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
  7-13.2.15, No. 560  
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Table of contents

Mongolia

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Switzerland

Leaks shed light on tax dodges in Swiss accounts at HSBC Holdings (SCMP)
2015-02-09
A trove of leaked documents has detailed the tax-dodging tactics and some US$120 billion in 30,000 Swiss bank accounts at HSBC Holdings, leading to questions over whether more countries would launch investigations into the London-based bank. A breakdown of the leaks, published on Sunday by the Washington-based International Consortium of Investigative Journalists, quoted emails from former bank leaders consulting clients on how to dodge taxes and conceal accounts within the Swiss jurisdiction. Dozens of high-profile clients, from Hollywood actor Christian Slater to one businessman connected to Lebanese terrorist outfit Hezbollah, were named in the disclosures, which the ICIJ called the largest leak of its kind. To regulators, though, the documents are old news. The information, which dated from 1988 to 2007, was handed over to French authorities several years earlier by former HSBC systems specialist Hervé Falciani, who was later indicted in Switzerland for trying to sell off the data. […] HSBC shares in Hong Kong on Monday closed down by just 0.2 per cent at HK$72.70. Franco Morra, HSBC private banking chief executive in Switzerland, said in an emailed statement that the disclosures were a “reminder that the old business model of Swiss private banking is no longer acceptable”. […] But the leak of the documents raised questions over whether more of the 44 countries whose residents were shown to have more than US$1 billion in such accounts would follow the US and France in launching investigations into the bank's activities. […] Britain, with US$21.7 billion in named accounts, has not announced an investigation. Hong Kong ranked No36 with US$1.8 billion in assets and 984 clients holding HSBC private bank accounts in Switzerland. A Hong Kong Monetary Authority spokesperson said there were no Hong Kong implications and that it does not comment on specific banks or cases. The ICIJ named only one Hong Kong passport holder, Joseph Paul Fok, a judge at Hong Kong's Court of Final Appeal, but did not include the size of the assets in his account. Fok could not be reached for comment on Monday. The ICIJ said he did not respond to repeated requests from comment. ^ top ^

 

Foreign Policy

Germany, China express willingness to further promote cooperation (Xinhua)
2015-02-08
German Chancellor Angela Merkel met Saturday with Chinese State Councilor Yang Jiechi with both sides showing willingness to further promote cooperation between Germany and China. Yang, who is attending the 51st Munich Security Conference in Germany, conveyed to Merkel the cordial greetings from Chinese President Xi Jinping and Premier Li Keqiang. Yang said China and Germany have enjoyed close high-level exchanges last year and established an all-round strategic partnership. China attaches great importance to Sino-German relations, Yang noted, adding that his country is willing to strengthen the mutually beneficial cooperation with Germany in all fields, and to work with Germany to conduct successfully important bilateral activities, including the Year of China-Germany Innovative Cooperation. For her part, Merkel asked Yang to extend her good wishes to Xi and Li. She said relations between Germany and China have been developing well, and her country hopes to further strengthen the all-round cooperation with China. The annual Munich Security Conference, an important forum for world leaders and experts to discuss major security issues, kicked off Friday in the southern German city of Munich and will run through Sunday. In his address at Friday's opening of the conference, Yang elaborated on the security concept that China actively advocates, calling for fostering a vision of a common, comprehensive, cooperative and sustainable security. During his stay in Munich, Yang has also met with German Foreign Minister Frank-Walter Steinmeier, Romanian Foreign Minister Bogdan Aurescu, Indian National Security Advisor Ajit Kumar Doval and others for exchanges of views on the promotion of ties between China and their countries, as well as major international and regional hot issues. ^ top ^

China vows to deepen mutually beneficial ties with AU (Xinhua)
2015-02-10
China will deepen mutually beneficial ties with the African Union (AU), a senior Chinese official said here on Monday. After meeting Zimbabwean President Robert Mugabe who assumed the AU chairmanship in January, Chinese State Councilor Yang Jiechi told reporters that China was keen to further engage with the AU for greater bilateral socio-economic benefits. Expressing optimism about China-Africa relations, Yang described the ties as an exemplar of mutual trust, equality and concerted efforts for win-win cooperation, adding the relationship enjoyed great prospects. "China will continue its mutually beneficial cooperation with the AU. We are well connected with the AU and all its members and we believe that there is a lot more that we can discuss in terms of economic and social progress in collaboration with each other," Yang said. He said China paid great attention to Africa's development efforts, including its 50-year development strategy dubbed Agenda 2063. "We think that it is a very ambitious program and it will materialize given the resourcefulness of African people, the strategic vision of African leaders and the many friends that Africa has in the world with one of them being China," he said. On China-Zimbabwe relations, Yang hailed the fraternal political and socio-economic ties between the two countries, noting that cooperation still needed to be enhanced in such areas as agriculture, energy, infrastructure, human resources training and tourism sectors, among others. China valued the backing of Zimbabwe on issues that concern its core interests and also affirmed its support for Zimbabwe's efforts to safeguard its independence, sovereignty and dignity, he said. "We believe that each country has the right to choose its own path of development," he said. Yang, who is on a three-day official visit to the southern African country, said he agreed with Mugabe that much progress had been made in implementing consensus between Zimbabwe and China on various cooperation agreements signed by the two leaders in 2014. "China is ready to work with Zimbabwe to further deepen their political mutual trust and expand their cooperation in various areas," he said. ^ top ^

China reiterates opposition to Dalai Lama visits (Global Times)
2015-02-10
China on Monday reiterated its opposition to any country allowing the Dalai Lama visit and interfering in China's internal affairs in the name of issues regarding the Tibet Autonomous ­Region. "Our position on Tibet-related issues is consistent and clear," said foreign ministry spokesperson Hua Chunying. "We oppose any other country's decision to allow the Dalai Lama to visit, and we oppose any country's interference in China's domestic affairs by exploiting Tibet-related issues." Hua made the remarks in response to a question about Denmark's government turning down a request to meet with the Dalai Lama, whom the Danish prime minister had previously planned to meet. "Tibet-related issues bear on China's core interests and national feelings... Under the banner of religion, he [the Dalai Lama] has been busy flying around the world and working to separate China and undermine China's national unity," Hua said. China's foreign ministry had opposed a meeting between US President Barack Obama and the ­Dalai Lama on Thursday in Washington, urging the US to stick to its commitments regarding Tibet. ^ top ^

China, Lithuania agree to advance relations (Xinhua)
2015-02-10
China-Lithuania relations are back on track after Lithuania withdrew support of the Tibet independence movement, Foreign Ministry Spokesperson Hua Chunying said here Tuesday. China-Lithuania relations hit rock bottom after Lithuanian President Dalia Grybauskaite met with the Dalai Lama in September, 2013. Chinese Premier Li Keqiang met with Lithuanian Prime Minister Algirdas Butkevicius last December on the sidelines of the third meeting between the heads of government of China and Central- and East-Europe countries in Serbia. The Lithuanian side stated that it placed great importance on developing friendly and cooperative relations with China. Lithuania made it clear that it respected China's sovereignty and territorial integrity and adhered to the one-China policy. Hua said the Lithuanian side recognized that Tibet was part of China and made it clear that it would never support any separatist forces or activities that advocated Tibet independence or harmed the integrity of China's territories. "The Lithuanian side has said it would properly handle sensitive issues of this kind in the future," Hua said. "China holds a positive view on the above mentioned stance of Lithuania," Hua said. She said the two sides agreed to advance relations on the basis of mutual respect, equality and respect of each other's core interests and major concerns. ^ top ^

China calls for dialogue in Yemen (Xinhua)
2015-02-10
China has urged parties in Yemen to solve disputes via dialogue and restore national stability as a dissolution of parliament looks set to deepen the deadly chaos in the Arab country. On Friday, Yemen's Shiite Houthi group announced its unilateral move to dissolve the parliament and form a presidential council to take over power after the country's president and premier resigned last month. "China pays high attention to the major political changes in Yemen," Foreign Ministry spokesperson Hua Chunying told a daily press briefing on Tuesday. "We hope parties in Yemen can take the nation's highest interests into consideration, enhance unity, avoid unilateral moves, properly solve disputes through dialogue and consultation in accordance with the Gulf Cooperation Council initiatives, the Peace and National Partnership Agreement and related UN Security Council resolutions, and forge ahead with the political transition so as to restore national stability and order as soon as possible," Hua said. Yemeni political factions resumed UN-brokered peace talks on Monday, hoping to end the country's long-standing political crisis. The Shiite Houthi group, also known as Ansarullah and based in the far northern province of Saada, has been expanding its influence southward after signing a UN-sponsored peace and power-sharing deal on Sept. 21, 2014 following week-long deadly clashes. ^ top ^

China, Russia pledge closer security cooperation (Xinhua)
2015-02-10
Chinese State Councilor and Minister of Public Security Guo Shengkun held talks with Russian Federal Security Service chief Alexander Bortnikov on Tuesday. Commenting on developments in law enforcement and security cooperation between China and Russia, Guo said the two countries should make full use their established mechanisms and expand cooperation on anti-terrorism, border management and the fight against trans-border crime. China and Russia should enhance coordination in the Shanghai Cooperation Organization to make it more security focused, Guo said. Bortnikov said the Russian side will cooperate with China on law-enforcement and security at a high level. ^ top ^

China, U.S. prepare for Xi's state visit (Xinhua)
2015-02-11
Senior Chinese officials on Wednesday spoke of their expectations for President Xi Jinping's state visit to the United States in September. In a meeting with visiting U.S. Deputy Secretary of State Antony Blinken, Vice President Li Yuanchao voiced his commitment to ensuring a the success of Xi's visit. China-U.S. relationship is developing well, Li said, calling on the two sides to push forward efforts to commemorate the 70th anniversary of the victory over fascism and the founding of the United Nations. Foreign Minister Wang Yi and Executive Vice Foreign Minister Zhang Yesui held separate meetings with Blinken. With significant and positive progress in China-U.S. relations in 2014, China expects both sides to keep up the pace this year and a successful visit by Xi will push forward the new type of major country relationship, according to an official news release on the meetings. The U.S. side is looking forward to strengthening dialogue and cooperation and promoting a better U.S.-China relationship, according to the news release. President Xi on Wednesday talked on the phone with his U.S. counterpart Barack Obama and accepted Obama's invitation to pay a state visit in September. ^ top ^

US, China to discuss repatriation of Chinese fugitives (China Daily)
2015-02-11
Senior US officials will meet in August with their Chinese counterparts to discuss the possibility of repatriating Chinese officials who have fled to America with billions of dollars of allegedly stolen government assets, according to a US State Department official. […] Officials from both countries met for two days in the Philippines last month, with the US delegation led by David Luna, the US State Department's senior director for National Security and Diplomacy. Luna confirmed to Reuters that he attended the meetings and said talks will reconvene in August and will include law enforcement and legal experts. The countries will share specific intelligence on allegedly corrupt Chinese officials and stolen assets and will also discuss potential ways to send the fugitives back to China. The Chinese Foreign Ministry declined immediate comment, as did the country's Central Commission for Discipline Inspection, the Communist Party's anti-corruption body. Alternatives to extradition exist, US officials say, including deportation for violations of US immigration law. […] Last year Chinese officials said more than 150 "economic fugitives", many of them described as corrupt government officials, were in the US. Neither country has publicly provided a figure for how much stolen money has been smuggled out of China and into the US. But the Washington-based Global Financial Integrity group, which tracks illegal outflows from countries, estimates that between 2003 and 2012, $1.25 trillion of illicit cash left China. […] The preliminary talks between US and Chinese officials were held on January 27 and 28 in Clark, Philippines, as part of an Asia-Pacific Economic Cooperation (APEC) international working group, called ACT-NET. The group, which involves multiple APEC countries, including Russia, was formed in Beijing in August 2014 to fight cross-border corruption. […] It was agreed after the talks that more formal negotiations within the ACT-NET forum will take place in August back in the Philippines, which chairs APEC for 2015. The US delegation will likely include officials from the State Department, the Department of Justice, and the Department of Homeland Security, Luna said. Luna said law enforcement officials from both countries will discuss specific cases and possible joint investigations into Chinese fugitives and stolen assets. "There are alternatives to extradition", Luna told Reuters. He said legal avenues being explored to potentially circumvent the lack of an extradition treaty between the US and China include the United Nations convention against Corruption, and the UN convention on Transnational Organized Crime. Luna said there is no formal agreement to return stolen assets to China, but the issue is "part of an ongoing bilateral dialogue, there are ongoing cases, and it is a priority." […] ^ top ^

China urges U.S. to play exemplary role in cyber security (Xinhua)
2015-02-12
A Chinese Foreign Ministry spokesperson on Thursday urged the United States to play an exemplary role in cyber security instead of pointing the finger at other countries. Spokeswoman Hua Chunying's remarks came as Assistant to the U.S. President for Homeland Security and Counterterrorism Lisa O. Monaco delivered a speech in Washington D.C. on Tuesday on cyber defenses, saying that U.S. cyber "threats come from nations with highly sophisticated cyber programs including China." "China has reiterated its position on cyber security that China firmly opposes to and fights all forms of hacker attacks in accordance with law," said Hua at a daily press briefing. Calling hacker attacks a global problem, Hua said the international community should unite to address the threats. She suggests countries respect but not be suspicious of each other and cooperate but not point the finger at others so as to jointly safeguard peace, security, openness and cooperation over cyber space. "As a country with the most advanced and powerful cyber technology in the world, the United States should set itself as an example first for others on safeguarding cyber security," Hua said. She called on the United States to take more positive moves and contribute more to safeguarding mutual trust and cooperation in the cyber space. ^ top ^

China hails Minsk agreement over Ukraine crisis (Xinhua)
2015-02-12
China welcomes the Minsk agreement on Ukraine crisis by leaders from Russia, Germany, France and Ukraine, saying it helps ease tensions in eastern Ukraine. Foreign Ministry spokesperson Hua Chunying said in a press release on Thursday that China has always believed that a political resolution is "the only way out" for the Ukraine crisis. "We hope all parties could respect the hard-won results and implement the consensus at an early date to bring peace and stability to Ukraine,"she said. French President Francois Hollande, German Chancellor Angela Merkel, Ukrainian President Petro Poroshenko and Russian President Vladimir Putin reached an agreement Thursday after 16 hours of talks in Minsk, capital of Belarus, including a ceasefire from Feb. 15, clear timelines for elections in eastern Ukraine, border control and prisoner exchange. Government troops and insurgents have been locked in fierce confrontation in eastern Ukraine since April 2014, leaving more than 5,000 dead and over 12,000 wounded. ^ top ^

FM denies Greek aid knowledge (Global Times)
2015-02-12
China's foreign ministry denied all knowledge of offers of economic support made to Greece by China and Russia on Wednesday ahead of an emergency meeting of eurozone finance ministers. "There have been proposals, offers I would say, from Russia, recently after the election, for economic support as well as from China, regarding help, investment possibilities," Greece's Deputy Foreign Minister Nikos Chountis told Greek radio on Tuesday, adding that "we have not asked for it." Greek Defense Minister Panos Kammenos also said on Tuesday that if Athens failed to get a new debt agreement with the eurozone, it could always look elsewhere for help like the US and "it could be Russia … It could be China." Hua Chunying, a spokeswoman for the Ministry of Foreign Affairs, said, "I am not aware of the specifics. China-Greece relations have been developing steadily since the establishment of diplomatic ties … The Chinese side views Greece as a good friend and partner in the EU. We are sincere and determined to develop mutually beneficial cooperation with Greece," Hua said. "Attaching great importance to China-Greece relations, the Chinese side is ready to work hand in hand with Greece's new government to deepen bilateral exchanges and cooperation in various fields following the principle of mutual respect and mutual benefit, and constantly advance the China-Greece comprehensive strategic partnership," Hua said at a regular press conference in Beijing. Wu Yikang, research fellow at the Shanghai Academy of Social Sciences, said that Greece's "plan B" is an attempt to help the country put pressure on EU members and that the comments made by Greek officials did not mean the country had already sought aid from China and Russia. […] ^ top ^

Chinese, Greek heads of gov't discuss bilateral cooperation (Xinhua)
2015-02-12
Chinese Premier Li Keqiang and Greek Prime Minister Alexis Tsipras vowed Wednesday to further advance the friendly ties and win-win cooperation between their countries during a telephone conversation. Li said China treasures bilateral friendship and continues to expand pragmatic cooperation with Greece. He wishes that both sides continue to be equal partners to achieve mutual benefit and win-win outcome, so as to lift bilateral ties to a higher level. For his part, Tsipras said the Greek government also prioritizes relations with China and welcomes China to invest more in Greece. Pledging not to change the nature of existing cooperation projects with China, Tsipras said Greece is confident that, together with China, the two countries' friendly and cooperative ties will be further advanced. Li said that the China-Greece relationship enjoys huge potential and that achievements generated in their cooperation have benefited the two peoples. The Chinese premier added that since Greece reffairmed welcome for Chinese investment and promised to implement existing bilateral deals, it should provide better legal guarantee for Chinese enterprises operating in Greece. The Piraeus port project, a success of China-Greece cooperation, has boosted not only local employment, workers' rights and interests, but also the conservation and improvement of their working conditions, Li stressed, hoping that both sides keep own promises. China is willing to work with the Greek side to develop the port into a first-class one in the Mediterranean and an important regional hub, which could play a key role in constructing a land-sea express passage linking China and Europe and boosting the Asia-Europe interconnectivity, said the Chinese premier. Li expressed the confidence that the project will also accelerate the integration process and balanced development in Europe. In response, Tsipras said that Greece, in a vital phase of reviving and developing national economy, needs China's support and help. Greece is ready to strengthen maritime and shipping collaboration with China and conduct mutually beneficial cooperation in such areas as infrastructure and finance, he added. The Piraeus project with the Chinese shipping giant Cosco is crucial for Greece's economic development, he said. As a pilot project for Greece-China cooperation, Athens will attach more significance and provide more support for it, promised Tsipras. China is an important power backing Europe's stability and development, said the Greek prime minister. Greece values the construction of the Europe-China land-sea express passage, and is willing to serve as a bridge for Europe-China interactions and enhance constant progress of the European-Chinese partnership. ^ top ^

Chinese FM calls for expanding all-round cooperation with Pakistan (Xinhua)
2015-02-13
Visiting Chinese Foreign Minister Wang Yi on Thursday called for expanding all-round exchanges and cooperation between China and Pakistan. Wang made the statement here Thursday during his meeting with adviser to the Pakistani Prime Minister on National Security and Foreign Affairs Sartaj Aziz. Speaking highly about the friendship between China and Pakistan, Wang called the two countries "bosom buddies" and "true friends", noting that their friendly ties are not built overnight, but have withstood the test of time and history. President Xi Jinping is going to visit Pakistan this year. The visit, which comes nine years after his last visit and to be his first to the country as president, will surely be an important one to further consolidate the all-weather strategic partnership between the two countries and deepen their all-round cooperation, Wang said. China and Pakistan's practical economic cooperation and security cooperation should go side by side and complement each other, Wang said. The China-Pakistan economic corridor, which is an flagship project of the "One Belt, One Road" initiatives […], constitutes the strategic framework of the bilateral pragmatic cooperation, Wang said. The two sides are to further boost the construction of the economic corridor and strive to achieve more progress in projects and fields such as the port of Gwadar, energy, transportation infrastructure, and industry cooperation so as to bring greater benefits to people of the two countries, he said. The two countries will also work to consolidate the security cooperation firewall and strength anti-terrorism cooperation to safeguard the safety of both countries and peoples, he said. The two countries are to strengthen cultural exchanges and work together to successfully conduct the celebration activities of the China-Pakistan Year of Friendly Exchanges, so that bilateral goodwill will be deeply rooted in hearts of the two peoples, he said. Wang also called on the two sides to strength coordination and cooperation in regional and international affairs, so as to jointly safeguard the interests of developing countries. For his part, Aziz said Pakistan considers relations with China as a cornerstone of its foreign policy. Pakistan will always adhere to the one-China policy and staunchly support China's core interests and major concerns. […] The country fully supports China's crackdown on the "three evil forces" of terrorism, separatism and extremism, and will continue to protect the safety of Chinese projects and persons in the country, said Aziz. ^ top ^

Support needed in four areas to resolve Afghanistan issue: Chinese FM (Xinhua)
2015-02-13
Support is needed in four areas to resolve the Afghanistan issue, visiting Chinese Foreign Minister Wang Yi said here after his meeting with Sartaj Aziz, Adviser to the Pakistani Prime Minister on National Security and Foreign Affairs. With the withdrawal of the International Security Assistance Force (ISAF), Afghanistan has entered into an important period of transition, Wang told a joint press conference with the Pakistani official. […] To resolve the Afghanistan issue, support is needed in the following four aspects, said Wang. First of all, the effective governance of the national unity government of Afghanistan needs to be supported. The international community needs to respect the independence, sovereignty and territorial integrity of the country and respect the develop path chosen by the Afghan people in accordance with their own national conditions. Second, the Afghan government needs to be backed in its efforts to realize reconciliation with various political forces including the Taliban. The broad-based national reconciliation on the Afghan-owned and Afghan-led basis is the right direction for Afghanistan to realize national unity and the long-term stability and security of the country. The international community should give it support and encouragement, and China is ready to play a constructive role and provide any necessary facilitation at any time if required by various parties in Afghanistan. Third, we need to support the economic and social reconstruction in Afghanistan, Wang said. To resolve the issue in Afghanistan, reconciliation is the key and reconstruction is the fundamental solution. Afghanistan will only have a new future when its economy and society developed and its people stripped off poverty. The Chinese government will earnestly deliver its commitment for the country's reconstruction, and work along with the international community to help enhance Afghanistan's self-development capacity, Wang said. Fourth, Afghanistan's integration into regional cooperation needs to be supported. We welcome Afghanistan's active participation in China's proposal of the One Belt and One Road initiative in the light of its own reconstruction and development needs, and we hope that through alignment of develop strategies, Afghanistan will achieve common development and win-win cooperation with China and its other neighbors, Wang said. […] Looking forward, China and Pakistan will further enhance communication with Afghanistan and work with the rest of the international community to make unremitting efforts for the smooth transition of Afghanistan, he said. ^ top ^

Chinese Embassy gives info about terror arrests (Global Times)
2015-02-13
The Chinese Embassy in Indonesia on Thursday gave further information about earlier reports which said that four terror suspects allegedly from the Xinjiang Uyghur Autonomous Region were arrested in a restive region in Indonesia. A Tuesday report by The Jakarta Post quoted Saud Usman Nasution, head of the National Counterterrorism Agency, as saying that Indonesian police in Central Sulawesi province arrested four of nine Uyghur terrorism suspects who had sought refuge in the town of Poso, while three fled into nearby jungle and two others managed to escape to Malaysia. The embassy told the Global Times Thursday that the four suspects were arrested at some point last year, but the embassy could not confirm their nationalities. It is still gathering information about the situation, the embassy said. In an e-mail reply to the Global Times on Thursday, the Indonesian Embassy in Beijing said that there is no documentation of their nationality other than the Turkish passport they were carrying when detained. Indonesian anti-terror agencies are working hard to establish the identities and nationalities of the suspects, it added. The nine suspects are believed to have been part of the Uyghur separatist group that launched a deadly terrorist attack on a train station in Kunming, Yunnan province in southwestern China, on March 1, 2014, that killed dozens, according to the report. […] The Indonesian police found documents about the Islamic State in the suspects' car, and therefore believe they have connections with the militant group. Indonesian police said that the four detainees initially said they had come from Xinjiang, but later claimed they came from Turkey. "They are believed to have fled to Poso by taking the land route through Myanmar, southern Thailand and Malaysia. From Malaysia, they entered Indonesia through Medan (capital of North Sumatra province) with Turkish passports and they posed as asylum seekers when they were in Medan," Saud was quoted as saying by the Antara news agency. Meng Jianzhu, head of the Commission for Political and Legal Affairs of the Communist Party of China Central Committee, met Saud on January 13 and both sides pledged to increase communication and cooperation on counterterrorism, the Xinhua News Agency reported. […] ^ top ^

China to expand soft power push through overseas cultural centres (SCMP)
2015-02-13
China plans to spend 360 million yuan (HK$454 million) on expanding its overseas cultural centres this year - nearly double last year's amount - amid government efforts to bolster its soft power abroad. But observers are sceptical whether the centres, which are different from the Confucius Institutes, can improve the nation's image overseas, especially given similar efforts have attracted criticism. China currently runs 20 overseas cultural centres, used mainly to host exhibitions and teach Chinese music, dance, fine arts, language, martial arts and cuisine. It will open two more this year - in Brussels and Singapore - the Ministry of Culture said, and other centres were planned for Nepal, Pakistan and Tanzania. China aims to have 50 across the world by 2020. The ministry had also finished surveying locations for centres in Sweden, Romania and Hungary, which could open as early as this year if plans went well, said Yan Dongsheng, deputy director of the ministry's finance department. The country set up its first two cultural centres - in Mauritius and Benin, in West Africa - in 1988. Since then, it had invested more than 1.3 billion yuan on the effort, Yan said. The fresh push behind the centres comes amid a backlash against the nation's other main soft power vehicle, the Confucius Institutes, which number 476 globally. Several universities in North America and Europe have ended their partnership with the institutes in recent years, citing concerns that they restrict academic freedom, conduct surveillance of Chinese students abroad and promote the political aims of the Communist Party. Jiang Zhenxiao, director of the Chinese Cultural Centre in Mauritius, said the two organisations were very different platforms, despite sharing similar activities. Confucius Institutes mainly dealt with students and focused on teaching the Chinese language, Jiang said. […] "Chinese cultural centres are different. It is a bigger platform facing all sectors of society, and it is entirely China's own venue. We also host more kinds of activities and provide a broader curriculum," he said. […] ^ top ^

Beijing slams British think tank's military report (Global Times)
2015-02-13
China's foreign ministry has criticized an annual military report published by a British think tank that argued that China's growing military spending lacks transparency. "China's military expenditure in 2014 accounted for less than 1.5 percent of GDP, which is not only well below major countries in the world, but also less than the world average of 2.6 percent," Chinese foreign ministry spokesperson Hua Chunying said Thursday. "Our per capita military spending is even less, only one twenty-second of that of the US, one-ninth of Britain's and one-fifth of Japan's," she told a daily press briefing. Her comments came in response to a question regarding a report released by the International Institute for Strategic Studies on Wednesday, which was an annual assessment of the military capabilities and defense economics of 171 countries worldwide. The report highlighted China's growing investment in maritime power-projection capabilities. ^ top ^

China 'not ready to win wars' despite PLA modernisation, says US report (SCMP)
2015-02-13
The People's Liberation Army is incapable of winning wars even though it has spent heavily on modernisation over the past two decades, according to a report commissioned by a US congressional committee. Chinese military experts said the shortcomings identified were valid, and the report could be a "good reference" to the PLA leadership as it showed a thorough understanding of the army's latest developments. The report by Santa Monica-based research group Rand Corporation, which was released yesterday, said the PLA faced continuing vulnerability because of widespread corruption, lack of qualified personnel and insufficient training. "Although the PLA's capabilities have improved dramatically [amid its military modernisation], its remaining weaknesses increase the risk of failure to successfully perform some of the missions Chinese Communist Party leaders may task it to execute," said the report, sponsored by the US-China Economic and Security Review Commission. […] The report points to critical weaknesses in the PLA in two categories: organisational and combat capabilities. It said a party-ruled army could be contributing to potential risk, citing the rift between then premier Wen Jiabao and Guo Boxiong, who was vice-chairman of the PLA's supreme Central Military Commission (CMC) during the 2008's earthquake in Sichuan province. Wen, who had no military rank, made a tearful call for the air force to send helicopters to aid the rescue, but there was no response from the military because the army takes its orders only from the CMC. The report said the PLA enjoyed an almost absolute immunity from external oversight, budgetary transparency, and accountability to the legislature for how it spent its funds and operates. […] Li Jie, a retired senior colonel with the navy, said it was a fact that "there is a certain gap" between the US and Chinese militaries even though the PLA had been trying to narrow the distance. […] "The report indicates the US army has tried all efforts to understand the PLA and done the work quite well. We have to recognise that many of the shortcomings mentioned by the report are all facts and could be a good reference to Beijing, too." […] ^ top ^

 

Domestic Policy

China executes mining tycoon Liu Han, who had links to ex-security tsar Zhou Yongkang (SCMP)
2015-02-09
A Chinese mining tycoon linked to former security tsar Zhou Yongkang has been executed, according to state media. Sichuan native Liu Han, 48, was found guilty of 13 charges – including murder, organising casinos, running a mafia-style gang and illegally selling firearms – and sentenced to death in late May. He was executed on Monday morning together with his younger brother Liu Wei and three associates, Tang Xianbing, Zhang Donghua and Tian Xianwei, Xianning city intermediate court in Hubei province said. The court organised meetings between the criminals and their families prior to the executions, Xinhua reported. He spoke calmly to his family as they visited him before his execution. He told them to accept his fate, and not to seek redress for any injustice, according to a source close to the family. His final words quoted the adage attributed to Abraham Lincoln: “You can fool some of the people all the time, and all the people some of the time, but you cannot fool all the people all the time.”. Liu Han's Hanlong Group – a conglomerate founded in 1997 with interests ranging from energy to real estate – was fined 300 million yuan (HK$377 million) for crimes including the use of fraudulent information to obtain bank loans. The group, of which Liu was board chairman, is Sichuan province's largest private enterprise. According to court verdicts after the first trial, the group led by the Liu brothers was identified as a criminal organisation as it had an established hierarchy and regular members, and profited from criminal activities, Xinhua said. Hanlong Group and 20 defendants submitted appeals to the Hubei court early in June, Chinanews.com reported. Liu met Zhou's eldest son, Zhou Bin, in 2003 through a senior official from Aba autonomous prefecture in Sichuan, according to an earlier report by the South China Morning Post. Sources said the elder Zhou had asked Liu to look after his son. While close ties between the business community and party officials are common in China, Liu's case has exposed in surprising detail large networks of the rich and their uncertain role in political struggles. After the pair's first meeting, Zhou Bin sold an Aba-based tourism company to Liu for some 12 million yuan – even though it was said to be worth less than six million yuan – because Liu wanted to "maintain a relationship with Zhou Bin", sources said. Liu later gave the Aba official a gift worth a few hundred thousand yuan, they added. Years later, the official took up a senior position in Chengdu. Zhou Bin has been detained since December over allegations of bribery. […] Liu built Sichuan Hanlong into a prominent energy conglomerate worth an estimated 855 million yuan, according to Shanghai research company Hurun Report. During a brief hearing in Xianning in May, Liu reportedly yelled "I've been framed" and "I've been wronged" to the court before guards took him away. A large number of officials had offered to assist the investigation of Liu, state media reported. ^ top ^

CPC proposes developing "consultative democracy" (Xinhua)
2015-02-09
The Central Committee of the Communist Party of China (CPC) on Monday published a document proposing to promote "consultative democracy", the country's own brand of democracy. Approved in the sixth meeting of the Leading Group for Overall Reform in late December, the document says socialist consultative democracy embodies the Party's "mass line" policy, and that developing it is essential to deepening reform of the political system. Consultative democracy is defined as a democratic pattern in which, led by the CPC, all sections of society are consulted on major issues before and during policy-making processes. Though it has been practiced by China for decades, consultative democracy needs to be strengthened as the country is in the decisive process of building a moderately prosperous society in all respects, according to the document. It says that this method be used to expand people's participation in politics, help modernize state governance and resolve conflicts. Consultation in non-communist parties, governments and the political consultative conference system are among the focuses for concentration, while grassroots organizations will also be strengthened, under the proposals. The document also vows to seek ways for consultation among non-public organizations. It says the CPC will hold seminars on key issues including major policies, important personnel arrangements and research by the eight non-communist parties, with these events presided over by major officials and leaders of the CPC Central Committee. According to the proposals, the system under which non-communist parties give advice to the CPC will also be improved. Non-communist parties give opinions and suggestions to the CPC through studying reports and in other forms, while leaders of these parties can give direct advice to the CPC and the State Council. The network of people's congresses, which is China's fundamental political system, is also highlighted. The document says the congresses should be made more consultative so as to "include people's wisdom and gather their opinions while performing their duties according to law". Specifically, the document urges enhanced consultation in law-making: for divisive issues, procedures including careful study, verification and consultation must be completed to reach broad consensus before draft bills are submitted for voting. It adds that the role of deputies to people's congresses must be strengthened, while online platforms must be better established for contact between deputies and the people. The document urges the Chinese People's Political Consultative Conference to continue to conduct consultation on topics related to major national and local policies and key political, economic and cultural issues. It also calls for various people's organizations to be allowed to contribute to consultation. Lastly, the document stresses that in pushing forward consultative democracy, the leading role must still be given to the CPC to ensure it can control the direction of development. ^ top ^

Chinese premier vows devolution to limit graft (Xinhua)
2015-02-09
The Chinese government will devolve some powers to lower levels in order to reduce scope for officials bargaining for benefits, Chinese Premier Li Keqiang said on Monday, putting forward requirements for anti-corruption work in 2015. Li made the remarks during the third meeting on clean governance, which focused on strictly managing public assets and limiting misuse of power as China's campaign against corruption continues. The pre-approval process of investment projects will be significantly slashed this year, while all examinations for non-administrative permission will be canceled, the premier said. He also urged the government to clean intermediary service sectors, breaking monopolies and strengthening regulation so as to eradicate the "grey zone" of administrative examinations and approvals. The central and local governments should make lists of those who have certain powers and their responsibilities, Li proposed. The premier said that, although there were significant results in anti-graft work last year, corruption still plagues the government in some sectors, largely because a minority of officials have so much power to give approvals and mete out benefits. At the meeting, the premier vowed to strengthen regulation of using public funds, pledging to put government income and expenditure under budgetary management and offer "a readable account book" to the public. "Every single penny of government expenses should be subject to auditing supervision," he said. "Supervision over state-owned assets and enterprises should be tightened to make sure no national property is pocketed by a small number of corrupt officials." Li asked officials at all levels to act on what they say and avoid empty talk. "Those who are lazy with administrative duties and don't make the slightest contribution to governance will be harshly punished while those who practice diligent government will be given a stage," he said. To fight corruption, Li urged officials to tackle root causes of problems. "All Party members should observe CPC disciplines, rectify undesirable work style, and advocate frugality," said Li. He pledged to keep up the tough stance against graft, severely punishing corrupt officials and restraining power in "the cage of regulations". Officials at all levels should take the lead to abide by laws and regulations, the premier added, while supervisory organs should carry out inspections to clean governance. The meeting was attended by vice premiers Zhang Gaoli, Liu Yandong, Wang Yang, Ma Kai, as well as other senior officials of the State Council. Wang Qishan, secretary of the Central Commission for Discipline Inspection of the Communist Party of China, attended the meeting on invitation. ^ top ^

Xi stresses implementing central economic policies (Xinhua)
2015-02-10
Chinese President Xi Jinping presided over a key economic meeting on Tuesday, calling for central policies in this field to be carried out to ensure positive effects. The policies discussed at the ninth meeting of the Central Leading Group on Financial and Economic Affairs included urbanization, innovation, development of Asian trade infrastructure, as well as food, water and energy security. Xi demanded stable urbanization, saying that the priority of this process is to attract suitable people to urban areas. They must be capable of maintaining steady jobs and comfortable in cities, he said. Urbanization does not mean making urban and rural areas alike, the president stressed, saying that development should be steered according to differing local requirements. Xi urged faster reform and innovation in investment and financing to explore the huge potential in public infrastructure construction. He also demanded agricultural modernization and industrial transformation, aiming at stable, sustainable and competitive grain production. Saving water must be made a priority in future work for water security, and the government will make better plans for disaster prevention and environmental protection, Xi vowed. He also called for close monitoring of the global energy market, improvements to oil reserve systems, accelerated development of unconventional energies and reforms to gas, oil and energy pricing. The president said red tape needs to be cut in order to smooth the way for the country to become more innovative. Regarding Asian infrastructure, Xi highlighted policies related to his proposed "Belt and Road" initiatives, saying the primary task of the Asian Infrastructure Investment Bank is to provide capital for these schemes. During the Beijing APEC summit, Xi announced a fund of 40 billion U.S. dollars for the land-based "Road" infrastructure. "Only when there is a road can people and things flow," he said here. Meanwhile, he cited the huge project to transfer administrative functions of Beijing to neighboring areas, and push forward the integration of Beijing, Tianjin Municipality and Hebei Province. It needs definite targets to help map out and accomplish this time-consuming work, he said. ^ top ^

A safer Internet needs better governance (Xinhua)
2015-02-10
As the world marked Safer Internet Day 2015 on Tuesday, which aims to promote safer and more responsible use of digital technology for children and young people, China was concerned about Internet safety in a broader sense. China had 648 million Internet users by the end of 2014 and more than 70 percent were worried by Internet security. Besides the safety of computers, servers and online content, cyber security includes the safety of national interests. China has been the target of cyber attacks, over 10,000 Chinese websites are maliciously tampered every month and 80 percent of the government's websites have been hacked, according to Lu Wei, minister of the Cyberspace Administration of China (CAC). IT development globally is uneven, which means some less-digitally developed countries are at risk of being controlled by more sophisticated nations. Mass surveillance by the United States National Security Agency (NSA) on governments and individuals disclosed since June 2013 by former NSA contractor Edward Snowden show that cyberspace also has boundaries. Chinese President Xi Jinping, who also heads the central Internet security and informatization leading group, told a meeting in February 2014 that "no Internet safety means no national security". Countries should respect for each other's sovereignty in cyberspace; all countries have the right and power to exercise jurisdiction over information facilities and activities within their own territories, and to enforce their own policies. When governments regulate the Internet within their boundaries, they should act in line with laws and regulations, which is what China has been doing. As the flow of information is border-free and cyber security is a common challenge faced across the globe, shared governance should also be advocated globally, just like this year's slogan for the Safer Internet Day -- "Let's create a better Internet together". ^ top ^

Ministries rebuked for faulty practices (China Daily)
2015-02-11
China's anti-corruption authority reprimanded two central government ministries on Tuesday for poor management and bad behavior among their staff members. In a rare move, the Central Commission for Discipline Inspection issued statements leveling criticism at two highly placed ministerial-level government bodies - the Ministry of Culture and Ministry of Environmental Protection. The Ministry of Culture appointed a new minister recently, and the Ministry of Environmental Protection may soon change its minister, according to sources close to the central government. Ministers at the two ministries are members of the State Council, China's Cabinet. A statement on the commission's website said that problems found at the Ministry of Environmental Protection included violations of the law, lax supervision and corruption. Ji Lin, head of the third central disciplinary inspection team, attended a meeting of senior officials from the ministry on Monday. Ji said at the meeting that corruption and a lack of supervision are behind widespread violations of the law and regulations in environmental assessments of development projects. This includes construction being carried out before approval is granted, or projects being modified without approval from environmental authorities, Ji said. Monday's meeting was also attended by Minister of Environmental Protection Zhou Shengxian, the statement said. Ji addressed the meeting to give feedback to the ministry on the results of an inspection into it late last year. "Some leaders, officials and their relatives interfered with the environmental assessment process of development projects, and even went so far as to set up companies to seek profit from winning contracts for projects where environmental assessment was required," Ji said. The inspection team also received tip offs about suspected corruption among some officials, the statement said. In a separate statement, the commission pointed to problems found at the Ministry of Culture. These included management failures at enterprises affiliated with the ministry-causing a loss of State assets and risk of corruption-and an excessive number of arts events being awarded. […] The inspection teams asked the two ministries to attach importance to the problems and to rectify them properly. ^ top ^

China appoints, removes officials (Global Times)
2015-02-11
The State Council, China's Cabinet, has announced appointments and removals of several senior government officials. Hou Jianguo was named vice minister of science and technology and will no longer serve as the president of the University of Science and Technology of China, the state council announced Wednesday. Liu Qiang was appointed vice chairman of the State-owned Assets Supervision and Administration Commission. Huang Shuhe and Jin Yang were removed from the post. Li Keming replaced Lü Huangsheng as chairman of the Board of Supervisors for Key Large-sized State-owned Enterprises, and he will no longer hold the post of vice director of the State Tobacco Monopoly Administration. Long Guoqiang was appointed vice director of the Development Research Center of the State Council. Wang Zhongtian was named deputy director of the Office of the South-to-North Water Diversion Project Construction Committee under the State Council. Luo Jun became the president of Sun Yat-sen University. The State Council also removed Yao Zengke from the post of vice minister of supervision and removed Hu Siyi from the post of vice minister of water resources. Huo Ke was removed from the post of deputy director of the China National Tourism Administration. Discipline authorities said last month that Huo was under investigation for suspected "serious discipline and law violations." ^ top ^

Health insurance faces risks (Global Times)
2015-02-12
A report by medical industry experts recommends that the government reduces medical costs, saying that China's health insurance scheme for urban employees may run into deficit in 2017 and the accumulated deficit could reach 735.3 billion yuan ($117.5 billion) by 2024. Insurance costs has been going up due to the rising medical costs and an aging population while insurance funds continue to be saddled by the slowdown in the economy, the report funded by the Ministry of Education and released on Tuesday said. The annual average growth of insurance funds between 2000 and 2013 is 33 percent while costs have risen 34.39 percent, the report added. The health insurance scheme for employees in urban areas excludes employees of government and public institution. Employees are required to pay at least 2 percent of their monthly salary to the scheme, while employers pay 5 to 7 percent of all their employees' salaries. As the economy slows down, the insurance scheme cannot expect greater contributions, Fang Pengqian, a professor of the School of Medicine and Health Management at the Huazhong University of Science and Technology, who led the study, said on Wednesday. "There is no need for the public to worry about a possible deficit as the scheme is in no danger of going bankrupt or will not cover their medical costs," Fang said. "But the scheme faces challenges." The average annual growth of healthcare costs in the past three years is 13.2 percent, or 1.62 times faster than GDP growth during the same period, the report noted. To reduce medical costs is a crucial way to avoid deficits, Fang said, adding the government should better supervise medicine prices and reform the industry. "Currently, 40 percent of many hospitals' revenue come from the sale of medicine, which could encourage some doctors to recommend higher-priced drugs," Fang said. The medical insurance scheme for urban employees suffered a deficit in 2010 in some parts of China, the People's Daily reported in January. Li Zhong, the spokesman of the Ministry of Human Resources and Social Security, said that authorities have already identified possible deficiencies, chinanews.com reported in July 2014. Li said that the government will improve the scheme's effectiveness, supervise it more closely and impose harsher punishment on violators, such as insurance fraud. ^ top ^

Draft law aims to improve counter-terrorism intelligence (Global Times)
2015-02-11
China's top legislature will deliberate on a draft counter-terrorism law that aims to improve intelligence gathering and enhance international cooperation in the field later this month. The Standing Committee of the National People's Congress (NPC) will meet from Feb. 25 to 27, said a statement issued after the meeting of chairman and vice chairpersons of the NPC Standing Committee on Wednesday. The draft law is targeted at boosting information sharing across government bodies and among the military, armed police and militia, and stipulates measures on Internet security, the examination of transport, dangerous materials, prevention of terrorism financing, and border controls. Other key tasks at the meeting will be to discuss an agenda for the third annual session of the 12th NPC in early March, a work report of the NPC Standing Committee to be submitted for review during the session as well as draft lists of attendees. The late February meeting will also see deliberation on a proposal from the State Council to review a draft amendment to the Law on Promoting the Transformation of Scientific and Technological Achievement and another proposal to review and approve a consular pact between China and South Korea. In addition, attendees will review the qualifications of a number of NPC deputies as well as appointments and dismissals. Zhang Dejiang, chairman of the NPC Standing Committee, presided over Wednesday's meeting. ^ top ^

China's graft-busters hit more SOEs (Xinhua)
2015-02-12
The first round of disciplinary inspection in 2015 will cover 26 centrally-administered state-owned enterprises (SOEs), China's chief graft-buster said on Wednesday. They will include the National Nuclear Corporation, National Petroleum Corporation, Huaneng Group, State Grid Corporation and China Mobile, said Wang Qishan, secretary of the Communist Party of China's (CPC) Central Commission for Discipline Inspection (CCDI). SOEs have played an important role in China's public ownership economy and made great contributions to economic and social development, Wang said. However, problems have been uncovered in the administration of many SOEs through inspection, audits and petitions, Wang added. Some CPC committees at SOEs failed to run the Party properly and some officials disobeyed the law to seek promotion via bribery. Problems have also been found in cadre selection, selling and buying positions and forming of cliques, Wang said. Some officials of the SOEs abused their power, broke procurement and bidding rules, sought benefits for their offspring and ignored the anti-graft "eight point" regulation. "All these problems show poor awareness of the CPC spirit and responsibilities," Wang added. Inspectors have been told to find new ways to check up on key people, and key issues, spotting problems of universal significance in conduct, personnel selection and appointments, not just corruption. […] The first round will take 13 teams, each covering two SOEs. The number of enterprises under scrutiny is almost double those of previous tours. All major SOEs will be inspected this year as a precursor to SOE reform. Previous inspections led to the fall of over 70 executives in 2014. Executives of energy company Shenhua Group were found to have accepted bribes. China Unicom's chief "colluded with contractors and suppliers, using their power to seek money or sex". […] Inspections will begin immediately after Spring Festival. […] Apart from corruption, this round will also touch on the problem of how to stop state-owned assets from losing value. Zhuang blames many of these big losses on expansion overseas, which is difficult to police. ^ top ^

PLA to start one-year audit of incomes, expenses of all military personnel (Global Times)
2015-02-12
China's military is set to begin a one-year long audit covering all levels of the armed forces as the central government continues its efforts to crack down on corruption within the military. The Central Military Commission (CMC), chaired by President Xi Jinping, has recently announced its plan to conduct an investigation of all military personnel's income and expenses during 2013 and 2014, the People's Liberation Army (PLA) Daily reported Wednesday. Zhao Keshi, head of the PLA's General Logistics Department and leader of the audit group, said during the group's first meeting Wednesday that Xi has attached great importance to the audit, which will help improve the army's efficiency in utilizing financial resources. The investigation, which will cover all departments and ranks within the army, will be far-reaching and may involve conflicts of interest, Zhao said. The financial investigation will look into all cash flows, receipts and expenses that exceeded original budgets to uncover cases of embezzlement or so-called "little coffers," hidden caches of cash that corrupt personnel have siphoned from public funds. The CMC requires the army to make the investigation their top priority, and to regularly review its progress. Major-General Xu Guangyu, senior consultant to the Chinese Military Disarmament Control Council, a non-governmental organization, told the Global Times that the move has shown to the taxpayers the authorities' resolve in furthering the corruption crackdown, and ensuring better use of funds. "The investigation will dig out more tigers and flies (high- and low-ranking corrupt officials) still hidden from the current graft probe. It will also facilitate better financial management within the army to avoid the abuse of power and to build up financial discipline," Xu said. The PLA daily said in a commentary Tuesday that the army has achieved some success in the fight against military corruption after setting up a series of rules to curb the misuse of expenses and improve financial efficiency. In an earlier speech, Xi spoke about the importance of eliminating corruption among high-ranking military officers and said that it is forbidden for such officers to receive income other than their salaries, after the PLA announced investigations targeting 16 senior military officials, the PLA Daily reported. ^ top ^

Residents sue ministry over herbicide report in GM food (Global Times)
2015-02-13
A Beijing court has recently accepted a lawsuit application filed by three residents against China's Ministry of Agriculture for refusing to publish the test report of an herbicide used to treat genetically-modified (GM) soy beans. "We have accepted the case and the specific date of the hearing has yet to be determined," an employee at the Beijing No.3 Intermediate People's Court confirmed with the Global Times on Thursday. Yang Xiaolu, one of the three plaintiffs, told the Global Times that "after five months the court finally accepted our case, which was encouraging." Yang said that they filed the lawsuit because the ministry refused to publish the toxicology report of Glyphosate, a herbicide named "Roundup," which was introduced in the market by the US-based agriculture company Monsanto, to protect the company's "business secrets." "Glyphosate on soy beans would affect women's fertility, cause cancer, deform crops and harm the environment," Yang said. China has approved GM soy imports since 1997, with shipments reaching 58.38 million tons in 2012, the People's Daily reported in 2013. The three have been asking the ministry to open the test report since February 2014, but the ministry said that Glyphosate has been registered in China since 1988 and that the company refuses to open the report for privacy and business reasons. The ministry also cited a test it did on the herbicide and said it was safe. However the plaintiffs think the test was bogus. ^ top ^

The great China getaway: World's largest human migration begins as Chinese flock home for Lunar New Year (SCMP)
2015-02-12
Planes, trains, automobiles, even motorcycles - whatever the transport option, it's bursting at the seams. Hundreds of millions of mainland Chinese are now embarking on the world's largest annual human migration, squeezing in up to 2.8 billion trips to visit friends and family over the Lunar New Year holiday. Official government figures predict 2.4 billion road, 295 million rail and 47.5 plane journeys will be taken over the 40- day travel rush between February 4 and March 16. […] ^ top ^

How premier's brother rose to the top of one of China's most profitable industries (SCMP)
2015-02-13
After more than three decades in one of China's most profitable industries, Li Keming, the brother of Premier Li Keqiang, has finally left his role as the deputy director of the powerful state tobacco monopoly. He has been appointed as one of 28 chairmen of a supervisory body that oversees state-owned enterprises in a promotion that boosts his rank from departmental level to vice-minister level. The move also avoids a potential conflict of interest and embarrassment to his elder brother Li Keqiang, who is in charge of reforming the health system to bring down medical bills. Li Keming had been in charge of several departments at the tobacco monopoly, including economic operations, human resources and subsidiaries including China Tobacco International. The 57-year-old from Dingyuan, Anhui, joined the province's tobacco corporation in 1982. He worked his way up to become head of production with Anhui Tobacco Monopoly Administration in 1994. He was transferred to Beijing as a production division chief at the State Tobacco Monopoly Administration, one year after his brother Li Keqiang was appointed first secretary of the Secretariat of the Communist Youth League of China. After a year as deputy general manager of China National Tobacco Corporation's Hebei branch, Li was promoted to deputy and then head of the development and planning department. He became the deputy head of the State Tobacco Monopoly Administration in 2003 and remained there until the Ministry of Human Resources and Social Security announced his transfer on Wednesday. Tobacco control is difficult in China because the industry is state-owned and one of the biggest taxpayers. The industry is one of China's most lucrative, generating more than 1.05 trillion yuan (HK$1.3 trillion) in profit and taxation last year - up from 955 billion yuan in 2013, when it accounted for 6 per cent of national fiscal income. Yet tobacco kills nearly one million people a year on the mainland, where three out of 10 adults smoke. The anti-smoking lobby has long urged China to separate the government from the China National Tobacco Corporation - the world's largest tobacco maker - to better fulfil the nation's commitments to tobacco control. ^ top ^

Two-child policy cannot be forced upon Chinese parents (Global Times)
2015-02-13
A senior member of the political advisory body of North China's Shanxi Province has proposed that China should further relax its family planning rules by implementing a comprehensive two-child policy. Mei Zhiqiang, deputy director of the Family Planning Commission of the province, said "the policy has to ensure every couple will have two children." This directive-style suggestion, once released on social media, soon caused quite a stir. Some lauded Mei's suggestion, calling it an assertive way to rectify the maladjusted demographic structure. Others sniffed at it, criticizing it as another compulsory policy. Family planning has turned increasingly controversial in Chinese society in recent years. […] There is no doubt that preventing over 400 million births in about 35 years is a great contribution to the reduction of social pressure. However, the side effects are affecting Chinese society, as its aged population increases out of proportion to the young, and the gender ratio becomes severely unbalanced. These drawbacks have set alarm bells ringing, and authorities are seeking a readjustment. About one year ago, Shanghai devised a pilot project to implement a limited "two-child policy," which allows a local couple, if either is an only child, to have a second child. So far, the real effect of the new policy remains to be seen. Although 90 percent of women in their child-bearing years qualify, only 5 percent have applied to local authorities to have another baby. Considering the contentions both in academic and societal dimensions, whether the family planning policy needs to be calibrated, re-oriented or even abolished is a technical issue. A policy change like this requires factual scientific research and substantial evidence drawn from pilot projects. The authorities need to show both prudence and initiative in the process and pay as much heed as possible to the exercise of administrative power. […] The country needs to learn lessons from its first demographic re-arrangement in 1979. Mei's intention to remodel China's demographic framework may be earnest, but calling for a direct administrative intervention to enforce a new policy over this delicate issue needs to be reconsidered. It is better to carry forward the new policy through encouragement and incentives, which will be more easily accepted by the people. ^ top ^

 

Shanghai

Car crashes into US consulate in Shanghai (Xinhua)
2015-02-13
A car crashed into the guardrail of the Consulate General of the United States in Shanghai late Thursday, injuring a Chinese armed police guard. In a statement released early Friday, Shanghai police said the car, a black Toyota sedan with license plate registered in southeast China's Fujian Province, drove along the South Urumqi Road before it suddenly veered right to hit the guardrail of the side entrance of the consulate at 9:43 p.m.. Police nearby and consulate guards captured the driver. The driver, identified as Liu Daojie, 35, from Sanming City of Fujian Province, claimed he ran a large company in Fujian and felt someone wanted to kill him, so he needed to provoke an incident to draw people's attention. "I drove from Hangzhou to Shanghai today, and saw the place is guarded by armed police. So I crashed my car into it," the police statement quoted Liu as saying. The police statement said Liu showed confusion of thinking, and spoke incoherently. The police has basically ruled out drunk driving and drug driving. Further investigation is under way. ^ top ^

 

Guangdong

Mediation underway in Guangzhou Citizen watch labor dispute (China Daily)
2015-02-09
The labor department and trade unions in Guangzhou's Huadu district are actively mediating a labor dispute after a well-known Japanese company suddenly dismissed more than 1,000 workers there, Guangzhou Evening News reported. A public relations executive from Japanese watch maker Citizen said the company suddenly dismissed workers last Thursday because they did not want their normal operations to be affected during its last month. "But the company told the local labor department it would shut down the company a month in advance," the PR executive said in a statement to local media on Sunday. The statement did not reveal why Citizen shut down. The company will pay workers a month's salary as compensation, according to relevant laws and regulations, it said. The Huadu Labor Department confirmed Citizen had informed them and local trade unions a month ago that they planned to shut down the company, but did not tell affected workers. Now the department is mediating the dispute. Mediating workers' compensation after they are dismissed. The labor department will protect workers' legal rights and interests, according to a statement from the department on Sunday. Wang Songjiang, a local labor expert, said Citizen violated relevant labor laws and regulations and rules when it suddenly dismissed the workers, despite informing the labor department in advance. "The employers have to inform their employees at least one month in advance, as well when they want to dismiss them, or they will have broken the laws and regulations," he said. ^ top ^

Wang Rong elected chairman of Guangdong's political advisory body (Xinhua)
2015-02-10
Wang Rong, former secretary of Shenzhen's city committee of the Communist Party of China in south China's Guangdong Province, was elected chairman of the Guangdong Provincial Committee of the Chinese People's Political Consultative Conference (CPPCC), Guangdong's political advisory body, on Tuesday. Wang replaced Zhu Mingguo, who was put under investigation for "serious disciplinary and legal violations" in late November. Zhu was disqualified in December as a member of the CPPCC National Committee. The election was held at the third session of the 11th provincial committee of CPPCC. ^ top ^

 

Tibet

Tibet's impoverished population down 30 pct (Xinhua)
2015-02-12
Tibet's impoverished population has dropped by about 30 percent from 2013 by the end of 2014, the region reported Thursday. Some 130,000 people in Tibet were lifted out of poverty in 2014, said Hu Xinsheng, head of the Tibet Poverty Alleviation Office. Those living in poverty decreased from 830,000 in 2010 to 320,000 in 2014, the proportion of people living in poverty in the region's farming and pastoral areas is now 13 percent, compared with 34 percent in 2010. Hu said Tibet had channeled 1.77 billion yuan (288.6 million U.S. dollars) to support poverty reduction efforts in 2014, up 13 percent year on year. This year 1.88 billion yuan will be invested by the region to lift another 80,000 people out of poverty, he said. The nation's poverty threshold is 2,300 yuan (375 U.S. dollars) a year for a household. ^ top ^

 

Xinjiang

China strengthens financial support to southern Xinjiang (Xinhua)
2015-02-12
China's financial regulators will increase policy support to southern Xinjiang to stimulate economic development and safeguard social stability, an official guideline said Thursday. Measures including deepening indirect fund-raising, expanding direct financing, promoting insurance, encouraging financial innovation and stepping up infrastructure will be adopted to benefit the west China region. The guideline was jointly released by the People's Bank of China and three state commissions respectively in charge of banking, securities and insurance sectors. The regulators will implement favorable monetary policies, such as differentiated required reserve, re-lending and rediscount to guide financial institutions to increase credit supply to south Xinjiang region, especially for agriculture and small firms. China's commercial banks should delegate more power to their branches in the region and improve tolerance to non-performing loans, under the condition that risks were well controlled, the guideline said. The guideline also encouraged state-owned banks to set up branches in counties of south Xinjiang where banks are inadequate and promoted the establishment of private banks in the region. Measures including expanding financing channels, encouraging agricultural insurance and improving financial circumstance could also be expected in the region. In addition, the guideline said the authorities should continue to strengthen efforts to crack down on terrorism-related money laundering. The multi-ethic southern Xinjiang is one of the less-developed regions in China, still plagued by a harsh desert environment and poor infrastructure. ^ top ^

 

Taiwan

Taiwan to charge leaders of last spring's 'sunflower' student movement (SCMP)
2015-02-10
The leaders of anti-China protests that angered Taiwan's legislature for weeks last spring will face charges of agitating the public and attacking police, officials said today. Student leader Lin Fei-fan and noted legal scholar K.C. Huang are among 22 people named in a lawsuit by the Taipei District Prosecutors Office for offences committed during the three-week occupation of Taiwan's parliament, which successfully blocked a controversial trade services pact with the mainland. Officials have not decided on what kind of punishment they will seek, although they did not exclude the prospect of jail. “We've submitted the suit to judges and are awaiting word from them on how to proceed,” said head prosecutor Chang Chieh-Chin. China regards Taiwan as a renegade province and has not ruled out the use of force to bring it under its control. The protests, nicknamed the "sunflower" movement, were the largest display of anti-China sentiment the island had seen in years. Students in the largely peaceful sit-in had demanded more transparency in pacts negotiated with China, Taiwan's largest trading partner. They had expressed anxiety over China's growing economic and political influence on the vibrantly democratic island, but stepped down after a concession by lawmakers to pass a uniform supervisory bill over all Taiwan-China trade pacts. Under Taiwan's China-friendly president Ma Ying-jeou, the two sides have signed a large number of agreements on everything from finance to tourism. The controversial Trade in Services Agreement, as the bill in question is known, remains deadlocked in Taiwan's legislature to this day. In a statement posted on his Facebook page, Huang said he would “calmly and bravely face and bear the consequences”, but that what he was accused of was “not a crime”. Lin did not respond to calls or a text message seeking comment. Notably absent from the suit is fellow student leader Chen Wei-ting, the fiery 24-year-old who became the public face of the protests. Chang said that some names of the accused had been left off the official statement and would not comment about Chen's status. ^ top ^

Cross-Strait contact unaffected by change of guard: mainland (Global Times)
2015-02-11
The resignation of Taiwan's mainland affairs chief Wang Yu-chi will not affect normalization of the cross-Strait contact mechanism, said a mainland official on Wednesday. Regular communication between the State Council Taiwan Affairs Office and Taiwan's mainland affairs committee was established during Wang's tenure. The mainland will not comment on the island government's personnel change, Ma Xiaoguang, spokesman for the State Council Taiwan Affairs Office, said at a press conference. Wang announced his resignation on Tuesday, taking responsibility for forcing his former deputy to quit in August over allegations that he had leaked official secrets. At a press conference announcing his decision, Wang said he felt sorry for the turmoil caused by the case involving Chang Hsien-yao. Wang's resignation came shortly after Taipei prosecutors said earlier on Tuesday that they would not indict Chang for allegedly leaking secrets to the Chinese mainland because of a lack of evidence. Expressing his disappointment, Wang said he disagreed with the prosecutors' view but had no choice but to respect it. Spokesman Ma said the mainland hopes to continue to communicate with Taiwan's mainland affairs committee on a planned visit by Zhang Zhijun, head of the State Council Taiwan Affairs Office, to Kinmen. The visit has been delayed, as both the mainland and Taiwan need to focus on the aftermath of the plane crash in Taipei on Feb. 4. Zhang was originally scheduled to meet with Wang on Feb. 7-8. However, Taiwan's mainland affairs committee claimed that the meeting's delay was linked to disagreements on a new flight path over the Taiwan Strait. At Wednesday's press conference, Ma said the M503 flight route was agreed upon through negotiations between the aviation authorities of the two sides, and that the mainland has made a gesture of good will in order to reach a deal. […] M503 was set within the Shanghai Flight Information Region instead of the Taipei region, and it maintains a safe distance from the Taipei region and will not affect the region's status quo, according to Ma. […] The new route is designed to relieve the pressure of increased flights around Shanghai and the Pearl River Delta in south China. […] Responding to a question whether Wang's resignation and the delayed Zhang-Wang meeting will affect the water channeling project from the mainland to Taiwan's Kinmen, Ma said both sides should continue working towards signing a deal to alleviate Kinmen's water shortage. As for the TransAsia Airlines crash, Ma said the mainland will maintain close contact with Taiwan to "reflect victims' relatives' reasonable wishes and appeals" and assist with compensation. Three mainland experts arrived in Taiwan on Sunday to participate in the investigation of the accident. ^ top ^

 

Economy

Steep plunge in China trade figures as imports sink almost 20 pc (SCMP)
2015-02-09
Mainland trade activity suffered a a worrying slump last month, new data has revealed, with unanticipated falls in exports and imports from a year ago signalling a slide in foreign and domestic demand. Total trade sank 10.8 per cent in January versus last year, dropping to 2.1 trillion yuan (HK$2.6 trillion). Exports fell 3.3 per cent to 1.23 trillion yuan, but it was a 19.9 per cent plunge in imports - the steepest in five years - that caught economists' attention. "This is far below market expectations," Steven Zhang, head of macro research at Morgan Stanley Huaxin Securities said. […] Last month's declines - which left the country with a record US$60 billion trade surplus - follows the mainland's slowest economic growth in 24 years and its first failure to hit the government's GDP growth target since 1998. The slide in imports is the sharpest since May 2009, when Chinese factories were slashing inventories in response to a worldwide trade slump triggered by the global financial crisis. Exports have not had a negative annual reading since March last year. China's general exports fell slightly by 0.9 per cent to 686.8 billion yuan in January, while its processing exports fell 11.7 per cent to 404.1 billion yuan, according to China Customs. The "good part" of the double-digit drop in imports was a fall in commodity prices, including crude oil, Francis Cheung, CLSA managing director of China-Hong Kong strategy said. "The bad part of it is weak demand," he added. China's exports to the European Union, its biggest trading partner, fell 4.4 per cent to 207.1 billion yuan in January, while its imports from the EU dropped 6.9 per cent to 115.9 billion yuan, according to China Customs. […] China's exports to the US rose 4.9 per cent to 216.2 billion yuan in January, but imports fell 9.3 per cent to 84.3 billion yuan. Trade with the Association of Southeast Asian Nations decreased 0.6 per cent to 257.1 billion yuan year on year. Exports soared 15.6 per cent to 168 billion yuan, but imports plunged 21.4 per cent to 89.2 billion yuan. ^ top ^

Mainland launches stock option trading (Xinhua)
2015-02-09
The Chinese mainland launched its first stock options on Monday, giving investors more tools to manage risks as the country's stock market showed signs of losing steam after gaining 53 percent last year. Shanghai Party Secretary Han Zheng and China Securities Regulatory Commission Chairman Xiao Gang opened the market for the option trading at the Shanghai Stock Exchange. The first day's trading involved transactions on about 18,800 contracts. Premium trade volume reached 29 million yuan (4.4 million U.S. dollars), according to statistics from the Shanghai Stock Exchange. "We hope the introduction of stock options will provide domestic investors diverse choices, promote product innovation and enrich trading strategies," said Huang Hongyuan, general manager of the Shanghai Stock Exchange. Huang said he expected the stock option would better reflect market sentiments and increase pricing efficiency. Option trading could accommodate the needs of insurance companies and pension funds, improving the structure of funds in the market, he added. The Shanghai Stock Exchange requires individual investors to have at least 500,000 yuan in their accounts to trade options, while institution investors must hold at least one million yuan. The benchmark Shanghai Composite Index rose 0.62 percent to end at 3,095.12 points as the stock option 50 ETF was introduced. […] Chen Dongwei, an analyst with CITIC Securities, said the introduction of the derivatives had given steam to banking, insurance and securities traders. […] "The risk-control tool will help improve stock market liquidity and boost investor confidence," said Qiu Yanying, chief analyst at V. Stone, a private fund. The Shumi Fund Research Center wrote in a note that the option would have little impact in the near term, but in the medium and long term, the option trading would develop more products and make "potential and gradual influences" on the valuations of blue chips. Chinese regulators have been trying to help individual investors better manage their risks by building a comprehensive derivative system. China introduced stock index futures in 2010 for investors to bet on future price movements. The Shanghai Stock Exchange will expand the scope of assets that the options can be bet on as it develops comprehensive arrangements of security deposits, according to a report from the exchange. ^ top ^

S.China Sea gas field has 100b cubic meter reserve (Global Times)
2015-02-09
China's first deepwater gas field in the South China Sea has proven reserves of more than 100 billion cubic meters, the country's largest producer of offshore gas, the China National Offshore Oil Corp (CNOOC) announced on Saturday. The Lingshui 17-2 field, which was discovered in September 2014 and is located 150 kilometers south of South China's Hainan Province, has been identified as a large-scale gas field, demonstrating that the South China Sea has extensive exploitable oil and gas resources, China Central Television (CCTV) reported on Saturday. The annual output of the Lingshui 17-2 field is expected to reach 3.5 to 4 billion cubic meters, Xie Yuhong, a manager with the CNOOC, was cited by CCTV as saying. "This figure is relatively conservative," Xie said. China consumed 180 billion cubic meters of natural gas in 2014, according to a report released by the China Petroleum and Chemical Industry Federation, a non-governmental organization, in January 2015. By the end of 2014, China's proven reserves of exploitable natural gas amounted to 37 trillion cubic meters, according to the Ministry of Land and Resources. Over 32 percent of the natural gas used by China in 2014 was imported and in 2013 the ratio was 31.6 percent, the report noted. China's increasing reliance on other countries for its natural gas is risky as the country cannot store huge amounts of gas, like it can with oil, and its gas supplies could be affected by changes in bilateral relationships, said Lin Boqiang, an energy expert from Xiamen University. The State Council in November 2014 urged the country to speed up the development of oil and gas extraction projects in the South China Seas in its five-year energy plan. "The majority of oil and gas resources in the South China Sea are in the form of deepwater reserves. The lack of deepwater exploitation technology was a key obstacle preventing China from conducting much extraction in this area previously," Lin said. The CNOOC has made technological breakthroughs in high-temperature and high-pressure drilling. The Lingshui 17-2 field is also the first significant deepwater gas and oil discovery made by the semi-submersible CNOOC 981 rig. ^ top ^

New China law targets tax avoidance offshore (SCMP)
2015-02-10
The mainland has stepped up its participation in the G20's fight against international tax avoidance by passing a law cracking down on the indirect sale of assets outside the country to avoid paying taxes. The law would affect investment companies, analysts said, adding it would also have a significant impact on Hong Kong, a major hub for cross-border deals involving the mainland. To strengthen global cooperation against tax avoidance, a law on tax on gains from the indirect sale of assets by offshore companies took effect last Tuesday, the State Administration of Taxation said on Friday. "This announcement is the latest policy of the taxation administration's proactive participation in the G20 base erosion and profit shifting action plan [against tax avoidance]," it said. Liu Jinghua, a Beijing-based tax partner at Baker & McKenzie, an international law firm, said the new rules "clearly indicate China will focus more on cross-border anti-avoidance enforcement". […] Patrick Yip, a national financial services tax leader at Deloitte Touche Tohmatsu, said the impact of the asset sales law would most likely fall on investment funds, including private equity funds and venture capital funds, which have investments on the mainland, as well as multinationals that restructured their mainland operations or sold mainland companies. The new law addresses cases where an offshore company indirectly sells an asset on the mainland by selling its stake in a vehicle located outside the mainland which owns the asset. Investors can abuse this indirect method by using a shell company to sell the mainland asset, and avoid paying mainland taxes by claiming the transaction took place outside the mainland. "Hong Kong is a common jurisdiction where the intermediate companies holding Chinese investments are established," Liu said. "The new rules would require more substance to be built into Hong Kong holding companies." The tax administration said the new law was an extension of a law passed in December 2009 that addressed the indirect sale of equities by offshore firms. […] "The new rules are seemingly more aggressive, and will significantly influence how cross-border mergers and acquisitions are conducted in China," Liu said. ^ top ^

RMB direct trading with foreign currencies tops 1 tln (Xinhua)
2015-02-10
Direct trading between China's RMB and foreign currencies reached 1.05 trillion yuan (170 billion U.S. dollars) in 2014, a report from China's central bank showed. Daily average direct transactions reached 10.2 billion yuan last year, 8.4 times more than in 2013, according to the monetary policy report for the fourth quarter released on Tuesday by the People's Bank of China. The RMB now trades directly with eight foreign currencies, including the Euro, Australian dollar and Singapore dollar. Growth of RMB direct trading has many advantages, including reduced exchange costs, improved price transparency and promotion of the internationalization of the RMB. ^ top ^

China imposes record anti-trust fine on Qualcomm (Xinhua)
2015-02-10
Chinese authorities have imposed a record fine of 6.09 billion yuan (994 million U.S. dollars) on mobile chip maker Qualcomm following an anti-trust probe, it was announced Tuesday. The National Development and Reform Commission (NDRC) said Qualcomm was found to have abused its market dominance, charging discriminatory fees in the Chinese market when licensing mobile chip technology. "Qualcomm's practices hampered innovation and technology development, harmed consumers' rights and interests, and violated China's anti-monopoly rules," according to an NDRC statement. The watchdog issued a fine of 8 percent of the company's revenue in the Chinese market for 2013, totaling 6.09 billion yuan, the largest anti-trust fine in China's history. The NDRC said it started the anti-trust probe in November 2013 and that the fine would stop the company's monopolistic practices, safeguard fair market competition and protect consumers' interests. It said Qualcomm improperly bundled unrelated licenses with baseband chip sales, forcing Chinese customers to pay for licenses they didn't need. San Diego-based Qualcomm said in a statement that it would honor the fine and modify its licensing practices. […] It cooperated with the probe and proposed a set of rectification plans, including not conditioning the sale of baseband chips on the chip customer signing a license agreement with terms that the NDRC found to be unreasonable or on the chip customer not challenging unreasonable terms in its license agreement. The NDRC said it welcomed the company's decision about investing in China and supported the company to charge a reasonable licensing fee for its technology protected by patents. "We are pleased that the investigation has concluded and believe that our licensing business is now well positioned to fully participate in China's rapidly accelerating adoption of our 3G/4G technology," said Derek Aberle, president of Qualcomm, one of the biggest makers of mobile phone chips. […] ^ top ^

China's annual consumer inflation hits 5-year low in January (SCMP)
2015-02-11
Consumer inflation on the mainland hit a five-year low last month, underscoring the economic slowdown and adding weight to calls for more monetary easing or stimulus to underpin growth in the world's second largest economy. The headline consumer price index (CPI) climbed 0.8 per cent year-on-year in January, the lowest increase since November 2009, the National Bureau of Statistics said yesterday. Food price rises easing to 1.1 per cent in January from 2.9 per cent in December were the main reason for this, the bureau said. The mainland's two stock exchanges rose by more than 1 per cent yesterday, led by financial firms, on speculation that lower inflation might trigger fresh liquidity injections. The People's Bank of China cut the reserve requirement ratio (RRR) for banks last Thursday for the first time since May 2012. HSBC Global Research economists said that besides falling energy prices and benign food inflation, core inflation also eased to a multi-year low, suggesting weak domestic demand. Economists with Nomura Securities Asia said the subdued CPI figures were distorted by the Lunar New Year holiday, which falls in February this year but was in January last year. But they said underlying disinflationary pressures had risen, with CPI inflation easing across the board, and that this was evident in producer price index (PPI) deflation. The PPI fell 4.3 per cent in January from a year earlier - compared to 3.3 per cent in December - to its lowest since October 2009, the NBS said. "Together with the weak trade data released over the weekend, which also points to weak domestic demand, pressures will increase on the People's Bank of China [for greater monetary easing]," HSBC said. In its report yesterday on fourth-quarter monetary policy, the Chinese central bank said action would be required if tumbling oil prices affected core inflation, but warned against "over-reacting to oil price fluctuations". […] ^ top ^

Shanghai FTZ relaxes overseas financing (Xinhua)
2015-02-13
Companies in the Shanghai Free Trade Zone may now borrow overseas without prior consent from authorities, the Shanghai headquarters of the People's Bank of China said on Thursday. Banks and securities brokers have also been allowed to finance overseas. Under the new regulation, companies in the Shanghai FTZ are no longer limited to borrowing Chinese yuan only. The scale of the financing has also been doubled to up to twice the company' capital. "Borrowing costs will be greatly lowered and may even be halved," said Wang Jianxin, deputy president of the FTZ branch of SPD Bank. ^ top ^

 

Mongolia

Fragile Mongolia (UB Post)
2015-02-12
The recent outrage in international media directed at Mongolia, sparked by the imprisonment of former SouthGobi Sands (SGS) employees for tax evasion, is proving just how fragile Mongolia's business reputation is. After Mongolia jailed U.S. citizen Justin Kapla and Philippine nationals Hilarion Cajucom Jr. and Cristobal David on January 30, international media giants such as Bloomberg, Fortune, and the Global Post delivered heavy blows against the sentencing of the defendants, one after another, telling Mongolia to stop jailing foreign investors if it wants investment. In contrast to the spotlight foreign media gave to this issue, the local media has been dismally quiet, with minimal coverage of the affair in daily newspapers and popular news websites. It seems like the story made headlines everywhere but the place it will impact the most. The Business Council of Mongolia and the U.S. Embassy in Ulaanbaatar released statements expressing their disapproval of the court's decision to jail the former SGS employees for up to nearly six years in prison. “According to practices in many other countries, as well as clearly defined articles in Mongolian taxation laws, tax disputes can be and usually are solved through civil proceedings. The Business Council of Mongolia regrets that this case has been considered a criminal case against above legislation, and that the defendants received very harsh sentences ranging from five years and six months to five years and 10 months of imprisonment in the correctional facilities under strict regimens in Mongolia,” said the Business Council of Mongolia. “Several embassy officials attended the trial, including Ambassador Piper Campbell, and noted that there were interpretation problems during the trial. […] The Business Council also noted that the imprisonment will hinder Mongolia's goal to attract foreign investors and fight Mongolia's shrinking economic growth. […] It is difficult to quantify Mongolia's lost monetary and business opportunity as a result of all of this bad press, but it might already be having an effect on U.S. aid to Mongolia through the Millennium Development Corporation. Jackson Cox, chairman of the American Chamber of Commerce in Ulaanbaatar, has called on the U.S. government to cease discussions of future aid until American citizen Justin Kapla is freed. […] So far, the international media have only voiced the concerns of foreign investors on the issue, as the opposing side, the Mongolian government, has determinedly dodged questions about the case. […] Mongolia really cannot afford to send mixed messages to foreign investors and lenders with foreign investment down more than 80 percent in the last three years and the MNT exchange rate falling by over 30 percent. GDP growth slowed down to a little over seven percent last year, down from 17.5 percent in 2011, and the inflation rate is still in the double digits. […]. ^ top ^

 

Mrs. Petra Salome Merki
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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