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
  12-16.7.2010, No. 328  
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Table of contents

DPRK and South Korea

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Foreign Policy

S.Korea, US set to change drill locations (Global Times)
South Korea will stage a series of joint military drills with the US late this month, starting in the country's east coast, Seoul's Ministry of Defense confirmed to the Xinhua New Agency Thursday. According to the official, the date of the drill in the Sea of Japan, which South Korea calls the East Sea, will be decided next week when US Secretary of Defense Robert Gates and Secretary of State Hillary Clinton travel to Seoul for "two-plus-two" security talks with South Korean officials. The official added that South Korea would also stage 10 drills in waters off its east, west and south coasts later this year. Regarding the reason for not starting the drills off the west coast (the Yellow Sea) as previously announced, another official from the ministry told AFP that it was partly a concession to China's opposition to drill in return for supporting a stronger UN stance toward Pyongyang. […] Pentagon spokesman Geoff Morrell also confirmed that the nuclear-powered carrier USGeorge Washington, based in Japan's Yokosuka port, will take part in the drill in the Sea of Japan. […] When asked about Morrell's remarks, Chinese Ministry of Foreign Affairs spokesman Qin Gang didn't reply directly, only reiterating Beijing's serious concern over the drills. Qin also dismissed reports that China and North Korea would retaliate by holding their own military drills. Confirmation of the drills came on the same day North Korea held talks with the US-led UN Command (UNC) over the sinking of the South Korean warship Cheonan in March. During the 90-minute meeting at the border truce village of Panmunjom, North Korea officials denied torpedoing the ship and demanded to inspect evidence provided by a multinational investigation team. Pyongyang's official Korean Central News Agency said both sides agreed to meet again at colonel-level talks next Tuesday. ^ top ^

Merkel visit expected to boost Sino-German relations (Global Times)
German Chancellor Angela Merkel is to start a four-day visit to China on Thursday, a move widely expected to boost the countries' bilateral economic ties and political interactions. The fourth visit of Merkel to China since she took office in 2005 is part of the high-level interactions boosting the bilateral ties. […] Further boosting bilateral relations between China and Germany is in the interests of both countries, especially in trade and economy. Germany's total exports dropped 18 percent last year due to the global economic slump, while its exports to China climbed 7 percent, the German newspaper Frankfurter Allgemeine Zeitung reported. Sino-German relations have been increasingly important under the new, post-crisis situation, the newspaper said. Bilateral trade last year hit 105.73 billion US dollars despite the global downturn, accounting for more than a quarter of the total China-Europe trade. German officials have said that a large troupe of German businessmen, from sectors such as energy, automobile, finance and retail, are among the members of the delegation led by Merkel, suggesting that trade and economic issues will top the agenda of the visit. A series of cooperation agreements will be also signed. […] China is pursuing a path of green growth by advocating energy saving and emission reduction, where Germany has a technological advantage. Analysts believe this can create opportunities if the two sides make joint efforts to promote research and development of renewable energy and set up a mutually beneficial technology transfer system. […] The global financial crisis and Europe's debt crisis has not reduced trade and investment between Germany and China, and China has become one of Germany's most important trading partners, said Wolfgang Roehr, who heads a Germany-China task group at Germany's Foreign Ministry. In the post-crisis context, China and Germany should strengthen their exchanges and cooperation on a wide range of global challenges such as climate change, global financial reform and nuclear security. ^ top ^

Russia to enhance energy cooperation with China: minister (Global Times)
Russia wants to further develop cooperation with China in oil, gas, nuclear power and coal sectors, said Russian Energy Minister Sergei Shmatko on Wednesday. The minister told Chinese ambassador to Russia Li Hui that China and Russia have seen fast progress in energy cooperation during recent years, notably the joint efforts in oil pipeline construction and Tianwan nuclear power plant project. Shmatko hoped that the two countries would complement each other in energy sectors, especially in oil, natural gas, nuclear power, electricity and coal, to achieve win-win situation. […] China is willing to work together with Russia in more energy projects, to push forward the two countries' economy and thus bring more benefit to their peoples, Li said. During the meeting, Li presented Shmatko the "Outstanding Contribution Prize" awarded by Chinese President Hu Jintao, to commend the Russian minister's dedication to the Sino-Russian relationship. ^ top ^

China calls for early resumption of six-party talks (Global Times)
China said on Tuesday it would work with other parties involved to resume the six-party talks at an early date and move the process forward. "China has always regarded six-party talks as a realistic and effective tool to realize denuclearization of the Korean Peninsula, and peace and stability in Northeast Asia," Foreign Ministry spokesman Qin Gang told a regular news briefing. […] After the UN Security Council on Friday adopted a presidential statement on the Cheonan warship sinking incident that killed 46 sailors, China urged the involved parties to "flip over the page" and restart the six-party talks on the Korean Peninsula nuclear issue as soon as possible. […] The Security Council statement noted the findings of the joint investigation submitted by the ROK and the DPRK's declaration that it had nothing to do with the incident. The statement encouraged the settlement of the outstanding issues on the Korean Peninsula by peaceful means and the resumption of direct dialogue and negotiations between the DPRK and the ROK. China hopes all sides could strengthen mutual trust, bridge differences and improve relations to maintain peace and stability of the peninsula, said Qin. He called for all parties to take advantage of the UN presidential statement to advance dialogue and negotiation for the ultimate denuclearization of the Korean Peninsula and peace and stability of the region. "A war of words and military means can't fundamentally solve problems," Qin said, urging all parties to take moves that contributed to easing the situation and preserving the interests of the region. ^ top ^

China, Argentina sign $10 billion railway deals (People's Daily Online)
China and Argentina signed railway deals totaling $10 billion on Tuesday, amid efforts by Beijing to forge stronger commercial ties with Latin America. Twelve agreements were reached between the two countries during Argentine President Cristina Fernandez de Kirchner's five-day visit to China. […] The 10 railway projects - ranging from two to five years - include the purchase of Chinese railway technology and investments in Argentina's rail line electrification projects, Argentine Transport Minister Juan Pablo Schiavi told AFP. Other deals cover areas like infrastructure, fishery, energy, and plant quarantine. […] At least three contracts focus on a $2.5 billion rail renovation project in Argentina's capital Buenos Aires. It requires the Argentine government to purchase materials and technologies for improving railway networks from two Chinese companies: China Northern Railway (CNR) and China Southern Railway (CSR). During the talks, Hu and Kirchner also expressed wishes to push forward stronger trade ties. […]. ^ top ^

China rejects US finger pointing on human rights, democracy (Global Times)
China has achieved obvious results in protecting citizens' rights and freedoms, a Chinese Foreign Ministry spokesman said Monday, rejecting a US report that criticized China. Spokesman Qin Gang made the remarks when asked to comment on a US State Department report that criticized China's democracy- and human rights-status. The Chinese government protects its citizens' basic rights and freedoms in accordance with law, Qin said, adding that the people-oriented approach has produced obvious results. "The US report ignores facts and gratuitously slams China's human rights, freedoms and democracy status," said Qin. China rejects the allegations and urges the US to focus on its own problems and stop interfering in China's internal affairs on the pretext of human rights, the spokesman said. ^ top ^

China, France vow to promote strategic cooperation (Xinhua)
Wu Bangguo, China's top legislator, met with French President Nicolas Sarkozy here Friday and the leaders agreed to deepen the strategic cooperative relationship between their countries. During their talks at the Elysee Palace, the two also pledged concerted efforts to enhance the G20 mechanism and enable the framework to better steer the global economy. […] China attaches great importance to the Sino-Franco relationship and regards France as an important partner in global affairs, Wu said. […] Commenting on the global financial crisis, Wu said that the most difficult period has passed but time was still needed for the world economy to completely walk out of the shadows. Concerning the global response to the credit crunch and economic downturn, he said that the G20 framework played an important role thanks to its wide representation of the international community. […] China is ready to work together with France and other G20 members to implement the agreements reached at previous summits, he said. China also is ready to help better the G20 working mechanism and turn it from a crisis response platform into a global economy management system, thus spurring economic growth in a robust, sustainable and balanced manner, Wu said. […] China hopes that the two sides will consolidate their cooperation in traditional fields such as nuclear power, aviation and transportation, and meanwhile expand cooperation in energy, low-carbon technologies, green economy and other new areas, Wu said. […] For his part, Sarkozy agreed with Wu's remarks. He said that China is a very important country in the world, and is an important strategic partner of France. […] Sarkozy added that his country, which is due to take over the rotating G20 presidency next year, is ready to strengthen cooperation with China and jointly improve the G20 mechanism and global economy management. Earlier in the day, Wu, who is in an eight-day official goodwill visit to France, held talks with French Economy Minister Christine Lagarde. ^ top ^


Domestic Policy

Death toll from south China floods rises to 135 (Xinhua)
At least 135 people had been confirmed dead and 41 are missing, as some of the worst flooding in years continues in south China. By 4 p.m. Thursday, close to 35.5 million people in 10 southern provinces and Chongqing Municipality had been affected by continuous rainstorms and floods since July 1, the Civil Affairs Ministry said in a notice on its website. About 113,000 homes were destroyed and more than 1.2 million people had been relocated, it said. Direct economic losses were estimated at about 26 billion yuan (3.8 billion U.S. dollars), up from Wednesday's 22.2 billion yuan. In Jiangxi Province alone, at least eight people have died since July 8, and direct economic losses have amounted to more than 2.9 billion yuan. The ministry had dispatched work groups to Jiangxi to direct relief work. The Office of State Flood Control and Drought Relief Headquarters announced earlier Thursday that floods had killed 594 people in 26 provinces since the beginning of the year. Another 212 people were missing. Direct economic losses cause by the floods totaled 120.2 billion yuan, the office said, adding that 97.5 million people and 6.16 million hectares of farmland were affected. In Hubei Province, continuous downpours and rain-triggered floods since July 3 have left 32 people dead and two missing. Heavy rainfall has raised water levels in many rivers in the middle and lower reaches of Yangtze River, China's longest, and a new round of rainstorm is expected to pelt the river course soon, bringing possibility of serious floods. The river's Three Gorges Dam raised the speed of water discharge Thursday afternoon to save space for the upcoming gushing flooding waters. ^ top ^

Top court urged to raise openness (SCMP)
The Supreme People's Court's first annual report to the public, released on Tuesday, has been generally welcomed as a step towards transparency, but lawyers and rights activists say it is far from enough to fix a system long plagued by secrecy and corruption. The country's top court presents a work report to the National People's Congress every March, but The People's Court Annual Report 2009 is the first annual report of mainland courts to the public in the form of a white paper, a Supreme People's Court spokesman said. […] The 80-page report breaks down the significant increase in administrative litigation last year, saying that birth-planning cases rose by almost three-quarters, environmental protection cases by just over two-thirds and that civil affairs cases more than doubled. Patent and pricing cases both rose by more than 180 per cent. […] This week's report does not include one of the numbers most sought after by human rights activists: the number of death penalties carried out each year. […] Hong Kong-based Chinese law professor Ong Yew Kim agreed that the report was a step in the right direction, but said "increasing transparency and gaining popular support are two different matters". "This report is in line with the judiciary's efforts to win the public's hearts, as seen in recent years," Ong said. "However, what we need is an overall increase in the transparency of the operations of the courts." […]. ^ top ^

Foshan factory strike enters fourth day (SCMP)
A strike by about 180 workers at a Foshan factory that supplies parts for Honda cars entered its fourth day yesterday in the latest stoppage by workers demanding a bigger piece of the country's growing economic wealth. […] Since May, both Honda, Japan's second-largest carmaker, and Toyota, its largest, have been hit by a slew of strikes over pay mainly at their parts suppliers in China. The auto giants subsequently raised pay levels. Local mainland media have been banned from covering any strikes as the authorities fear more workers may follow suit. The recent wave of labour disputes has highlighted a broader demand for wage increases among mainland workers. In Foshan, the strike organiser, who refused to be identified for fear of retribution, said the changes in their work hours would cut their overtime pay, on which they rely heavily, as the basic salary is 1,070 yuan (HK$1,226) per month. Attempts to negotiate with the management on Monday failed, triggering the strike just before 4pm. Workers have demanded an extra 500 yuan on top of their basic monthly salary. […] "We were told to return to work immediately, or it would be easy for the company to have us all replaced in no time because there were so few of us. These harsh words hurt our feelings and reflected the management's lack of sincerity," he said. "All of us have reached a consensus that if the company sacks any one of us, we will all walk out and quit immediately. We will also seek legal means to protect our rights." […] Honda Motor's mainland sales in June fell 2.7 per cent from last year's June figure of 51,497, to 50,113. Honda was hit by strikes at key suppliers after achieving record production in April, forcing it to halt output at several of its mainland factories. The conflicts with workers over pay caused critical delays to the company's "just-in-time" delivery system as factories ran short of key parts. ^ top ^

Crackdown begins on microblog activities (SCMP)
The online crackdown on mainland microblog sites that many activists feared has begun, with a massive self-censorship campaign resulting in the removal of sensitive content, the shutdown of some accounts and a reversion to testing mode. Days after a major government think tank branded internet socialising tools such as Facebook and Twitter as potential instruments of subversion, authorities ordered all microblog operators to "improve their operations" - a synonym for self-censorship. Tens of millions of Chinese post information on the internet every day. Without having specific guidelines, the microblog platforms on four portals - Sina, Sohu, NetEase and Tencent had been told to delete both posts and accounts related to sensitive political issues or pornography, industry insiders said. "We believe this round of control is just a warning [to all portals]," one such insider said yesterday. "The censors won't kill all microblog platforms at once, though they do have the power to do that." […] Most industry workers, internet users and information technology analysts said it showed that censors or even top leaders worry about losing control of the social networking systems. But another industry insider said the cause might be more commerce-related. "I heard that internet censors are planning to launch new measures to control microblogs, such as asking us to apply for licences before starting operations. Then they will have a chance to charge rent." […] Some IT engineers and internet analysts worried about not only the possibility that microblogging services would be shut down completely but also the loss of internet users. Michael Anti, a Beijing-based internet analyst, said that because of the old-style administration system, which relies heavily on orders from the top, it would be impossible for internet censors to deal with microblog services as the amount of information created by individual users was enormous. ^ top ^

Villagers riot over poisoned water (SCMP)
[…] Witnesses said several thousand angry Zhuang from nearby villages had surrounded the county government's headquarters on Tuesday afternoon after smashing equipment at the aluminium plant on Sunday. Huang An, a Zhuang from Lingwan village, said the local government had mobilised more than 1,000 riot police to quell the protest. "The road leading to the county government building, which is several kilometres long, was packed with villagers holding slogans, and armed policemen fired into the air to warn the furious protesters," he said. At least five of his fellow villagers had been wounded in the confrontation and the figure could rise once casualties from other villages were counted, he said. […] The Information Centre for Human Rights and Democracy said yesterday more than 100 people were injured in the riot and at least 10 vehicles, including a police car and an armoured vehicle, were smashed by angry villagers in the protest. It said the riot continued yesterday morning, with more protesters injured. A Jingxi county propaganda official said one official had been injured in the riot after villagers had blocked roads and pelted policemen and government officials with stones. "The confrontation first broke out on Sunday afternoon, when the aluminium plant tried to reconstruct a road next to Lingwan... Villagers later protested outside the plant and smashed equipment in the evening," the county said in a statement. "A protest organised by villagers on Tuesday afternoon blocked the expressway and the county's road traffic." The official claimed the riot had quietened down yesterday. Zhuang from nearby villages complained pollution from the aluminium plant, located in the upper reaches of an underground river, had blocked their only water source in March during a construction project. "Thousands of people were short of drinking water for several months, at a time when the autonomous region was having a once-in-a-century drought," a villager said. The drought this year left more than 2.2 million people and 1.1 million head of livestock short of water and 740,000 hectares of farmland too dry to plant. "The plant was later forced to change the course of a river for villagers living in the lower reaches. But the water is red and heavily polluted by untreated industrial sewage discharged from the plant. We don't dare drink water from it," he said. Meanwhile, residents of Lingwan village complained more than 400 people in the upper reaches of the river were affected by flooding for three months after the plant had blocked the same underground river. "Authorities claimed the flood was caused by a slight earthquake, but we believe the plant sealed off the underground river by mistake after it had tried to demolish a mountain during a construction project," he said. The Guangxi Daily reported last month that the county had spent 7 million yuan (HK$8 million) over two months to drain off floodwater. He said the riots on Sunday and Tuesday were triggered by the plant's security guards, who beat villagers who had been protesting outside the plant. More than 96 per cent of people in Jingxi county are Zhuang - who make up one of the five largest ethnic minorities in China. […]. ^ top ^

Jailings for endangering state security up 20pc (SCMP)
The number of people convicted of endangering state security and sentenced to more than five years' prison jumped 20 per cent last year, according to the first annual report issued to the public by the Supreme People's Court. The significant jump reflected the authorities' toughened crackdown against not only such serious offenders, but also dissidents on the whole, human rights observers said. "The figure is not surprising, given the number of sensitive events and incidents" in the past 2-1/2 years, said Joshua Rosenzweig, senior research manager of the Hong Kong-based Dui Hua Foundation. […] "It also confirms what we see in individual cases - the suggestion of Chinese authorities taking a much harder line against critics," Rosenzweig said. Endangering state security is a blanket charge that includes everything from espionage, inciting subversion of state power to leaking state secrets, with five years being the average sentence. Some arrests made after the riots in Tibet would probably have been tried last year, as well as arrests made after the riots in Xinjiang. But Liu Xiaobo, drafter of Charter 08, stands out from all those convicted last year under this charge: he was sentenced to 11 years imprisonment for inciting subversion. The report did not provide an actual number of offenders, just a percentage for the increase in number. […]. ^ top ^

Lower milk standard to ward off melamine use (SCMP)
Beijing has accepted reality and lowered the mainland's minimum protein level for raw milk in what is seen as a move to discourage dairy farmers from adding the toxic industrial chemical melamine to their milk in order to pass protein tests. The new national safety standard for dairy products, in force since the start of last month, lowered the minimum protein level required for raw milk from 2.95 per cent to 2.8 per cent, a dairy official said in Beijing yesterday. The old standard had been in place since 1986 but most of the milk produced in some provinces failed to make the grade. […] Wu Heping, secretary general of the Heilongjiang Dairy Industry Association, told a Ministry of Health press conference that the standard had been lowered to "respect the reality of the domestic dairy farm industry". He said that between 75 per cent and 90 per cent of raw milk in some provinces had failed to reach the old protein level standard in 2007 and 2008. "Raw milk produced by healthy cows whose protein level is lower than 2.95 grams per 100 grams does exist," Wu said. […] Chen Junshi, a researcher at the Chinese Centre for Disease Control and Prevention's Institute of Nutrition and Food Safety, said the lowered protein level requirement for raw milk would not affect the standards for liquid milk and milk powder bought by consumers. […] Industry insiders doubt that the central government's move will achieve its desired effect, because there is still a financial incentive for dairy farmers to add melamine to raw milk. Guangzhou dairy industry association president Wang Dingmian said it was putting the cart before the horse. "It is not a very wise incentive," Wang said. "There is still raw milk with a protein level below 2.8 per cent and the farmers still have every motivation to add melamine so that they will not have to throw away the milk." Wang also said that prices for raw milk varied in practice and better quality raw milk with higher protein levels fetched higher prices, giving farmers another incentive to add melamine. Wang said the best way to deal with the problem would be to upgrade the industry and give cows quality feed, which would raise protein levels in raw milk. Despite repeated pledges by the authorities to crack down on melamine-tainted milk, it is a problem that keeps resurfacing. In February, hundreds of tonnes of stored toxic milk powder was discovered. Some of it was sold to make dairy products such as milk candy. And just last week, 76 tonnes of contaminated milk powder was found in Gansu and Qinghai, 39 tonnes of which had been bought from Hebei. […]. ^ top ^

Hordes of illegal workers crossing China's borders (Global Times)
[…] Thousands of foreign workers have entered the country illegally in search of higher salaries, attracted by China's recent economic boom. A severe labor shortage in southern China, and higher salaries offered by factory owners in Guangdong has boosted the influx of illegal immigrants. In Guangxi, official statistics showed that last year police detained 1,820 illegal migrants, stopped 4,839 people from crossing the border, and deported 2,218 migrants who had no work visas. So far this year, at least 10,000 illegal migrants have swarmed into Chongzuo, Guangxi, according to Mo Shaoren, deputy head of Chongzuo's human resources and social security department. In Chongzuo, the "sugar bowl" of China, many young men have left the sugar cane fields to go to work in larger cities, creating a labor shortage of 30,000 farmers and 50,000 during the busy season. Smugglers often bring Vietnamese field workers across the border to fill in the labor gap. […] In March, another wave of Vietnamese migrants swarmed into Guangdong, which producing nearly a third of China's exports, after authorities there announced a 20 percent increase in the minimum wage. According to the Guangdong Provincial Public Security Department, the police have been involved in six cases involving 154 illegal migrants in the first quarter of this year. A total of 180 illegal migrants were apprehended last year. Vietnamese are considered hard working, obedient and cheap, so many factories prefer to hire them, turning a blind eye to their illegal status. […] Sun, boss of a garment costume factory in Dongguan of Guangdong who refused to name his company, told the Global Times that he employed more than 10 workers from Cambodia last year. "They normally would work eight hours a day for an entire month without a day off. Domestic workers, especially the post-80s and 90s generations, refuse to work like that," he said. The number of illegal aliens entering China keeps growing, especially in more developed East China region. Official statistics released in 2004 show that about 20,000 Africans were living in Guangzhou, and their numbers increase by 30 to 40 percent every year. […] It is difficult for illegal workers from Southeast Asia and African countries to get into China, but people from Vietnam, Cambodia and Laos can easily cross over a long border with many openings and smuggling routes for contraband goods and migrant laborers. […] According to the Law on Control of the Entry and Exit of Aliens, anyone who illegally employs foreign workers will be subject to a maximum fine of 50,000 yuan ($7,383). The fine is a small sum, which doesn't effectively prevent illegal migrants from working in China. Some experts suggest China to work with neighboring countries to make it legal for foreigners to work here, or live here to pursue their careers. […]. ^ top ^



Senior Chinese leader stresses economic restructuring (Global Times)
Senior Chinese leader Jia Qinglin has encouraged south China's Guangdong Province to be a trailblazer in building a harmonious society and promoting the country's new economic growth pattern. Jia Qinglin, chairman of the National Committee of the Chinese People's Political Consultative Conference, toured businesses and research institutes during his visit here from Thursday to Monday. He urged businesses to shift economic growth patterns and promote business restructuring at a faster pace. Jia said that enterprises should strive for high quality and shift from reliance on the consumption of resources to stronger human resource and sound management, from low-end assembling and processing to developing brand-name products with indigenous innovation. Jia also stressed improving the working and living conditions of employees to assure a harmonious working environment. Jia also urged the province to enhance cooperation with Hong Kong, Macao and Taiwan, taking advantage of its adjacency with these regions, and to push Guangdong's cooperation with Taiwan to a new high. ^ top ^



China calls on world not to provide stage for Tibetan separatists (Xinhua)
Chinese Foreign Minister Yang Jiechi here on Wednesday called on all countries not to provide stage for Tibetan separatists, saying Tibet-related issues are purely China's internal affairs. Yang made the remarks at a press briefing after his talks with his British counterpart William Hague. He said it is widely recognized by the international community that Tibet has been an inalienable part of Chinese territory since ancient times. He said Tibet adopts the system of ethnic regional autonomy, according to China's Constitution and Law on Regional Autonomy for China's Minority Nationalities. In March 1959, the Chinese government dissolved the aristocratic local government of Tibet and freed more than 1 million serfs. Since the democratic reforms more than 50 years ago, Tibet has made remarkable achievements in all fields including political, economic, cultural areas, and enjoyed comprehensive social progress, great improvement of people's living standard, and proper preservation of cultural heritages, Yang said, adding the Tibetan people fully enjoy freedom of speech and all rights endowed in the laws. The Tibet issue bears on China's sovereignty and territorial integrity, and its core interests, and is the internal affair of China, Yang said. He called on countries to respect China's sovereignty, not to provide a stage for the Tibetan separatists. […]. ^ top ^

Tibet tourists rise (Gobal Times)
Tibet hosted 1.8 million tourists, up 20.3 percent year-on-year, in the first half of the year. A total of 78,000 international tourists visited in the same period, up 67 percent, the regional tourism administration said Tuesday. The region's tourism income topped 1.39 billion yuan ($204 million) in the past six months. ^ top ^



Slum, shanty towns to be removed from Urumqi (Global Times)
Excavators move back and forth at Heijiashan area, Tianshan district of Urumqi, capital of Xinjiang Uygur Autonomous Region, demolishing one of Urumqi's shanty towns, which used to house 200,000 people. […] Most of the homes in Heijiashan, one of the several shanty towns in Urumqi, had no utilities, gas or heating, and the area was considered a hotbed of poverty and crime. Adljan, director of the demolition coordination team of Heijiashan area said "floating population here often disrupted social order." Heijiashan was hit hard by riots in Urumqi on July 5 last year that left 197 people dead and more than 1,600 injured in the capital city of Xinjiang. "Due to the poor management of the area, the migrants were easily incited by rioters," he said. Earlier this year, Premier Wen Jiabao said that transformation of shanty towns was vital for the improvement of people's livelihoods. The Ministry of Housing and Urban-Rural Development then ordered local governments to reform shanty towns, especially the homes of those facing financial difficulties. ^ top ^



Parents of poisoned babies continue to fight in Hong Kong (SCMP)
Parents of four babies affected by tainted dairy products, left with no means to claim compensation on the mainland since the manufacturer at the centre of scandal went bankrupt last year, have taken their claim to a Hong Kong tribunal. They sued Brands (China), a Hong Kong incorporated company that had a 43 per cent stake in now-bankrupt Sanlu Dairy Group which was found culpable for producing melamine-laced diary products. Zhou Xiong, Li Jieli, Chen Lu and Ye Hongbo had asked Fonterra Brands (China) for HK$12,369 to HK$33,490 in compensation, accusing the company of delaying the release of information about the contamination for six weeks, failing in its responsibility to oversee Sanlu and making profits from tainted milk before the scandal was exposed. Their children suffer from kidney stones and other urinary problems and will require regular medical check-up. However, their actions suffered a setback in May after the Small Claims Tribunal struck out their claims, saying the People's Court would be a better place to pursue their claims as the entire food-safety saga had taken place on the mainland. Now the parents are pursuing an appeal to overturn the judgment. They are due to appear at the same tribunal on Friday to present evidence backing their appeal application. ^ top ^



Taiwan preps for simulation exercise (Global Times)
A five-day military exercise will be launched since July 19 by Taiwan's army despite of the improving cross-Straits relations, according to a report by China Times. The exercise, called “Taiwan's Han Guang 26 military exercises”, aims to improve the island's defense capabilities in the face of any missile attack from the Chinese mainland. The exercise will last 24 hours, with the Guangzhou and Nanjing military areas serving as imaginary enemy zones. Taiwan's military spokesman, Yu Sy-tue, said that the exercise is independent and “foreign armies” would not be asked to participate. […] Taiwan's minister of defense is not allowed to intervene into this exercise, and the island's “Han Guang 26 military exercises” will be directed by chiefs of the general staff. The minister is only responsible for establishing which forces and chiefs of the general staff will direct the exercise. ^ top ^

Political costs of trade deal pondered (SCMP)
The future course of cross-strait ties since the signing of a landmark trade deal was the topic yesterday as the honorary chairman of Taiwan's Kuomintang, Wu Poh-hsiung, met Communist Party leader Hu Jintao at a summit in Beijing. While some analysts warn that the Economic Co-operation Framework Agreement (ECFA) might advance the time for cross-strait political negotiations, others note it is still too early to say whether Taiwanese President Ma Ying-jeou will follow the timetable set by the mainland. […] "We have already honoured our commitment for our Taiwanese compatriots, and now that the agreement has been signed, we hope it can be implemented as soon as possible," Hu said. […] To become officially effective in Taiwan, the semi free-trade deal needs to be reviewed and approved by the legislature, and relevant laws and institution of implementation measures also need revising - all of which Ma hopes will be completed at the end of this year so that they can take effect on January 1. […] The informal talks have also been regarded as "secret dealings" by the pro-independence camp in Taiwan, which fears the KMT might eventually hand the island back to the mainland. […] Dr Lai I-chung of the private Taiwan Thinktank said the signing of ECFA had advanced the timetable on cross-strait political talks, something Beijing wanted before Hu stepped down as party general secretary in 2012. "Political negotiations would not have come so soon were it not for the much earlier-than-scheduled signing of ECFA," he said, adding that the agreement had provided a handy opportunity for Beijing to pressure Taipei to hold political talks. Dr Wong Ming-hsien, director of the Graduate Institute of International Affairs and Strategic Studies, said the next step would be for Beijing to push for the signing of cross-strait confidence-building measures and then a peace accord, which would be tantamount to "unification without the slogan of cross-strait reunion". To counter that, he said Taiwan must set up a national affairs council to allow the people to express their views on cross-strait affairs and make sure that no deadline was included in any negotiation timetable. Dr George Tsai Wei of Chinese Cultural University in Taipei, however, said Ma was unlikely to dance to the mainland's tune, "given that there is no consensus for political talks with the mainland and that he wants a second term after his current one expires in 2012". ^ top ^



Inflation eases, rate hikes to be put off (Global Times)
Concerns over inflation eased on major macroeconomic data for June released Thursday. Economists revised forecasts for interest rate hikes as they expected reduced risks of inflation over the rest of the year. The market previously forecasted a continued rise in June's consumer price index (CPI) reading. However the CPI moderated to 2.9 percent year-on-year in June from 3.1 percent in May, the National Bureau of Statistics (NBS) said Thursday. The overall price level fell 0.6 percent from May to June. Economists attributed the fall in CPI inflation mainly to a decline in food price inflation. […] The CPI is likely to jump again in July owing to rising food prices on the back of floods in South China. […] JPMorgan Chase has cut the forecast for 2010 average CPI inflation rate to 2.8 percent from a previous 3.2 percent, the investment bank said in a research report distributed Thursday. "At this moment Chinese policymakers seem to believe that, as the growth momentum in the overall economy has been moderating, the near-term moderate upward trend in headline CPI inflation is tolerable for a while," the report wrote. The economy saw a continued slowdown in growth in June, shown by a decline seen in industrial growth and urban fixed asset investment growth as well as retail sales growth, according to the NBS. China's economic growth slowed to 10.3 percent in the second quarter from 11.9 per-cent in the first quarter. JPMorgan cut its previous forecasts of a total of two interest rate hikes in the second half of the year to only one in the fourth quarter. "In view of the reduced inflation risk, we revise our policy call to no benchmark interest rate hike in either the deposit or lending rate through 2010," economists Peng Wensheng and Chang Jian at Barclays Capital also said in a note Thursday. ^ top ^

Tightening property policies to continue (China Daily)
The country will continue its tightening policies for the property sector, even as housing prices in June saw the first monthly fall since February last year, the Ministry of Housing and Urban-Rural Development said on Monday. In a statement on its website, the ministry said it will strictly apply different mortgage policies and curb speculative purchases, as well as increase the supply of affordable homes and low-rent housing. Property prices in 70 major cities nationwide edged down 0.1 percent month-on-month in June, the National Bureau of Statistics said on Monday. The year-on-year increase in prices slowed to 11.4 percent last month, compared with 12.4 percent in May and 12.8 percent in April. The figures indicate that government measures to cool down the sizzling property sector have kicked in, analysts said. […] To rein in runaway property prices, the government in April raised down payments, ended mortgage discounts, tightened rules on loans to developers and made it harder to buy more homes. The property sector usually accounts for about 10 percent of gross domestic product and construction consumes half of the nation's output of steel and 36 percent of the aluminum that it makes, JPMorgan Chase & Co estimated. Property sales in Shanghai, Nanjing and Hangzhou halved in the first six months of the year, while those of Beijing dropped 40 percent, statistics from the policy research center under the housing ministry and China Index Academy showed. Similarly, land prices in 103 cities fell 9 percent in the first half of the year. "Aside from insisting on some fundamental rules such as increasing land supply and changing the land bidding system, we should also fine-tune some temporary policies as the situation changes," Qin Hong, the ministry's deputy research head, said. Authorities should publish the timetable for levying any property tax as soon as possible and ease curbs on second-home purchasers who are buying property for their own use and not for investment, Qin said. "They should be allowed to renegotiate contracts with banks to get lower mortgage rates, provided they sell their first homes within a year," she said. […] The central government has entrusted professional institutions to investigate property markets to pave the way for laying out policies in the following months, industry sources said. […] "The government will not ease its policy lightly, and a growing supply of housing and tighter cash flow will force developers to cut prices over the next few months," Ren Zhiqiang, chairman of Beijing-based Huayuan Property, said. Sun Mingchun, chief economist of Nomura China, said the nation's real estate policy may loosen after the average property price drops 10 to 20 percent in 12 to 18 months. "I believe such a price fall will have limited impact on China's economy and we maintain our forecast of GDP to grow at 10.5 percent in 2010 and 9.8 percent in 2011," Sun said. ^ top ^

Yuan hits new high on dollar rebound (Global Times)
The yuan reached a new high Monday mainly on a recent dollar rebound against other currencies and June's stronger-than-expected trade data. The People's Bank of China (PBC) set the yuan's central parity rate against the dollar at 6.7718 Monday, surpassing a peak of 6.7720 reached July 2. The dollar has rebounded recently due to rising uncertainties seen in the euro zone, pushing the yuan to rise, as the weight of dollar remains predominant in the currency basket, said economist Chang Jian with Barclays Capital in Hong Kong. […] The trade data for June released over the weekend also put pressure on yuan appreciation, said Yan Jin, a Shanghai-based economist with Standard Chartered Bank (China). China's exports hit a record high of $137.4 billion in June, making the trade surplus exceed $20 billion, and continuing expansion for the third consecutive month. The value of the yuan has increased by 557 base points as of Monday since the resumption of the exchange rate reform in June. The yuan is likely to see small appreciation over the next one to two months, while slowing down its pace through the last quarter of the year, Yan said. Export growth would decline in the fourth quarter when the impact of European debt crisis on China's exports would start to be felt, she explained. The yuan is estimated to reach 6.63 against the dollar by the end of this year, she said. While appreciation rates fluctuate differently depending on the global economy, the yuan is expected to rise at a gradual and modest pace over the medium- to long-term, given a decline seen in the proportion of trade surplus over GDP, Chang said. The proportion of China's current accounts surplus over GDP shrank to 6.1 percent in 2009 from 9.6 percent in 2008, and the ratio is likely to further drop this year, the State Administration of Foreign Exchange said Thursday. ^ top ^

Slower credit expansion eases 'overheating' concerns (People's Daily Online)
Chinese banks issued 603.4 billion yuan in new loans in June, 927 billion yuan less than last June. New loans totaled over 4.6 trillion yuan for the first half of 2010, over 2.7 trillion yuan less than the same period of last year, according to statistics released by the People's Bank of China, China's central bank, on July 11. A few months ago, investors were worried that China's economy was overheating. But as new loans, the leading economic indicator, grew more slowly this year, their worries may have disappeared to some extent, though this means that China's economic growth may also slow. Yuan Gangming, a researcher at the Center for China in the World Economy under Tsinghua University, said based on statistics on the industrial added value, loans, investments, and other aspects in recent months, China's economy is not overheating. Instead, the growth rate will slow to a certain extent. A central bank insider said that in the first half of 2010, the central bank tried to make the macro-control measures more targeted and flexible and the credit policy more practical to ensure balanced loans while continuing the moderately loose monetary policy. […] The expansion of bank loans has slowed and China's financial system operated smoothly, which has consolidated the upward trend in China's national economy, according to the People's Bank of China. […] However, some experts say that there are fluctuations in economic growth. A sharp downturn may not appear if the Chinese government further conducts more flexible and effective macro-controls. ^ top ^

Big rebound in mainland exports signals global recovery on track (SCMP)
The mainland's trade surplus last month topped expectations with surprising strength in exports that suggests the global economy is maintaining momentum despite worries about a renewed slowdown. Mainland exports rose 43.9 per cent from a year earlier, beating forecasts of a 38 per cent rise. Imports rose 34.1 per cent year on year, in line with projections. That resulted in a trade surplus of US$20 billion, its largest in nine months. The market expected a surplus of US$13.8 billion. "Exports were better than expected because the negative impact from the European debt crisis was not as serious as the market feared," Liu Nenghua, an economist with the Bank of Communications in Shanghai, said. "Growth in China's exports will slow down in the coming months, that's for sure. But there will be no sharp drop." The strong trade numbers could ease fears - for a time, at least - about the potential for a skid in the mainland economy after the government clamped down on the red-hot property market. It could also lead to fresh calls for Beijing to let the yuan rise more quickly. The currency was depegged from the US dollar on June 19, after being locked in place for 23 months to help exporters ride out the economic turmoil. The yuan has gained just 0.78 per cent against the US dollar since then and pressure is building on US President Barack Obama to again take a stronger line against Beijing. The mainland's slowdown in import growth, from a year-on-year pace of 48.3 per cent in June last year, was in large part caused by a higher base of comparison, but it also points to a slackening in domestic demand as investment flags. […] If a sustained rebound in mainland exports adds fuel to trade disputes with Europe and the United States, that would create more uncertainty for markets at a time of great concern about the fragility of the global recovery. But analysts say the mainland's export strength may be transitory. Shipments may slow in the coming months as US fiscal stimulus fades and European governments cut back on spending. Tom Orlik, an economist with Stone & McCarthy Research Associates in Beijing, said: "A resurgent trade surplus will clearly strengthen the argument for rapid appreciation of the yuan. "But with the global recovery on slippery sands, the outlook for China's exports is not as stable as the last two months of data suggest.". ^ top ^


DPRK and South Korea

Second DPRK-US military meeting set for late July (Global Times)
The Democratic People's Republic of Korea (DPRK) and the US-led United Nations Command (UNC) have agreed to hold a second round of their meeting on the "Cheonan" warship case around July 20, the official news agency KCNA reported on Thursday. Earlier on Thursday, DPRK-US military senior colonel-level working contact was made in the truce village of Panmunjom, and the two sides discussed technical matters such as the date and venue of talks and the formation of delegations for opening the DPRK-US military general-level talks. They all agreed to adopt "probing the truth behind 'Cheonan' case in an objective and scientific way" as the agenda of the talks, said the report. "If the US forces side is truly interested in the settlement of the case, there is no reason for it to refuse the DPRK's proposal which was to send the inspection group to South Korea," it said. "The DPRK side will closely follow how the US forces side will handle the issue of the NDC (the National Defense Commission of the DPRK) inspection group's field investigation, strongly urging the US forces side holding the prerogative of the supreme command over the South Korean army to fully fulfill its responsibility," the report added. The meeting came after the United Nations Security Council issued a presidential statement condemning the attack on the warship, which killed 46 South Korean sailors. Pyongyang said it was "satisfied" with the statement, which stopped short of directly naming it as a culprit. […]. ^ top ^

N Korean health care a shambles: Amnesty (SCMP)
[…] The state health care system has been deteriorating for years as the country's economic difficulties worsen. Many of the country's 24 million people also reportedly face health problems related to chronic malnutrition, such as tuberculosis and anaemia, Amnesty International said. […] The report was based on interviews with more than 40 North Koreans who have defected, mostly to South Korea, as well as organisations and health care professionals who work with North Koreans. However, Amnesty researchers did not have direct access to North Korea, one of the world's most closed countries. There was no immediate reaction from the North. In May, World Health Organisation director general Dr Margaret Chan Fung Fu-chun, speaking a day after returning from a three-day visit to the country, said North Korea's health system would be the envy of many developing countries because of the abundance of medical staff that it had available. North Korea, which does not allow its citizens to leave the country, had no shortage of doctors and nurses, in contrast to other developing countries where skilled health care workers often emigrated, she said. This allowed North Korea to provide comprehensive health care, with one "household doctor" looking after every 130 families. […] Yesterday's Amnesty report said health facilities in North Korea were run-down, with frequent power cuts due to energy shortages, forcing doctors to perform duties in only daylight or by candlelight. "During operations, patients, if lucky, are given anaesthesia but sometimes not enough to completely control the pain," it said. "Without essential medicines, health facilities in North Korea clearly cannot provide services such as surgery without endangering the lives of their patients." A 24-year-old defector from northeastern Hamkyong province told Amnesty that a doctor amputated his left leg from the calf down without administering anaesthesia. […] "Five medical assistants held my arms and legs down to keep me from moving. I was in so much pain that I screamed and eventually fainted from pain," said the man said. "I woke up one week later in a hospital bed." North Korea says it provides free medical care to all its citizens. But Amnesty said most interviewees said they or a family member had "paid" doctors cigarettes, alcohol or cash to receive medical care. ^ top ^

Inquiry into sinking flawed, experts say (SCMP)
A South Korean-led investigation into the sinking of a warship near its disputed border with the North was inconclusive, may have contained fabricated data and should be reopened, two American-based researchers from South Korea say. Jae-jung Suh, a political scientist at Johns Hopkins University, and Seoung-hun Lee, a University of Virginia physicist, said the report issued after the inquiry had flaws and did not jibe with experiments they carried out to replicate the conditions caused by the type of blast that allegedly sank the ship. South Korea's military dismissed their claims. ^ 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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