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
  2-5.8.2011, No. 382  
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Table of contents

DPRK and South Korea


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Foreign Policy

China calls for bigger UN role on Libyan crisis (China Daily)
China on Tuesday called for the United Nations (UN) to play a bigger role in easing tensions in Libya, as the UN secretary-general's special envoy to Libya, Abdul Ilah Al Khatib, concluded a visit to China on Tuesday. "As the international community continues to voice a stronger desire for a political solution to the Libyan crisis, the UN should play a bigger part," Wu Hailong, China's assistant foreign minister, said during talks with Khatib on Tuesday. Wu called on the UN to step up mediation efforts and strengthen consultations with the African Union (AU) and other regional organizations in order to obtain a ceasefire in Libya as early as possible [...]. In a separate meeting with Khatib, Foreign Minister Yang Jiechi reaffirmed China's support to a political solution to the Libyan crisis [...]. Yang called on both sides of the Libyan crisis to give priority to interests of the country and its people and to take the international community's mediation proposal into account. He also asked both sides to adopt a more flexible attitude and resolve the crisis through political means. "China would like to work with the UN and other parties to make continuous efforts for an early resolution to the Libyan crisis," Yang said [...]. Khatib said that he appreciates China's support, saying that the UN have given great attention to the positive role China has played in promoting a political solution for the crisis. Khatib said the UN would like to make concerted efforts with the international community to resolve the crisis by political means [...]. ^ top ^

Concern over PLA ships near Japanese islands (SCMP)
Japan's latest defence white paper highlights a mounting source of Sino-Japanese friction - the movement of PLA ships through its southern island chains - and warns of Chinese "coercion" in dealing with regional conflicts. The annual Defence Ministry report notes that, [...] : "It is expected that China will try to keep expanding the area of activities and to make its naval activities a routine practice in waters surrounding Japan, including the East China Sea and the Pacific Ocean, as well as in the South China Sea." Regional military analysts have long warned of the tensions that will arise as the Chinese navy, with ambitions to operate far from home shores, sends ships past Japanese islands. This is happening already, military attaches say, with vessels from the PLA's East Sea Fleet increasingly heading out into the ocean - among them submarines and intelligence-gathering vessels. Gary Li, a PLA analyst with the private intelligence firm Exclusive Analysis, said in practical terms the PLA navy had few other options. "I'm not sure the Japanese are really worried about any immediate military threat," he said, "but rather the Chinese getting comfortable operating near the Japanese coast as a routine presence. They are finding themselves having to live with the precedents that are now being set, if you like. The presence of intelligence collection ships is something of immediate concern." While formal Japanese references to the disputed South China Sea have recently annoyed Chinese diplomats and analysts, who question Tokyo's intentions in stirring up trouble for Beijing, Japanese strategists are increasingly worried about seaborne supply routes in the event of conflict. Yesterday China said it had conducted a scientific survey of the southwestern section of the South China Sea last month in collaboration with a French research unit [...] during which it had acquired a "high-quality integrated geographic profile" of the area [...]. While Japan's budget for defence is shrinking and there is little public support for expanding the military, it is boosting its fleet of submarines from 16 to 22 and is putting more troops and installations on its southern islands [...]. ^ top ^

China wins right to explore seabed off Africa (SCMP)
China has become one of the first countries to win rights to explore the seabed for mineral deposits, as Beijing pushes ahead with a global search for resources to feed its fast-growing economy. The International Seabed Authority (ISA), an organisation under the United Nations, has approved China's plan to look for polymetallic sulphide deposits in a 10,000 square kilometre area of seabed in the Indian Ocean. A licence has been granted for 15 years, a spokesman for the Foreign Ministry said yesterday. China needs to map the seabed and identify suitable mining spots. In exchange, it will be given priority rights to mine these deposits. A contract is expected to be signed in November. The deal makes China one of the first countries authorised under the UN Convention on the Law of the Sea (Unclos) to explore for polymetallic sulphides - one of the most valuable metallic mineral sources, found around volcanic springs on the ocean floor [...]. "The refined metals from these deposits will help China meet our increasing demand for resources," Jin Jiancai, secretary general of China Ocean Mineral Resources Research and Development Associated, was quoted by state media as saying. Mainland marine experts said the deal marked Beijing's entry to an elite global club capable of tapping the rich resources in the deep sea. "It is a cake too big for any country to claim a monopoly on but only a few countries are capable of having a slice," said Professor Wang Xiutian, marine geophysicist with the Ocean University of China [...]. China still faces many challenges in mining the Indian Ocean deposits because of its distance from the country and because some of the ocean floor is 3,000 metres deep [...]. "We should not start mining activities until we have solved the environmental issues. We may need to wait for years, if not decades, to see the first ship of ore arriving at a Chinese port," said Han Xiqiu, a researcher with the State Oceanic Administration's Second Institute of Oceanography based in Hangzhou, Zhejiang [...]. The ISA, established under the authority of Unclos, has 162 member countries. Its mission is to co-ordinate activities on the seabed, ocean floor and subsoil beyond the limits of national jurisdictions. Han said that China started "decades behind developed countries" in deep-sea prospecting. It knew very little about polymetallic sulphides until recent years, while the US has been doing research on it for years. China must give up its claim on 75 per cent of the region by 2026. It is also under the obligation to launch scientific and environmental research to further understanding and protection of the region. ^ top ^

China, Russia discuss military cooperation (China Daily)
The chief of the Chinese army's General Staff Chen Bingde discussed military cooperation with Russian Defense Minister Anatoli Serdyukov on Thursday. During their talks, Chen, chief of the General Staff of the People's Liberation Army (PLA), said bilateral military relations were in good shape and there had been dramatic progress in recent years. China stood ready to work with Russia to further advance their military ties, which would help promote the China-Russia strategic cooperative partnership and was conducive to peace and stability in the region and the world, Chen said [...]. The two sides also conducted an in-depth exchange of views on contacts and cooperation between defense departments and the two militaries and reached broad consensus [...]. ^ top ^

China, Albania vow to deepen bilateral ties (China Daily)
Chinese Foreign Minister Yang Jiechi and his Albanian counterpart Edmond Haxhinasto vowed on Wednesday to further expend and deepen bilateral relations between the two countries. Yang, who was on a one-day visit to Albania at the invitation of Haxhinasto, said China and Albania would become not only good friends of mutual trust, but also good partners with mutual benefits under new circumstances. He said China and Albania needed to do more to promote personnel exchanges at all levels to enhance understanding of each other, and to promote trade and economic cooperation between the two sides [...]. "And Albania is committed to expanding exports and attracting foreign investment. Businesses of our two countries can be complementary to each other," he said. Yang stressed that China appreciated Albania's adherence to the one-China policy, saying the two countries should strengthen cooperation on regional and international issues of common interests [...]. The Albanian foreign minister said he hoped the good political relations between China and Albania could lead to closer cooperation in the fields of trade, energy resources, infrastructure, finance and others [...]. ^ top ^


Domestic Policy

Train crash compensation rises to 915,000 yuan (China Daily)
The compensation for the families of those killed in a high-speed train crash in Wenzhou, East China's Zhejiang province has been increased to 915,000 yuan ($143,000), the Xinhua News Agency reported Friday, quoting sources with the local rescue command center. It is almost double the previous offer of 500,000 yuan after officials spoke to family members about their loss, and is done in accordance with the Tort Law of the People's Republic of China. The compensation is a payment to families for their loss and funeral expenses, and includes compensation for emotional distress and one-off aid that will help cover living expenses for the victims' children. The new amount will be made to all the families of victims who died even if they had already accepted the previous offer. The Ministry of Railways is still working on the compensation package for those who were injured in the tragedy on July 23. The death toll from a high-speed train crash in East China's Zhejiang province has risen to 40 after a critically injured passenger died, local government authorities said Friday [...]. ^ top ^

China orders strict management of drinking water quality after SW water contamination (Xinhua)
The Ministry of Environmental Protection has ordered local governments to enhance management of drinking water quality during flooding periods after a southwestern city had its main water source contaminated by waste chemicals through heavy rains, a statement said Monday. With the arrival of this year's flood season, floods and rainfall have eroded soil and possibly washed waste from river banks into the water, [...]. The ministry asks local governments to strengthen the monitoring of water quality, especially in areas susceptible to pollution, and also to provide greater supervision of factories, such as pharmaceutical, chemical, papermaking, smelting and other heavy industries [...]. The warning system should also be improved so that environmental pollution incidents would be reported promptly to reduce damage, the statement said, adding that acts of covering up pollution accidents must be strongly prohibited. Waste chemicals from the Xichuan Minjiang Electrolytic Manganese Plant in the city of Mianyang of southwestern Sichuan Province were washed into the Fujiang River, the city's main source of water, by heavy rains last month. Mianyang residents resorted to buying bottled water after local authorities reported the contamination [...]. ^ top ^

Media dares to get tough with Railways Ministry (SCMP)
Mainland railway authorities have come under fire from local and state media, including the Communist Party's mouthpiece, for their handling of the fatal high-speed train crash at Wenzhou. As public anger appeared to rise even higher over Saturday's tragedy, local and national media, both broadcast and print, have dared to point their finger directly at the Ministry of Railways. A China Central Television reporter asked an unusually blunt question during Premier Wen Jiabao's press conference yesterday: had the railway authorities been too hasty in cleaning up the scene and possibly missing essential evidence [...]. As calls for the resignation of the railways minister continued to grow, internet users hailed an academic's suggestion that the ministry be dismantled because such a legacy of the planned economy was doomed to be a cradle of corruption. "The ministry serves political achievements, not people's livelihoods," said Liu Junning, a political analyst in Beijing who runs his own microblog [...]., a major news portal, published a special commentary page detailing the reasons behind Liu's call. "Such an industry ministry is no longer needed," it said. "It wastes people's money and doesn't respect lives." Following the collision, the ministry's spokesman Wang Yongping said he was still confident in the advanced high-speed-rail technology. However, Bai Yansong, host of the CCTV commentary programme News One Plus One, disagreed. "Advanced technology doesn't necessarily ensure qualified [products] and confidence because we must look at whether it's advanced in the operational management, its supervision and respect for human beings," Bai said on Monday. "For instance, if a 40-year-old person has a heart, liver and lungs as healthy as a 20-year-old, can we say he is perfectly healthy if he is mentally retarded?" Bai asked rhetorically. Wang Xin, host of a Guizhou Television commentary programme, lashed out at the ministry: "Eight ministry officials have been investigated over the past year. "How much unashamed, stinking, bloody and naked corruption lies behind such hypocritical commitment in front of cameras?" [...]. The Beijing Evening News published a full-page interview on Wednesday with Professor He Weifang, a law expert at Peking University, after he called on the National People's Congress to set up a special committee to investigate the accident. Although the story was removed from its official website, it has been widely circulated online [...]. ^ top ^

Wenzhou crash response exposes rot in political system, say analysts (SCMP)
The official handling of the Wenzhou train accident and its aftermath has descended into a disastrous mess for the government's credibility and exposed serious flaws in the Ministry of Railways and the political system, according to mainland analysts. They have called upon Beijing to introduce political reform. A disrespect for life, demonstrated by "cold-blooded" officials who tried to bury the train carriage inside which two-year-old Xiang Weiyi, nicknamed "Yiyi", was still alive, flies in the face of people's core values, they said. Analysts said the problems laid bare by the ministry's much-criticised response could only be addressed if political power were restricted under an improved system. A thorough investigation into the cause of the accident, as pledged by Premier Wen Jiabao, would show up the ministry's flaws as a reflection of the whole system, said Du Guang, a retired professor of the Party School of the Communist Party's Central Committee [...]. "Accountability for the accident must be pursued inside the ministry. The problems identified in the ministry, such as unchecked power, exist throughout the entire political system. The core of political reform is to constrain power and prevent its abuse." The authorities would not change their attitude unless citizens or National People's Congress delegates who truly represented them had the right to sack officials, said Professor Hu Xingdou of the Beijing Institute of Technology [...]. "The authorities should fundamentally understand the seriousness of the issue and get on with reform within the framework of the constitution. Only elections can empower people and take irresponsible and indifferent officials in hand." He believed that the need for stability should not pose an obstacle to reform. The mainland had "a political system of contradiction", Hu noted. On the one hand, the various political powers could balance and restrain one another - between the police, prosecutors and courts, and between the judicial system and the NPC - but on the other hand, they were all under the leadership of Communist Party committees, he said [...]. Fei Liangyong, chairman of the Federation for a Democratic China, said in an open letter that the country's breakneck speed of development had led to a low level of human rights and security. "Disasters in China are mainly man-made as a result of corruption and an authoritarian system," Fei wrote. "The disaster has shown the urgent need for reform of the railway system, which should extend to the whole system" [...]. Calls for dismantling the ministry have been growing since the July 23 train crash [...]. ^ top ^

Questions over impartiality of Wenzhou probe (SCMP)
Experts appointed to investigate the Wenzhou train disaster could compromise the findings in the eyes of the public, it was claimed yesterday. At least half are closely linked to the Ministry of Railways or are from a company that provides key technological support to the rail line where the accident took place [...]. The government has pledged to conduct a thorough investigation and punish those responsible. The inquiry findings will be released next month, with many hoping they will bring about much-needed reform of the Ministry of Railways. But analysts following the issue yesterday said they were disappointed with the make-up of the inquiry team [...]. Of the eight members, at least four could be alleged to have a conflict of interest. Professor He Weifang, who has called for a revamp of the inquiry team, warned: "If public concern over [apparent] conflicts of interest are not properly addressed, the impartiality and credibility of the investigation will be seriously compromised." The special task force was set up by the State Council a day after the accident. But the list of the task force members was released only last Thursday after mounting calls from the public for an "open and transparent investigation” [...]. Led by Luo Lin, director of the State Administration of Work Safety, the probe team is made of 40 members. Most are from the government safety watchdog and the Ministry of Supervision, but they also include a deputy railways minister and two other senior Ministry of Railways officials. It is the expert panel, though, that has caused most public concern. Among the experts are three professors from Beijing Jiaotong University known to be staunch advocates of high-speed rail.

Another, Li Heping, is from a research institute affiliated with the Ministry of Railways [...]. One of the three professors, Tang Tao [...] is an independent director of Shenzhen-listed Henan Splendor Science and Technology, the designated supplier of rail signalling, disaster prevention and safety monitoring systems. The company was heavily criticised after the accident. Rail officials earlier blamed the fatal collision on design flaws in a signalling system. The system is used in at least 58 railway stations across the country and on subway lines in major cities, including Beijing [...]. Another professor, Wang Mengshu, is one of the best-known supporters of the expansion of high-speed rail [...]. The third professor, Ji Jialun, serves as secretary general of a transport committee under the China Railway Society - directly controlled by the Ministry of Railways. None of the experts was available for comment yesterday. But Professor Mao Shoulong, [...], said experts opposed to bullet trains and specialising in law and public administration should also be involved. He said: "It may be true that the task force has to include rail officials and experts to facilitate the investigation. "But as a consequence the truth, or at least part of it, will have to be sacrificed, let alone the growing hopes for a revamp of China's highly monopolised rail system" [...]. Lew Mong-hung, a Hong Kong delegate to the Chinese People's Political Consultative Conference, said the official explanation so far was unconvincing and called for an inquiry led by members of the Standing Committee of the National People's Congress. "Many of them [members of the probe team] are linked with the railway authorities so it will be friends probing friends," said Lew. "The NPC should launch an independent investigation.". ^ top ^

One accident they mustn't cover up (SCMP)
With public anger over the fatal high-speed-rail crash in Wenzhou unabated, officials are now saying what people want to hear. Premier Wen Jiabao and others have promised over the past week that the truth will be made known through an open and transparent investigation and that, with accountability uppermost, those responsible will be punished accordingly. Safety, it is said, will no longer be compromised in the name of speed or technology; corruption, if found, will be rooted out. Nothing short of this will do, but much more needs doing to correct the flaws in a system increasingly out of touch with the national interest. Allowing the media to report freely on the crash would be a good start [...]. There can be no half measures or cover-ups this time. The collision of two bullet trains on July 23, which left 40 people dead and up to 200 injured, is highly symbolic. It has not only prompted the usual criticism of how such matters are handled, but called into question the pace of expansion of high-speed rail and other infrastructure projects and opened debate on whether China's breakneck development is in some cases doing more harm than good. High-speed rail has been pushed by the government as proof of China's technological prowess and the crash damages perceptions. But it is just the latest tragedy to involve infrastructure, from collapsing buildings and bridges to environmental disasters [...]. Whatever the findings, it is clear the ministry has serious problems and that deep reforms are needed. The railways are one of the biggest monopolies in the mainland's economy and, of late, have been dogged by corruption. The ministry's handling of the accident drew fierce criticism. Putting it under the authority of the Ministry of Transport would, in the circumstances, make sense. Safety has to be the top priority. Construction of high-speed railways should be halted until concerns surrounding the crash have been resolved. Caution should also be exercised in other areas of the economy, where growth and the interests of powerful groups are too often put ahead of communities and their needs. Economic development cannot take precedence over the environment, resources and safety. There are many lessons to be learned, and changes to be made, in the wake of this accident. ^ top ^

Openness encouraged by State Council (Global Times)
The State Council, or China's cabinet, released a circular on Tuesday urging increased openness in government affairs in order to ensure that government officials will continue to work in a lawful and efficient manner. "We should stick to lawful, scientific and democratic policy-making and increase the scope of publicity, especially for major reform plans, policies and projects that are directly related to the people's interests," said the circular, which was jointly issued by the State Council and the General Office of the Communist Party of China Central Committee. The circular stressed that expenditures and budgets for government departments at all levels, as well as data on key construction projects, must be publicized in full detail. Information on major emergencies should be released to the public in an "objective and timely manner" [...]. The circular specified several obstacles for transparency efforts, including a lack of information, nonstandardized publicity procedures, poorly designed information-sharing systems and problems regarding the distinction between classified information and public information. ^ top ^

Cabinet demands more open official response to crises (SCMP)
The State Council has ordered more transparent official handling of emergencies, as the government reels from the blows to its credibility inflicted by last month's deadly high-speed-train crash. In a circular issued on Tuesday, the cabinet said investigation results and other issues of widespread interest should be publicly disclosed in an objective and timely manner [...]. The orders come as the government confronts mounting criticism of handling of the train crash in Wenzhou on July 23, which killed 40 people. The media and the public have denounced officials for failing to respond to concerns ranging from the cause of the crash to a review of the national high-speed rail programme [...]. Qian Gang, from the China Media Project at the University of Hong Kong, said "individual departments may have different interpretations of the documents". "The propaganda departments may still curb media criticism and say they have to objectively guide public opinion," Qian said. "At the end of the day, officials may still say, 'We cannot disclose the information to you because it is secret'." The transparency order echoes pledges Premier Wen Jiabao made at the crash site a week ago. Wen said the investigation would be open, transparent, under public supervision and "stand the test of history". The next day, propaganda authorities told mainland media to severely limit reporting of the crash. The State Council document also said supervision of the government by the media, lawmakers and the country's eight "democratic parties" should be bolstered [...]. The State Council also ordered government expenditure and information on key construction projects be published in full unless state or commercial secrets are involved. Hu and Qian agreed the orders were positive and showed the government's determination to be open, but Hu said the public should have more freedom to monitor the authorities. ^ top ^

Death penalty deal for China trial on NZ killing (SCMP)
The 25-year-old Chinese man who allegedly killed a taxi driver in New Zealand went on trial in Shanghai this week after China reportedly agreed to a request from New Zealand that he would not face the death penalty if convicted. The case is the latest example of growing police and judicial co-operation between China and foreign countries regardless of whether any extradition agreement exists, as in the case of China and New Zealand. According to a Chinese legal expert, the accused could be tried in his home country under a law that makes Chinese nationals liable for crimes committed abroad. Shanghai native Xiao Zhen, who went to New Zealand for studies in 2006, is on trial for murder after killing a taxi driver in Auckland on January 31 last year [...]. In court on Tuesday, Xiao admitted stabbing the driver but said he took out his knife only because Mohini was much bigger than he was, and because Xiao felt intimidated. He said he was only struggling to get away from the driver and did not aim for his heart. Xiao also expressed remorse for the killing [...]. He is charged with wounding with intent to cause death, which means he could have faced the death penalty if not for the deal between China and New Zealand. Despite his admission, the court has yet to rule on his guilt. After arriving in Shanghai, he did not tell his family and friends what happened [...]. New Zealand police traced the killing to Xiao through closed-circuit video recordings and a bag he abandoned near the scene. On June 10, 2010, he was apprehended by Chinese police in Shanghai at the request of the New Zealand government [...]. Law experts said it was common practice for a country to refuse to send its own nationals to another country for trial, even where extradition agreements existed. But they said this was no incentive for Chinese nationals to flee to China after committing a crime abroad. "China has the death penalty, and is generally harsher in its criminal punishments than foreign countries," said professor Huang Feng of Beijing Normal University. ^ top ^

Striking cab drivers back to work in Hangzhou (China Daily)
Striking cab drivers in the eastern Chinese city of Hangzhou returned to work Thursday after three days of protests that prompted the local government to promise a fare increase. The cabbies began to take passengers again on Thursday morning [...]. The strike started during rush hour Monday morning. About 1,500 striking cabbies voiced their complaints about skyrocketing prices for food, gasoline and housing, as well as insufficient cab fares. Wang Yusheng said that he earns 500 yuan on average per day. However, he has to give 220 yuan to the car's owner and fork over another 200 yuan for gas every day as well. "My monthly income is only 2,400 yuan; my monthly rent is around 700 yuan," Wang said. In response, the city government pledged to hike cab fares by the end of October and provide cab drivers with temporary subsidies. According to the new polices, cabbies will receive a one-yuan (US$0.16 ) subsidy for every trip they make starting from Monday. "According to our estimates, a cab driver can make an average of 42 trips every day, which means the driver can get a subsidy of more than 1,200 yuan per month," said Wang Yichuan, deputy director of the Hangzhou Municipal Traffic Bureau [...]. ^ top ^

More secret 'black jails' exposed in the capital (SCMP)
More secret prisons locking up petitioners in Beijing have been exposed by mainland media, after several similar facilities were revealed to the public in the past couple of years. Many petitioners who claimed to have been imprisoned recently in two such "black jails" in Beiqijia town in Beijing's Changping district suspected that they had been tracked by local authorities from their hometowns, who co-operated with those running the jails, Beijing News reported yesterday. From July 1 to July 12, at least 50 people who came to Beijing from various provinces to seek justice had been held in a courtyard house in Nanqijiazhuang village in the town, the report said, citing people who said they were among the detained. It said police busted the prison on July 12 after receiving a tip-off, freeing 13 people confined there that day. More than 20 other people were held in a nearby village called Lingshang in March, according to Chen Hongxian, a retired worker from Funing county, Jiangsu province, who came to petition on March 8 against alleged corruption in the county government, but ended up being locked there for three days [...]. Mainlanders who don't trust lower-level petition offices often take their complaints to higher authorities in Beijing, but many local governments consider such complaints an embarrassment, and it is almost an open secret that they purge these people from the capital by using mental or physical torture. Xu Zhiyong, a legal expert who, along with other activists, first exposed such jails in Beijing in 2008, said the central government's neglect of the issue has made the existence of such jails possible [...]. "Many problems that people petition about stem from the country's political system. They will continue popping up as long as there's no political reform" [...]. ^ top ^

Mainland soy milk drinkers up in arms (SCMP)
Two popular restaurant chains have been accused of selling soy milk made from liquid concentrate or soybean powder, dealing another blow to the already shaky confidence in the country's food industry. Zhen Kungfu, known for their dishes such as congee, told The Southern Metropolis News: "Our soy milk is made from soy milk powder". And Yon Ho Soya Milk, another popular Chinese-style fast food chain, confirmed to the South China Morning Post that some of their milk was made from concentrate. Lin Zhicheng, a spokesman for Yon Ho, said about 20 of its restaurants in Shanghai began serving soy milk made from concentrated powder this year. "The rest of the branches in Shanghai and other cities all serve freshly ground milk," he said [...]. The revelations came amid a public outcry of "being cheated" by fast-food restaurant KFC, which was found to be serving concentrated soy milk powder. A picture of several boxes of soy milk powder, piled in front of a KFC restaurant in Guangdong, was posted online last week and caused an uproar. A subsequent KFC statement said that processing freshly ground soy milk might result in problems with meeting the quality and safety standards for all of the chain's more than 3,000 restaurants in China. Although none of these companies claimed that their soy milk was freshly ground, domestic consumers still feel cheated [...]. These fast food chains are the latest casualties of a scandal that can be traced to Japanese-style noodle chain Ajisen Ramen, which has been accused of misleading the public about the calcium content in its noodle soup. The Hong Kong-listed restaurant has seen its share price plummet more than 34 per cent from the controversy. The franchise has been accused of using concentrates and flavouring powders to make its soup base, instead of boiling actual pork bone stock, as it claims in advertisements [...]. ^ top ^



Half of Beijingers are 'middle class' (Global Times)
Many Beijingers are surprised to discover they have joined the ranks of the middle class without realizing it. According to a report released Wednesday, Beijing's middle class accounted for 46 percent of the population in 2009, higher than the nation's average [...]. The report, by the Chinese Academy of Social Sciences (CASS), based its calculations on Engel's coefficient, an economic measure of expenditure on food relative to income – the lower the coefficient, the wealthier the country. In China, the average is 37 percent, or 230 million people. If a family's expenditure on food accounts for 30 to 37.3 percent of overall consumer expenses, then they are defined as middle class, said the report [...]. It is notoriously difficult to define what middle class means, whether income, education, employment, property or even cultural preferences are taken into consideration. The public may have had a misunderstanding about the number, said Song Yingchang with the Institute for Urban and Environment Studies under CASS, and chief writer of the report. "Our research was conducted from a national perspective. The average income in Beijing is higher than that in many Chinese cities, so the city's number might be more than people expected, while people themselves don't notice the difference," Song said. However, the public is divided, as some think the percentage is lower than they assumed [...]. The middle class percentage for Beijing reflects a basically true situation, according to Zhong Dajun, director of the Beijing Dajun Institute for Economic Observation. "I estimate that earning about 4,000 to 5,000 yuan ($621 to 776) per month is middle class in Beijing, which is about the average income level for the city," he said. The average annual salary in Beijing was 50,145 yuan in 2010, according to the Beijing Municipal Bureau of Statistics [...]. "Beijing is not doing well enough in city management and government services," Song said, "for example, it's difficult for migrants to blend in, and they don't have the same access to public services like the locals." The middle class in China will grow on average by 2.3 percent a year from 2010 to 2025, the report said, and it's estimated that by the year 2023 the number will reach more than 50 percent. ^ top ^



Home appliance replacement for Tibet (China Daily)
Tibet followed the steps of many other Chinese provinces and municipalities Tuesday in launching an old-for-new home appliance subsidy program. Under the program, consumers selling their old appliances to recycling companies are eligible for a 10-percent discount on the purchase of new appliances, said Ma Xiangcun, director of the Tibet Autonomous Regional Department of Commerce. The new program targets five designated products -- televisions, computers, air-conditioners, refrigerators and washing machines, and consumers can get a subsidy ranging from 250 yuan ($39) to 400 yuan per unit while buying those appliances, Ma said. As Tibet has no qualified recycling companies for electronics, old home appliances need to be sent to other provinces to be dismantled and recycled, and the government shall bear all the costs in transportation, he added [...]. ^ top ^



Attackers were 'trained in Pakistan' (SCMP)
Local authorities said yesterday that Muslim extremists trained in Pakistan masterminded one of two deadly attacks over the weekend in restive Xinjiang, which left six victims and five assailants dead. A police investigation found that organisers of Sunday's attack had learnt gun-and bomb-making skills at a terrorist camp in Pakistan, the Kashgar city government said. "The heads of the attackers had earlier fled to Pakistan and learned skills of making explosives and firearms in camps of the terrorist group East Turkestan Islamic Movement (ETIM) before infiltrating back to Xinjiang," the statement said [...]. Two further suspects, Memtieli Tiliwaldi, 29, and Turson Hasan, 34, were shot dead by police on the outskirts of Kashgar yesterday, the Xinjiang government's website said. Beijing has long accused the ETIM, which advocates Xinjiang independence, of orchestrating terror attacks in the Western region. Meng Hongwei, deputy public security minister, recently warned of ETIM terrorists sneaking back into the country through Central Asia. "The malign intention behind this violent terror was to sabotage inter-ethnic unity and harm social stability, provoking ethnic hatred and creating ethnic conflict," the statement said. The attackers stormed into a restaurant on Sunday afternoon, setting it on fire after killing the owner and a waiter, and then ran onto the street and hacked four people to death, Xinhua reported. Five terrorists were shot by police. Sunday's attack was the second in Kashgar in 24 hours. On Saturday night, eight civilians were killed and 27 injured when a truck was driven into a busy street by knife-wielding attackers. At an urgent meeting on Sunday, Xinjiang party chief Zhang Chunxian vowed to crack down on violence and "illegal religious activities" in the Muslim-majority autonomous region, promising "resolute and strong-handed measures". Zhang said at the meeting in the regional capital, Urumqi, that the central government was "highly concerned" with the security situation, Xinhua reported [...]. Academic Jiang Zhaoyong, a specialist in Xinjiang issues, warned that strong surveillance of Uygurs may build frustration among the minority. Jiang said some Uygurs moved south to Kashgar after deadly 2009 riots in Urumqi as they struggled to find work. "The recent attacks may severely affect the economy of southern Xinjiang, which makes it more difficult for them to settle down," he said. ^ top ^

Tensions high after deadly clashes (SCMP)
Tensions were running high in the remote western city of Kashgar yesterday after authorities shot dead two Uygur men suspected of fomenting deadly ethnic unrest and vowed a further crackdown on "religious extremists". Police shot the men, both from the mainly Muslim minority that makes up about half the population of northwestern Xinjiang autonomous region, late on Monday as they were trying to capture the pair, authorities in Kashgar said. The deaths bring to 21 the number of people reported killed in the city since the weekend in the latest bout of unrest stemming from Uygur frustration at Beijing's rule. Thirteen civilians died in two weekend attacks [...]. The remaining six dead were said to be dissidents, some of whom were trained in "terrorist" camps in neighbouring Pakistan, according to mainland authorities. Armed police yesterday stood guard outside Kashgar's main mosque [...] as the city's Muslim residents observed the holy month of Ramadan. There was a heavy police presence and the streets remained quiet although some shops and businesses had reopened by yesterday. Xinjiang's government has pledged to punish terrorists and crack down on religious extremists [...]. Xinjiang governor Nur Bekri described the attackers as "terrorists who are the common enemy of all ethnic groups in the region" [...]. Cheng Zhenshan, the party secretary of Kashgar, said in a meeting on Sunday that the government would fight separatists, religious extremists and terrorists "with an iron fist". Security would be stepped up during Ramadan, the Islamic month of fasting from August 1 to 29, he said. Many of Xinjiang's nine million Turkic-speaking Uygurs are unhappy with what they say has been decades of political and religious repression, and the unwanted immigration of the Han, China's dominant ethnic group. "Look at the Han and the Uygurs - who is rich and who is poor?" said one Uygur man in his 20s. "Some Uygurs go to university in Urumqi, they graduate, come back and can't find jobs. These all go to the Han. And even when they do find jobs, their salaries are low.". ^ top ^

Security chief talks tough on Xinjiang (SCMP)
The mainland's top police officer yesterday promised tougher action against violent crime and terrorism to protect stability in Xinjiang, [...]. Xinhua quoted Public Security Minister Meng Jianzhu as telling delegates to a national anti-terrorism work conference in Urumqi, the capital of Xinjiang, on Wednesday that everyone had to be well aware of the seriousness, complexity and long-term nature of the arduous anti-terrorist campaign. "In an attempt to safeguard social stability and the safety of people's lives and assets, we must make the maintenance of stability the overriding priority in our jobs, while clamping down on violence and terrorist activities with more adamant determination and stronger measures," Meng said [...]. He stressed that all Chinese citizens were equal before the law, saying anyone who threatened the safety of civilians and their property or engaged in any form of violence or terrorism would be severely punished [...]. In Xinjiang, many Han complain about policies they see as discriminatory, such as allowing minorities to give birth to more than one child and giving non-Han students extra marks in their university entrance exams. Many Uygurs resent the arrival of the Han and say they face discrimination in jobs and education and curbs on their religion. ^ top ^



Loyalist urges Tsang to stand tall (SCMP)
A staunch Beijing loyalist has called on Chief Executive Donald Tsang Yam-kuen to stand up to mainland officials who interfere in Hong Kong affairs. Lew Mong-hung, a Hong Kong delegate to the Chinese People's Political Consultative Conference (CPPCC), said Tsang should be brave enough to say "no" when central government officials make statements that infringe on the one country, two systems concept of the Basic Law. Lew was speaking in the wake of comments by top Beijing official Wang Guangya who criticised the city's civil servants last week. Wang said they were trained to carry out orders in colonial days and "don't know how to be a boss". Lew said Wang's comments had gone beyond the pale and threatened the autonomy of Hong Kong [...]. "Tsang can accept kind reminders but if some infringe on Hong Kong's autonomy, he doesn't always have to say yes. Sometimes he can say no," said Lew. He said he would write to President Hu Jintao and vice-president Xi Jinping urging the State Council's Hong Kong and Macau Affairs' Office, which Wang chairs, to review the extent of its criticisms [...]. Wang, Beijing's head of Hong Kong affairs, has been a vocal critic of local issues in recent months. During his first official visit to the city in June, Wang signalled out housing as a potential political problem [...]. According to the latest University of Hong Kong poll, released yesterday, the administration's popularity is at a seven-year low. Of the 1,000 people interviewed by the university's public opinion programme, only 17 per cent were satisfied with the government's performance, while 65 per cent cast a vote of no confidence in Donald Tsang [...]. ^ top ^

Most back police over protest clashes (SCMP)
Nearly two-thirds of Hongkongers see protesters clashing with police and obstructing traffic as too radical and unacceptable, a university poll found. More than 60 per cent of the 832 adults interviewed for the poll think protesters abusing their rights and disrupting social order was more worrying than the police using excessive force, compared with less than a fifth who think the contrary view. The results come a month after a hard core of July 1 marchers caused traffic chaos in Central in a lengthy clash with police that lasted until about 4am and resulted in 231 arrests [...]. While 62.2 per cent of respondents rejected rowdy protests, 17.4 per cent endorsed such expressions of opinion. Professors Wong Chack-kie and Laurence Ho Wing-him, of Chinese University's Hong Kong Institute of Asia-Pacific Studies, who conducted the survey, said the government should be wary of the substantial minority who endorsed radical protests. Fred Lam Fai, chief campaigner of policy think tank Roundtable, said the core problems lay in the government's attitude when facing dissent. "The government is not willing to listen to you unless you corner it by taking to the streets," said Lam, a social activist and frequent protester [...]. "I think it's not radical when compared with other countries. We are very mild indeed, not even throwing a stone." Dissent persists despite an improving economy, low unemployment, and a number of government relief measures, including the HK$6,000 cash handout [...]. "I doubt if we are enjoying prosperity. We have a huge wealth gap and many live miserable lives," Lam said. He said that even the rollout of relief measures highlighted the government's weakness. "The saga of the HK$6,000 handouts reflects the administrative weakness of the government," he said. The government initially said HK$6,000 would be paid into each Mandatory Provident Fund account, but a week later reversed course and said all permanent residents would get the sum in cash. Non-permanent residents were initially excluded, then included subject to a means test [...]. The survey also found that 35 per cent of respondents disagreed with the proposition that Hong Kong was not harmonious, compared with 19.2 per cent who agreed. Avery Ng Man-yuen, vice-chairman of the League of Social Democrats, said the survey reflected deep-rooted social conflicts. "Hong Kong is a relatively conservative place, but there are still quite a number of people endorsing radical protests. So you see Hongkongers who have found no other way out of the deeply rooted problems," Ng said. ^ top ^

US news group office in HK hacked for two years (SCMP)
A US news organisation in Hong Kong was hacked for nearly two years as part of the biggest global theft of information in history, according to internet security experts. The UN, US government and Asean secretariat were also hit, with the finger being pointed at Beijing. In what internet security firm McAfee dubbed Operation Shady RAT, 72 targets in 14 countries were hit over at least five years, most of them in the US. This included defence contractors, federal and state governments, and think tanks. Dmitri Alperovitch, vice-president of threat research at McAfee, said in a report that the attacks were all part of a single operation and the choice of targets "potentially pointed a finger at a state actor". The main culprit is believed to be China [...]. "What is happening to all this data is still largely an open question," Alperovitch said. "The loss represents a massive economic threat... not to mention the national security impact of the loss of sensitive intelligence or defence information." The Washington Post reported that the news agency in Hong Kong, which was compromised for 21 months with its office in New York also infiltrated for eight months, was The Associated Press. That agency is one of three news bureaus in town with a headquarters in New York, fitting the description in the McAfee report. The others are Bloomberg and The Wall Street Journal. The AP offices in Hong Kong and Beijing could not be reached for comment [...]. Mak Yin-ting, chairwoman of the Hong Kong Journalists Association, said there were fears that anonymous sources, often whistle-blowers of malpractice and corruption, would hold back from speaking to the media if they knew their identities might be exposed by hackers [...]. Eight of the 14 areas attacked were in Asia. Targets included the governments of India, South Korea and Taiwan. The report said that the choice of other targets - the international and national Olympic committees and the World Anti-Doping agency around 2008, a Western non-profit group promoting global democracy and the Asean secretariat - potentially pointed to a state actor because "there is likely to be no commercial benefit to be earned from such hacks" [...]. But Professor Li Chuanfeng, a researcher with the Key Laboratory of Quantum Information at the Chinese Academy of Sciences, said data leaks were inevitable. Intercepting digital packets required only simple tools and a fast enough super computer could decipher the encryption of information in any civilian, and sometimes military, sector, he said. Li said that many governments and private groups had exploited these loopholes for decades [...]. ^ top ^



Solo mainland tourist numbers disappoint (SCMP)
Wang Tsung-wei, a cab driver in Taipei, has yet to give a ride to a single mainland tourist, despite expectations of a surge of visitors after a ban on individual travellers was lifted on June 28. "The government said our business would increase when it allowed solo mainland tourists to visit, but where are they?" Wang asked. Similar questions have been asked by operators of high-end department stores who have not seen a rise in sales over the past month. According to statistics released by the Taiwanese Tourism Bureau, just 633 solo mainland tourists travelled to Taiwan in the first month of such visits. Excluding the first day, when 280 individual mainland tourists arrived, the average number of such visitors was about 12 a day, far short of the 500-per-day ceiling permitted by the island's government. Unenthusiastic travel agencies and too much red tape may explain why so few mainland tourists opted to visit the island outside of tour groups, market operators said. "It takes at least one to one-and-a-half months to prepare the required documents, including financial statements, household registration records, approval from the mainland police and processing from Taiwanese immigration, making it far too troublesome for solo tourists to come visit," said tour operator Royce Wang, [...]. Another reason might be that such visits are expensive. Wang said the cost for an individual visit is often higher than for visitors who come in tour groups [...]. Other operators blamed the lack of visitors on insufficient promotion by the island's government in the three cities - Beijing, Shanghai and Xiamen - from where residents are allowed to visit Taiwan individually, and some operators cited unavailable plane seats, as well the hot Taiwanese summer, which discourages mainland tourists from visiting [...]. ^ top ^



Weak dollar may lift China inflation (China Daily)
Though there appears to be a light at the end of the US debt crisis tunnel, the agreement reached over the weekend in Washington won't remove concerns over a weaker dollar, which will push up commodity prices and increase imported inflation in China over the long term, analysts said. Even if the US debt crisis is resolved, it will push up commodity prices and increase China's imported inflation over the long term, analysts said. China's consumer price index in June reached a three-year high of 6.4 percent. China's consumer price index (CPI) in June reached a three-year high at 6.4 percent [...]. Zhu Baoliang, chief economist at the State Information Center, a top government think tank, said China's CPI in July would be very close to that of June, but the US debt crisis would have little influence on the figure [...]. Zhu said that the $1 trillion reduction of the US fiscal deficit over the next 10 years wouldn't be enough, so the debt crisis, though narrowly averted this time, might be repeated. The US debt is too large to be resolved through normal measures such as tax increases and deficit reductions, while effective choices such as reducing entitlements and withdrawing overseas troops are impracticable considering the US political landscape, Zhu said. Lu Zhengwei, chief economist with Industrial Bank Co Ltd, said a major effect China will have to face is a possible third round of quantitative easing, which will be a certain choice if the performance of the US economy remains poor in the second half [...]. According to Chen Kexin, chief analyst at the Distribution Productivity Promotion Center of China Commerce, no matter how the US debt crisis is resolved, it will push up commodity prices and increase China's imported inflation. An agreement to raise the debt ceiling helps avoid a sudden collapse of US economy but does not get to the root of the problem [...]. "Investing in precious metals such as gold and silver would normally be a hedging strategy under these circumstances, but with excess liquidity globally, investors will seek more such channels," Chen said. In that case, medium- and long-term commodity prices will keep rising, with the oil price back to $100 a barrel and the copper price closing in on $10,000 a ton, for instance, Chen predicted. With the rising cost of raw materials and suppressed price hikes for food, it will be hard to bring the CPI back to "mild" levels in the second half, he added [...]. ^ top ^

China, Japan on a collision course over train patents (SCMP)
[...]. Even before the accident, the intellectual property dispute between Japan and China over the technology used in China's new bullet trains was heated. Since the crash, it has come to a boil. Japan, of course, was the first country to build "bullet" trains, and their safety record is enviable. The Shinkansen "super bullet" train, which was directly affected by Japan's devastating March earthquake, was able to resume services in April. Since it began operating [...], the Shinkansen [...] has suffered no fatal accidents [...]. Despite its technological lead and enviable record, Shinkansen trains were not exported overseas for decades. The first such technology transfer was the Taiwan High Speed Rail, which began operating in January 2007. As a result of a renewed emphasis on safety following an earthquake, the Taiwanese authorities decided to use Japanese technology for the rolling stock and a mixture of German and French technology for other facilities and operations. Today, the great stage for the Shinkansen is China's vast territory [...]. The rolling stock for China's CRH380A bullet train is based on technology from Kawasaki Heavy Industries, whereas the German company Siemens provided the technology for the CRH380B. One reason Japan hesitated to export its high-speed rail technology was revealed by a JR Central Japan Railway official, who wanted to make its provision conditional upon the "country being politically stable and governed by the rule of law", and highlighted the importance of compliance with enforceable contracts that would guarantee intellectual property rights. With these reservations in mind, JR East proceeded with the export of Shinkansen technology to China. Unfortunately, those fears have been vindicated. Immediately before the Beijing-Shanghai railway was built, the Chinese Ministry of Railways initiated international patent claims over the technology used in the CRH380A. It is believed that China has now filed for 21 patents under the Patent Co-operation Treaty. Since 2003, China has filed for 1,902 patents related to high-speed railways. But the 21 recent applications are the first based on Japanese Shinkansen technology. The content of the patent application will not become clear until the 18 months required for investigation has elapsed. But there is a strong view that the technology under application is an extension of that provided by either Japan or Germany, and the case could lead to a major IP dispute. Infringement of intellectual property rights by China is one of the most vexing aspects of trade with the Chinese. The market for Shinkansen technology is growing not only in China, but also in the United States and in emerging-market countries such as Brazil. With demand extremely large, international competition to build high-speed railway networks is becoming intense. And this competition concerns not only technology and speed, but also safety. So long as protection of intellectual property rights in China is woefully inadequate, the high-speed rail market is likely to remain racked with heated disputes [...]. ^ top ^

Rail ministry may need bailout (SCMP)
Amid the widespread public anger over the deadly bullet-train crash in Wenzhou on July 23, another concern has arisen - whether the Ministry of Railways can repay its huge debts. "It's possible that the ministry may need a central government bailout," said Shanghai-based economist Ye Tan. The ministry's liabilities exceeded 2 trillion yuan (HK$2.4 trillion) for the first time this year, and stood at 2.09 trillion yuan on June 30, according to the Shanghai Clearing House's website. The debt is equal to 58 per cent of its assets, up by 1.5 percentage points from the end of last year, when its debts were 1.89 trillion yuan. Two days before the crash that killed 40 people and injured nearly 200, the ministry planned to sell 20 billion yuan in short-term bonds, but only managed to sell 18.7 billion yuan worth. The ministry is the only government agency other than the Finance Ministry that is allowed to issue bonds [...]. The ministry, which has a monopoly on rail services, had revenue of 3.5 trillion yuan in the first half of the year but spent 3.47 trillion [...]. Ye said the ministry's bonds were guaranteed by the government, which could help the ministry indirectly, such as by offering it lowinterest loans. He said the ministry would find it difficult to raise funds, and investment in high-speed railways was very likely to drop sharply because of the Wenzhou accident. "After the collision it will take time for people to regain confidence in China's fast trains, and I think the impact on train exports will be considerable and will last for a long time" [...]. Liu said spending on high-speed rail would be cut back. "This year, the government plans to invest 700 billion yuan on railways, of which more than 200 billion was spent in the first half of the year. Now the rest of the investment will slow down." She said the overall economic impact would be small, since investment in railways accounted for only a fraction of total fixed-asset investment of more than 20 trillion yuan. ^ top ^

No 'double-dip' risk for China's economy: NDRC (China Daily)
The Chinese economy will not experience a "double-dip" nor big fluctuations, and the government is capable and confident of keeping steady and relatively fast growth in the long-run, an official said Tuesday. China's potential growth rate will remain at a high level in the future on the back of the deepening process of industrialization and urbanization, as well as accelerated economic restructuring, which will release huge domestic demand, said Li Pumin, spokesperson with the National Development and Reform Commission (NDRC). Improving scientific and educational development and looser institutional restrictions will also work to promote stable growth, he said. Li admitted the country faces many challenges, such as the weakening global economic recovery and unbalanced, uncoordinated and unsustainable domestic development [...]. However, many advantages and opportunities remain. As long as the central government's policy is well implemented, the economy will keep sound growth, he added [...]. Li said it is a self-steered slowdown, and goes in the track of the government's macro-regulation. Cooling down is conducive to correct relations between market supply and demand, reduce price-hike pressure, and relieve resources and environmental restraints, he noted [...]. ^ top ^

Chinese agency downgrades US credit rating (China Daily)
Chinese officials and economists expressed concern about further uncertainty in the US economy despite the debt ceiling being lifted [...]. However, Chinese rating agency Dagong Global Credit Rating Co responded with a rating downgrade of US sovereign credit from A+ to A. The raising of the ceiling does not reverse the trend of debt growing faster than the US economy and actually marks a decline in the ability of Washington to pay its debts, Beijing-based Dagong said in a report. Zhou Xiaochuan, governor of the People's Bank of China, the central bank, said on Wednesday in a statement on the bank's website that the progress made in raising the debt ceiling and cutting the deficit was "welcome", but also urged the US to handle its debts responsibly. He added that any uncertainty or fluctuation in the securities market would undermine financial stability and hinder global economic recovery [...]. China is by far the largest foreign holder of US debt, with holdings of $1.16 trillion in May, US Treasury Department data showed. It is estimated that 70 percent of China's $3.2 trillion foreign reserves are dollar assets. Ma Jun, chief economist for greater China with Deutsche Bank, said that a lower US rating will affect China mainly through trade, because if GDP in the US goes down by 1 percent, China's exports fall by 7 percent. Capital markets will also be affected as a downgrade will damage investor confidence in Hong Kong and A share markets on the mainland, Ma said [...]. Two out of three major global rating agencies, Moody's and Fitch, reacted to the debt ceiling being raised by maintaining the triple A rating for the US. The focus is now on Standard & Poor's, which has not yet made its decision public. S&P said earlier that a downgrade would be likely if there was no plan to stabilize debt as a percentage of GDP [...]. Li Daokui, a member of the monetary policy committee of the central bank, said on his micro blog that the US rating would probably be downgraded in the next two months [...]. Frank Lavin, former US ambassador to Singapore, said at a conference call organized by the US embassy in Beijing that even raising the downgrade question sends a signal to Washington to reconsider its fiscal policy. Dagong predicted that the US has to cut $4 trillion from its deficit in the next five years to sustain its current debt scale, and the debt will exceed GDP by the end of 2012. "A third round of quantitative easing (QE3) will drag the world into crisis and shake the very foundation of the dollar's status," the report said [...]. ^ top ^

Free-trade status for delta zone approved (SCMP)
A sleepy island in the Zhuhai special economic zone is poised to become a free-trade zone modelled on Hong Kong after Beijing approved pilot co-operation projects in customs, finance, revenue systems and land management. All overseas goods shipped to the 106 square kilometre Hengqin island, next to Taipa and Coloane islands in Macau, will be exempted from import duties unless they are transported to the rest of Zhuhai or elsewhere on the mainland, Shanghai Securities News yesterday cited an unnamed source as saying. The report also said trading among companies on Hengqin island, on the western side of the Pearl River Delta, will be exempted from value-added and consumption taxes, and qualified companies will be eligible for a 15 per cent reduction of their corporate income taxes. Goods shipped to Hengqin will not be required to go through customs unless they are destined for the rest of the mainland, although people entering Hengqin from the Macau or Hong Kong special administrative regions or from overseas will have to complete customs formalities [...]. Niu Jing, deputy managing director of the management committee for Hengqin New Zone, refused to comment on the report other than to say that new policies endorsed by the State Council would be announced soon [...]. Dr Fang Zhou, assistant chief research officer of the Hong Kong-based One Country Two Systems Research Institute, said Hengqin's new policies on customs and revenue systems are similar to those at the 15 other free-trade zones set up in the mainland since the early 1990s. "However, unlike previous free-trade zones that were set up only for manufacturing, Hengqin island will also include residential communities and shopping malls where people can spend their money," Fang said. He added that the new free-trade zone would not pose a threat to Hong Kong's economy in the short term [...]. ^ top ^


DPRK and South Korea

Pyongyang says ready to join Six-Party Talks (Global Times)
The North Korean foreign ministry announced on Monday that the country is ready to restart the long-stalled Six-Party Talks as early as possible and with no preconditions, but the South responded by saying its neighbor must first suspend its atomic activities [...]. Pyongyang has also agreed to resume separate talks with the US over its nuclear weapons program, the spokesman revealed. The announcement came just days after a meeting in New York between North Korea's Vice Foreign Minister Kim Kye-gwan and US special envoy on Korean affairs Stephen Bosworth. "Both sides recognized that the improvement of the bilateral relations and the peaceful negotiated settlement of the denuclearization of the Korean Peninsula conform with the interests of both sides and agreed to further dialogue," the Pyongyang official was quoted by KCNA as saying. Despite these upbeat comments by North Korea, both South Korea and the US have urged Pyongyang to first take concrete steps in giving up its nuclear weapons. The US State Department said it was too early to determine Washington's stance on resuming the negotiations since it needed to consult with Seoul and other allies on possible next steps. on Monday, South Korea's chief nuclear negotiator Wi Sung-sac said, "We cannot go to the Six-Party Talks when (the North's) nuclear program is up and running," he told reporters said, [...]. Analysts are skeptical as to whether the talks will restart anytime soon given the huge chasm between the two Koreas. "It is positive that the recent engagement between Pyongyang and Washington and statements by both sides following the meeting has served to reduce regional tensions [...]. ^ top ^

DPRK asks for food, cement following S Korea's aid offer (Xinhua)
The Democratic People's Republic of Korea (DPRK) asked for food, cement and other supplies following South Korea's offer of flood relief supplies worth 5 billion won (4.7 million U.S. dollars), the Red Cross here said Thursday. In response, South Korea notified its neighbor it will only send medical supplies and other necessities such as blankets, clothes and instant noodles, according to the non-profit humanitarian organization. "We hope discussions over flood aid would be concluded soon so we can deliver aid, "the group said in a statement. Pyongyang's state media reported earlier this week that the country was hit hard by torrential rains between late June and mid- July. Some 8,000 people are reportedly displaced as heavy downpour destroyed 29,000 houses [...]. South Korean government recently approved flour aid to its northern neighbor, the first food aid since the two Koreas exchanged fire near their disputed sea border last November. ^ top ^



Uvs aimag and Tuva Republic expand ties (Montsame)
A contract has been established between Mongolia and the Russain Tuva Republic to cooperate in trade, economics, science, technology, culture and frontier spheres. This contract was signed last weekend in Ulaangom city of Uvs aimag by Sholban Kara-ool, the chairman of the Tuva Republic's government, and by E.Tsaschikher, a governor of Uvs aimag. Bordered with the Russian Federation, Uvs aimag has partnership relations with Tuva. Students of Uvs are studying in universities and institutes of Tuva, a Tes soum is provided with energy by Tuva. The Representative office of Tuva opened in 2003 in Uvs. Several exhibitions were mounted in Tuva from 2009 to 2010 by the Mongolia side, delegates are exchanged, and various festivals, theory-practice conferences and forums are run by the two sides. ^ top ^

Khaan Quest-2011 begins (Montsame)
Approximately 100 U.S. military, 220 members of the Mongolian Armed Forces (MAF) and 180 International military representatives are participating in exercise Khaan Quest 2011 that started on July 25. The exercise takes place at the Five Hills Training area near Ulaanbaatar. The Khaan Quest Exercise of 2011 is a multinational peace support operations training exercise with the goal of increasing peace support operations core competencies. The exercise is hosted by the Mongolian Armed Forces and, as part of the exercise, Mongolian, Multinational, and U.S. forces conduct training designed to improve multi-national speed of response, mission effectiveness, interoperability and unity of effort. The MAF and U.S. will also conduct Humanitarian Civic Assistance operations and medical and engineering capabilities exercises. The purpose of Khaan Quest is to gain United Nations Training recognition and certification of participants; train MAF, multinational and U.S. personnel; increase interoperability; and improve military relationships among participating nations. The military exercise will last until August 25. ^ top ^

Few details on sale of Erdenes Tavantolgoi Coal to Chalco (
Erdenes Tavantolgoi LLC has concluded an agreement to sell coal to the Chinese state-owned company Chalco, but few details have been made public. Chalco will make an advance payment of USD250 million which would go into the Human Development Fund, and not to developing the mine. The Executive Director of Erdenes MGL LLC, B.Enebish, has said the advance payment would be made before 1.5 years from now, but he has not said what price has been decided upon for the coal. Many have a feeling that Chalco has agreed to the advance payment only if it gets coal at lower than the market price. ^ top ^

ADB grant USD 20 million to improve education (
The Asian Development Bank (ADB) is providing a USD 20 million equivalent loan to help Mongolia improve the quality of its higher education system and increase enrollment of youth from poor, remote communities. The ADB Board of Directors on Friday approved the financing for the Higher Education Reform Project. Along with strengthening the relevance of existing higher education programs, it will also address issues such as governance and management, financing, and access. “The ultimate goal is to boost the number of graduates who have the skills to match Mongolia's changing economic needs, and who can bring international standards to its labor markets,” said Robert Schoellhammer, Country Director of ADB Mongolia Resident Mission. Mongolia has over 100 higher education institutions but only about 40 percent of graduates manage to find employment. In response, the Government of Mongolia has drawn up a plan to rationalize higher education which includes reducing the large number of public universities from 42 to 16, and improving teaching and programs. The project will aid the government's plan by funding research facilities, staff training, e-learning centers and testing centers. It will aim to strengthen management capacity at universities to improve accountability and transparency, and will support new public-private partnerships and twinning arrangements with industry and foreign institutions to develop labor market-ready graduates. It will also seek to tackle current imbalances in the system where few students from poor families in remote areas take higher education courses, and boys—despite being strongly outnumbered by girls—get the bulk of jobs on offer after graduation. “Assistance will be given to increase state support mechanisms for students who are poor or living in distant areas, and for policies that can improve gender balance,” said Eisuke Tajima, Education Specialist in ADB's East Asia Department. “As part of this initiative four rural institutions will be chosen to pilot distance learning courses to reach out to more students.” ADB's loan from its concessional Asian Development Fund has a 32-year term and will fund 90 percent of the project cost with the government providing an additional USD 2.2 million. The Ministry of Education, Culture and Science will manage the project which is due for completion by December 2016. ^ top ^

GDP expected to rise by 16.6% next year (
According to projections in the draft budget for 2012 and the preliminary budgets for 2013 and 2014, GDP will rise by 16.6% in 2012, 14.8% in 2013 and 15.5% in 2014. Prices are expected to rise between 8% and 9% between 2012 and 2014. The draft for next year's budget has a projected revenue of MNT176.1 billion, which would be 29.8% of GDP. Social welfare expense would reach MNT218.8 billion. ^ top ^


Jean Binder
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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