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
  21-25.6.2010, No. 325  
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Table of contents

DPRK and South Korea

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Foreign Policy

Chinese president, Canadian PM talk on bilateral ties (Global Times)
Visiting Chinese President Hu Jintao met Canadian Prime Minister Stephen Harper on Thursday for talks on the development of China-Canada ties. The two leaders are also expected to exchange views on major global and regional issues of common concern, said Chinese diplomats. According to the schedule, Hu and Harper will attend a signing ceremony of cooperation documents following their talks. Hu flew into Ottawa on Wednesday for a state visit to Canada. This year marks the 40th anniversary of the establishment of diplomatic relations between China and Canada. During the past 40 years, the two countries have expanded bilateral cooperation in various areas including economy, trade, energy and resources, culture, education and environmental protection. At present, China is Canada's second largest trading partner while Canada is China's thirteenth. In 2009, two-way trade between the two countries reached 29.7 billion US dollars. In the first four months of this year, bilateral trade was recorded at 10.2 billion dollars, an increase of 19 percent over the previous corresponding period. Following his state visit, Hu will attend a summit of the Group of 20 (G20) in Toronto over the weekend. The summit is aimed at securing the world economic recovery and addressing the economic challenges and risks. Established in 1999, the G20 consists of Argentina, Australia, Britain, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, the United States and the European Union. ^ top ^

China not keen on yuan talks at G20 (Global Times)
Regarding Washington's intention of pushing China over the yuan issue during the G20 summit in Toronto, Beijing said Thursday that such a move would not produce any positive results. "We believe the appreciation of the yuan cannot bring balanced trade and cannot help the US solve its problems of unemployment, over-consumption and low savings," said Qin Gang, spokesman of China's Ministry of Foreign Affairs. "We hope the US can reflect on the problems of its own economic structure instead of playing blame games and imposing pressure on others." Qin was responding to questions concerning recent remarks by US Secretary of Commerce Gary Faye Locke, who said that US President Barack Obama would raise the yuan issue with Chinese officials at the G20 summit. "We hope the US can work with us … to promote our economic relations in a balanced way," he said. "Monotonously pressuring China or resorting to trade protectionism would be unreasonable and bring benefit to no one." Locke's words came after US lawmakers pushed legislation Wednesday that they said would treat currency manipulation as an illegal subsidy and enable US authorities to impose tariffs on Chinese goods. They claimed the yuan is still undervalued, despite a pledge by Beijing to relax controls on the currency. Zhou Shijian, a senior research fellow at the Center for US-China Relations at Tsinghua University, said the new policies by the People's Bank of China (PBC) have been misinterpreted by some US officials. "The PBC's announcements on June 19 and 20 are aimed at making the yuan market-based, not about currency appreciation," Zhou said. "Some US officials judged the new policies from a US perspective, without considering the impact of the yuan's rise on China's exports." He Weiwen, managing director of the China Society for WTO Studies, said that the G20 summit will feature more important talks on the US' debt and European economic conditions. "China has made a commitment to the yuan issue, now G20 members want to see some actions from the US and Europe on their own problems," He said. ^ top ^

Afghanistan has China in mind (Global Times)
Afghanistan, cast into the global spotlight following a recent report about its immense resource reserves, is seeking assistance from China to engage in lucrative mineral exploitation in the land-locked Islamic republic. The south-central Asian nation, with its mining sector handicapped by under-developed technology, needs help unearthing that financial windfall. China, "in our neighborhood" and "very much in need of these resources," will "actually be forthcoming more than other countries," Said T. Jawad, Afghanistan's ambassador to the US, told the Pajhwok Afghan News agency, citing an alleged lack of interest by US enterprises. The war-torn nation holds tremendous resource deposits of iron ore, copper, cobalt, gold, coal and lithium, worth an estimated $1 trillion, according to a report issued by the US Department of Defense on June 14. The US authority's revelation has fueled suspicion that the US harbors the intention to lure China into the chaotic situation in the region, as the US struggles with a nearly decade-long war there. "China will devise its own strategy in accordance with its own national interests instead of being manipulated by other powers," Yin Gang, a Middle East expert at the Chinese Academy of Social Sciences, told the Global Times. "The US aims to internationalize the issue. Unable to settle the ravages after it waged war nine years ago, the US strives to induce other nations to share responsibilities," Yin said. Yin, while highlighting the potential risks of becoming involved in the conflict, stressed that Afghanistan has a stake in China's overall security. "China should mull the general geopolitical environment. Afghanistan is linked with Pakistan; China has to address the regional turmoil sooner or later," Yin said. "Economic cooperation is conducive to enhancing China's clout and contributes to helping the nation get due peace dividends," Yin added. […]. ^ top ^

PLA should get green light for anti-piracy role (SCMP)
China's request to play a leading role in the international fight against Somali pirates held out the prospect of an historic expansion of the PLA's operations. Seven months later, however, this ground-breaking development is yet to take place despite the agreement of the other international players. The cause of the delay is unclear. It may be that China needs more time to implement the plans. But the holdup is creating uncertainty and the sooner that the new arrangements for tackling piracy off the Horn of Africa are put in place, the better. Beijing's announcement last November that it wanted to chair Shade, the Dubai-based group co-ordinating the anti-piracy strategy, surprised the international military community. China's contribution to that point had been three vessels escorting Chinese-flagged ships through the region, already an unprecedented step for the PLA. The leadership role would mean China closely co-operating with the 40 other navies protecting shipping through the Gulf of Aden. Heading the effort to defeat the scourge would be significant, in effect representing the nation's debut as a military diplomat. Other members - Nato, European navies and the US-led Combined Maritime Forces - applauded the decision. They had good reason to: the pirates have been growing in numbers and getting increasingly bolder and ambitious. Ships off the Horn of Africa had previously been vulnerable, but seizures were now taking place deep into the Indian Ocean. Chinese chairmanship would bring much-needed ideas and naval patrol and escort vessels. But the implications run deeper than logistics. The role of the PLA in working closely with other navies to combat a common threat, would offer a chance for greater trust at a time when there are concerns among some about China's military build-up. And China's contribution is urgently needed. The incidence of piracy from Somalia has increased three-fold over the past year. More than 15 ships and hundreds of foreign crew are still being held for ransom. PLA navy officers told a meeting of Shade earlier this month that the chairmanship offer still needed political approval. It is to be hoped that any problems in this regard are quickly ironed out. […] China's sending warships beyond its waters for the first time in centuries is not viewed positively by all concerned; some, like India, see it as an excuse for an expanded military presence. Taking a central role in the battle with pirates will go some way to allaying such worries. Working together openly will break down barriers. […]. ^ top ^

Chinese protest in streets of Paris (People's Daily Online)
Organizers expected about 10,000 Chinese nationals would take to the streets of Paris on Sunday, appealing for the French government to improve public security in the country where the Chinese community has been frequent victims of robbery. More than 30 Chinese associations planned to participate in the demonstration under the slogan of "No violence, but security". Among them are Chinese in France from various walks of life, overseas students and victims of crime. The demonstration would be the largest ever by overseas Chinese. […] "We are demonstrating to fight for our own interests and urge relative departments in the French government to intensify the fight against crimes," Chen Shengwu, organizer of the demonstration and chairman of the Association of Chinese Residents in France, told China Daily on Sunday. On the website of the Chinese embassy in France, councilor Xu Jiangong said the embassy firmly supported Chinese nationals expressing their demands through legal means, and had asked French police to enhance protection. […] Reports of Chinese nationals in France being robbed have become more common in recent years. In May, Wuyun Qimuge, vice-chairwoman of the Standing Committee of the National People's Congress, experienced an attempted robbery in her car on the way to airport in Paris, but with the protection of her security staff suffered no loss or injury, China News Service reported. Jin Chunlei, press counselor with the Chinese embassy in France, told China Daily that the underlying cause of the demonstration is poor public order in French society, and "the most recent trigger is the Zhong Shaowu incident," Jin said. On the night of June 1, when a group of local gangsters cornered and robbed some Chinese nationals who were leaving Chinatown Belleville after a wedding, Zhong grabbed a gun and wounded a gangster, reported Nouvelles d'Europe, a Chinese language daily newspaper in Europe. Zhong, a Wenzhou businessman, was later taken away by police and is still under arrest, according to the newspaper. Paris police said the problem was not Zhong shooting in self defense, but illegally possessing guns, the newspaper said. […]. ^ top ^

Swiss FM to visit China with focus on political dialogue (Global Times)
Swiss Foreign Minister Micheline Calmy-Rey will pay an official working visit to China later this month with a focus on the opening of political dialogue between the two countries, it was announced on Friday. The visit on June 27-29 "will focus on the opening of the official political dialogue that Switzerland and China have agreed as a means to deepen their bilateral relations," the Federal Department of Foreign Affairs said in a statement. Another purpose of the visit is to celebrate the 60th anniversary of the establishment of diplomatic relations between the two countries, said the department, adding that Switzerland was one of the first western countries to recognize the People's Republic of China. In Beijing, Calmy-Rey will meet her Chinese counterpart and other high-ranking officials. And prior to the talks, she will visit the World Expo in Shanghai, where the Swiss pavilion has become one of the attractions of the event, the statement said. ^ top ^


Domestic Policy

More rain hits after hundreds killed by floods and landslides (SCMP)
Flood-battered parts of the south battled fresh downpours yesterday after hundreds died as rivers broke banks and landslides cut road and rail links in a week of torrential rain. The government has rushed troops, food and tents to flood-hit regions, where millions of residents have been displaced by pelting rain that has swollen reservoirs and caused economic losses of about 70.9 billion yuan (HK$80.6 billion). Premier Wen Jiabao visited Fuzhou, a city in Jiangxi province at the centre of the disaster, to meet residents and urge on the thousands of troops and civilian rescue workers, Xinhua reported. It was Wen's second visit to a flood-hit area in one week. About 100,000 people were evacuated earlier this week in Fuzhou […]. The government has mounted a heavily publicised show of national unity against adversity. The threat from the flooding is not over yet. Rescuers in Changkai town, near Fuzhou, were slowed by rain as they tried to reach residents perched in flooded towns and villages. More rain is still expected. "Our two boats will go out today to rescue people. But comparatively, the difficulty of our rescue work will increase today compared to days when it is not raining," said one civilian rescue worker, […] The flood-battered Changkai dyke near Fuzhou suffered a fresh breach on Wednesday. The government expects the breaches will be fixed in six days, Xinhua said, though the unceasing rain could make that hard. […] At least 211 people have died in the disaster and 119 are missing. Xinhua yesterday said floods had killed 365 people in China this year and 147 remained missing. The death toll caused by floods was more than double the annual average since 2000. Since the flood began last week, More than 2.4 million people have been evacuated, though many are moved only short distances. In Fengcheng, another small city in Jiangxi, a 50,000-square-metre slice of a rain-sodden mountainside threatened to slide off and crush homes, Xinhua reported. Officials ordered rescue workers to move threatened residents. Hundreds of troops with earth-moving equipment worked to avert a massive slide. Water levels in the Changkai town and neighbouring villages fell slightly from Wednesday night. With ankle-deep water at some places, some residents recovered wet belongings and prepared to stay in their homes, resisting officials' advice that they move to temporary relief centres set up in the Fuzhou city centre. […] This month's floods are among the worst in the south since 1998, when over 3,600 people were killed and more than 20 million displaced, Xinhua said. Large flood-hit areas of the south and southwest, particularly Guizhou, Guangxi and Chongqing, have only just recently emerged from a crippling drought that in some regions was the worst in a century. ^ top ^

Chinese vice premier urges more efforts on flood control (Global Times)
Chinese Vice Premier Hui Liangyu Thursday urged more efforts be made on flood control efforts, as the country had reached a "crucial and urgent period" for such tasks. Hui made his remarks during a videophone conference, noting that China was "facing a severe situation at present and in a certain period in the future". […] Hui also asked local authorities to put public safety as a top priority and try to keep property damage to a minimum. Local authorities should strengthen monitoring, forecasting and warnings of typhoons, floods and rainstorms, Hui said, adding more efforts were needed to prevent the further rupturing of dikes and reservoirs. Hui also called for more efforts to relocate people living in at-risk regions. Also, more attention was required to ensure public safety is maintained in schools and hospitals. Further, Hui ordered local authorities to send relief materials to flood victims to make sure they have proper access to food, drinking water, clothing, accommodation and medical care. Further, more efforts should be given to post-disaster reconstruction, Hui added. China's National Meteorological Center said that torrential rains are expected to continue to pound the country's southern regions over the next three days. […]. ^ top ^

Honda's mainland sales and output plunge amid strikes (SCMP)
Honda Motor's production and sales on the mainland suffered double-digit declines of as much as 37 per cent last month following the first in a wave of wildcat strikes that have rocked Japanese manufacturers in the world's largest car market. The plunging sales and production figures for Honda are the first material indications of the severity of the impact from snowballing supplier strikes, which started on May 17 at a Honda-owned transmission factory in Foshan and began spreading this month to some other parts factories that supply the mainland car plants of Honda, Toyota Motor Corp and Nissan Motor. Several of the strikes have resulted in hefty pay increases for assembly-line workers at the supplier factories. But because wages for factory-floor staff on the mainland only account for a fraction of carmakers' costs - an estimated 1 to 3 per cent of revenues - most analysts see lost production as the greater near-term financial liability. Honda's mainland sales dropped 10 per cent from a year earlier to 39,963 vehicles last month […]. That compares with industrywide growth of 33 per cent in mainland car sales last month, and to Honda's own sales growth of 28 per cent over the first five months of the year. Japan's No 2 carmaker saw production fall last month by 37 per cent from April to 37,200 units, against an industrywide decline of 10 per cent, according to JD Power. […] The initial strike at the Foshan transmission factory forced a 10-day shutdown of Honda's four mainland car plants that carried into the first week of this month. Guangzhou-based Guangqi Honda, partly owned by Hong Kong-listed Denway Motors […] was the hardest-hit unit: production nearly halved while sales declined by a third last month from a year ago, according to JD Power. The resulting lost production of about 20,000 vehicles could cost Honda's mainland business about 12 billion yen (HK$1.04 billion) in operating profit, JP Morgan analysts led by Kohei Takahashi wrote this month in a research report. The Foshan employees won an additional 500 yuan (HK$572) per month or a 24 per cent pay increase before agreeing to end their strike on June 4. An across-the-board 30 per cent increase in factory wages would probably only reduce Honda's mainland operating profit margin by 0.6 per cent, the JP Morgan analysts wrote. Since the Foshan walkout, strikes have broken out in at least six more Honda, Toyota and Nissan parts suppliers in Guangdong and Tianjin, triggering the repeated starting and stopping of production at several of the Japanese-owned car-making plants on the mainland. […]. ^ top ^

Chinese vice premier calls for efforts to step up urbanization (Global Times)
Chinese Vice Premier Li Keqiang called for more efforts to accelerate China's urbanization Thursday, as part of the government's efforts to promote economic restructuring and expand domestic demand during this process. Li made the remarks at a training course in Shanghai, saying China's urbanization, which still has much room for expansion, is China's largest source of domestic demand as well as the largest potential driver for development. Further, urbanization would bolster domestic demand, improve people's livelihoods and solve rural problems, Li said. Li noted that China would coordinate development among cities and towns, and step up development of cities in China's central and western regions, while prioritizing development in eastern cities. Li demanded more efforts to solve issues for rural workers including settlement, education for children, housing and social security during the urbanization process. To steadily push forward urbanization in China is an urgent job at present and also a long-term task, Li added. The government said in March that China's rapid urbanization would continue for 15 to 20 years and China would become an urban society in five to six years, with the urbanization rate reaching or exceeding 50 percent. ^ top ^

Strikes expose fatally flawed union system (SCMP)
"Every month we pay five yuan out of our pockets to the union, but I don't know what for," fumed a worker at the Honda Auto Parts factory in Foshan, Guangdong, where workers went on strike last month. Workers at the factory, which employs about 1,900 people, downed tools to demand a pay rise. Things turned sour when representatives of the local branch of the official Communist Party-controlled All-China Federation of Trade Unions (ACFTU) stepped in to mediate but ended up scuffling with workers. Some workers said union staff had beaten them. […] About 70 kilometres away, an employee at a factory that makes locks for Honda cars echoed similar frustrations. Workers at Honda Lock in Zhongshan went on strike for a week and agreed to go back to work on Saturday only after representatives they themselves elected negotiated a pay deal with management. "The trade union? It's useless. They never speak on our behalf," said a 25-year-old worker at the factory. […] He pointed out the fact that the factory's trade union chairman is also the factory's deputy manager and other "union representatives" are also senior managers - making it no surprise that they would side with the management. When asked what role the local Zhongshan union had played in the dispute, an official there said it had made "timely responses to understand the incident" but referred the reporter to the city government propaganda office for further queries. Independent trade unions are banned on the mainland; all trade unions are part of the ACFTU, which sees itself more as a mediator between workers and employers than a body that genuinely fights for workers' interests. […] Professor Lin Yanling of the China Institute of Industrial Relations said the trade unions' priority - since they are government run - is not the workers' welfare. […] Trade union staff are civil servants on the government payroll, and even union representatives in private companies - such as Honda Lock in Zhongshan - tend to be senior company executives. So as long as the mainland's unions remain accountable to the government rather than the workers, they will never perform the role played by trade unions in the West. […]. ^ top ^

Sichuan police detain 40 parents seeking justice after earthquake (SCMP)
About 40 parents seeking justice over the collapsed school buildings in the Sichuan earthquake were detained by police yesterday for trying to petition the authorities. They were among a group of nearly 60 parents who attempted to petition the provincial government headquarters regarding what they called unfair treatment over the loss of their children in the 8.0-magnitude quake two years ago. The parents, mostly from Dujiangyan, said they had arrived at the headquarters around 9am, hoping to hand in their petition documents and a joint letter. "But the police came right away and took us away," said one parent, who managed to flee and refused to be named for fear of detention. The parent, who lost his son during the quake, said up to 40 parents had been taken away, and most were held at the police station. The whereabouts of the rest was unknown. […] "We have been petitioning various government departments, and none of them would listen to us. We are very angry and frustrated now," said another parent. In the letter, the parents urged the government to investigate the building quality of the collapsed schools and properly compensate them for the loss of their children. […] Parents and activists have been calling on the government to investigate and punish those responsible as they believe the buildings were substandard. With their calls for justice going unheeded, many parents have been petitioning the authorities over the past two years despite constant harassment from local officials - whose chances of promotion are harmed by complaints. Some parents have even attempted to take their cases to Beijing, but were returned to Sichuan before they could do so. Two well-known activists, Huang Qi and Tan Zuoren, both from Sichuan, were sent to jail for their attempts to help the quake victims. Huang was jailed last year for three years on charges of illegal possession of state secrets. Tan, who carried out his own investigation of the school buildings, was sentenced to five years' imprisonment for "inciting subversion of state power" in February. ^ top ^

Improving livelihoods called key to social security: senior Chinese official (Xinhua)
Senior Chinese leader Zhou Yongkang has urged Party and government departments across the country to focus on improving people's livelihoods to manage social security. Zhou, a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, made the remarks during a two-day meeting on the country's social security management that ended Saturday. "Currently, our country's overall social situation is stable... But at the same time, we must see that various conflicts have been emerging, especially as many incidents happened recently that harmed the country's stability and induced tremendous negative effects," Zhou said. He noted that such cases exposed the weaknesses in social construction and social management. "Party and government departments should focus their work on ensuring and improving people's livelihoods, and making greater efforts in solving prominent issues in education, employment, medical treatment and social insurance in order to let both urban and rural people share the fruits of the country's development," he said. […]. ^ top ^



Beijing, Moscow sign cooperation pact (People's Daily Online)
Mayors of Beijing and Moscow signed in Moscow Thursday cooperative plan between the two cities for 2010-2012. Moscow Mayor Yuri Luzhkov introduced the municipal administration, city plan and economic development to his Beijing counterpart Guo Jinlong, who led a delegation for a visit to Russia starting from June 20. Based on the cooperative plan, official delegations will engage in mutual visits during the three years, as well as exchanges between experts on energy efficiency, security, telecommunications, mass media and management. The plan said both sides would expand cooperation and provide support for each other on promoting economy, city plan and technologies. The two cities would also further develop collaboration and contact in education, social security, environment protection, heritage conservation, culture, sanitation, sports, city infrastructure, among other things. Beijing municipal government also donated two buses with green energy to Moscow. ^ top ^



Aging population may be catalyst for change (People's Daily Online)
The increasingly troubling demographics of an aging population in the financial hub of Shanghai may be just the catalyst needed to revise the country's current population policies. According to the local population authorities, the birth rate of Shanghai's registered population is "at a very low level" in the world. In 2009, the total fertility rate in Shanghai was 0.83, while it was 2.6 globally, including 1.7 in developed Western countries and 1.8 in China. "The aging population is a serious problem. The city's long-term, low birth rate will structurally skew the population, which will create a series of social problems," said Xie Lingli, director of the Shanghai Population and Family Planning Commission. Shanghai's aging population began to surface in 1979, 20 years before it became noticeable elsewhere in the country. The city has also seen 17 successive years of negative population growth, according to a report from the Shanghai Municipal Statistics Bureau. The most populated city in China currently has more than 3 million registered residents aged 60 and above, nearly 22 percent of its population. By 2020, the group is expected to encompass one-third of the city's total population. In addition to the family planning policy, high living costs and competitive conditions in Shanghai make more and more young people less willing to start a family, contributing to the continuing decline in the birth rate, experts said. Xie said the first generation of single child families are growing older. It is estimated that from 2013 onwards more than 80 percent of the increasingly aging population will be the parents of single child families. […] According to population policies, the parents of single child families are entitled to receive aid from the local government. Assistance is also available to these parents when they retire. In Shanghai, the parents of single child families receive a 2.5 yuan (37 US cents) bonus each month, the lowest level in the country. They are also entitled to 2,300 yuan of government aid when they retire. "The policy hasn't changed in nearly three decades," Xie said. […] The Shanghai Population and Planning Commission has made similar recommendations to the Shanghai Municipal People's Congress. ^ top ^



Method for selecting HK's Chief Executive in 2012 passed (Global Times)
HK's 60-member Legislative Council (LegCo) on Thursday passed the electoral method for selecting HK's Chief Executive in 2012 by a two-thirds majority after 13 hours of debate since Wednesday. A total of 46 lawmakers voted Yes, 13 lawmakers voted No. Lawmaker Jasper Tsang did not vote since he is LegCo President. According to the Amendment to the Method for the Selection of the Chief Executive, the number of the Election Committee to elect the fourth term Chief Executive in 2012 shall be increased from 800 to 1,200. The composition of the 1,200-member committee shall be divided evenly into four sectors -- Industrial, commercial and financial sectors; The professions; Labor, social services, religious and other sectors; as well as members of the Legislative Council, representatives of members of the District Councils, representatives of the Heung Yee Kuk, Hong Kong deputies to the National People's Congress, and HK's representatives of the Chinese People's Political Consultative Conference. Candidates for the office of HK Chief Executive should be jointly nominated by no less than 150 members of the Election Committee. The Basic Law and the decision by the Standing Committee of the National People's Congress (NPCSC) in December 2007 provide that the methods of selecting the HK's Chief Executive and on forming the LegCo in 2012 may be revised in accordance with the principle of gradual and orderly progress. The method for selecting HK's Chief Executive will take effect after receiving the consent of Chief Executive Donald Tsang and being reported to the NPCSC for approval. The method for forming the LegCo would be discussed and debated in following sessions. ^ top ^

Yuan business expansion reinforces Hong Kong as international financial center: official (Global Times)
Yuan business in Hong Kong is of strategic importance to both China's mainland and Hong Kong, and the expansion of yuan business will help reinforce Hong Kong's position as an international financial center, said Hong Kong's Secretary for Financial Services and the Treasury in Londonon Monday. Speaking on "Hong Kong - Gateway to the China Opportunity" at the Chatham House Seminar, K C Chan said China had started encouraging the use of yuan overseas and further expansion of yuan business in Hong Kong was expected. […] He believed that the availability of more yuan products would attract a larger variety of market participants and help create the right conditions to increase yuan liquidity in Hong Kong, and this would facilitate Hong Kong to develop into a testing ground and international financial center in yuan business. Also on Monday, Chan and the United Kingdom (UK) Exchequer Secretary to the Treasury, David Gauke, signed a comprehensive agreement for the avoidance of double taxation (CDTA) between the Hong Kong Special Administrative Region and the UK. The agreement is the 12th CDTA Hong Kong signed with its trading partners and sets out clearly the allocation of taxing rights between the two jurisdictions and the relief on tax rates on different types of passive income. It will help investors better assess their potential tax liabilities from cross-border economic activities, foster closer economic and trade links between the two places, and provide added incentives for companies in the UK to do business or invest in Hong Kong, and vice versa. ^ top ^



Prominent Tibetan antique dealer gets 15-year jail term (SCMP)
Prominent Tibetan businessman and environmentalist Karma Samdrup was sentenced last night to 15 years in prison on what supporters say were trumped-up charges against him and a move to target his family, who have antagonised local officials with their activism. Karma Samdrup, 42, was convicted of "robbing ancient graves" by a court in Yanqi county in Xinjiang. He was also fined 10,000 yuan (HK$11,400) and deprived of political rights for five years. His lawyer, Pu Zhiqiang, said the verdict was a "disgrace". […] Karma Samdrup was one of the biggest private dealers of Tibetan antiques and was named philanthropist of the year by China Central Television in 2006. […] Before the verdict, [his wife] said she had "lost all hope" after the court had rejected the lawyer's demand to call in police witnesses over Karma Samdrup's allegation of being tortured in custody. Karma Samdrup was detained on January 3 in Chengdu, Sichuan, by Xinjiang police on charges of buying artefacts illegally taken from graves, a crime he was accused of in 1998, but the charges were then dropped. During the three-day trial, Karma Samdrup told the court that torture had been used to make him confess, including sleep deprivation, repeated police beatings and being given drugs that made his nose and mouth bleed. His wife said her husband had been hit on the head so many times that he had coughed up blood and thought he was going to die. The court had rejected the lawyer's request that police evidence extracted through torture be thrown out. "It's a blow for the credibility of the legal system in China, and it calls into question China's recently announced commitment to act on the endemic problems of forced confession and torture," Nicholas Bequelin, senior researcher at New York-based Human Rights Watch, said. Supporters believe Karma Samdrup was implicated because he was trying to save his two brothers […] who were detained in August on charges of establishing an illegal NGO and an environmental journal. […] Rinchen Samdrup was to be sentenced yesterday on more serious charges of subverting state security, but the hearing was postponed. Jigme Namgyal is serving a 21-month re-education-through-labour sentence for "harming national security". […]. ^ top ^



Terrorist cell broken up, Beijing says (SCMP)
Police say they have broken up an overseas-backed terrorist cell responsible for two major bombings at the time of the Beijing Olympics and a series of other attacks in the restive region of Xinjiang since 2008. More than 10 suspects were arrested and a substantial number of homemade explosives and devices confiscated, police said, but gave no details as to how and when the arrests took place. The timing of the announcement coincides with the upcoming first anniversary of the bloody ethnic clash in Urumqi last July, which killed at least 197 people and injured 2,000 others. The central government blamed separatist forces overseas for instigating the incident. In line with past press conferences on terrorist activities marked by their brevity and scant details, the announcement yesterday by Ministry of Public Security spokesman Wu Heping lasted about 10 minutes. He did not take questions. Reading from a statement, Wu said the cell was initiated and supported by the East Turkestan Islamic Movement (ETIM), a separatist group that he said also helped the cell plan its escape from China. The ETIM is allegedly linked to al-Qaeda and was designated a terrorist organisation by the United Nations in 2002. […] Two leaders of the cell […] admitted being key members of the ETIM and East Turkestan forces, according to Wu. […] Wu said that from 2008 the cell planned and implemented "many terrorist attacks" in Xinjiang, including two high-profile bombings during the Olympics. On August 4, 2008, two Uygur men drove a car at a border police team on their morning jog in Kashgar, shooting and setting off explosives at the same time. Seventeen policemen died and 15 were injured; the two defendants were executed in April. On August 10, five Uygur men threw grenades at a police station and a government department in Kuga county. The five were killed on the spot. The police yesterday provided pictures of the two cell leaders and of some of the explosives confiscated. However, it is unclear from the statement how the police concluded this cell was responsible for the various bombings. Police said the group was preparing for bigger attacks between July and October last year in places such as Kashgar, Hotian and Aksu, but decided to flee when several plots were foiled by police. […] Wu said "terrorist organisations such as ETIM are currently and will be the main terrorist threat to our country". Beijing regularly blames the ETIM for terror attacks in Xinjiang but human rights groups remain sceptical amid concerns that Beijing exaggerates the ETIM's activities to justify clamping down on Uygurs. ^ top ^

Xinjiang launches campaign to promote stability ahead of riot anniversary (Xinhua)
Almost 10,000 people Tuesday went out among the people of west China's Xinjiang region to deliver a message of stability and prosperity in the run-up to the first anniversary of a riot that left almost 200 people dead. A total of 9,210 officials and scholars would explain the government's support policies in schools, government departments, communities, villages, families and mosques across Xinjiang, said Li Yi, head of the regional publicity department of the Communist Party of China (CPC). […] A focus of the campaign is the package of policies resulting from a central work conference on Xinjiang's development held from May 17 to 19. President Hu Jintao told the conference that Xinjiang should comprehensively push forward its economic, political, cultural and social development and enhance Party building. By 2015, per capita GDP in Xinjiang should match the national average and incomes and access to basic public services should equal the average levels of the country's western regions, Hu said. The campaign is the first phase of a larger project -- "Love the great motherland and build a beautiful homeland" -- jointly rolled out by the central government and Xinjiang's CPC committee Tuesday. Zhang Chunxian, secretary of the regional CPC committee and head of the 30-month project, said it was of real and historic significance in maintaining and enhancing ethnic solidarity, long-term economic growth and social stability. ^ top ^

Muslim leader urges sensitivity in Xinjiang (SCMP)
The head of the world's largest Muslim grouping urged Beijing on Tuesday to match economic growth in its restive Xinjiang region with more attention to other concerns of its Uygur minority. The carefully worded comments by Ekmeleddin Ihsanoglu, Secretary-General of the Organisation of the Islamic Conference (OIC), came after he completed a visit to Xinjiang as the July anniversary of deadly ethnic riots approached. “We hope development on the cultural field will go hand in hand with the economic field,” Ihsanoglu told reporters in Beijing before leaving China. Ihsanoglu arrived last week for his seven-day visit – the first-ever to China by a head of the 57-member, pan-Islamic organisation – that included two days in Xinjiang, the traditionally Muslim north-western region. […] Uygurs complain that rapid state-backed development in the region has benefited only Han migrants to the area and that an influx of Han threatens to further swamp their culture. Ihsanoglu declined to comment further on what the OIC would like to see in Xinjiang, and otherwise applauded China's efforts to increase development there. Ihsanoglu, who met with government leaders in Xinjiang, said China had also pledged to raise the per capita income in the region up to the national average by 2015. “I think this is a serious attempt from the government to address the issue of unrest,” he said. […] Ihsanoglu met with China's top legislator Wu Bangguo and the head of the National Administration for Religious Affairs. […]. ^ top ^



Taiwan, Mainland agree to terms of historic trade deal (Global Times)
A landmark trade deal between Taiwan and the Chinese mainland will cut tariffs on more than 800 products and open up service industries, officials and sources said Thursday, giving a major boost to around $100 billion in annual two-way trade. The most significant deal between the two sides will be signed Tuesday in Chongqing. Taiwan has been heavily pushing the deal, fearing its $390 billion export-driven economy will lose out to rivals in the mainland market. The economic cooperation framework agreement (ECFA) would see tariffs cut on 539 Taiwanese products bound for the mainland and 267 mainland products exported to Taiwan, the island's "Executive Yuan" head Wu Den-yih told reporters. The cuts on the Taiwan items are valued at $13.84 billion and those from the mainland $2.86 billion. Separately, a source with direct knowledge of the deal said it would also open up to mainland investment Taiwan industries, including movies and business services, while the mainland's computer service, airline maintenance and medical sectors would be opened to Taiwan's investors. The source, who could not be identified as the information has not yet been made public, added that Taiwan banks operating in the mainland would be allowed to conduct business in the mainland's currency a year earlier than current rules allow. ^ top ^



Yuan edges down against dollar on Wednesday (Global Times)
The yuan fell against the US dollar on Wednesday after rising to a five-year high Tuesday, adding evidence that the new round of exchange rate reform will be a two-way street. The central parity of RMB against the US dollar declined to 6.8102 on Wednesday's opening, down 0.18 percent from the last opening, according to the China Foreign Exchange Trading System. China's central bank announced over the weekend it would push forward reform of the Renminbi exchange rate to make it more flexible, but ruled out a one-off revaluation. After a 0.45 percent rise at Tuesday's opening, yuan's spot price rose to 6.7900 in the morning session, the highest since China unpegged the yuan to the US dollar in July 2005. However, it dipped 0.37 percent to 6.8229, and closed at the 6.8136 as pressure for yuan's appreciation eased. ^ top ^

Fiscal deficit hits 750b (Global Times)
Chinese Finance Minister Xie Xuren said Wednesday that central government expenditures exceeded revenue last year, resulting in a fiscal deficit of 750 billion yuan ($110.1 billion). Xie also said the country's fiscal revenue exceeded 6.85 trillion yuan ($1.01 trillion) last year, 11.7 percent more than 2008. Xie revealed the figure in a report on last year's fiscal situation to the 15th session of the Standing Committee of the 11th National People's Congress, China's top legislature. ^ top ^

China sees fastest growing number of millionaires in international community (Global Times)
The world's team of millionaires (with a net asset of or over $1 million) went up 17 percent to 10 million in 2009 putting China among countries with the fastest growth in wealth, according to the Merrill Lynch-Capgemini world wealth report released Tuesday. Global millionaires' combined wealth swelled 19 percent to $39 trillion, while the position of Asia's millionaires in the rank, for the first time, matched Europe's, rising to 3 million, and their collective wealth surpassed Europe's ($9.5 trillion) hitting $9.7 trillion. In terms of population, China, with 477,000 millionaires, ranks fourth in the world, following the United States (2.87 million), Japan (1.65 million) and Germany (861,000) in succession. Only in Hong Kong, the millionaire population climbed 104.4 percent last year. The report interviewed 1,100 wealthy investors in 23 firms, finding out that millionaires were benefited from holding a vast range of investments which include commodities and real estate. They injected most of their money into fixed-income investments seeking predictable returns and cash flow, said the report. ^ top ^

China to overtake US as largest manufacturer (Global Times)
China is set to overtake the United States as the world's biggest manufacturer next year at the earliest, ending the latter's more-than-a-century reign in the field, according to an economic report. Some analysts voiced caution Tuesday, saying that without securing core competitiveness through innovation and industry upgrades, goods producers should not celebrate such a title. […] China is very likely to surpass the US in manufacturing in 2011, and it could be a "close call" this year, Mark Kilion, managing director of IHS, was quoted by CNN as saying. By then, China will supply one fifth of the goods consumed worldwide. The manufacturing sector in China was close to bridging the gap with that of the US last year, with the value of goods produced by Chinese factories reaching $1.6 trillion, while those of the US' were valued at $1.72 trillion. According to IHS, China's manufacturing sector is estimated to have grown by 14 percent in "real" inflation-adjusted terms from 2007 to 2009, while the US witnessed a decline of 8.2 percent over that period. […] The report also pointed out that a stronger Chinese yuan in recent years "magnifies the growth rates" in its manufacturing sector. China pledged to enhance the yuan's flexibility on Sunday. […] Ding said the composition of the US manufacturing industry is more appealing than that of China, which is still much more dependent on low-end products such as apparel, textiles, appliances and other commodities, while US manufacturing focuses on high-end products, including airplanes, automobiles and technology. […] The manufacturing sector makes up more than a third of the country's GDP, while it only accounts for 13 percent of the US', Tian said. Wan Jun, an economist at the Chinese Academy of Social Sciences, told the Global Times that the gap between the Chinese manufacturing sector and its US counterpart is still obvious in terms of production quality. […] Recent labor unrest prompted some experts to predict that rising labor costs will mark the end of the cheap-production era in China. But Ding believes that low-end production and other problems in the manufacturing sector are inevitable along China's development path, and the country's industrialization process is still progressing. […] The number of labor disputes has increased recently as awareness of workers' rights has been raised. […] According to the Ministry of Human Resources and Social Security, the authorities accepted 693,000 labor-dispute cases in 2008, 98 percent more than in 2007. ^ top ^

Homebuyers find ways around loan laws (Global Times)
Homebuyers have begun using their existing houses as collateral to get loans to buy more apartments in reaction to tightening mortgage regulations introduced by the China Banking Regulatory Commission (CBRC) in April. The number of consumers came to the company for mortgage loans increased dramatically in the past month, according to 5A Home Loan Services, a real estate and finance company. […] According to the data collected by the Beijing Chaoyang District Housing Administration Bureau, half of mortgage applications are using existing homes as collateral. "Because of credit tightening policies, people who already have multiple houses and want to buy more in instalments come here, even though the interest rates are high," Zhou said. Under current CBRC regulations, buyers of second houses have to make down payments of no less than 50 percent of the total value of the property, and take loans out with an interest rate 1.1 times China's benchmark interest rate. Banks have also been empowered to suspend granting loans to buyers who want to purchase a third house. […] Song Qinyu, a researcher with Centaline China, a real estate agency, said this would not become a long-term phenomenon that would put more pressure on the rising house prices. The interest rates are too high for this buying method to be used as a tool for speculation, she said. ^ top ^


DPRK and South Korea

High level of telltale gas suggests North Korea conducted nuclear test (SCMP)
South Korean scientists detected a high level of xenon gas - a by-product of atomic tests - two days after North Korea claimed last month that it had staged a successful nuclear test. The North announced on May 12 that it had conducted a nuclear fusion reaction. The South greeted the claim with scepticism at the time because of the technical difficulty inherent in the fusion process. Xenon is produced during the nuclear fission process. Chosun newspaper said yesterday that xenon readings taken near the border raised speculation that the North had carried out a small nuclear test in developing fusion technology. "The amount of xenon detected in the air at the Geojin monitoring site in Goseong county on May 14 was eight times more than normal," a science and education ministry official said. The ministry could not determine the reason for the high level of xenon radiation, a gas that occurs in the atmosphere in trace amounts. "There was no tremor - which usually goes with nuclear explosions - detected at the time," the officials said. "Xenon may have come from a nuclear reactor elsewhere or due to a reason we have yet to understand." The Korea Institute of Nuclear Safety, affiliated to the ministry, also confirmed the detection of a high level of xenon on May 14. […] South Korean experts doubt the North, which suffers daily power shortages, has made major progress in the process. Yang Hyung-lyeol, of South Korea's state-funded National Fusion Research Institute, said at the time that the North might have begun operating a small magnetic nuclear fusion device. A Science Ministry official said the wind was blowing from north to south when the xenon was detected. But the official said the gas could have come from Russia or China, not necessarily from North Korea. The official also said the gas could not have originated from any nuclear power plants in South Korea. ^ 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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