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
  4.5-7.5.2010, No. 318  
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DPRK and South Korea


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Foreign Policy

Get used to PLA navy, says general (SCMP)
China's neighbours should get used to the presence of the Chinese navy in Asian waters, a retired People's Liberation Army general said in response to Tokyo's protest over a vessel chasing one of its surveying ships out of an area under dispute - which has caused an uproar in Japan.

"China's long absence in its exclusive economic waters over the past decades was an abnormal historical accident and now it is just advancing to normal operations," Xu Guangyu said in response to Japan's protest over the latest incident earlier this week. "We kept silent and tolerant over territory disputes with our neighbours in the past because our navy was incapable of defending our economic zones, but now the navy is able to carry out its task." Xu said the maturing of the Chinese navy was driven by its continuation of national interests abroad over the past decade, including its oil investments in Africa and energy transport route from the Middle East and Africa, as well as its duty to protect Chinese nationals. "We have never expanded our territory or invaded other countries; we have just been protecting our national interests," he said. "The Chinese navy would not enter waters of Guam or the Strait of Malacca except to go through it for overseas missions such as anti-piracy or maritime trade."

Tokyo reacted angrily to one of its oceanographic survey vessels being chased by a Chinese vessel on Monday and lodged a formal complaint with Beijing. The incident occurred in the East China Sea about 320 kilometres northwest of Japan's Amami Oshima Island. A Chinese vessel identified as the Haijian 51 allegedly interfered with the work of the Japanese ship the Shoyo, according to the Japanese coastguard. Coastguard officials claimed the Chinese ship had chased the Shoyo for hours, demanding that it halt its research and leave China's exclusive economic zone.

The exact line of the maritime boundary between China and Japan is in dispute - partly because of vast deposits of natural gas that are believed to lie beneath the seabed in the region - and never before had a Chinese vessel forced a Japanese ship to leave the area. Coming so soon after a series of incidents involving the Chinese navy and their Japanese counterparts, there is concern that Tokyo is facing a more aggressive and determined policy in the region from Beijing. "This is a surprise," said Jun Okumura, a senior adviser with the Eurasia Group, adding that while he would have been inclined to write off incidents last month - the buzzing of a Japanese warship by Chinese navy helicopters and a fleet of 10 Chinese naval vessels found operating in international waters close to the islands of Okinawa - this latest confrontation raises the stakes. "It is hard not to see a pattern now because this involves two different institutions of the Chinese government, the military and a civilian surveying vessel," Jun said. "It is even more surprising given that there is such an unprovocative regime in Japan at present."

Some Japanese media outlets said the incidents "call into question the value of the diplomatic stance toward China taken by the administration of Prime Minister Yukio Hatoyama". Some media also suggested that the failure of Hatoyama to take a stronger line with President Hu Jintao in Washington on April 12, after the first incident involving a Chinese helicopter approaching a Japanese vessel, may have emboldened the Chinese military. Shanghai-based military observer Ni Lexiong said the navy's aggressive attitude was also aimed at easing domestic conflicts. "The Chinese public prefers Beijing to be tough when dealing with all kinds of foreign affairs whenever our country is strong or weak," Ni said. "The navy's aggressive presence will help Beijing win more support from the public amid the current worsening social unrest."

Zhang Yunling, professor of international relations at the Chinese Academy of Social Sciences, said both Beijing and Tokyo would not hype up the incidents. "After all the time and effort Japan took in deciding to co-operate with China on northeastern Asia, they will not want bilateral ties to be spoilt by the incidents," Zhang said. "Even if Hatoyama were to meet Chinese leaders, these naval incidents would probably not be on top of his agenda." Japanese media reported that Hatoyama would visit the World Expo in Shanghai on June 12, designated by expo organisers as "Japan Day". Professor Liu Jiangyong, an expert on Sino-Japanese relations at Tsinghua University, said "these incidents were probably used by media and politicians in order to sway the government's defence policies". ^ top ^

US seeks bigger role for China in Afghanistan (China Daily)
A high-ranking US official has expressed hope that China will contribute more to the reconstruction of war-torn Afghanistan. Washington wants Beijing to "coordinate more" with its efforts in Afghanistan and Pakistan, US Assistant Secretary of State for South and Central Asian Affairs Robert Blake said on Tuesday after completing a two-day visit. He made the remarks about a month before the international coalition forces' planned offensive against Kandahar, considered the spiritual home of the Taliban, in southern Afghanistan. Blake, who discussed the South Asian situation with scholars and officials at the Ministry of Foreign Affairs, said: "China has an important stake in the success of these (international) efforts. And we welcome the opportunity to discuss ways China can contribute more both through investments and through assistance of various kinds." He did not specify the areas in which Washington hopes Beijing will do more. Both NATO and Kabul have repeatedly called upon Beijing to reopen its 90-km border - which China sealed after 2001 - so that it can serve as a route for logistics supplies.

[…] "The US hopes China to be as deeply involved as it can," said Hu Shisheng, a senior scholar of South Asia studies at the China Institutes of Contemporary International Relations. "It's in accordance with (US President Barack) Obama's strategy, which seeks to involve regional powers in Afghanistan," he said. Hu, who had a discussion with Blake on Monday, said the US official suggested that Beijing provide more aid in agriculture, education and training of officials. "He (Blake) also noted that China and the US are yet to set up a regular information exchange mechanism on Afghanistan," Hu added.

China has been active in the reconstruction of Afghanistan since the US invasion in 2001 following the 9/11 terror attacks. China Metallurgical Group Corp and China's top integrated copper producer, Jiangxi Copper Corporation, in July started a project in Logar, a province southeast of Kabul, to explore the vast Aynak copper mines. The $4 billion investment is the biggest in Afghanistan's history. China has also helped Afghanistan train dozens of minesweepers over the past year. In late March, Beijing signed three deals with Kabul when Afghan President Hamid Karzai paid a state visit. They cover economic cooperation, technical training and the granting of preferential tariffs for Afghan exports. Despite these efforts, Hu said China can do more in reconstruction, and pointed to India as an example. India is one of the leading donors to Afghanistan, giving more than $1.2 billion since 2001, according to a recent DPA report. China has offered more than $131 million in assistance to Afghanistan since 2002, Xinhua reported in March. "China should actively contribute to helping Afghanistan with people's livelihood, economic growth and social stability," Hu said, noting it is in China's interests to do so. ^ top ^

World hails opening of Shanghai Expo (Global Times)
The 2010 Shanghai World Expo opened on Friday night, attracting the attention of the world and international participation and earning heartfelt congratulations. Some 20 world leaders attended the opening ceremony and toured the Expo, including French President Nicolas Sarkozy and South Korean President Lee Myung Bak.

Chinese President Hu Jintao met Prime Minister of the Netherlands Jan Peter Balkenende in Shanghai Saturday. Balkenende spoke highly of the opening ceremony and fireworks and said he was impressed deeply by the China National Pavilion and Sichuan Pavilion he visited Saturday morning. While meeting European Commission President Jose Manuel Barroso in Shanghai Saturday, President Hu thanked the EU for its participation in the Shanghai World Expo, the organization's first presence at a World Expo held outside the EU countries. Barroso said the ceremony was a great event that showcased a modern China and a China that was much respected. He also said the Expo would be conducive to a stronger common understanding between China and the EU.

Canadian Prime Minister Stephen Harper issued a statement Friday, saying he expected the Canada Pavilion would show Canada as a modern, democratic and pluralistic country. "The Expo itself will provide us with an opportunity to build stronger economic, diplomatic and cultural ties with China as we showcase our country, our arts and culture, and our values," he said. Expecting millions of visitors from around the world over the next six months, he said: "Let us seize this opportunity to promote our country and build closer ties with our trading partners."

Rafal Baniak, undersecretary of state in Poland's ministry of economy, said Saturday at a ceremony at the Shanghai Expo to open his country's pavilion that the Polish people wanted to give the world a better understanding of Poland's economic development through the Expo.

He added that Poland wished to foster closer economic ties with China.

Chairman and CEO of the U.S. Greater China Corporation, John W. Allen, told Xinhua in an email interview after the opening ceremony that "like the Beijing Olympics, the Shanghai Expo is bigger and better than any previous such event and will definitely set the standard for the future." Allen echoed Chinese President Hu Jintao's remarks that the Expo was a "showcase of the best achievements of human civilization." "It serves as a beacon for peace rather than a capacity for war," he said, "The Shanghai Expo will probably become an even hotter topic among Americans as China has once and again stunned the world by showcasing its might and skills of handling such big events."

In an interview with Xinhua, Milan's Mayor Letizia Moratti, whose city will host the next World Expo said: "Shanghai Expo will be a monumental exposition, with many magnificent buildings created by architects from all over the world." "We have many things to learn from China's ability to quickly innovate, open to the world and adopt the best technologies," she said while extending her warm congratulations on the opening. ^ top ^

Chinese President holds talks with Mongolian president (Global Times)
Chinese President Hu Jintao held talks with visiting Mongolian President Tsakhia Elbegdorj in Shanghai on Saturday. Hu said China highly appreciated Elbegdorj's efforts and commitment to promoting the China-Mongolia relations. Elbegdorj expressed his sympathy to China for the casualties and damages caused by a 7.1-magnitude earthquake in Yushu of northwest China's Qinghai Province last month and his confidence in the recovery and reconstruction of the quick-hit area. The talks were held in the Shanghai International Convention Center. Elbegdorj, on a state visit to China from April 28 to May 3, attended the opening ceremony of the Shanghai World Expo on Friday evening. ^ top ^


Domestic Policy

Dozens killed and thousands of homes damaged by freak weather (SCMP)
At least 39 people were killed when a tornado, hail storms, gale-force winds and torrential rains hit southern China, damaging thousands of homes and destroying crops. The storms hit Chongqing as well as neighbouring Guizhou and Hunan provinces overnight, leaving more than 190 people injured. State television showed collapsed homes, uprooted and downed trees, landslides and partially flooded roads in Chongqing, where 29 died and more than 70,000 people were displaced, according to the civil affairs ministry. The death and injury tolls rose throughout the day, as officials worked to tally the total number of dead and injured. "Tornados never happened here in the past - this is the first time," said Liu Fang, a local township official in Liangping county, one of the hardest-hit areas of Chongqing. The injured were being brought to local hospitals while tents were being set up for those whose homes were destroyed, Li said.

Up to 157 millimetres of rain had fallen in parts of the region - stricken by a severe drought since last year - from late Wednesday to yesterday afternoon, the China News Service said. The storms were caused by a heatwave from the south colliding with a northern cold front. An official in Xinmin township said older houses suffered very serious damage, while new brick homes were also damaged. According to the People's Daily, as many as 1,000 homes in six towns in Chongqing had at least partially collapsed in the storm, while thousands of others were damaged. Power was cut in several areas, many roads in the region were blocked by flooding, and bridges also suffered damage, the report said. The cost of the damage in the six towns was expected to surpass 20 million yuan (HK$22.7 million), it added, citing preliminary estimates. In Guizhou, six died in rain-triggered landslides while four were killed in Hunan, Xinhua reported. ^ top ^

Premier Wen says more efforts needed to cut emissions, conserve energy (Global Times)
Chinese Premier Wen Jiabao on Wednesday called for more efforts to cut emissions and conserve energy to meet the country's target set by the 11th Five-Year Plan. According to the plan laid out in 2006, China will cut its per unit GDP energy consumption by 20 percent compared with 2005 levels by the end of 2010 The task of fulfilling the goal was still tough, Wen said at a State Council meeting, adding that this year would be particularly difficult as the first quarter had already seen rising energy consumption per unit of gross domestic product (GDP) in the major industrial sectors.

In the first three months, six major industries, including steel, power and non-ferrous, saw a 3.2 percent growth in energy consumption per unit of GDP, Wen said. This came after a decline for the previous four years to 2009 of 14.38 percent. "We can never break our pledge, stagger our resolution, or weaken our efforts, no matter how difficult it is," Wen said. Wen called for stricter control over high-energy-consuming and high-polluting sectors. More efforts were needed to reduce use of outdated capacity and curb new projects in industries with overcapacity, he said.

This year, China will phase out 10 million kilowatts of small coal-fired power generators, 25 million tonnes of outdated capacity in iron-smelting industry, 6 million tonnes in steel sector and 50 million tonnes in cement sector, Wen added. The government will further promote energy-saving lamps and intensify efforts to lift energy efficiency in steel, power, non-ferrous, and other high-energy-consuming sectors, Wen said. More publicity campaigns to promote energy saving and emission cuts were needed, he said. ^ top ^

China raises 637 mln USD for quake-hit Yushu (Global Times)
China had raised 4.349 billion yuan (637 million US dollars) of donations in money and materials for quake-hit Yushu as of Tuesday, according to the Ministry of Civil Affairs. The donations included 3.66 billion yuan and quake-relief materials worth 686 million yuan as of 4:00 pm, said a statement released by the ministry. The post said 635 million yuan, including 79 million yuan and materials worth 556 million yuan, had been channeled to the quake zone.

It said 69,353 cotton-padded tents, 143,854 cotton-padded coats, together with other quake-relief materials, had been delivered to Yushu. At least 2,200 people died and more than 100,000 were left homeless when the 7.1-magnitude earthquake hit the Yushu prefecture, Qinghai Province on April 14. ^ top ^

Watchdog urges universities to tackle corruption (SCMP)
Amid widespread public dissatisfaction with the education system, the Communist Party's anti-corruption watchdog has urged universities and colleges to step up efforts to crack down on corruption, state media reported yesterday. Rampant financial corruption - which often takes the form of shady deals in infrastructure projects or the illicit trading of university degrees - has tarnished the image of many mainland universities in recent years. University officials are also fast gaining a reputation for being as bureaucratic and corrupt as government officials. Plagiarism is also rife in academia, curtailing research quality and violating academic ethics. State media has reported that professors and students often copy and paste material they find on the internet in their academic papers and many pay to have papers written and published as they seek pay rises and promotions.

Wang Liying, who is in charge of the education sector at the Central Commission for Discipline Inspection, told an anti-corruption conference that the leadership at universities and colleges must clean up corruption - particularly in the areas of finance, admissions and the contracting of infrastructure projects - The Beijing News reported. It quoted prosecutors in Beijing's Haidian University district as saying that financial irregularities often occurred in finance and procurement departments, whereas embezzlement often occurred at property estate management and finance offices. Wang said: "The leadership at universities and colleges must step up supervision to ensure the correct use of power."

Since 2005, more than 20 top university officials in Hubei alone have been jailed or given administrative punishment for corruption. Last year, two senior officials, an executive deputy president and a party deputy secretary at Wuhan University, a leading mainland institution, were arrested for taking several million yuan in bribes in connection with several campus projects. In the past three years, corruption cases in the education sector in Beijing have doubled and more than half of the cases involved admissions and personnel, The Beijing News said. "Our universities are more and more bureaucratic and many decisions involving personnel, finance or resources are in the hands of a small number of top officials," said Li Chengyan, head of Peking University's Anti-corruption Research Institute.

For mainland universities to rival the standards of universities abroad, reform in the education sector must be carried out to make universities more independent and accountable to academics and students, rather than government officials, Li said. Renmin University president Ji Baocheng last year lashed out at the wholesaling of university degrees by mainland universities, saying "bureaucratic departments, not universities, have the largest number of PhD holders in China" as a result of officials buying their way to fast-tracked academic qualifications. ^ top ^



Shanghai World Expo examines water's significance to cities (SCMP)
"What is the significance of water to a city?" The Shanghai World Expo is trying to answer the question. "With the (World Water Council) pavilion, we want to show the connection between the city and where water comes from. Better city or better life, from what we see, is directly connected to good water," said Director General of World Water Council Ger Bergkamp in an exclusive interview with Xinhua.

The World Water Council (WWC) Pavilion is inside the International Organizations Pavilion at the Shanghai World Expo. Ger Bergkamp said it is the first time the WWC has had a pavilion at the World Expo, even though WWC organizes the World Water Forum every three years.

[…] "What the pavilion shows is how water affects our life, and how important water is for avoiding disasters, and for having food and producing energy," Bergkamp said. In his view, China is facing challenges when it comes to water, with a growing population and changes in lifestyles necessitating more and more water. "At the same time, we also see that China is not alone. There are many countries that also have very similar problems. We need to solve these problems together. No country alone can solve all the problems," he said. […] "We hope our young visitors will learn in their early life about how important water is," Bergkamp said. He said the Chinese government is very much aware of the challenges relating to water.

"What is needed is more awareness and willingness by people and businesses to change their behavior," he said. […]. ^ top ^

Interview: Shanghai expo site to transform city skyline for the better in time (Global Times)
Shanghai's hosting of the World Expo marks a momentous occasion in the city's history and one that will ultimately improve the lives of local residents in the long-term, according to two of the main principals who transformed Vancouver's waterfront following the Canadian city's hosting of Expo '86. While the eventual redevelopment of the Shanghai expo site straddling both sides of the Huangpu River will forever change the city's skyline, the transformation will take years to ensure the land's proper usage and the quality of the buildings and infrastructure constructed there, say architect Stanley Kwok and developer Terrance Hui.

The two Vancouver residents, both Hong Kong immigrants, are key figures in the rise of Concord Pacific Development, a company established in 1987 by billionaire Li Kashing, then the principal stakeholder, with the purpose of acquiring and developing the expo land. With the successful purchase of 204 acres along the north shore of False Creek, about one-sixth of downtown Vancouver, for a reported 320 million Canadian dollars, today the former industrial land has been transformed into a city showpiece with parks and more than 40 residential towers that house thousands of residents. Hui, the forty-something tycoon who purchased Li's interest in Concord Pacific and now has mega-projects under development in Toronto and Calgary, among others, says even 20 years after buying the expo land, the company was "only 70 percent through the site." "I think it is a positive that you take a reasonable amount of time to adjust to the market. It is a large mass of land," say Hui who immigrated to Canada in 1985. […]

Hui is confident great things will come from the development of the Shanghai expo land, but add the city planners really needed to create their vision looking to the city' s future needs "If they could think out of the box, because they have to think of the next century, not just what's happening today”. "The main thing is traffic, not only traffic within this development. It's also how this development relates to the rest of the city. And also in their situation, straddling the Huangpu River, bringing the two pieces of land together will create a lot of opportunity for Pudong and Puxi to link together as one rather than being two separate entities." "The site is a very good location," Hui says of the Shanghai expo land. "They share the same advantage (as Vancouver) in waterfront. Waterfront real estate is always desirable if you plan it properly." "Shanghai has the benefit of international architecture. Every building is completing the showcase.". ^ top ^

Expo attendance falls short (Global Times)
Attendance at the World Expo in Shanghai, in its first four days since opening, has fallen short of expectations, adding new concerns for organizers who have been already troubled by complaints about long queues and a lack of affordable food options. Tuesday was the first unofficial day of the Shanghai World Expo when visitors who hold standard tickets or appointed, unused day tickets could visit the Expo Park. A total of 146,100 visitors showed up at the park Tuesday, slightly more than Sunday. Organizers forecast an influx of 70 million visitors, mostly Chinese, over the next six months. To achieve this target, an average of 380,000 people need to visit the site daily. So far, the highest attendance was on Sunday, with 215,000. On Monday, the last day of the long public holiday, only 131,700 people, the lowest level so far, showed up at the site. Although officials said about 1,050,000 tickets for the three opening days had been sold, only half of that number showed up.

Speaking at Sunday's press conference, Hong Hao, director-general of the Bureau of Shanghai World Expo Coordination, attributed the lower-than-expected number of visitors to the high temperature and the fact that many visitors holding appointed day tickets postponed their visit for fear of a big crowd during the public holidays. Despite the fewer than expected visitors in the first three days, Hao expected more visitors to arrive in the coming days. […]

In the past, the event has not always guaranteed a financial success for its host country. The 1984 expo hosted by New Orleans declared bankruptcy during its run, the 1992 Seville Expo in Spain was said to post $300 million deficit, but Aichi Expo in Japan reaped a profit of 5 billion yen ($53 million). Luring visitors to the event is always a daunting task for any organizer as the sales of tickets can generate the biggest revenues. An online poll conducted by Tuesday showed that more than 64 percent of 43,350 respondents were not planning to visit Shanghai during the Expo. […]

Alongside concern about falling visitor numbers, forgery issues also pose a challenge to organizers. The Shanghai-based Xinmin Evening News reported Tuesday that fake Haibao - the official mascot of the expo - has hit the market days after the opening of the largest-ever expo in history, mostly targeting children and foreigners. The public are warned to avoid buying fake ones because they may pose risks to their health. Roadside vendors are seen peddling fake Haibao to visitors in a picture published by the newspaper. According to the paper, fake Haibao has no anti-fake certificate, but it is still popular among the public. […] Chen Tao, a member of the criminal law committee of the Beijing Bar Association, told the Global Times that in an effort to remove fake Haibao from the streets, the administration departments for industry and commerce and quality inspection should enhance their supervision over the infringement of the right of the Expo symbols. And the public is responsible for reporting fakery to the competent authorities.

Although visitor numbers are not as high as expected, some popular pavilions are still crowded. The Chinese pavilion still needs a reservation in order to visit it, and visitors were in a long queue at around 10 am Tuesday. The Taiwan Pavilion, which also requires a reservation to enter, sold out its 4,000 tickets in half an hour. […]. ^ top ^

Puxi site of expo's core theme fails to draw crowds (SCMP)
The abiding image of World Expo 2010's first three days in Shanghai has been of sizzling visitors queuing for hours on end to get into the most popular exhibits. But the multibillion-yuan fair has also been a classic tale of two cities. Across the river from the mobbed national pavilions, the Puxi half of the site has been an oasis of relative calm. Yesterday, crowds on the west bank were sparse and queuing times were short - despite an impassioned plea from expo director Hong Hao the previous day for more visitors to cross the river. "Puxi has 18 commercial pavilions, it has the Urban Best Practices Area," he said. "I have already been over to that side for a look. Some of the pavilions on that side are really quite marvellous with very strong interactive elements... I suggest that everyone should visit the Puxi pavilions first."

The lack of interest is particularly vexing for organisers as the Urban Best Practices Area was intended to showcase the expo's core theme, "Better City, Better Life". The zone, located in the northeast corner of the Puxi site, contains pavilions from 60 cities depicting urban development and presenting solutions for transport, environmental protection and promoting a better quality of life. But pavilion volunteers in the zone yesterday admitted their visitors were few and far between, with little need to queue. Some pavilions are seeing just 200 visitors a day - a sharp contrast to some country pavilions, which can receive up to 100,000. The exceptions are the pavilions highlighting urban practices in Taipei and Hong Kong, which are both receiving about 3,000 visitors a day. Rudy Chau, a Hong Kong visitor, said he had seen two foreign cities' urban practices pavilions after Hong's comments persuaded him to visit Puxi. "The Urban Best Practices Area's location is so remote," he said. "I think it was marginalised and labelled unimportant at the beginning of the design stage." Chau said a lack of clear directions on maps and at the site made it difficult to find the pavilions he was interested in.

Wang Yi, an office worker from Shanghai, said she was impressed by the "advanced" interactive elements in Hong Kong's exhibit. "I watched a short video telling a story about a Hong Kong citizen getting medical help with... a smart card," she said. "The card saved her a lot of time and was very convenient." She said she planned to visit more city pavilions. However, her interest in urban issues was not shared by many visitors. Some rushed through the pavilions in just a few minutes and could not recall any highlights. […]

The lack of interest in the Puxi section is just a small part of expo organisers' woes. Visitor numbers for the whole park yesterday were down on the previous two days. Just 131,700 people passed through the gates, almost 100,000 fewer than on Sunday. The figure only just limped past a third of the 380,000 daily average the fair needs to reach its goal of 70 million visitors over its 184-day run. Last night, Hong declined to speculate on the reasons for the lower-than-expected attendance. "We are still investigating the situation," he said. ^ top ^



Tsang: I have still not decided whether to vote (SCMP)
Chief Executive Donald Tsang Yam-kuen twice refused yesterday to commit to voting in this month's by-elections, but said he would "give an account to the people" once he had made up his mind. Normally on election day, the chief executive poses for the media at a polling station early in the morning and urges the public to vote. Both Tsang and the administration have said they are only organising the May 16 by-elections because they are duty-bound by law. They believe the by-elections have been deliberately engineered.

The by-elections follow the resignations of five lawmakers from the Civic Party and the League of Social Democrats who are seeking re-election on a shared platform calling for genuine universal suffrage and the abolition of functional constituencies. Such a move, the legislators say, amounts to a de facto referendum on the issue, sending a clear message to both the administration and Beijing. Earlier this year, the central authorities said the move was a blatant challenge to Beijing's authority, leading many Beijing-friendly political groups to boycott the by-elections.

In a question-and-answer session in the Legislative Council yesterday, Democratic Party lawmaker Andrew Cheng Kar-foo said the promotion material for the by-elections was hardly eye-catching, with no appeal to the public to vote.

"You are always saying that with political reform, we must walk forward," Cheng said. "But if you aren't even willing to walk to the polling station, how can you expect us to have confidence in you to strive for real universal suffrage for us." Tsang replied: "This time, the by-elections are very different... a lot of people think this is an abuse of the election procedures and a waste of public resources. "So I feel that if I go to vote this time, I must consider it carefully. I have not made a decision yet but if I decide with these elections that I go to vote, or I don't go to vote, I will definitely give an account to the people."

Independent lawmaker Cyd Ho Sau-lan also questioned Tsang's sincerity in pushing forward democratic reform when he was not even committed to voting. "A lot of civil servants are worried that if they are caught voting, they will be tagged, and suffer the consequences later... unless you state clearly you will vote, you cannot extinguish this white terror." Tsang said public servants were free to decide whether to vote. Secretary for the Civil Service Denise Yue Chung-yee said she had 100 per cent confidence in civil servants thinking independently when deciding whether to vote. The minister did not say if she would vote. Leung Chau-ting, chairman of the Federation of Civil Service Unions, said he did not believe that comments by the chief executive or other high-ranking officials would affect the decisions of most civil servants on whether to vote. "The by-elections have become a heated topic of discussion in our offices. I think most colleagues will make their choices by themselves. But senior civil servants, such as department heads, may fear that their promotion prospects will be affected if they are seen stepping into polling stations," Leung said.

A University of Hong Kong poll shows that only 44 per cent "definitely will" or "most likely will" vote, with a one-point increase from the first survey conducted last month. Pollster Dr Robert Chung Ting-yiu said the results translated into a likely turnout of between 22 per cent and 29 per cent, taking into account that many people responded positively to a survey but would not necessarily act in the same way. However, in Kowloon West constituency, there was an increase of five percentage points, with 47 per cent saying they were likely to vote. Respondents who said they would vote for Pamela Pak Wan-kam, the partner of lawmaker Paul Tse Wai-chun, increased by five percentage points, to 10 per cent. ^ top ^

Tsang's team may not vote in by-election if consensus reached (SCMP)
Chief Executive Donald Tsang Yam-kuen may announce that his team of political appointees is not voting in the May 16 Legco by-elections, if a consensus is reached among his ministers and aides over their intentions. But pan-democrats and some government allies warned that on top of setting a bad precedent for the government's traditional stance of encouraging turnout in elections, such moves could be a threat to people's right to vote.

A pan-democrat politician yesterday said a political appointee had revealed that Tsang is to announce soon that his team of ministers, undersecretaries and political assistants would stay away from polling stations. But a person with knowledge of the situation said any suggestion that Tsang had ordered his officials not to vote was groundless, adding that whether to vote or not, and who to vote for, would be left to political appointees. "There exists no question about the chief executive affecting people's voting intentions under duress," the person said. But the person would not rule out the possibility of an announcement being made if a consensus to not vote was reached among the appointees.

Tsang last year announced a "voluntary" pay cut for political appointees after they reached an agreement on the issue, despite some privately complaining that they had no choice but to follow the lead of their boss. Electoral laws prohibit "the use of force or duress" against anyone "to induce him to vote or not to vote at an election". In particular, the law warned that "persons in position to exert pressure and influence on others", such as superiors over subordinates, "should be careful not to breach the provisions". A spokesman for the Chief Executive's Office reiterated Tsang's position that the election - which he described as "a deliberately engineered one" through the resignation of five pan-democrat lawmakers to trigger what they see as a de facto referendum for universal suffrage - has a "different texture" than a normal election.

Pan-democrat lawmakers vowed to demand an explanation from Tsang today when he appears in a Legco question-and-answer session. Democratic Party chairman Albert Ho Chun-yan said a "dangerous precedence" would be set if the Tsang team announced it would not vote. He said that even if the government said political appointees had voluntarily reached a consensus to not vote, they might still have been intimidated. Miriam Lau Kin-yee, chairwoman of the Liberal Party whose leadership has decided not to vote in the by-election on the grounds that it was billed as a referendum rather than a normal by-election, nonetheless urged Tsang to "let his team members decide for themselves" because they had a right to vote. But Ip Kwok-him, of the Democratic Alliance for the Betterment and Progress of Hong Kong, and Wong Kwok-kin of the Federation of Trade Unions, said they would support any moves by political appointees to announce they would not vote. Both Secretary for Food and Health Dr York Chow Yat-ngok and Caspar Tsui Ying-wai, political assistant to the home affairs secretary, denied the government has asked them not to vote. But Tsui said that he told Secretary for Home Affairs Tsang Tak-sing of his voting intentions because he was a member of the DAB. He declined to reveal his intention. ^ top ^

Beijing warns against another reform veto (SCMP)
In an open appeal for pan-democrats to support the government's constitutional reform package, Beijing's representative body in Hong Kong warned yesterday of a lose-lose situation if the Legislative Council vetoed the proposals again. Li Gang, deputy director of the central government's liaison office - in a rare speech on political reform - urged lawmakers to act "bravely" and "responsibly" to reach consensus. He said passing the package would "create favourable conditions for realising the universal suffrage timetable". Chief Secretary Henry Tang Ying-yen also warned lawmakers against walking a "road of no return". Both were speaking at a seminar organised by the Alliance for Constitutional Development, a coalition of Beijing-friendly groups. Pan-democrats dismissed their remarks as merely stating the official line, saying that if the government wanted them to compromise it would have to do so too.

Li's speech follows a South China Morning Post report yesterday stating that Beijing was considering setting out the path to universal suffrage, including reform for the 2016 Legco election on condition that the 2012 package was passed. The Alliance for Universal Suffrage showed signs of being willing to compromise yesterday, suggesting it would consider supporting electoral proposals for 2012 if the central government made a pledge on certain "bottom line" issues. A core member of the alliance said these included increasing the proportion of directly elected seats in the legislature in 2016 and promising that the election of the chief executive in 2017 and Legco in 2020 would conform to the principle of universal and equal suffrage. The member, who declined to be named, said the moderate grouping saw it as a second-best scenario because it fell short of its public calls for the abolition of functional constituencies by 2020. At the seminar, Li said: "It is impossible for a winner to take all on the issue of constitutional development. There can only be win-win. If one wants to win alone, the result may be lose-lose. Hong Kong citizens are waiting for you to show your courage and make a responsible choice at a key point in time."

Last month the government announced a package under which the size of the Election Committee, which elects the chief executive, would be expanded from 800 to 1,200 members, and 10 more seats would be added to Legco in 2012. On the same day Qiao Xiaoyang, deputy secretary general of the National People's Congress Standing Committee, made a statement in Beijing seeking to clear doubts about the path to universal suffrage. He said making clear a timetable for universal suffrage was like throwing open the door now to full democracy. Quoting Qiao's comments yesterday, Li said the central government had already given a green light for Hong Kong to introduce universal suffrage. "The vehicle of universal suffrage can be started now. The year of 2012 is an important starting point. We need the Hong Kong community's united efforts to drive the vehicle forward."

Tang, who has twice met the Alliance for Universal Suffrage, said it was best to work for a long-term goal. "Being led by the nose by a small group of loud people, one will only step onto a road of no return paved with thorns," the chief secretary said. Tang also urged pan-democrats to put aside their demand for the abolition of functional constituencies. Citing unspecified opinion polls, he said: "For the 40 per cent of citizens who do not want functional constituencies to be scrapped, is their opinion being respected? Is it democratic to ignore their views?"

Chinese People's Political Consultative Conference delegate Lew Mon-hung, also at the seminar, said those who vetoed the package would be seen as sinners in history. Pan-democrats dismissed Li and Tang's remarks. "If the government's package is implemented, it will only be the privileged in functional constituencies who win," Civic Party leader Audrey Eu Yuet-mee said. "It is unfair for the government to request pan-democrats to compromise." Democratic Party chairman Albert Ho Chun-yan described the remarks by Li and Tang as totally unpersuasive. ^ top ^

UBS case puts HK in US tax dodge spotlight (SCMP)
Hong Kong may be doing all it can to avoid accusations of being a tax haven but, judging by the United States' pursuit of clients of Swiss banking giant UBS, it is a popular site for offshore tax evasion schemes. Hong Kong shell companies or bank accounts were involved in more than half the tax evasion cases against American UBS clients made public so far. Of the 16 cases publicised by prosecutors since the US began investigating UBS, nine have involved Hong Kong entities. Panama, Singapore, the Cayman Islands, the British Virgin Islands, Mexico and Liechtenstein have also been implicated, but Hong Kong entities were by far the most frequently used.

New York toymaker Jeffrey Chernick, California businessman John McCarthy, New Jersey building supplies seller Juergen Homann, retired Boeing sales manager Roberto Cittadini, and watchmakers Jack Barouh and Jules Robbins all transferred assets to Swiss UBS accounts in the name of Hong Kong shell companies. All six pleaded guilty to felony charges, among the 11 UBS clients who have pleaded guilty so far. On April 15, American officials unsealed charges against five more UBS clients, including three - Sybil Nancy Upham, Ernest Vogliano and Shmuel Sternfeld - who prosecutors say hid money in Swiss UBS accounts tied to "sham" Hong Kong companies.

In February last year, UBS agreed to pay US$780 million to settle charges of helping American clients dodge taxes. It also agreed to supply US prosecutors with detailed account information of nearly 4,450 UBS clients, though the handover of that information has been held up in litigation in Switzerland.

In the 15 months since the UBS settlement, US authorities have been avidly pursuing offshore tax evasion. And as cases have been publicised and Hong Kong's involvement has gained more prominence, many observers have suggested that the city itself has become a target of investigation. "What happened in Switzerland is a taste of things to come, and I believe that the next focus of US law enforcement interest is going to be in Asia," said US tax lawyer Scott Michel at a University of Hong Kong forum earlier this year. Those predictions proved right, as Hong Kong's frequent appearances in the UBS cases prompted a visit last week by US prosecutors, who met US consular officials and local financial institutions, said Kevin Downing, a US government lawyer prosecuting the UBS cases. "We found out that UBS bankers and Swiss lawyers were recommending to the US clients to open up Hong Kong corporations and Hong Kong bank accounts as almost a second curtain of secrecy to conceal the accounts and offshore assets from the Internal Revenue Service," Downing said at a University of Hong Kong forum on Friday.

While Hong Kong has strict laws against money laundering and terrorist financing, it is both cheap and easy to form a corporation in the city without ever having to set foot in it. […] The convenience and low cost of forming corporations from afar puts the city at risk for illicit activities, according to the Financial Action Task Force, an intergovernmental agency that monitors countries' efforts to combat money laundering and terrorist financing. "The availability of corporate services and the relative ease with which shell companies can be purchased contribute to the risk of Hong Kong being used for structuring of the proceeds of financial crime, corruption, tax evasion and smuggling," according to the taskforce's 2008 report. […]

Downing said that for a long time, many companies were opened in the Caribbean, leading US officials to crack down on those jurisdictions earlier in the decade. "In the course of investigation against UBS, we found out a lot of the Caribbean money made its way into Switzerland, made its way into Hong Kong. So we've just been in Switzerland and we're dealing with that issue." And now they have come to Hong Kong. "We're here to talk with, and we're hoping to get co-operation from, the financial institutions that have a similar situation that UBS had with respect to dealing with US clients," he said. […]

At present, Hong Kong cannot hand over tax information to the US in civil tax matters, because there is no information-sharing pact between the two governments. However, each jurisdiction can provide assistance on criminal investigations, including felony tax investigations. Regardless, financial institutions in Hong Kong will soon be handing over information about their American clients to US authorities. Earlier this year, US President. ^ top ^



Taiwan opens tourism office on mainland (SCMP)
Taiwan opened a tourism office in Beijing yesterday, the island's first official presence on the mainland in more than six decades. The opening, to be reciprocated on Friday by the launch of a mainland tourism office in Taipei, could pave the way for higher-level official exchanges between the two sides of the Taiwan Strait. There have been reports over the past two years that the Straits Exchange Foundation and the Association for Relations across the Taiwan Strait - the semi-official agencies sponsored by Taipei and Beijing respectively to handle business or negotiations on technical matters in the absence of formal ties - were poised to set up representative offices on each other's soil. However, Taiwan's mainland-friendly Ma Ying-jeou government has been dragging its feet in proceeding with the plan due to strong criticism from the pro-independence camp, which accuses the administration of bending over backwards to please Beijing.

For the past nine years the tourism agencies of both sides have represented their respective governments in brokering holiday charter flights, eventually leading to the launch of cross-strait direct air and travel links in the past two years. "The purpose is to introduce Taiwan's scenery and landscapes to mainland people, and promote mutual understanding and interaction between the sides through tourism. That's the most important goal," said Yang Ruizong, head of the Taiwan Strait Tourism Association office in Beijing. Yang is the first senior Taiwanese official to be based in Beijing, a key milestone in bilateral ties after decades of hostility. Cross-strait relations are at their warmest in years under Ma's presidency. In the absence of official ties, the two bodies will also work informally to handle travel problems and disputes that are encountered by tourists. […]

Taiwanese officials are hopeful that tourism will help to promote better relations. "This is an important development in cross-strait relations," said Mainland Affairs Council deputy chairman Chao Chien-min, speaking from Taiwan. "The opening of the semi-official office shows that cross-strait exchanges are being gradually institutionalised and now the government can help Taiwanese travellers on the mainland to handle problems that come up during their trips." However, some tensions still persist. The mainland continues to aim an estimated 1,300 missiles at Taiwanese targets and has refused to consider renouncing the use of force in dealing with the island. […]. ^ top ^

Taiwan pledges not to seek US help in war (People's Daily Online)
Mainland experts on Monday hailed Taiwan leader Ma Ying-jeou's pledge that the island will never ask the United States to help fight a war with the mainland, saying it demonstrates Ma's determination to push for better cross-Straits ties. In a CNN interview, conducted entirely in English via video conference and broadcast on April 30, Ma, speaking from his office in Taipei, said that "we will continue to reduce the risks so that we will purchase arms from the United States, but we will never ask the Americans to fight for Taiwan. This is something that is very, very clear."

Chen Xiancai, a researcher at the Taiwan Studies Center in Xiamen University, said Ma has been the first Taiwan leader who dared to say "never" to US help since former leader Lee Teng-hui introduced direct "presidential" elections in late 1990s. According to its 1979 Taiwan Relations Act, the US has the obligation to help defend the island, but as it seeks better ties with Beijing, the US has hedged on saying how far it would go in the event of a war, Reuters commented on Monday. "The society of Taiwan has a strong dependence on the US, while Ma's comment of never asking for US help to fight for Taiwan indicates his determination to ease cross-Straits relations, which can be interpreted as goodwill toward the mainland," Chen told China Daily. He said the move proves Ma will continuously promote cross-Straits exchanges and cooperation, including the proposed comprehensive trade pact between the two sides. Chen, however, emphasized that Ma was very cautious to appease the US by reiterating the demand for arms sales, which are strongly opposed by the mainland.

Li Jiaquan, a senior researcher with the Institute of Taiwan Studies at the Chinese Academy of Social Sciences, also expressed his appreciation for Ma's comments. He said a consistent and determined mainland policy is also helpful in winning more support for Ma. Li said while the pro-independence opposition Democratic Progressive Party (DPP) always attempted to drag America into a war to help its push for "Taiwan independence", Ma is trying to rule out such a possibility. Ma also said during the CNN interview that the risk to the US of a conflict between the mainland and Taiwan is the lowest in 60 years. […]

Hsiao Bi-khim, director of the International Affairs Department of the DPP, accused Ma on Sunday of undermining "national security" by eliminating the vagueness Washington has deliberately maintained on how it would respond to a possible mainland attack against Taiwan, the Taipei-based "central news agency" reported on Sunday. Washington, which had no immediate comment on Ma's remarks, could decide on its own whether to help Taiwan, Taiwan's "cabinet" spokesman Johnny Chiang said on Monday following protests from the opposition DPP. […]. ^ top ^

Taiwan executes 4 after 4-year suspension of death penalty (Global Times)
Taiwan's judiciary authorities have confirmed that four convicts were executed Friday evening after a four-year suspension of the practice of execution. Two of the executed, Chang Wen-wai and Chang Chun-wang, had respectively killed their adopted son and adopted daughter who were held by them as hostages. The other two were Or Sai-ming, who killed two people and dumped the bodies into a pond, and Hung Chan-yiu who shot three to dead amid debt disputes. The four were all executed by shooting. Taiwan had not executed any convict since it executed a murderer in December 2005. Wang Ching-feng, the island's former head of judiciary authorities, stepped down in March due to her highly controversial campaign to abolish death penalty, which she had long been engaged in. She also had refused to approve 44 death penalty cases. Her successor Tseng Yung-fu had said he would deal with death penalty cases and perform official duties according to law. A poll by Taipei-based United Daily News on March showed that 74 percent of people surveyed opposed abolishing death penalty and 12 percent upheld the abolishment. ^ top ^



Xinjiang government job candidates required to be bilingual (Global Times)
Candidates for government jobs in Xinjiang must be able to communicate in both Chinese and the local language, regional authorities said Friday. From 2010, all candidates for government jobs must be bilingual, according to the regulation adopted by the regional government Tuesday, Kang Tingfeng, a spokesman for Xinjiang's human resources department, said. The regulation will enable officials to better serve the people, encourage the learning of languages and promote exchange between people of different ethnic groups, he said. Ethnic Han candidates will have to be able to talk with ethnic minorities in the ethnic minorities' language. Similarly, ethnic minority candidates must be able to read and write simple Chinese. A candidate who passes the job test and interview but who fails to meet the language requirements will be required to attend a 3-month language training program, the regulations say. After the training, the candidate's language abilities will be tested again. If the candidate fails the test again, he/she will be given another opportunity to study in the following year's training program. If the candidate fails the test a third time, his/her job application will be rejected. The regional government is also urging officials, especially grassroots officials, to become bilingual. Government employees hired in the past two years are required to join language training programs. Bilingual skills have been a prerequisite for government jobs in the Xinjiang cities of Kashgar and Hotan for years. The regulation is significant in Xinjiang, where more than 12 million of its 20-million population speak 13 ethnic languages, said Ma Pinyan, a scholar with Xinjiang's Academy of Social Sciences. ^ top ^



UN expects 9.5% growth (Global Times)
A United Nations report released Thursday said that China will see economic growth of 9.5 percent in 2010. The report titled "Economic and Social Survey of Asia and the Pacific 2010," an annual publication of the United Nations Economic and Social Commission for Asia and the Pacific, finds the country's urban fixed-asset investment, which had increased by 26 percent during both 2007 and 2008, rose even more quickly in 2009, when it grew by 31 percent after the government responded with a fiscal stimulus package.

Chinese consumer confidence at record high (People's Daily Online)
Chinese consumer confidence in the first quarter hit the highest level since 2007, but people's willingness to spend was slightly reduced by high property prices, said the latest market prospects research report. Consumer confidence hinges on local job prospects, personal finance and willingness to spend, according to experts at the China Economic Monitoring & Analysis Center affiliated to the National Bureau of Statistics (NBS) and international market researcher Nielsen Co, which jointly released the report on Thursday. "This significant jump is largely driven by increasing confidence of consumers in central and rural areas, as well as big improvements in consumers' perception of local job markets and personal finances," said Mitch Barns, president of Nielsen Company (Greater China).

Covering more than 3,500 shoppers from cities, towns and villages, researchers reported a marked lift in optimism in Central China provinces, and a narrowing gap between different levels of the cities, and between cities and rural areas in confidence indices. Pan Jiancheng, deputy director-general of the NBS center, said the fast growth of value-added industries in the central region and the rapid increase of migrant workers' income contributed to their growing consumption confidence. "Boosting consumption is extremely important to ensure China's economic restructuring will succeed, and raising the consumption of people in the central and western regions is the key," Pan said.

Consumer spending has made major strides since 2008 due to favorable government policies, especially in the auto and home appliance markets. Of the 2009 GDP growth of 8.7 percent, consumption contributed 4.6 percentage points, investment, 8 points, and net exports, negative 3.9 points. The contribution of consumption stood at 4 points in 2008, when GDP growth registered 9 percent. Investment contributed 4.2 points and net exports, 0.8 points. Because of the government's subsidy programs, low-income groups which used to have lower confidence are now closer to the national average, with their confidence up 12 percentage points from the previous quarter, the report said.

Ha Jiming, chief economist of China International Capital Corporation, said better infrastructure in rural areas will largely boost consumption. Despite rising consumer confidence, people's willingness to spend has decreased. The report showed that 43 percent of consumers think now is a good time to spend, down 3 percentage points from the previous quarter. "One hypothesis is that consumers are concerned about price increases, especially for real estate. If you are saving to buy a property, and housing prices are increasing faster than income, it logically motivates people to save more and spend less. Concern over healthcare policies and costs also contribute to this picture," said Barns. Property prices in 70 major cities rose 11.7 percent in March, the biggest year-on-year rise since July 2005. "We expect consumer confidence to be stable or rise next quarter, and job prospects will continue to be favorable. The thing to watch is price inflation, especially for high visibility items like housing," said Barns. The report showed that income is consumers' top concern, unchanged from the previous quarter's finding. It is followed by health and children's education. ^ top ^

China may allow offshore yuan investment in mainland (Global Times)
China is considering allowing offshore yuan to be invested in the mainland's capital market, including in the bond, stock and inter-bank lending, in order to gradually perfect cross-border trade settlements in yuan, according to Shanghai Financial Service Office Tuesday. International trade settlement in yuan has increased dramatically this year, and for Import &Export Enterprises, using yuan for international trade settlements can avoid losses caused by exchange rate risks, control financial cost expenditure and make a better use of capital, said insiders from Bank of China (BOC) and China Merchants Bank (CMB). In terms of a rapid business growth, the total supply of yuan in cross-border trade settlements may reach 200 billion ($29.29 billion) in 2010 and it may attain 300 billion yuan as China includes more cities in the pilot project allowing the use of yuan to settle cross-border trade payments, said insiders. Foreign financial organizations issuing more yuan-denominated products will increase yuan deposits and its circulation, which will finally improve cross-border trade settlements in yuan, said Hong Pizheng, chairman of Hong Kong Association of Banks.

Currently, many foreign banks, including Hongkong and Shanghai Banking Corporation Ltd. (HSBC) and Citibank, have issued yuan-denominated insurances. ^ top ^

US to increase exports to cut trade deficit (China Daily)
The United States will try to boost exports to China - rather than limit imports from the country - to reduce its huge trade deficit, US Secretary of Commerce Gary Locke has said. Locke will lead a trade mission to China from May 15 to 21, ahead of the second US-China Strategic and Economic Dialogue (SAED) scheduled for May 23. The mission will be "focusing on promoting US exports for a broad range of new energy technologies, including clean energy, energy efficiency, and electricity transmission, distribution and storage," Locke told China Daily in an email interview. "China is our second-largest trading partner, our largest source of imports and the largest export market for American goods outside of North America. We believe increasing our exports to China - not limiting our imports from China - is the best way to address the trade deficit," he said. "To accomplish this goal, we are actively promoting the export of American goods and services."

Locke's remarks come among rising trade tensions between the two countries, which have announced anti-dumping tariffs on some of each other's products over the past weeks. Beijing announced last Wednesday that it would slap anti-subsidy duties of up to 31 percent on chicken products from the US after the US Commerce Department initiated an anti-subsidy and anti-dumping investigation into Chinese aluminum extrusion manufacturers. Beijing is also under mounting pressure from Washington to let its currency appreciate as many politicians and economists in the US say the value of the yuan is kept artificially low against the dollar, which they contend is a key reason behind the huge US trade deficit with China. China refutes the claim, saying US restrictions on exports of high-tech products are the root cause of the deficit. According to US foreign trade statistics, the trade deficit with China reached $227 billion last year, compared with the record $268 billion in 2008, the largest between any two countries. Total bilateral trade volume hit $366 billion in 2009.

Zhou Shijian, a senior fellow at the Center for US-China Relations affiliated to Tsinghua University, agrees with Locke's game plan but added "the problem is what the US can sell to China". The United States considers it a "very sensitive" issue when China seeks more imports of high-tech products, as they are often referred to as dual-use technologies that can be applied in both military and civilian fields. "But the US can export more high-tech products for civilian use such as environmental protection and green energy products," which China is in dire need of, Zhou said. An increase in the exports of such products will help create job opportunities in the US, where the jobless rate hit 9.7 percent in March. In 2007, China signed an agreement with US-based Westinghouse, under which it will use the company's AP1000 technology to build two nuclear power plants. The $8-billion agreement, the first large-scale joint venture nuclear project, created more than 5,500 jobs in the US. […]

But he said the US is concerned "about China's increasing use of industrial policies that may restrict market access and discriminate against foreign goods and services". Some foreign companies in China say those policies favor domestic businesses, but some Chinese companies have long complained that the government offers too many preferential policies to foreign firms. Premier Wen Jiabao reassured foreign companies last week that they will not face discrimination in the country as the government will "unswervingly" continue its opening up drive that will facilitate foreign investment. "The policy of encouraging indigenous innovation treats all businesses in China the same. It will not exclude foreign companies," Wen said when he met some European business people who have enterprises in China. Locke also expressed hope for a more open market in China. ^ top ^


DPRK and South Korea

Kim reaffirms N Korea nuclear disarmament talks during secretive visit (SCMP)
North Korean leader Kim Jong Il reaffirmed the importance of nuclear disarmament talks during his visit to China this week, Xinhua reported on Friday, in Beijing's first official confirmation of the secretive but widely reported trip. The visit could potentially kick-start the process of North Korea dismantling its nuclear programmes, although the reports did not say whether Kim had made a firm commitment to restarting talks or whether he had attached any conditions to such a move. “Kim said that the DPRK will work with China to create favourable conditions for restarting the six-party talks,” the Xinhua News Agency said.

The visit began Monday and has been shrouded in secrecy in keeping with Kim's reclusive ways. In footage run by state broadcaster CCTV, Kim, 68, who reportedly suffered a stroke in 2008, appeared thin but vigorous in meetings with President Hu Jintao, Premier Wen Jiabao, and other officials. Kim, wearing a pea-green leisure suit, was shown shaking hands with China's leaders at the Great Hall of the People in central Beijing, in footage apparently shot on Wednesday night. He exchanged comments with Hu in a conference room, then stood and read from a piece of paper at a banquet table and exchanged toasts, wine glass in hand. Other footage showed him visiting a biotechnology firm accompanied by Hu, during an excursion to Beijing's Zhongguancun high-tech zone believed to have happened on Thursday morning shortly before his armoured train departed for home. The eccentric Kim is known to shun air travel and travels entirely by road and rail. […]

While Kim has grown ever more dependent on mainland aid and diplomatic support, Beijing appears determined to honour his wishes and do whatever it takes to prevent his impoverished regime's implosion and the potential political chaos that could bring severe unrest to its border. […]

South Korea's Yonhap news agency reported that Kim told Hu he is ready to return to six-nation denuclearization talks, but it gave no details. Kim has said the same thing in the past, but usually with attached conditions, such as a long-sought direct dialogue with the United States. Yonhap did not say what, if any, conditions he set this time. Scholars have said they expected Kim to express some new willingness to rejoin the long-stalled China-sponsored negotiations, under which North Korea agreed to dismantle its nuclear programmes in return for food and fuel aid. […]

Although China is unlikely to link them explicitly, a return to the talks is likely to go hand-in-hand with new aid, including the implementation of economic agreements reached during a visit by Wen to North Korea last year. […]

Beijing's support for Kim is driven overwhelmingly by its own security concerns, which override any unhappiness it might have over North Korea's nuclear programme or rejection of economic reforms, mainland scholars say. “No matter how different its opinions are from those of the North Koreans, and how much unhappiness it has toward them, the Chinese government will not leave North Korea to implode, and it will not let the strategic balance of the Korean peninsula be broken,” said Cai Jian, deputy director of the Center for Korean Studies in Shanghai's Fudan University.

That, however, comes at the risk of upsetting South Korea, where suspicion is rising that a North Korean torpedo destroyed the naval ship Cheonan in March, killing 46 sailors. North Korea has denied involvement. The timing of Kim's visit has aroused some complaints among South Korean politicians, who say it shows insensitivity toward the Cheonan victims. South Korean officials have asked that China play a “responsible role” in the aftermath of the sinking and keep them informed of Kim's activities. ^ top ^

Power transition and economy top agenda for Kim Jong-il's meetings (SCMP)
North Korean politics and its economy will top the agenda for leader Kim Jong-il's meetings with Beijing's leaders today, even though nuclear diplomacy is at the centre of international attention, observers say. Kim apparently visited the port city of Tianjin, southeast of Beijing, yesterday before heading to the capital at night for talks with President Hu Jintao, South Korea's Yonhap news agency reported, citing unnamed sources. "It is predicted that the summit talks between North Korea and China will be held [today],"

Professor Jin Canrong, associate dean of Renmin University's school of international relations, said Kim would be received by all four top leaders: Hu; parliamentary chief Wu Bangguo who is No2 in the ruling hierarchy; Premier Wen Jiabao, who is No 3; and Jia Qinglin, chief of the government's top advisory body. Professor Liu Ming, director of Korean peninsular studies at the Shanghai Academy of Social Sciences, said he expected Kim would also meet Vice-President Xi Jinping, who is No 5.

Jin said that while the outside world's focus remained on stalemated nuclear negotiations and strained inter-Korean relations, Kim's hopes of securing Beijing's endorsement of and support for his planned power transition top his agenda. "China's endorsement is crucial if Kim wants to secure a peaceful transition of power as his father did," Jin said. Kim Jong-il stepped in when his father and North Korean founder, Kim Il-sung, died of heart failure in 1994, marking the first hereditary succession of power in a socialist country. Before his demise, Kim Il-sung had introduced Kim Jong-il to Chinese leaders. Liu said he believed Kim would brief leaders on the latest development in North Korean politics. "These are the kinds of issues often exchanged and discussed between ruling Communist parties of friendly socialist nations," Liu said.

Before yesterday's stop in Tianjin, Kim visited dock and industrial facilities in and around Dalian, Liaoning, on Monday and Tuesday. Both Liu and Jin said Kim's visit to the industrial and transport hub highlighted his emphasis on economic issues. North Korea is under tough UN sanctions over its refusal to halt its atomic drive, and its economy suffered a new blow in November when a currency reform backfired, wiping out people's savings and sending prices soaring. China is Pyongyang's sole major ally and its main source of finance, food and fuel. It is also seen as the only country with any ability to put pressure on Kim's hardline regime. Liu said the North Korean leader was desperate to develop the country's economy with a plan unveiled last year to develop eight cities. "All these development plans need China's help, including financing, technology exchange and the training of workers," Liu said. Jin said Chinese leaders would push for Kim's reassurance that it will return to nuclear disarmament talks it abandoned over a year ago, and seek an explanation for the sinking of a South Korean warship in March. ^ top ^

Six-party talks hinge on N Korea's role in sinking (SCMP)
Kim Jong-il would be asked to explain the sinking of a South Korean warship during his trip to China in the hope of resuming the six-party talks, mainland commentators said. The North Korean leader would hold talks with President Hu Jintao and other Chinese leaders today, according to South Korea's Yonhap news agency.

While analysts in the region linked Kim's visit to the stalled talks over the denuclearisation of the reclusive country and requests for more economic aid, mainland analysts said the timing made it difficult for progress to be achieved. Relations between the two Koreas have taken a hit since the sinking on March 26 of the South Korean corvette Cheonan near a disputed sea area, leaving 46 sailors dead. While investigations continue, Seoul has blamed Pyongyang and has threatened to retaliate if the North sank it.

Professor Liu Ming, director of Korean Peninsular Studies at the Shanghai Academy of Social Sciences, said Kim, known for his reluctance to travel abroad, made the trip after repeated requests from Beijing. Hu extended two invitations to Kim last year as the two countries celebrated 60 years of diplomatic ties. Liu said Kim's visit, which is the first time he has left the country since a reported stroke in 2008, could be in response to Premier Wen Jiabao's trip to Pyongyang in October. Liu said China would ask Kim to explain the Cheonan case so that efforts to resume six-party talks could move forward. "China would really like to resume the six-party talks through Kim's trip, which was planned a long time ago," Liu said. "But the timing of this trip is very bad, as it takes place after the Cheonan incident. Now it's going to be more difficult to resume the talks."

China has sought to play an active role in the talks - involving both Koreas, Japan, Russia, the US and itself - in what analysts said was an attempt to enhance its regional clout. But Seoul has said it would be difficult to resume the talks, which have been dormant since late 2008, if Pyongyang proved to be behind the incident. Washington also indicated the talks would stay on hold until the situation was clarified. Liu said resuming the talks would be vital to obtaining more economic aid from Beijing - another issue widely believed at the top of Kim's agenda. "A lot of the aid programmes China pledged to offer during Wen's trip last year are connected to the resumption of the six-party talks," Liu said. "It's possible that Beijing could offer food aid to Pyongyang, but that's all Kim can expect. It's tricky: whether Pyongyang can get more aid depends on whether the six-party talks resume. And whether the talks are reopened depends on the resolution of the Cheonan case."

Wang Fan, director of China Foreign Affairs University's School of International Relations, said the choice of Dalian, Liaoning province, as Kim's first stop could be related to his economic plans. In the first leg of his visit, the first since 2006, Kim reportedly inspected a port outside Dalian, a major port city in the northeast. North Korea recently leased the port of Rajin, located on its northeastern coast, to China and Russia. The company that is managing the port has its headquarters in Dalian. […]

The Foreign Ministry would not confirm the visit, saying only that China and North Korea were carrying on the tradition of high-level exchanges. "No information [about Kim's visit] is available," ministry spokeswoman Jiang Yu said. ^ top ^

Kim reportedly rolls into China (Global Times)
North Korean leader Kim Jong-il arrived in China by train on Monday on his first visit to the country in over four years, amid mounting international pressure over Pyongyang's nuclear tests and growing suspicions that the state may be behind the deadly sinking of a South Korean warship in late March, according to South Korean media. The rumored visit was not confirmed by the North Korean or Chinese governments on Monday, a national holiday in China. Press officials of the foreign ministry said it had not received any information about the visit and referred the Global Times to the International Department of the Communist Party of China Central Committee, which could not be reached.

According to South Korea's Yonhap News Agency, citing unidentified government officials in Seoul, a 17-carriage train from North Korea arrived in the Chinese border city of Dandong, in Liaoning Province, at around 5:20 am on Monday, with Chinese police officers sealing off the area around the railway station until 6:30 am. All regular passenger trains from North Korea to Dandong arrive in the afternoon and usually have only four or five coaches, the report said, suggesting that the 17-carriage train is Kim's armored private train. AFP reported that an official with the tourism bureau at Dandong border crossing confirmed that Kim had arrived early on Monday. It is thought that the train carrying Kim was headed to the eastern port city of Dalian, while a source in Dalian said the North Korean delegates had an entire wing of the Furama Hotel reserved until 7 pm on Wednesday, Yonhap said. Japan's Kyodo News Agency carried photos of Kim getting into a car in front of the hotel, wearing his trademark khaki outfit and dark sunglasses. One source said the 68-year-old leader left Dalian on Monday afternoon, presumably for Beijing, but that he later returned to the hotel. A booking agent in the hotel told the Global Times on Monday that all the guest rooms had been booked for the coming two days, though a member of staff in the sales department denied the North Korean leader is staying at the hotel.

The reported visit to China by Kim, if it turns out to be real, will be his fifth since he took office. The last time he visited China was in 2006, when he toured the country's commercial centers. Lü Chao, an expert on North Korea at the Liaoning Academy of Social Sciences, told the Global Times that China-North Korea relations suffered a downturn after the country launched nuclear tests in the face of international opposition but warmed after Premier Wen Jiabao paid a visit to North Korea in October. "Kim's possible visit is aimed at further cementing bilateral ties with China," Lü said. "China's economic achievements in recent years are sure to impress Kim, who is leading the country in seeking communism with North Korean characteristics."

Observers said Kim's reported first stop in Dalian may have to do with North Korea's plan to develop its port at Rajin, on the border with China and Russia. Kim and his party are then likely to travel to Beijing, where he is expected to hold talks with President Hu Jintao and other members of the Chinese leadership, Kyodo reported. Economic assistance from Beijing and the North's return to the six-party nuclear talks are expected to top the agenda in bilateral discussions during Kim's visit.

Reuters reported that additional UN sanctions, imposed after Pyongyang's May 2009 nuclear test, squeezed its once lucrative arms trade and that the strain on its already dysfunctional economy has been compounded by a major currency policy blunder late last year. As North Korea's foreign exchange shortages curbed its imports, the trade volume with China is estimated to have dropped by 4 percent in 2009, the Korea Development Institute in Seoul said in February. UN food aid to North Korea will run out at the end of next month, following a drop in international donations after the country detonated a nuclear device, the World Food Program told Bloomberg on Monday. But analysts expect the visit will add new life to the now dormant nuclear disarmament talks hosted by Beijing and boycotted by Pyongyang in April 2009. Kim's previous trip to China in 2000 was soon followed by a summit in Pyongyang with the South Korean government and the start of two major joint development projects in North Korea. Another visit in 2004 led to a push for talks on the North's nuclear programs.

Optimism has dimmed, however, amid suspicions that Pyongyang may be behind the sinking of South Korean warship Cheonan, after an unexplained explosion on March 26 killed 46 sailors, the Korea Times commented. Seoul has so far not directly accused Pyongyang, which has denied responsibility. However, South Korean Foreign Minister Yu Myung-hwan said his country will oppose resuming the nuclear negotiations if Pyongyang is found to have been involved in the warship's sinking. South Korean President Lee Myung-Bak also raised the issue Friday in talks with President Hu in Shanghai. "It's too early to make any judgment before the ongoing investigation is released," Lü said. "Even if the Six-Party Talks are further stalled by the incident, both Koreas are not willing to get involved in military conflicts. Negotiations will be the final solution.". ^ top ^



Thousands of local businesses unite to work at Tavan Tolgoi (UB Post)
More than a thousand local Mongolian businesses have joined Mongol 999, a national consortium established last week in a hope to win Tavan Tolgoi coal mine project, opposed to currently aligned world coal mining giants that includes Peabody.

“Charity begins at home”, as the popular saying goes in Mongolian language, we should be helping Mongolians first, rather than helping foreigners to raise capital at the global stock markets by pledging our mineral wealth, local press have voiced their support by making the news centerpiece stories. “We [Mongolia] can do whatever other nations do. We will develop the project, and all earnings will remain in Mongolia,” told L.Ariunbold, Director General of Mongol Bazaltwool LLC, who initiated the project, which is widely applauded by public.

Any business wants to join the consortium is required to “contribute” a minimum of MNT1 million to the consortium, which hopes to fulfill the government's initial requirement of getting US$0.5-2.0 billion in advance from a winner.

The Parliament ordered the government last month to submit draft investment agreement to be signed with potential investor and speed up the launch of the project within this year.
The government is trying to secure as much participation of local Mongolian companies as possible in the development of the project and to make more value added products rather than exporting unprocessed minerals abroad.

Current interested parties are as following:

• A consortium of Vale (Brazil), Jindal Steal and Power (India), and eleven other South Korean companies
• A consortium of Bazovoy Element (Russia) and Renovo (Russia)
• A consortium of Peabody Energy (USA) and Shenhua Energy (China)
• A consortium of Mitsiu (Japan), Itochu (Japan), Marubeni (Japan), and Sumitomo (Japan)
• Xstrata (Switzerland-Australia)
• Russian Railway (Russia)
• Erdos Chinglon Coal (China). ^ top ^

Ulaanbaatar launches biggest infrastructure project (UB Post)
Ulaanbaatar government launched largest ever financed infrastructure projects last week. The first one closed vehicle traffic of Gurvaljin Bridge last Saturday for a complete renovation until August 25, 2010. All vehicles to pass the bridge was advised to choose alternative roads.

Also, a major intersection at the north of the bridge will be partly closed for maintenance this month, which might prevent movement of east-west traffic. Also western part of the Peace Avenue and Ikh Toiruu will be partially closed for maintenance. The capital city projected to spend a total of MNT74 billion for the construction of new bridges and roads as well as maintaining current ones to tackle rapidly increasing urban population.

First ever overpass road of Ulaanbaatar or Engels Bridge has changed its name into Narny Guur (Bridge of the Sun) at the request of its developers. The project will be built at the assistance of the Government of Japan and will be completed in November 2012. 895 meter long overpass road will connect Narny Zam with Tsagaan Khaalga (White Gate) at the Khan-Uul District to ease down traffic load of Peace Bridge, the only bridge that was connecting southern district to city center. Another overpass road on the Namyangju street (south west of Narantuul market) is expected to be built at a cost of MNT22 billion. ^ top ^

Mongolia to decide soon on uranium JV with Russia (
The Government of Mongolia could soon decide on establishing a joint venture with Russia to develop a Mongolian uranium deposit, the head of the Russian civilian nuclear power corporation, Rosatom, said on Tuesday. At a meeting with Russian Prime Minister Vladimir Putin in the Black Sea resort of Sochi, Sergei Kiriyenko said that Russia had signed an intergovernmental deal on the uranium joint venture early in 2009 but the project stalled due to the change of government in Mongolia.

"Already after the election, we signed an agreement with the new government and in January signed a specific protocol. The government of Mongolia has made a decision on the Dornod-uranium deposit. This deposit is in the ownership of the government of Mongolia," Kiriyenko said. He added that Russia had transferred all the constituent documents on the joint venture to the Mongolian side and the secretary of the Mongolian Security Council has confirmed to Rosatom that a final decision on contributing the deposit to the joint venture would be made soon.

Kiriyenko said work on the deposit could be launched quickly as the deposit was located 300 km (186 miles) from Russia"s neighboring Chita Region where a mining enterprise was situated and whose specialists and equipment could be used in the uranium deposit development. Rosatom increased production of uranium by 25% in 2009 and has set the task of increasing uranium output by at least 11% in 2010, Kiriyenko said. ^ top ^

Eldegdorj's China visit ushers in a new era (
President Ts. Elbegdorj returned home on Tuesday morning after a six-day official visit to China at the invitation of Chairman Hu Jintao. Foreign Minister G. Zandanshatar told reporters the visit “defined a new era in bilateral relationship”, giving a significant impetus to forge deeper mutual understanding and stronger partnership between the two neighboring countries. This was the refrain at all the meetings the Mongolian side held with the Chinese leadership.

Those whom President Elbegdorj met included Party Chairman Hu Jintao, Prime Minister Wen Jiabao, and National Committee Chairman Jiao Tsinlin. All these talks were marked by the leaders of the two countries emphasizing how the bilateral relationship has been developing successfully. There was agreement that top leaders must continue to meet regularly to keep the momentum on. ^ top ^

Cooperation documents signed (Montsame)
Mongolia's President attended Saturday the signing ceremony of documents on bilateral cooperation after their talks in Shanghai. The Minister of Foreign Affairs of Mongolia G.Zandanshatar, and the China's Minister of Commerce Chen Deming signed an economic and technical cooperation agreement between governments of Mongolia and the People's Republic of China on granting a non-refundable aid of CNY 40 million to Mongolia.

An inter-governmental agreement on opening cultural centers in Beijing and Ulaanbaatar cities was signed by Yo.Otgonbayar, the Minister of Education, Culture and Science of Mongolia and Cai Wu, the Minister of Culture of China. The Ministers also inked a plan of cultural exchange to be realized in frames of measures in 2010-2013 between the governments of Mongolia and China. ^ top ^


Corentin Buela
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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