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
  28.6-2.7.2010, No. 326  
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Table of contents

DPRK and South Korea


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Foreign Policy

PLA opens door for visit by US defence chief (SCMP)
[…] "Our stance remains that when both sides consider it's appropriate, [China welcomes] his visit," said General Ma Xiaotian, deputy chief of the People's Liberation Army general staff, in Beijing. Ma's remarks came one month after Beijing turned down a US proposal that Gates visit China, a move that Washington considered a snub to its fence-mending efforts. The PLA at that time reportedly told the Pentagon that it was not a convenient time for Gates to visit, without elaborating. Beijing has halted high-level military exchanges since January to protest against Washington's decision to proceed with US$6.4 billion worth of arms sales to Taiwan, which China considers a renegade province. The 1979 Taiwan Relations Act commits the US to the defence of Taiwan and authorises arms sales to aid its defence. After his visit request was turned down, Gates warned at a security conference in Singapore that the lack of contact between China and the US would damage security in Asia. With nuclear-related problems in North Korea and Iran showing signs of escalation, Washington has been pressing Beijing for its assistance to resolve the issues. […] Professor Gao Haikuan, a security specialist with the mainland-based Chinese Association for International Friendly Contacts, said Ma was sending out a positive signal without giving a definite answer. […] "... But it all depends on how the Pentagon handles bilateral relations from now on. If they do something to make China unhappy, China may change its mind again." A case in point is a joint military drill between the US and South Korea later this month, which could further complicate bilateral military ties as the Pentagon is considering sending an aircraft carrier to participate in an exercise in the Yellow Sea. […] Beijing has warned that it is "extremely concerned" about the war games. In an apparent move to protest against the possible presence of a US aircraft carrier on its doorstep, the PLA is staging live-fire naval exercises in the East China Sea, close to the Yellow Sea. They began on Wednesday and will end on Monday. […]. ^ top ^

China, Vietnam agree to properly handle sea issues (Xinhua)
China and Vietnam agreed Thursday to properly deal with the maritime territorial issues in the South China Sea. This is one of the five consensus decisions made at the fourth meeting of the China-Vietnam steering committee on cooperation, which was co-chaired by Chinese State Councilor Dai Bingguo and Vietnamese Deputy Prime Minister and Foreign Minister Pham Gia Khiem. China and Vietnam signed a package of agreements on the demarcation of their 1,300-kilometer land boundary last November. During the signing ceremony, the two nations agreed to begin discussions to formulate the guidelines to solve the sea issues. Khiem reaffirmed Thursday that Vietnam was willing to work with China to properly handle the sea issues in light of the overall situation of bilateral relations and the friendship between the two peoples, as well as the need to maintain stability. […] Dai stressed that, in light of the future development of bilateral relations, the two sides should always bear in mind the general situation and take a long-term perspective while maintaining good neighborly friendship. […] China is ready to work with Vietnam to steer the development of bilateral relations from a strategic height and use the China-Vietnam steering committee on cooperation as a platform to push forward the bilateral comprehensive strategic cooperative partnership, said Dai. Khiem said it was the firm position of the Vietnamese party and government to continuously enhance the Vietnam-China comprehensive strategic cooperative partnership, which was also the priority of Vietnam's foreign relations. […]. ^ top ^

Beijing hits back at Obama comments (Global Times)
China defended its North Korea policy Tuesday after US President Barack Obama accused Beijing of turning a blind eye to Pyongyang's alleged provocation by sinking a South Korean warship. "We don't favor either side, and we decide our position on the merits of the issue. China's position and efforts on this issue brook no accusations," Qin Gang, spokesman of China's Ministry of Foreign Affairs, said when asked about Obama's comments. "We don't do anything to fan the flames," he added. At the Group of 20 summit in Canada over the weekend, Obama said Beijing must not show "willful blindness" over Pyongyang's "belligerent behavior," noting that he had spoken bluntly to Chinese President Hu Jintao on the matter. […] "China is a close neighbor of the Korean peninsula and over this issue our feelings must be completely different from those (countries) far away from the region. We have a more direct and more serious concern over this," Qin said. When asked whether Pyongyang was escalating tensions by saying Monday that it needed to bolster its nuclear weaponry, the spokesperson said Beijing was against "any act that undermines the stability of the Korean peninsula." Meanwhile, North Korea warned Tuesday that any accidental clash during an upcoming US-South Korea naval exercise could spark war. ^ top ^

Chinese vice premier calls for enhanced exchanges with Switzerland (Xinhua)
Chinese Vice Premier Li Keqiang met with Swiss Foreign Minister Micheline Calmy-Rey on Monday, calling for enhanced exchanges and contacts between the two countries. This year marks the 60th anniversary of China-Switzerland diplomatic ties. Li said the two countries had witnessed smooth progress of bilateral ties over the past 60 years and carried out substantial cooperation in the areas including economy, trade and technology. He suggested to further develop bilateral friendly cooperative ties on the basis of mutual respect, equality, mutual benefit and seeking common ground while putting aside difference. Because the world is undergoing profound and complex changes with global challenges on the rise, the two countries share the responsibility and aspiration to maintain world peace and development, said the vice premier. "China appreciates Switzerland's positive role at the global stage, and hopes to enhance contacts with the country to jointly contribute to world peace, development and cooperation," Li said. Calmy-Rey said her country highly valued its relations with China and hoped to further strengthen bilateral exchanges in various areas and at all levels. Calmy-Rey is on a three-day working visit to China with a focus on the celebration of the 60th anniversary of diplomatic ties with China and the official political dialogue that Switzerland and China have agreed as a means to deepen their bilateral relations. ^ top ^

Beijing's subtle message to US over Korea drill (SCMP)
Beijing yesterday sent a subtle but carefully constructed message to Washington, which is soon to engage in a joint military exercise with South Korea in sensitive waters off the Korean Peninsula, by making public a naval drill planned in the nearby East China Sea. […] Beijing meant to underscore its resentment over the likely presence of a US aircraft carrier in the Yellow Sea next month, but not doing so through the highest-level government mouthpieces such as Xinhua suggested efforts to avoid making the issue an even bigger controversy. […] The joint drill was originally scheduled for this month, but South Korea's Yonhap news agency reported yesterday that it had been pushed back to early next month. The People's Liberation Army announced its drill in the East China Sea off Wenzhou from tomorrow to Monday in a statement carried by the Wenzhou Evening News, the local official newspaper in the coastal city in Zhejiang. The drill, which involves live ammunition exercises, would be carried out between midnight and 6pm every day, the statement said. […] "China wants the US to know that it's not happy about the [Yellow Sea] drill, but this was done in a very subtle way," said Ni Lexiong, a Shanghai-based security expert and a retired general. Ni said announcing the drills through a local newspaper was a careful move by the PLA to make the drills appear to be less provocative. […] Beijing has express its concern over the joint military drill, especially as media reports said Washington might send a nuclear-powered aircraft carrier, the USS George Washington, to the four-day exercise. Anthony Wong Dong, president of the International Military Association in Macau, said the PLA would normally announce military drills through state-level media outlets such as Xinhua and the PLA Daily. Wong said the East China Sea drill could have been long planned and may not have been staged to coincide with the one in Yellow Sea. "But the PLA chose not to keep a lid on it, as it sometimes will, and announced it through a local newspaper. This says a lot about its intention to make its discontent heard but in a low-profile way," Wong said. Another consideration for a low-profile announcement was to avoid putting new Japanese Prime Minister Naoto Kan, considered friendly to Beijing, in a difficult situation. The East China Sea has long been a sensitive body of water between the two Asian powers, and a military drill could easily set off a diplomatic spat. If a US aircraft carrier sailed into the Yellow Sea, Wong said Beijing would likely retaliate by banning US naval vessels in Chinese waters. ^ top ^


Domestic Policy

13 dead, 86 still buried three days after landslide in SW China (Global Times)
The death toll from a rain-triggered landslide in southwest China's Guizhou Province had risen to 13 after rescuers recovered another two bodies Thursday night, rescue headquarters said. Some 2,000 people continued the rescue operation, but the chance of survival for the other 86 villagers was slim after being buried under mud for three days, rescuers said. […] The landslide consisted of about 1.5 to 2 million cubic meters of mud, and it was unstable and likely to trigger additional landslides, said Yin Yueping, a researcher with the Ministry of Land and Resources. At least 1,000 villagers living in the area have been evacuated. […] Local meteorological bureaus said heavy rains would continue to pound Shandong and some area of Qinghai Province. ^ top ^

Industrial unrest hits plant in Tianjin (SCMP)
[…] The strike at the Tianjin Mitsumi Electric factory, with 3,000 workers in the port city of Tianjin, follows weeks of stoppages by workers across the mainland demanding higher wages and better conditions. […] Workers at the factory in Tianjin's Dongli district, stopped work on Tuesday, demanding wage rises and improved benefits, the report said. "We want a pay rise" and "We want fair treatment" said handwritten posters stuck to factory walls by workers. The report did not say what pay rise the striking workers were demanding. One worker told Xinhua that he received 1,500 yuan (HK$1,700) for working full time and doing two hours of overtime a day and also working on Saturdays. Calls to the factory office rang unanswered yesterday evening. The mainland government is in a dilemma. On the one hand it wants farmers and workers to earn more in order to boost domestic consumption. But on the other hand, the continued strikes could become a worry for the Communist Party, which fears public discontent could erode its authority and alarm investors. The strikes earlier disrupted production at carmakers Toyota and Honda, and have laid bare the rising demands of China's 150 million migrant workers, especially younger workers seeking their share of the growing prosperity seen in the mainland's major cities. ^ top ^

Crossover 5,800 Chinese officials penalized for corruption in construction projects (Global Times)
Over 5,800 Chinese officials have been penalized for disciplinary violations related to construction projects since August last year, a spokesman for the Communist Party of China (CPC) Central Commission for Discipline Inspection (CCDI) said Wednesday. The officials were implicated in more than 9,900 cases of corruption. Some 3,400 of the officials have been referred to judicial authorities, CCDI spokesman Wu Yuliang said at a press conference.

The CPC Central Committee decided in July last year to launch a two-year campaign to tackle corruption in the construction sector. As of May, discipline authorities had probed more than 340,000 construction projects and uncovered disciplinary violations in 140,000 of the projects being probed. About 60,000 cases have been rectified, according to Wu. ^ top ^

One man's touch sets off wave of factory strikes (SCMP)
The recent wave of strikes at factories in the southern mainland was triggered by one bold worker who decided to stick his thumb out. Early on the morning of May 17, Tan Guocheng, a 24-year-old worker in the gearbox department at the Honda Auto Parts factory in Foshan, Guangdong, pressed an emergency button that shut down the production line. It was a symbolic strike signal that not only awakened his 1,900 underpaid co-workers but also millions of workers in the Pearl River Delta. "We had waited for a leader to give us such a signal for a long time," a worker at the factory said. […] Many of us considered going on strike for better pay, but no one had enough courage to take action." […] Tan, a Hunan native who dreams of joining the mainland's burgeoning middle class, said he had planned the strike after submitting his resignation. "I just wanted to fight for some benefits for my co-workers before I left," he said. […] Drawing inspiration from the non-violence and non-co-operation practised by Mahatma Gandhi in India in the 1920s and 1930s, they set down two strict rules for the strike: no damaging of machines or facilities at Honda; and no scuffling with people holding different opinions, including the Japanese management. […] The workers were then offered pay rises of 55 yuan a month and told that Tan and Xiao had been sacked. But if management believed such a tough response would cow the factory's workers into submission, it was mistaken. It actually brought all 1,900 - mostly aged between 19 and 21 - together. "What's the meaning of a 55 yuan pay rise? It was insulting; we felt that management regarded us as beggars," one worker who did not take part in the earlier strike said. […] Many neighbouring factories in Foshan's Songgang industrial zone increased salaries to prevent copycat strikes. Nearly two-thirds of the workers at Honda Auto Parts are interns from technical schools, and management invited their teachers and principals to Foshan to try to persuade the students to go back to work, raising the pay rise offer to 400 yuan. Some interns said their teachers even threatened them, saying they would have to sign a letter agreeing not to go on strike if they wanted to receive their graduation certificates. Tan kept in touch with his former workmates through QQ, a popular online chat forum, and mobile phone text messages. "He reminded us to unite, drawing on popular anti-Japanese sentiment," a worker in the factory's foundry department said. "It was very useful because many of us had learned about the anti-Japanese war from our history books and movies." […]

A Honda Auto Parts worker from Qingyuan, Guangdong, said young workers were tired of being underpaid. Unlike their parents, who were farm workers, they were well-educated technical school graduates. "We are daring to bargain with management because we have the full support of our parents," he said. "My migrant worker father told me that he doesn't want me to suffer the same unfairness he endured.". ^ top ^

Labor issues top the agenda (Global Times)
Weeks of labor frictions and strikes at plants across the country have finally registered on the central government's radar. Measures need to be adopted to foster good relations between workers and employers so that wages can rise and employment levels remain stable, Premier Wen Jiabao said over the weekend. His speech came one day after a sit-in was resolved at a Japanese auto parts plant located in Nansha, Guangzhou Province. […] The latest round of labor issues is only the most recent in a long-term nationwide trend toward higher wages. Average workers' cost of living has risen with economic expansion in the labor-intensive coastal regions due to soaring housing prices, said Lian Ping, chief economist with Bank of Communications. […] Many provinces and cities recently announced an increase of roughly 20 percent in minimum wages effective July 1. Several ministries and commissions have also mulled an income distribution reform plan, the revision of which is expected later this year. Economists don't think wage increases will put pressure on inflation in the near term while raising concerns over its long-term implications. Pay rises will have an influence on the consumer price index (CPI) consisting mainly of food prices, but it is not likely to greatly affect the CPI in the near future, Lian said. The higher labor cost in costal regions will prompt companies to transfer their production to central and western regions, which could limit the impact of wage increases on inflation nationwide, he said. "Monetary policy is likely to become more accommodative to inflation over time as wage hikes accelerate," Peng Wensheng, head of China research at Barclays Capital, also said in a note distributed June 14. He added higher productivity together with infrastructure investment and better education would offset a slow down in economic growth as less people enter the labor force and the rate of investment falls gradually. Peng warned, "China is likely to see slower growth but a higher rate of inflation than in the past decade.". ^ top ^



Delay of water diversion project leaves Beijing thirsty (Global Times)
The delay of the South-to-North Water Diversion Project is accelerating the water crisis in China's capital, where 17.55 million people are overdrawing inadequate supplies, Tuesday's China Daily quoted experts as saying. The project was planned to transfer 1 billion cubic meters of water to the capital in 2010, but its completion has been postponed until 2014. According to Beijing's urban planning design (2004-2020), the city's annual water demand will be 4 to 5 billion cubic meters by 2020. The water diversion project will transfer at least 1 billion cubic meters of water every year. The project is very important to alleviating the capital's water shortage, Wang Jianhua, a scientist with the China Institute of Water Resources and Hydropower Research, was quoted by Beijing media as saying in May. The city's current shortage has reached 400 million cubic meters, experts said. The capital's urban planning design recommended that the capital's population be kept within 18 million. But it grew from nearly 17 million at the end of 2008 to at least 17.5 million a year later, Beijing government figures show. Experts estimated that unless controlled, the city's population is likely to surpass 21 million, perhaps even reaching 25 million. Since 1949, available per-capita water has decreased from 1,000 cubic meters to less than 230 cubic meters as of 2008, less than 3.3 percent of the global average, Probe International's Beijing Water Report 2008 said. Yu Yaping, director of Beijing Water Bureau's information department, told the Beijing Sci-Tech Report that nine straight years of drought have decreased the Miyun reservoir's annual storage volume. The major water source's storage level is about 1.1 billion cubic meters, meaning more groundwater must be extracted. The storage volume in Miyun and Guanting reservoirs, which supply more than 90 percent of Beijing's surface water, reached nearly 11 billion cubic meters in mid-June. That is about 200 million cubic meters less than the same period last year, Beijing Water Bureau's latest figures show. The diversion project is designed to transfer water from the country's wet south to the drought-prone north along three routes (eastern, central and western), with most of it coming from the Yangtze River. Officials have said the eastern route will eventually be able to annually transfer about 15 billion cubic meters of water and the central route will be able to send 13 billion to 14 billion cubic meters north each year. ^ top ^



Low-income homebuyers get boost (Global Times)
New regulations reworking a government-backed housing fund were unveiled Tuesday in Shanghai, making it easier for low-income families in the municipality to get mortgages for affordable housing. This is the first move to incorporate low-cost apartments, which are subsidized by the government, into the public housing fund. The Chinese housing fund is similar to a social security program in which employees put a portion of their salary into a reserve that can only be used for housing purchases. The new guidelines now allow for multiple borrowers to pool their funds and repay loans of one unit together. The qualified co-borrowers are expanded from spouses or immediate family members who applying for the same units, to any person who also own the property rights, according to the municipal government's new plan. "If the borrowers have difficulties in repaying the credit loans, they can apply with the Shanghai Housing Fund Management Center to add more supplementary family members to help them repay the loans using their own housing funds," said the plan. […] According to Shanghai's affordable housing guidelines, only families with incomes of less than 2,300 yuan ($338.33) per month on average can apply for the residences. […] If an individual with a salary of 2,300 yuan ($338.33) per month wants to buy an apartment with the average sales price of 5,000 yuan ($735.50) per square meter in Minhang district in Shanghai it is difficult for him to repay 1,300 yuan ($191.10) per month for 20 consecutive years. "Those purchasing affordable houses using the fund have to make a down payment equal to no less than 20 percent of the property's value," the guidelines said. "And the credit lines for each family will be no more than 600,000 yuan ($88,265)," said the guidelines. The first batch of affordable houses will be made available in July. ^ top ^

Shanghai World Expo attendance hits 20 mln mark (Global Times)
[…] The number of Expo visitor arrivals broke the 20-million mark Monday, the Bureau of Shanghai World Expo Coordination said in a statement, adding that the number of visitor arrivals passed the 10-million mark June 5. A new daily attendance record was set Saturday when 553,500 people visited the Expo Park. Shanghai is experiencing a relatively cool summer, with only one day so far, June 19, over 35 degrees Celsius in temperature. Large crowds of visitors, particularly students, are expected at the Expo during the school holidays in July and August. The Expo is expected to draw 70 million visitors in total by the time it closes on Oct. 31. The Expo organizers have urged tourists to brace for rain and hot summer weather. […]. ^ top ^



Top political advisor stresses protection of Tibetan culture (Global Times)
Top Chinese political advisor Jia Qinglin Wednesday stressed the importance of protecting and developing Tibetan culture. "The preservation and development of Tibetan culture bears on the inheritance of the centuries-old Tibetan history, the advancement of social and economic development in Tibet, and the unity of the nation," Jia said at a meeting with representatives of the second congress of the China Association for the Preservation and Development of Tibetan Culture at the Great Hall of the People in Beijing. Jia, chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), spoke highly of the association's work over the six years since it was founded. He encouraged the association to continue to contribute to the preservation of Tibetan culture and to promote the common prosperity and unity of ethnic groups in Tibet. […] The association's second congress opened Tuesday and concluded Wednesday afternoon. Pagbalha Geleg Namgyae, vice chairman of the CPPCC National Committee, was elected president of the association. Du Qinglin, vice chairman of the CPPCC National Committee and head of the United Front Work Department of the Communist Party of China (CPC) Central Committee, and Ragdi, former vice chairman of the Standing Committee of the National People's Congress, were elected the association's vice presidents. ^ top ^

Tibet's fourth civil airport opens (People's Daily Online)
Gunsa Airport sits more than 4,200 meters above sea level and has a 4,500-meter runway. Its annual throughput capacity is expected to reach 120,000 passengers by 2020. Construction of the airport began in May 2007 and cost an estimated 1.65 billion yuan (241.22 million U.S. dollars). Before the airport opened, Ngari was linked to Lhasa only by road and it took three days to cover the 1,600-km route. Gunsa Airport is the fourth civil airport in Tibet after Gonggar Airport in Lhasa, Bamda Airport in Qamdo Prefecture and Nyingchi Airport. A fifth airport, Peace Airport in Xigaze, is expected to open in October. Exactly four years ago, China opened a landmark railway linking Tibet with major cities, including Beijing, Shanghai and Guangzhou. ^ top ^



One year after Xinjiang riots, Uygur leader appeals to world (SCMP)
One year since China's worst ethnic violence in decades, the exiled leader of the Uygur minority has seen a surge of global interest in her cause but says the world can do far more. Long an obscure issue to much of the world, the simmering resentment against Beijing's rule by the mostly Muslim Uygur community burst into the open in July last year as riots engulfed Urumqi, capital of the vast Xinjiang region. The violence catapulted into the spotlight Rebiya Kadeer, a department store tycoon turned activist. The 63-year-old mother of 11 spent years in a mainland prison before she was allowed to go into exile in the United States in 2005. "I'm just an ordinary woman, yet the Chinese government is so fearful of what I say and do. That shows I stand for justice," Kadeer said in her tiny office in Washington. […] Kadeer says her sources indicated mainland authorities have been going door to door since the unrest, rounding up suspicious Uygurs and justifying the raids with occasional announcements of busted "Islamic terrorist" cells. Kadeer said it was impossible to give an exact number of detained Uygurs due to internet restriction and a climate of fear. "China's economic power gives it the opportunity to crack down on the Uygurs because they can silence Western governments and also Muslim governments," she said. […] The central government said it would pour around 10 billion yuan (HK$11.46 billion) in development aid into the region, beginning in 2011, to raise Uygurs' living standards and quell discontent. Kadeer was dismissive of any shift in policy. "If they truly changed the policy, then they should release innocent and the injured Uygurs and they would apologise - not only to the Uygurs, but to all the people of East Turkestan - for what they've done." Beijing has accused Kadeer and her World Uygur Congress of fomenting last year's unrest, charges she denies. […]. ^ top ^



Trade pact has 'flowers and thorns' (SCMP)
[…] Speaking at a farewell ceremony as both sides wrapped up their monumental negotiations in Chongqing, Chen Yunlin, president of the mainland's Association for Relations Across the Taiwan Straits, said: "There will be flowers and thorns on the road for future cross-strait negotiations. But once we believe it's right, we will stick to it and do it well. "The project is only a framework. There is still a lot of work we must do." […] The historic deal is expected to boost two-way trade by US$100 billion. The pact would need approval from the mainland and Taiwanese authorities, and both sides would continue discussing agreements for commodity trade, service trade and investment within six months after the trade pact takes effect, Xinhua reported yesterday. […] Taiwanese President Ma Ying-jeou will hold a press conference today about the pact. ^ top ^

Approval of pact not a done deal in Taiwan (SCMP)
Although Taiwan and the mainland have signed a landmark trade pact that allows the island to take a breath in regional economic competition, it still needs approval from the Taiwanese legislature, and that's not the only bump in the road ahead. […] The Democratic Progressive Party, the main opposition and pro-independence party, said there was no way it would let the deal pass in the legislature because of its colossal impact on the island. […] The DPP and other pro-independence groups in Taiwan have labelled the ECFA as the equivalent of the Closer Economic Partnership Arrangement that Hong Kong signed with the mainland seven years ago. They claim that, like Cepa, only big conglomerates in Taiwan would benefit from the deal while the majority of smaller businesses would be seriously affected, including shutdowns due to low competition and loss of jobs. Mainland-friendly President Ma Ying-jeou is determined to seek public support for the ECFA so he agreed to let the legislature review the trade deal and issue a final approval before it can become effective. […] "Each of the items and each clause of the pact must be reviewed carefully to see if it is really beneficial to Taiwan," DPP legislator Lee Jun-yi said. Huang Kun-hwei, chairman of the Taiwan Solidarity Union, said his party, which had already collected more than 100,000 signatures, would apply today to hold another referendum on the issue after the government rejected a previous proposal. Ma asked the opposition yesterday not to boycott the trade bill, saying it was highly beneficial and significant to the island in its efforts to keep from being marginalized in the face of increasing trade blocs in the region. Premier Wu Den-yih said yesterday that he hoped the legislature would have time to revise relevant laws before December. […]. ^ top ^

Taiwanese rally against trade deal (SCMP)
Thousands of people took to the streets of Taipei yesterday protesting against an imminent major trade deal with the mainland. Protesters shouted "Oppose ECFA" and "Save Taiwan" as they took part in a march in central Taipei organised by the pro-independence Democratic Progressive Party (DPP). The party said 100,000 people would join the protest. Security was tight and more than 2,000 police officers were deployed during the protest that was held before Taiwanese envoy Chiang Pin-kung travelled across the strait to sign the Economic Co-operation Framework Agreement (ECFA) on Tuesday. The deal will allow preferential tariffs on 539 Taiwanese products, including petrochemicals and textiles, while applying only to half as many mainland items. Former Taiwan president Lee Teng-hui, who opposes the deal, told the protesters: "The ECFA will benefit big corporations rather than the public, labour or small businesses... It is wrong and will hurt Taiwan." […] Opponents say the accord will strengthen Beijing's clout over the island, marking a first step towards reunification. […]. ^ top ^



Economy on right track, Wen says (SCMP)
Premier Wen Jiabao believes the world's third-largest economy is moving in the "expected direction", the government said yesterday, amid fears that it may be losing steam. "The domestic economy is developing in the expected direction under the government's macroeconomic controls," Wen said during two days of meetings this week with economists and business executives. […] "The domestic and international economic situation is still extremely complex," Wen said. "We should maintain the continuity and stability of macroeconomic policies." Global financial markets are concerned that a series of measures to cool the property market and slow bank lending will bring about an abrupt slowdown in the economy. Wen made no mention of the government's pledge last month to pursue a more flexible yuan exchange rate. The currency has since appreciated about 0.5 per cent against the US dollar. His comments came after President Hu Jintao, in a speech to the Group of 20 summit in Canada at the weekend, called for caution in exit strategies from economic stimulus programmes to safeguard the global recovery. The country's economy expanded by a blistering 11.9 per cent in the first three months of the year, fanning inflationary pressures and raising fears it was at risk of overheating. Royal Bank of Scotland economist Ben Simpfendorfer has forecast an 11.1 per cent growth in the second quarter. ^ top ^

IMF pushes for currency revaluation (Global Times)
The head of the IMF said Monday he would like to consider putting the Chinese yuan into the basket of currencies that make up the Fund's Special Drawing Rights (SDR) "the sooner the better", but its value first needed to be freely determined by the market. Dominique Strauss-Kahn told reporters in a news conference that he believed there would be more pressure to include yuan, also known as the renminbi, among SDR currencies as China's economic clout grows. "This question has to be considered. I think it will be difficult to include the renminbi before the renminbi really has a market price and is in one way or the other a floating currency. But the sooner, the better," he said. […] The IMF's Special Drawing Rights, the Fund's internal unit of account, has often been suggested as a global quasi-reserve currency alternative to the US dollar. Its value is based on a basket of dollars, euros, yen and sterling. China this month said it would resume a policy of greater exchange rate flexibility for the yuan after keeping it pegged at about 6.83 to the dollar for the past two years. The move is expected to lead to a gradual rise in the yuan's value against the dollar. ^ top ^

Yuan hits 5-year high after reforms (Global Times)
The yuan jumped to a record high against the dollar Monday, a week after the People's Bank of China (PBC) announced further reforms of the exchange rate regime. The PBC set the yuan's central parity rate at 6.7890 against the dollar Monday, the highest level since July 2005 when China depegged the yuan from the dollar. Such reforms were suspended during the economic crisis, but the announcement on June 19 resumed a depegging. […] The exchange rate will lose flexibility if only pegged to one currency, Yi Gang, vice governor of the PBC, said at a forum in Shanghai over the weekend. Economists said the yuan will keep rising, albeit gradually. The yuan is returning to its pre-crisis path, and it has already appreciated a lot against the dollar, said Frances Cheung, a senior strategist for Asia excluding Japan at Crédit Agricole CIB in Hong Kong. Cheung predicted a 3 to 5 percent appreciation in a year from now. "That's very gradual but it is more realistic." Some analysts fear a rising yuan's effects on China's export economy. The revaluation is likely to affect the country's trade, which is just rebounding, said Tan Yaling, head of the China Forex Investment Research Institute. But Cheung said the concerns over exports could be relaxed as other Asian currencies are expected to rise as well. The fact that China's trade kept expanding along the same path since 2005 also proves that the currency reforms have had little impact on trade, she added. "Intra-Asia production linkages would mitigate the impact on China's export prices," Johanna Chua, Citigroup's chief economist for Asia Pacific region, also said in a note Monday. The PBC's move reflects China's intention to make the yuan an international currency, Cheung said. But the yuan's real appreciation may be increasingly important over the medium term, "as real appreciation can be realized via a combination of nominal appreciation and higher inflation," Chua pointed out. The country's rapid wage growth is likely to raise the inflation level to above 4 percent in the coming decade compared to 2 percent in the previous 10 years, Chua said. Prices will further move up as price reforms covering everything from water to electricity are implemented, she remarked. ^ top ^

Govt steadies coal price to curb inflation (Global Times)
The National Development and Reform Commission (NDRC) has asked the country's major coal companies to keep coal price stable, another effort to curb worsening inflation. "All coal companies should keep annual contract coal prices steady, while State-owned coal firms should also maintain the current level of spot coal prices," the country's top planning body said Friday on its website. The benchmark term price signed by top coal miner China Shenhua and utilities for coal with 5,500 kcal/kg (NAR) was 570 yuan ($83.93) a ton, while the spot price for the same grade of coal stood at about 760 yuan ($111.91) a ton. Coal prices are a key input factor for coal-fired electricity prices and can have great significance on the country's inflation. In May, the consumer price index, an index of inflation, rose 3.1 percent compared with the same month last year, overtaking the government's own inflation target of 3 percent for the year. In the past, the government has quickly hiked interest rates to curb inflation, often at the expense of GDP growth, but this year it has not taken that step yet. "Policymakers will hike interest rates in the third quarter if the inflation rate still goes up," said Sun Junwei, analyst with HSBC. "But the government is putting off deciding what to do with interest rates and yuan revaluation because of the uncertainty brought on by the European debt crisis," said Sun. Trying to keep coal prices under control is a move to stave off inflation without running a major risk of upsetting the economic recovery. Thanks to the NDRC's annoucement, shares of the country's major coal companies fell Monday on the Shanghai Stock Exchange. China Shenhua fell 1.45 percent to 23.15 yuan ($3.41), China Coal dropped 1.63 percent to 9.06 yuan ($1.33), and Yanzhou Coal was down 2.57 percent to 17.83 yuan ($2.63). ^ top ^


DPRK and South Korea

N Korea urges UN to back new sinking probe (SCMP)
North Korea has asked the UN Security Council to support its call for a new probe into the March sinking of a South Korean warship that Seoul blames it for, saying it could co-operate on it with the South. “We are of the view that the most reasonable way of settling this incident is that the north and south of Korea sit together to probe for the truth,” North Korean UN Ambassador Sin Son-ho said in a letter to Mexican UN ambassador Claude Heller, current president of the council. The letter, dated June 29, was obtained by Reuters on Wednesday.

Western council members have dismissed the idea of conducting another investigation, saying a South Korean-led inquiry with international participation yielded a persuasive case against Pyongyang. […] Sin said the 15-nation Security Council should “take measures that can lead the US and South Korea to receive the inspection group of the National Defence Commission as already proposed by the DPRK [North Korea], the victim, to help verify the ‘investigation result' and find out the truth.” US State Department spokesman P.J. Crowley said another inquiry was not needed. […] A separate South Korean letter to the council, also obtained by Reuters, said that the sinking of the ship was a breech of the 1953 North-South armistice and should be discussed by the commission overseeing the Korean War truce. The Security Council has been discussing a possible rebuke of North Korea, but China, Pyongyang's only major ally, has been reluctant to allow any direct criticism that might provoke retaliation by its impoverished communist neighbour. […] Western council diplomats have said that a statement on the issue agreed on Saturday by the Group of Eight rich nations club, which includes Russia, was very close to language they have been considering in New York for a council resolution or statement on the Cheonan sinking. The G8 “deplored” the attack on the Cheonan and blamed North Korea for an incident it said “is a challenge to peace and security in the region and beyond.” The diplomats said they hoped the council could agree on something on the Cheonan incident soon but Heller told reporters after the council discussed North Korea behind closed doors on Wednesday that there was still no agreement. […] In his letter, Sin also asked the council to back the North's request for high-level military talks with the South. […] One senior Western diplomat described Sin's letter as “more moderate and more measured” than communications the council usually receives from the North Korean mission. North Korea had previously threatened to turn Seoul into a “sea of fire”. ^ top ^

North Korean heir apparent elected to assembly (SCMP)
[…] Kim Jong-un was elected to the Supreme People's Assembly at the elections in March last year from district 216, South Korean media quoted a Western source familiar with the North as saying. The election may have been kept under wraps because the North has been wary of inciting discontent by publicly promoting Kim Jong-il's son as heir during economic difficulties, analysts said. […] The number 216 signifies the birthday of the current leader and is reserved for persons of special entitlement, making it likely “Kim Jong” who appears on the list of elected delegates is in fact the youngest son of Kim Jong-il, the source said. The Supreme People's Assembly is the country's rubber-stamp body that formally approves decisions by the leadership but key officials of the military and the ruling party are typically its elected members. Kim Jong-il appears to have struck a deal with the military after he suffered a stroke in 2008 to get his son accepted as the next leader in return for agreeing to take a hardline policy externally as demanded by the army, the source was quoted as saying. “The military will probably come to the front after Kim Jong-il's death as a collective leadership with Kim Jong-un as figurehead,” the source was quoted as saying. There are indications that a new campaign to build a cult of personality for the junior Kim has begun, including the teaching of songs that try to give legitimacy to his place to succeed his ailing father, the source said. The ruling communist party has called a rare meeting in September to elect a new leadership, a move analysts said could formally set in motion succession plans for Kim Jong-un to take over. ^ top ^

North Korea vows to bolster nuke arsenal (Global Times)
North Korea said Monday it would bolster its nuclear arsenal in "a new, developed way" to counter what it called US hostility and military threats, state media reported. In a separate statement, Pyongyang also warned of military action against the United States and South Korea, as it accused Washington of bringing heavy weapons into a truce village in the demilitarized zone that divides the Korean peninsula and urged their immediate withdrawal. […] The spokesman did not elaborate on the term "new, developed way." The North conducted two atomic weapons tests, in 2006 and 2009. It announced it had reached the final stage of enriching uranium in September. […] North Korea said Sunday that it was open to North-South Korea senior military talks to investigate the incident, but it repeated its refusal to engage in North Korea-US general-level military talks to resolve the issue. […] According to the Armistice Agreement that ended the 1950-1953 Korean War, the forces of both sides in the area around the Panmunjom Conference Hall can carry only small arms such as pistols and rifles. Heavy weapons are banned in the area. The introduction of heavy weapons to the area where the armed forces of both sides stand in acute confrontation was "a premeditated provocation aimed to spark a serious military conflict," the KCNA quoted its military as saying. The US forces should immediately withdraw all those weapons already in the area, or the Korean People's Army (KPA) will "take strong military countermeasures," it added. South Korea's defense military could not immediately comment on North Korea's reports about what may have occurred in the truce village, when reached by the Global Times Monday. Xu Guangyu, a researcher at the China Arms Control and Disarmament Association, said the US has mainly installed self-propelled guns in the demilitarized zone, with a range of scores of kilometers. North Korea has always taken a tough stance on the issue, and its threat of taking strong military countermeasures is actually aimed at "not opening fire" with the South, he said. "The price of opening fire between the two sides is too high. Neither side could afford serious consequences," he said. Lü Chao, of the Laoning Academy of Social Sciences, told the Global Times that Panmunjom, in the demilitarized zone, which is less than 70 kilometers from Seoul, has long been in a state of stalemate, and both sides have deployed virtually equal amounts of weapons in the area to maintain the delicate balance. "Any unilateral increase of weapons will definitely trigger a strong reaction from the other side," he said. However, Lü ruled out the possibility of large-scale confrontations in the area. […]. ^ top ^



Mongolia's anti-corruption chief under investigation (Global Times)
Mongolia's State Prosecutor's office on Tuesday requested job suspension of the head of the country's anti-corruption agency. The head of the investigation unit of the prosecutor's office said during a press conference that "Ch. Sangaragchaa overstepped his authority on many things, including financial and investigative matters." "He also made false statements" to the state prosecutor's office, said the investigation unit head, referring to statements made by Sangaragchaa on Monday. The prosecutor's office refused to disclose detailed charges against the official, saying it was a "state secret." But Sangaragchaa said the state prosecutor's office was attacking the agency for political reasons, saying the office had asked the agency to drop corruption cases related to some of the country's top officials and a lawmaker. ^ top ^

Mongolia, Saudi Arabia to boost mining cooperation (Global Times)
Mongolia and Saudi Arabia on Tuesday pledged to step up their cooperation in the mining and minerals sectors. There is full potential for successful and mutually beneficial cooperation between the two countries, Prime Minister Batbold Sukhbaatar said during a meeting with a Saudi Arabian delegation led by Ali bin Ibrahim Al-Naimi, Saudi Arabia's Minister of Petroleum and Mineral Resources. Sukhbaatar stressed the need to raise current bilateral cooperation to a new level, especially in the mining and minerals sectors, which are the two countries' most dominant economic sectors. The prime minister added that Mongolia could learn from Saudi Arabia's experience in oil exploitation, capitalization and management. The Saudi oil minister said that his visit to Mongolia aims to explore opportunities for mutual cooperation and investment in the mining sector. The minister said that the Saudi Chamber of Commerce and Industry looks forward to strengthening bilateral cooperation with Mongolia. The Saudi minister also expressed willingness to help train Mongolian oil specialists and create opportunities for Saudi businessmen to invest in the Asian country. ^ top ^

DP group wants power plant agreement cancelled (
The issues discussed by the Democratic party group in Parliament at its regular meeting on monday mainly related to those to be considered by standing committees this week. The group set up a working group to review the basic guidelines of the socio-economic policy for 2011. It also heard reports from other working groups on several issues and asked the groups to prepare recommendations to be submitted to the standing committees and to parliament. The meeting favored a parliamentary discussion on a government draft amendment to the law on guaranteeing bank deposits and supported a draft resolution to change the boundaries of some natural complexes. One of the other important issues discussed was construction of a thermal power station based on the coal mine in Khuvsgul province near Mogoi river. The minister of minerals and energy explained why a Chinese company has been asked to build the plant. The DP group supported cancellation of the agreement, especially as mps Ts.Sedvanchig and L.Gundalai, both of whom were elected from the province, are against it. The mps want a clear statement on the number of mongolian employees at the plant and also a new estimate of the costs now fixed at usd110 million. also foreigners must not own more than 49 percent of the plant. Group head Ch.Saikhanbileg told media after the meeting that ownership should be transferred to mongolia earlier than that proposed 30 years and foreign workers must not be brought in large numbers. ^ top ^

Move to pay allowance to 160,000 poor families (
The Ministry for Social Welfare and Labor yesterday organized a discussion on whether it was right to assist poor citizens. A ministry official said it was necessary for people to have correct information on the contents of the draft amendments to the social welfare law that the Government has submitted to Parliament. A survey conducted by the National Statistics Office shows that 73 percent of poor families have at least one member with a job. Thus it is not unemployment as such but rather failure to earn enough that keeps families poor. Poor families also have many children with not enough earners to support them. The draft recommends giving a monthly allowance to poor families. This will consist of MNT7,000 for each adult and MNT10,000 to every child. On an average a family will get MNT40,000. Families will qualify to be registered as poor on the basis of average income. The ministry estimates MNT60-80 billion will be needed per year to give the allowance to 160,000 households. This is expected to reduce the poverty rate by between 3.7-8.2 percent. MNT160 billion was earlier spent from the state budget to pay child money and young family money. ^ top ^

Government wants to allot land to groups of ninjas (
MPs curious to know if artisanal miners, popularly called ninjas, really make much money from the gold they find were told during recent discussions on amendments to the Mineral Resources Law and the Land law, which are, among other things, aimed at adopting a comprehensive policy on artisanal mining, that a survey in August 2009 found over 35,000 artisanal miners working in 100 areas of 57 districts of 18 provinces. They do not pay any royalty for what they produce, but they did give to the Central Bank 564 kg of gold in 2008, and 400 kg more in 2009. Such miners do not pay any tax or royalty. The Government proposal is to allot 2,500 hectares of land to each cooperative group of ninjas with five members. ^ top ^

Mongol Bank's foreign currency policy criticized (
Noted economist N. Dishevel says the failure of the Mongol Bank to contribute anything to the state budget in 2009 shows the flaws in its policy in relation to foreign currency reserves. “That tax payers' money was wasted in loss-making currency deals shows that the bank's officials are not qualified,” he said. Other economists see little merit in the Central Bank's claim that the present foreign currency reserves are at “a historic high” of USD1.3 billion. They say this should actually be much higher, given the country‘s natural resource and the high commodity prices in recent months. Gold extraction was estimated to reach 15 tons but the Central Bank received less than 3 tons, indicating failure of last year's measures to support gold extractors. Parliament cannot take Central Bank officials to task because their appointment is decided by MPs. ^ top ^

Mongolia to increase crude oil output with foreign investment (
Ambassador to Australia J. Tserendorj has said Mongolia is looking for foreign investors to help it boost domestic crude oil production tenfold in the next three years,. The increase in crude production to 10 million barrels a year from 1 million in 2009 would coincide with construction of Mongolia"s first oil refinery, enabling the country to reduce its dependence on Russia for all petroleum products. The move is the latest by Mongolia to exploit vast untapped natural resources with the help of billions of dollars in foreign capital as it seeks more economic autonomy from its neighbors. "Right now we export all our crude oil to China and are 100% dependent on Russia for oil products, except for a little from Kazakhstan and China," Tserendorj said. "We have a plan to build a refinery in Mongolia in order to not be dependent on imports." Mongolia sits on vast quantities of untapped mineral wealth and analysts say it could be one of the fastest growing economies of the next decade and a key investment target for global resources companies. Foreign investors are watching to see if the country"s fledgling democratic government can build needed infrastructure, improve the rule of law and negotiate its way through the geopolitical pressures exerted by Russia 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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