaining chip" with Washington, and no prominent Americans would be invited to discuss his case. "Some media of the US said that the DPRK (North Korea) tried to use Pae's case as a political bargaining chip. This is a ridiculous and wrong guess," a foreign ministry spokesman told the official KCNA news agency. "The DPRK has no plan to invite anyone of the US as regards Pae's issue." Pyongyang said on Thursday it had sentenced Pae, known in the US as Kenneth Bae, to 15 years' hard labour for "hostile acts" aimed at toppling the communist regime. The Korean-American tour operator was arrested in November as he entered the northeastern port city of Rason. Several Americans have been held in North Korea in recent years, and been freed after visits by high-profile Americans such as former presidents Jimmy Carter and Bill Clinton. The development comes amid high military tension. Pyongyang is angry about UN sanctions imposed after its nuclear test in February and US-South Korean joint military drills. ^ top ^

North Korea missiles moved away from launch site, says US officials (SCMP)
2013-05-07
North Korea has taken two Musudan missiles off launch-ready status and moved them from their position on the country's east coast, US officials said on Monday, after weeks of concern that Pyongyang had been poised for a test-launch. US Secretary of State John Kerry warned North Korea last month that it would be a “huge mistake” to launch the medium-range missiles, but the prospects of a test had put Seoul, Washington and Toyko on edge. One US official, speaking on condition of anonymity, cautioned that the missiles were still mobile and the fact that they had been moved was no guarantee they would not be set up elsewhere and fired at some point. “It is premature to celebrate it as good news,” said another US official, Daniel Russel, the senior director for Asian affairs at the National Security Council. However, a third US official, also speaking on condition of anonymity, said the United States did not believe the missiles had gone to an alternate launch site and that they were now believed to be in a non-operational location. The Musudan missiles have a range of roughly 3,000 to 3,500 kilometres. A possible test launch, depending its trajectory, could have dramatically escalated tensions on the Korean peninsula. North Korea's move coincided with preparations by US President Barack Obama to meet South Korean President Park Guen-hye at the White House on Tuesday, where they will hold talks and have a working lunch followed by a joint news conference. Pentagon spokesman George Little declined to comment on the status of the North Korean missiles. “I wouldn't again comment on intelligence. But what we have seen recently is a 'provocation pause'. And we think that's obviously beneficial to efforts to ensure we have peace and stability on the Korean peninsula,” Little told reporters. [...] Asked what may have contributed to Pyonyang's latest move, Little noted various possibilities, including the fact that, North Korea's previous cycles of provocation had ended after a while. He also noted that the Chinese government had made some helpful statements. “We do think [China] probably – again I can't speak for them – they probably heard very loudly from us and from others the need to ratchet it back and lower the temperature,” Little said. [...]. ^ top ^

 

Mongolia

The Repatriation Ceremony of the Great Tyrannosaurus Bataar was held in New York on May 06, 2013 (Info Mongolia)
2013-05-07
Recently, Mongolian delegation led by the Head of the Office of the President Mr. P.Tsagaan and Minister for Culture, Sports and Tourism Ms. Ts.Oyungerel has left for New York, US, to co-sign the repatriation certificate on returning a Tyrannosaurus bataar skeleton that was proved being smuggled from the territory of Mongolia. As a result of mutual efforts that lasted a year-round, the Repatriation Ceremony of the Great Tyrannosaurus Bataar was held in New York, representing the Government of Mongolia Minister for Culture, Sports and Tourism Tsedevdamba OYUNGEREL and John Morton, Director of the U.S. Immigration and Customs Enforcement (ICE) have inked the repatriation certificate on May 06, 2013. During a repatriation ceremony, "We never had dinosaurs' museum before, so we'll set up for the first time a new museum - Central Dinosaur Museum of Mongolia. Tyrannosaurus Bataar is going to be the first item, first exhibit of the museum, moreover the first cultural repatriation ever to Mongolia", said Minister Ts.Oyungerel. The "Tyrannosaurus Bataar" dinosaur skeleton, which is proved of Mongolian origin, was announced for bid through New York-based Heritage Auctions on May 20, 2012 and went for 1.05 million USD before US authorities intervened at the request of Mongolia's authorities. Meanwhile, the Heritage Auctions May 20, 2012 Natural History Auction Catalog listed, as lot 49315, one Tyrannosaurus bataar skeleton (the "Display Piece") was valued at between 950,000 USD and 1,500,000 USD. ^ top ^

Japan wants to collaborate with Mongolia in mining and other industries (Montsame)
2013-05-07
The Japanese side has expressed its willingness to cooperate with Mongolia in the mining and other fields.Japan said it at the 6th Mongolia-Japan intergovernmental consultative meeting held last week. A report on it was given Tuesday by the Ministries of Economic Development, of Foreign Affairs and of Mining. The Japanese side has proposed buying coal with a cheap price for a long time and holding shares of the Tavan tolgoi mineral deposit. Moreover, Japan has expressed its willingness to establish a joint commercial corporation with an aim to augment the coal export of Mongolia. In response, Mongolia has put forward a proposal to have its mining experts trained in Japan and to take technical and technological support from Japan. During the meeting, the countries agreed to introduce a technology in Mongolia to enrich coal with a dry method using sand, to collaborate in a project of constructing the "Darkhan" oil refineries, and to cooperate in founding a factory of semi-coked briquettes with a purpose of reducing air pollution in Ulaanbaatar. In addition, the sides agreed to introduce a progressive technology of reducing greenhouse gas, to create infrastructure, products and to install a smart network of energy with a financing from the Japan Bank for International Cooperation (JBIC). ^ top ^

Former presidents release request rejected (news.mn)
2013-05-08
Former president and head of the Mongolian People`s Revolutionary Party (MPRP) N.Enkhbayar, who sentenced to two and a half years in jail for power abuse and corruption charges by three courts sent a release request to the Capital City Prosecutor`s Office on May 2nd. The Capital City Prosecutor`s Office revised the request, however it was returned. The request does not meet the requirement of the joint decree written by the Minister of Justice and Minister of Health to release a convict on the grounds of their health condition. The request delivered from the hospital of the detention center did not meet the requirements of the rule. The former president has served in jail for over a year including the period since he was detained. ^ top ^

Mongolian contortionist sets new Guinness Record (UB Post)
2013-05-08
Mongolian contortionist E.Tsatsral has made an entry in the World Guinness Record on April 9 for her longest “Marinelli Bend” – a contortion act in which the performer suspends the entire weight of his body using her teeth. Her act was shown at the theater named “Circus Maximus” in Budapest, Hungary, which lasted for two minutes and 34 seconds. E.Tsatsral is a talented contortionist from Mongolia who took the third place at the Junior Circus Festival in Paris, France in 2006. The previous record holder of this act was also from Mongolia. L.Oyungerel set the world record in 2009 for performing the contortion act for the longest duration of 50 seconds. ^ top ^

Mongolia and China to deepen its strategic partnership (Info Mongolia)
2013-05-09
Chinese delegation led by the State Councilor of the People's Republic of China Mr. Yang Jiechi is conducting a two-day official visit to Mongolia, where Deputy Prime Minister of Mongolia and Chairman of Mongolia's part of the China-Mongolia Intergovernmental Commission, D.Terbishdagva received the delegation in the Government House on May 08, 2013. At the beginning of the bilateral talks Deputy Premier D.Terbishdagva noted Mongolia has been following a friendly relationship and a policy to develop sustainable mutually beneficial cooperation with the People's Republic of China since long time. Further emphasized, “Mr. Yang Jiechi is making his first foreign visit starting from Mongolia at the State Councilor-level, which means new leadership and the Government of China pays an important attention to the relations of the two countries and I am confident that in the frames of this visit Mongolia and China will deepen its strategic partnership and approach a new level of cooperation”. “Mongolia is a friendly neighbor and as a result of progressive partnership in recent years, China-Mongolia strategic partnership has been established. China is ready to collaborate in many sectors, in particular developing Mongolia's mining products and VAT included industries”, said State Councilor Yang Jiechi. ^ top ^

 

Andrin Eichin
Embassy of Switzerland
 

The Press review is a random selection of political and social related news gathered from various media and news services located in the PRC, edited or translated by the Embassy of Switzerland in Beijing and distributed among Swiss Government Offices. The Embassy does not accept responsibility for accuracy of quotes or truthfulness of content. Additionally the contents of the selected news mustn't correspond to the opinion of the Embassy.
 
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