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
  22-26.8.2011, No. 385  
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DPRK and South Korea


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Foreign Policy

U.S. VP welcomes China's prosperity as opportunity for more cooperation (Xinhua)
Visiting U.S. Vice President Joe Biden on Sunday called China's rise a "positive development" that will bring more opportunities for bilateral cooperation. "I believed in 1979, and I believe now that a rising China is a positive development," Biden told hundreds of students in Sichuan University in Chengdu, capital city of southwest Sichuan Province. Biden said a rising China will "fuel economic growth and prosperity," and will mean "more demands for American-made goods and services and more jobs back home in the United States." It will also bring a new partner "with whom we can meet global challenges together," he added. "It's in our self interest that China continues to prosper," he said. As a member of the first delegation of U.S. congressional leaders who visited China in 1979, Biden acknowledged that China was on a course of remarkable transformation and the U.S.-China relationship has also improved dramatically in the past 30 years. [...] He stressed the importance of cooperation in development of bilateral relations and called for more from China in many areas, ranging from international and regional issues to bilateral dialogue between military leaders. "We're working very hard to develop our cooperative partnership through more than 60 separate dialogues on issues" that matter to both China and the United States, Biden said. In the speech and the following question-and-answer session, the vice president rejected the claim that U.S. power is declining and he reassured the security of China's huge holding of U.S. financial assets and treasury bonds. "You are safe," he said. "America today is by far the largest economy, with a GDP of almost 15 trillion dollars, about two and a half times as large as China's." He said Americans own a far bigger percentage of U.S. financial assets and treasury bonds than China does. [...] Chengdu is the second and last leg of Biden's six-day official China visit. Biden said he was pleased to make his first visit to western China, acknowledging the incredible role it played in China's history, and the role it will play in the hi-tech future. In the city's hi-tech zone, there are more than 160 Fortune 500 companies operating, including U.S. businesses such as Intel, Dell and Oracle. Biden also visited a high-school, which was reconstructed after the disastrous earthquakes in May 2008. He will wrap up his visit on Monday and then head to Mongolia and Japan. ^ top ^

China offers largest donation to UN food agency for famine-relief in Somalia (Xinhua)
China has donated 16 million U.S. dollars to the World Food Program (WFP) to support its famine-relief operations in Somalia, said a WFP press release on Sunday. It is China's largest single donation to WFP, adding the country's donation to WFP this year to 20 million U.S. dollars, according to the release. The donation will be directly delivered to WFP's food aid program in famine-hit Somalia, where about 1.5 million people are receiving emergency rations of food, said the release. "It fully reveals Chinese people's greetings and heartful care for people around the world," said WFP Deputy Executive Director Amir Mahmoud Abdulla in the statement. China had emerged as an important donor for WFP programs around the world, he added. [...]. ^ top ^

Vietnam fails to bring China into Paracels talks (SCMP)
Vietnam appears to have failed in its latest bid to convince China to open talks on their long-simmering territorial dispute over the Paracel Islands in the South China Sea. While an initial report from Vietnam's Foreign Ministry after the latest round of discussions on outstanding sea disputes with China stated that a "preliminary consensus on some issues" had been reached, a later statement made clear the Paracels were not yet part of that consensus. "The negotiations are still going on," Foreign Ministry spokeswoman Nguyen Phuong Nga said in a statement. "Our position has been made clearly in many occasions that the Hoang Sa Archipelago [the Paracels] is part of the of the negotiations between Vietnam and China on sea issues." Chinese officials have yet to comment in detail on the talks - now in their eighth round - but its envoys and scholars have repeatedly made clear that China's occupation of the Paracels is not up for discussion as part of outstanding issues with Hanoi. The discussions between the two fraternal if mutually distrustful neighbours are discreet, but nonetheless are still being closely watched by a region increasingly focused on the South China Sea. While it recently pledged co-operation with the Association of Southeast Asian Nations (Asean), including Vietnam, over the South China Sea, Beijing has long demanded that specific disputes be settled one to one rather than as part of a regional settlement, as advocated by Asean. Vietnam and its Asean counterparts - Malaysia, the Philippines and Brunei - have claims on the South China Sea and the Spratly Islands. Only China and Vietnam claim the Spratlys in their entirety and are the sole claimants to the Paracels. Taipei's claims mirror those of Beijing's. Hanoi has said it will negotiate directly with Beijing on specific bilateral disputes and more broadly when more countries are involved. "Given everything that is happening, the fact that China and Vietnam are talking is significant and being very closely watched by the rest of us," said one veteran Southeast Asian envoy. "The problem is [that] they don't seem to be getting very far despite progress in the past." Since normalizing ties in 1991, Beijing and Hanoi have successfully settled disputes over their mountainous 1,400-kilometre land border as well as the Tonkin Gulf. The last remaining issues relate to the mouth of Tonkin and the rest of the South China Sea, claimed in large part by China through its controversial nine-dotted line. The discussions are still in their infancy, technically setting a framework of guiding principles - and the Paracels are a key stumbling block as Beijing refuses to accept they are even in dispute. "There is nothing to negotiate," said Dr Wang Hanling, a scholar of maritime affairs and international law at Beijing's Chinese Academy of Social Sciences. "China's sovereignty over the Paracels has never been in dispute and the Vietnamese have acknowledged this in the past. Discussions about co-operative efforts - resource protection, search and rescue and so on - are one thing, China's sovereignty is another.". ^ top ^

Beijing won't deter visits to Philippines (SCMP)
Beijing yesterday moved to distance itself from tensions between Hong Kong and Manila ahead of Philippine President Benigno Aquino's first state visit to China next week. Just 24 hours after the Hong Kong government said it would not lift a black travel alert imposed since the Manila hostage tragedy last year, China's ambassador to the Philippines, Liu Jianchao, said Beijing would not discourage Chinese tourists from visiting the country. Speaking in Manila, Liu said: "I'm very sorry the incident resulted in very bad relations. We feel very sad about it. We understand the reasons and thinking of the Hong Kong people about the security situation in this country, but the central government of China also does evaluation of the security situation in the Philippines. "At this stage, we don't see it as necessary to upgrade the travel warning." He said specific warnings were in place for some parts of the Philippines deemed risky. Hong Kong has had a black travel alert in place for the entire country since the shootings. The only other country for which it has such an alert in place is Syria, where violence nationwide involving protesters and government forces has left 2,200 people dead in the past five months. [...] Democratic Party lawmaker James To Kun-sun, who has been helping the victims of the incident and their relatives, said the matter came under the umbrella of the "one country, two systems" formula. To said Liu's comments should not stop government officials helping survivors and relatives get justice when Aquino visits Beijing at the end of the month. [...] Liu said that during Aquino's visit, an accord would be signed to boost tourism, a main economic driver. He said that how long Hong Kong's alert stayed in place was a matter for the city's government. [...] The hostage fiasco had not affected "the general relationship" between the two countries, he said. Liu also signalled that Beijing was willing to separate tensions over the South China Sea from The countries' business ties. He confirmed the Spratlys would be discussed during the visit, which comes just a week after Aquino welcomed to Manila the navy's new Hamilton-class cutter to patrol the South China Sea. Aquino will be accompanied by more than 300 businessmen and 13 cabinet ministers. Trade and investment deals will take centre stage during the five-day visit, which starts on Tuesday. He would speak to business forums in Beijing, Shanghai and Xiamen - "a rare thing" for a Philippine leader, Liu said. ^ top ^

Chinese FM holds talks with Pakistani counterpart (Xinhua)
Chinese Foreign Minister Yang Jiechi held talks with his Pakistani counterpart, Hina Rabbani Khar, here on Wednesday, pledging to further promote bilateral ties. Yang hailed the China-Pakistan relationship as a "high-quality strategic cooperative partnership," saying the two countries are close neighbors and have forged an all-weather friendship. Yang voiced his appreciation for Pakistan's consistent support of China's core interests, including issues related to Taiwan, Tibet and Xinjiang. He said China will continue to stand by Pakistan in safeguarding its national stability and developing its economy. Yang said this year marks the 60th anniversary of diplomatic ties between China and Pakistan as well as the Year of China-Pakistan Friendship, which generates new opportunities for bilateral relations. [...] The government of Pakistan firmly adheres to the one-China policy and continues to support China on issues regarding its core interests, Khar said. Khar thanked China for its support of Pakistan in social and economic construction. She said Pakistan hopes to make joint efforts with China to enhance cooperation in various fields, including energy, infrastructure, agriculture, and finance, and to further promote the strategic cooperative partnership of Pakistan and China. Yang and Khar also exchanged views on international and regional issues of common concern. ^ top ^

Hu tells Sarkozy China has faith in Europe's economy (SCMP)
China still has confidence in the European economy, President Hu Jintao told French counterpart Nicolas Sarkozy in hastily arranged talks in Beijing yesterday, while urging European countries to take measures to protect Chinese investment. [...] Sarkozy made a brief stop in Beijing yesterday to discuss the European debt crisis and the agenda for the G20 summit in Cannes in November. The trip was announced on Sunday, and Sarkozy left for New Caledonia after dinner with Hu. In addition to the lingering debt crisis, the two also discussed the situation in Syria and Libya. Sarkozy said China had reservations about - but had not blocked - military intervention in Libya, and he invited China to participate in a meeting in Paris soon to discuss Libya's future governance. But financial issues were the focus, as the panic caused by the European sovereign debt crisis spreads to France, with rumours that its second-biggest bank, Societe Generale, is on the brink of bankruptcy. Hu gave an upbeat assessment of the sovereign debt issue in Europe. [...] He said China would continue to make Europe a major investment market and he "looks forward to measures by the European side to ensure the security of Chinese investment in Europe". Sarkozy said he needed to ensure that the Cannes summit would play an active role in the world's economic recovery, and that China's participation was important. "I think it would be inappropriate for me if I did not come to China to discuss with you the serious economic problems that are worrying the world," he said. Speaking at a press briefing after the meeting, Sarkozy said the value of the euro would be protected, and euro assets were still a good investment choice for China. He said they discussed currency reform, the internationalization of the yuan and reform of the International Monetary Fund to enhance the representation of emerging markets. ^ top ^

Mongolian PM sees "golden era" for Mongolia-China ties (Xinhua)
Mongolian Prime Minister Sukhbaatar Batbold has said bilateral ties between Mongolia and China are entering a "golden era". Batbold made the remarks Wednesday at a meeting with Zhou Yongkang, a senior official of the Communist Party of China (CPC). Batbold said the neighboring countries of China had benefited greatly from China's huge progress in economic and social development since it adopted the reform and opening-up policy more than 30 years ago. Developing the Mongolia-China strategic partnership was one of the priorities of Mongolia's foreign policy, he said. The prime minister thanked China for supporting Mongolia's economic and social development, especially the assistance it provided to Mongolia in improving transportation, education, sports facilities and housing programs. He said Mongolia welcomed more Chinese enterprises to invest in his country. Zhou Yongkang, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and Secretary of the Commission for Political and Legal Affairs of the CPC Central Committee, said China, Mongolia's biggest trade partner and investor for more than a decade, was happy to witness the recent significant progress in China-Mongolia ties. Zhou said Batbold's June visit to China was a milestone in bilateral relations, during which Batbold and his Chinese counterpart, Wen Jiabao, jointly announced a strategic partnership between the two countries. [...] He made a four-point proposal for promoting bilateral ties. Firstly, the two countries should maintain high-level exchanges, strengthen strategic communication, enhance political mutual trust and respect each other's social system and way of development. [...] Secondly, the two sides should implement the consensus reached by leaders of the two countries, pushing forward the development of mineral resources, infrastructure construction and financial cooperation to consolidate their pragmatic cooperation, he said.Thirdly, the Inner Mongolia Autonomous Region in north China could bridge China and Mongolia, deepening cooperation in agriculture, education and health, Zhou said. Lastly, he suggested both sides conduct closer cooperation in security and law enforcement to fight "the three evil forces" of terrorism, separatism and extremism, strengthen border management, crack down on drug trafficking and cross-border crimes and prevent and reduce disasters. After the meeting, Zhou and Batbold attended the signing ceremony of a series of bilateral documents on cooperation covering trade, finance, technology, education and culture. [...] Mongolia is the last leg of Zhou's five-nation Asian tour, which has also taken him to Nepal, Laos, Cambodia and Tajikistan. Zhou will wrap up his official goodwill visit to Mongolia on Friday. ^ top ^


Domestic Policy

Chinese museum, Swiss foundation cooperate to restore ancient silk relics (Xinhua)
A north China museum has worked with a Swiss foundation to successfully restore 14 pieces of silk relics unearthed from tombs with over 1,000 years of history, sources with the museum said Sunday. Since 2010, the Inner Mongolia Museum and the fabric restoration and research center of the Switzerland-based Abegg Foundation have conducted research and repaired antique silk costumes, said Tala, director of the museum. The costumes were discovered in 1991 from a cluster of nine tombs that were built in the Liao Dynasty (907-1125), also known as the Khitan Empire, according to Tala. The tombs, located in Horqin Right Wing Middle Banner (county) of Inner Mongolia Autonomous Region, are believed to have belonged to Khitan nobles. Tala said the cooperation of the two sides will lay the foundation for further research on antique fabrics and shed light on ancient culture of the Liao Dynasty. ^ top ^

South-to-North Water Diversion to relocate 345,000 in Central China (Global Times)
A total 345,000 people need to be relocated in Central China within two years for construction of the South-to-North Water Diversion. The workload exceeds that of the Three Gorges that relocated 400,000 people in 18 years, the Beijing News reported on Monday. First proposed by Chairman Mao Zedong, the massive water diversion project will divert 44.8 billion cubic meters of water from the Yangtze River to the north of China via eastern, central and western routes. The volume of water to be diverted is the equivalent of the Yellow River, the second-longest river in China, according to the project's official website. The construction of the central route linking Beijing and Danjiangkou Reservoir in Hubei, began in December 2003 and is expected to finish in 2014. By then, the water supplied by the central route will account for 65 percent of Beijing's daily water consumption. [...] People relocated are provided with housing and reimbursement of 600 yuan ($92.7) a person a year for 20 years. One family that moved out of Henan has not received any money, a report from the Beijing Times revealed on Monday, and no one has repaired the house after resettlement. ^ top ^

Death sentence for farmer in Yunnan raises concerns over judicial independence (SCMP)
The Yunnan Provincial Higher People's Court sentenced a farmer to death for killing a young woman and her little brother at a retrial yesterday after a public outcry at an earlier suspended death sentence, state radio reported. The court announced the verdict late last night after a one-day hearing. Legal experts said the retrial had damaged judicial independence because it was launched only to assuage public anger over the earlier sentence. The retrial aroused a great deal of attention on the mainland, with more calls for the cancellation of the death penalty and many contrasting demands from people insisting that the murderer, Li Changkui, should pay with his life for killing two people, especially after a man had been executed for killing just one woman in a similar case. Li, from Yingge village, in Yunnan's Qiaojia county, killed 18-year-old Wang Jiafei and her three-year-old brother at their home after raping her in May 2009. The Wang family, who lived in the same village, had rejected Li's proposal to marry her two years earlier. Li, 29, was sentenced to death by the Zhaotong Intermediate People's Court in July last year. However, the provincial Higher People's Court reduced that to a suspended death sentence at a second trial in March on the grounds that the crimes had been triggered by personal conflicts and that Li had surrendered to police after the murders. The judge in March's trial said that even though the intermediate court's judge had correctly convicted Li, the sentence was too heavy. The verdict giving Li a suspended death sentence sparked fierce public debate, with many people saying that he deserved the death penalty since he had killed two people and comparing his crime to that of 22-year-old student Yao Jiaxin of the Xi'an Conservatory of Music, who was executed in June for stabbing a woman to death after he accidentally hit her with his car. Last month, the provincial Higher People's Court decided to rehear Li's case, after the Wang family lodged an appeal and the provincial People's Procuratorate suggested a retrial. Legal experts were split over the retrial decision, with some saying that overthrowing a verdict made through normal procedures showed a lack of trust in the judicial process, while others said that public opinions could help decide whether a verdict was mistaken. Zhang Qingsong, the defence counsel at the retrial, said that by law, a court could launch a retrial only when there was a mistake in the previous verdict. "There's no mention of any mistake in the court's decision to retry the case," Zhang told Legal Weekly. "Instead, the court chief simply said 'there's a necessity' to rehear the case.". ^ top ^

'Quality not quantity' (Global Times)
Despite China's GDP propelling it to the second largest economy in the world, some cities across the nation are choosing to drop GDP as an indicator of success, instead using quality of life as a measurement tool. Earlier this month, the Nanjing government announced it would stop the GDP assessment for 66 townships in six districts and judge improvement by environmental quality and how well off individual residents are. In the future, residents will take an annual satisfaction survey that would be used to determine the effectiveness of government officials. Wang Liuping, deputy secretary general of the Nanjing Party Committee said canceling the GDP assessment was done because industry has seriously damaged the environment as local officials desperately pursue economic development to underline their performance and then get promoted. Recently, similar reforms occurred in other places, including Zhejiang and Sichuan provinces. In Zhuhai, Guangdong Province, assessments based on economic growth in townships were also called off in May. [...] In October last year, Sichuan announced it would not order a "GDP target" for city-level governments to achieve every year. "Without a GDP target, local officials might not be busy constructing glamour projects, which have done little to help us or accomplish anything positive," Cao Li, a resident in Chengdu, capital of Sichuan Province, told the Global Times. [...] In the 12th Five-Year Plan (2011-15), the National Development and Reform Commission kept the requirement of an annual GDP growth (7 percent). Some experts, including Wu Xiaoling, a member of the National People's Congress Standing Committee, also vice chairman of the NPC Financial and Economic Committee, said it is difficult for local governments not to care about the GDP at all. [...]. ^ top ^

Agency sets new rules for safety in coal mines (People's Daily Online)
China's top workplace safety regulator is introducing national standards for safety technologies used in the country's accident-plagued coal mines. A set of four standards on polymeric materials used for coal mining safety will take effect on Dec 1, according to the State Administration of Work Safety (SAWS). The standards are related to the prevention of coal mine accidents, including methane gas blasts, underground floods and shaft collapses, by using high-technology polymeric materials, Jiang Zhimin, the secretary-general of the China National Coal Association, said on Sunday at a conference to introduce the standards. Polymeric materials, a group of chemical compounds that are in liquid or foam states, are mainly used for four functions that are covered by the standards: water shut-off, filling and sealing of mine structures, ventilation sealing and consolidation of coal and rock. The four functions are related to the prevention of mine floods, shaft collapses and fire accidents. Introduced in China from Western countries in the 1970s, these chemicals have found widespread use in domestic coal mines in the past five years. [...] However, the absence of national standards for these chemicals has aroused concern at some mines. [...] Producers of the polymeric materials must ensure that there are no safety flaws in their products, said Huang Yi, spokesman for SAWS. ^ top ^

China's foreign ministry not to unveil spending figures (Global Times)
The finance division of China's Ministry of Foreign Affairs said on Monday that the ministry is not to reveal its expenditure figures at the moment this year, on the basis that such information qualifies as state secrets, according to the Beijing News. As of August 9, 95 of 98 central government departments made public their spending in the three areas of official receptions, vehicles and overseas trips, except for the Ministry of Foreign Affairs, the Overseas Chinese Affairs Office and the Hong Kong and Macao Affairs Office of the State Council. An official from the ministry told the newspaper that as some of the budget information is classified as state secrets, which precludes it from being opened to the public, such expenditures will not be released at this point. Expenditures on these three items have long been criticized as the largest sources of corruption and waste in government departments in the country, according to Xinhua News Agency. ^ top ^

26 provinces have aging populations (People's Daily Online)
The main data of the sixth national population census has been announced in Guangxi, and the 31 provinces in China have finished publicizing their own census's data. On Apr. 28, the National Bureau of Statistics of China publicized the main data of the census in 2010, which found that there are about 1.37 billion people in China, of whom 51.27 percent are male and 48.73 percent, female. According to the statistics, more than 7 percent of total people are older than 65 years old in 26 provinces in China, and China has become an aging society. On the basis of the international convention adopted in China, a society with people older than 65 years old accounting for 7 percent is an aging society.[...] The 21st century is an era of aging population signified by a predictive research report about China's aging population tendency announced by a committee on the elderly in 2006. China had entered an era of aging population in 1999, and it was also a country that became an aging society at an early stage relative to other developing countries. In the 21st century, China will become an irreversible aging society. The report also emphasizes the serious backwardness in terms of solutions, such as thoughts, material and regime, for the aging population. China should have adequate preparation for the apex of the aging population due to limited time. ^ top ^

Overhaul for law on criminal process (SCMP)
Extensive changes will be made to the mainland's Criminal Procedure Law according to a draft revision submitted to the National People's Congress Standing Committee yesterday. The draft has not yet been made available to the public but according to Xinhua the changes cover all stages from arrest, detention and interrogation to trial, as well as much-called-for reforms to the evidence and witness system, and the rights of defence counsel. The first draft includes a list of 99 amendments and expands the law from 225 clauses to 285. The law, introduced in 1979, was last amended 15 years ago. The draft may have to undergo more rounds of reading before adopted by the legislature. A Standing Committee spokesman said the changes reflected the authorities' efforts to deal with some "incompatibility problems" that had emerged between the criminal justice system and a rapidly developing society. It also aimed to strike a balance between punishing crime and protecting human rights. Meanwhile the legal community hopes that the changes will be enforced this time around, and that a ban on the use of torture to obtain confessions will finally be heeded. Mainland media reports say that for the first time the draft states that it is a citizen's duty to testify about what they know about a case. It also sets up a system to compel witnesses to testify in court and protect witnesses in cases where retribution is feared. Also for the first time, police may be made to testify in court, and witnesses who refuse to give evidence to police or testify in court without an appropriate reason may be detained for up to 10 days. However, there will be exceptions to this rule, covering spouses, parents and children. [...] The draft also specifies that evidence obtained through illegal means should not be accepted, and that interrogators suspected of using such illegal means should be prosecuted as criminals. The draft also says a suspect cannot be made to give self-incriminating evidence. The draft reportedly tries to bring the Criminal Procedure Law in line with the more rights-oriented Lawyers Law of 2007, for example by specifying that lawyers can meet suspects during the investigation stage upon presentation of necessary documents, without the need for permission from interrogators, and also to meet suspects or defendants unmonitored. The draft also specifies that interrogations must take place in detention houses - as opposed to other sites where abuse could easily occur - and they should be videotaped in serious cases. ^ top ^

P.L.A. on track to be a modern force by 2020 (SCMP)
The People's Liberation Army (PLA) is on track to catch up with modern military powers by 2020, according to the Pentagon's annual report on China. The next few years could prove "critical" to that development, the report warned. Drafted to meet United States congressional requirements, the extensive report stressed the growing importance of China's naval reach to its modernization and also noted that Beijing had kept the focus on Taiwan while dealing with an expanding array of missions. [...] "Many modern systems have reached maturity and others will become operational in the next few years," the report says. "Following this period of ambitious acquisition, the decade from 2011 through 2020 will prove critical to the PLA as it attempts to integrate many new and complex platforms, and to adopt modern operational concepts, including joint operations and network-centric warfare. "China has made modest, but incremental, improvements in the transparency of its military and security affairs. However, there remains uncertainty about how China will use its growing capabilities," the report adds - a theme repeated through the 94-page report. [...] More heavily-nuanced than last year's report, an apparent reflection of improved Sino-US military relations, the report said Washington welcomed a "strong and prosperous" China and recognized its contributions to support global and regional security. However, it again drew swift fire from Beijing. A Xinhua commentary dismissed the Pentagon's account as an alarmist "cock-and-bull story". "China, which has adhered to a defensive military policy, with its rising economic clout and sprawling commercial and strategic interests around the world, has every right to build a competent military," the commentary says. A spokesman at the Chinese Embassy in Washington said it reflected America's "Cold War mentality" and expressed hopes that the US would take practical steps to improve ties. Li Jie, a senior colonel with the Chinese Navy's Military Academy, said the report had attempted to talk up China's threat to the region by exaggerating the PLA's capability. ^ top ^

Two-thirds of Chinese gov't spending goes to public well-being sectors in H1: report (Xinhua)
The Chinese government spent 1.15 trillion yuan (180 billion U.S. dollars), or two thirds of the central budget, on improving people's livelihoods in the first half of the year, according to a government report submitted to China's top legislature on Thursday. The funds were mainly used to boost education, social security, job creation, health care and affordable housing, according to Finance Minister Xie Xuren's report presented during the on-going session of the Standing Committee of the 11th National People's Congress, China's top legislature. Also, 28 percent of transfer payments from the central government to local governments went toward such projects, said the report. Education expenditures reached 610 billion yuan and 576 billion yuan was invested in the social security and job creation sectors. Xie said the government will expand a pilot pension insurance program for 800 million rural residents to cover 60 percent of the country's rural population. Xie expects national fiscal revenue growth to slow in coming months after jumping 30.5 percent from a year earlier to hit 6.67 trillion yuan in the first seven months. ^ top ^

Reservoirs dogged (Global Times)
Tens of thousands of reservoirs are undergoing the largest ever repair processes as China's top leaders vow to improve the capacity of nationwide water conservancy projects. But irrigation experts warn financial support shortages and a lack of enthusiasm from local governments could hurt the entire effort. More than one month after the central government held a high-profile conference on July 8 to address water conservancy issues, water authorities nationwide sped up plans to reinforce the country's 87,000 reservoirs, most of which were built between the 1950s and 1970s and are now too rundown to battle rainstorms and floods, China Economic Weekly reported. Due to a lack of maintenance fees over the past few decades, more than 40,000 reservoirs around the country have been in use longer than expected and are working poorly, according to the report. Located in vast rural, and even upstream areas, of many cities and towns, these "ill and dangerous" reservoirs pose a great threat to people's lives as well as agricultural production. [...] According to statistics released by the Ministry of Water Resources, China has experienced dam breaches from 3,515 reservoirs since 1954, of them 98.8 percent were caused by small reservoirs under 10 million cubic meters in volume. [...] Despite long-term investment and efforts by water authorities to strengthen reservoirs nationwide, more than half of the country's reservoirs are still running under risky conditions, according to a survey by the Ministry of Water Resources after the 1998 Yangtze River Flood. Finally, the central government decided to tackle increasingly dangerous reservoirs with a comprehensive plan, and it drafted the National Risky Reservoir Special Reinforcement Plan in 2008, which included repair plans for 7,356 small reservoirs. During the past three years, China invested 62 billion yuan ($9.7 billion) to strengthen these reservoirs, among which 637 reservoirs have been repaired, ensuring the safety of 144 million people and 10.7 million hectares of farmland, according to the ministry. ^ top ^

China plans to improve human rights (China Daily)
China will draft a new national program for human rights development for the period from 2012 to 2015 to improve people's basic rights, said Wang Chen, minister of the State Council Information Office, on Thursday. he new national human rights action plan, the second of its type in China, will set up detailed goals and measures related to people's rights in sectors including employment, social security, health and education, Wang said at a two-day seminar in Beijing. The first such action plan for 2009 to 2010 has been fully implemented, with all tasks completed, he said. The seminar, themed "development and creation of Chinese human rights theory and practices", will end on Friday. Wang urged some 70 Chinese experts on human rights studies attending the seminar to be innovative, enrich Chinese human rights theories, and make China's path of human rights development "able to be understood by more people from the international community". Disregarding the monumental progress that China has made in human rights, some Western people still criticize the condition of human rights in China without supporting facts, experts said. Wang said that the country will "make active responses" to the international community's concerns about China's human rights. "The construction of Chinese human rights theories still cannot meet the requirements of modernization and Chinese human rights practices. It is important to communicate with the international human rights circle in a language that they can understand," he said. The minister also required institutions and mass media to play a role in human rights education to raise the public's ability and awareness to defend their basic rights. Researchers at the seminar agreed that a social consensus on respecting and protecting human rights will not only maintain social stability, but also contribute to the cause of world human rights. Luo Haocai, chairman of the China Society for Human Rights Studies, which sponsored the seminar, said China still needs to improve legislation to balance rights and obligations and therefore better protect human rights. ^ top ^



Stunning: Pilot 'refused' emergency order (People's Daily Online)
China's civil aviation regulator is investigating claims that a pilot refused to give way to a plane that was running out of fuel as it waited to land at Shanghai's Hongqiao International Airport. The pilot of Qatari Airways flight QR888 had sent a Mayday signal - the international distress call - but a Juneyao Airlines pilot ahead of the Qatari plane in the airport queue refused to give way saying he, too, had little fuel left, according to a post on the microblog site The Qatari plane was queuing to land at the Pudong International Airport in bad weather on August 13 when it reported that its fuel would soon be used up. The pilot asked to land at the Hongqiao instead. Air traffic control asked the Juneyao plane to give way but the pilot failed to comply, saying his fuel supply was low too, according to the post. However, the Chinese plane was found to have sufficient fuel to keep it in the air for another hour while the Qatari pilot had just five minutes' supply left, the post said. Air traffic control rearranged landing orders to secure a safe landing of the Qatari plane, said an official from the East China Regional Administration under the Civil Aviation Administration of China. [...] Juneyao has suspended the air crew involved while the investigation is ongoing, it said in a statement late yesterday. "Weather, remainder of jet fuel, and instructions by the air traffic control department should all be probed to determine who will be responsible for the issue," said a Juneyao Airlines' marketing manager. "What the post has said was not all the truth." A Qatar Airways marketing official confirmed that there was a dispute on August 13 and that the aviation regulator was to be holding meetings with both airlines in order to discuss the incident. ^ top ^



Tax rates cut to woo talent to island (SCMP)
Companies investing in a newly opened free-trade island in Zhuhai will enjoy a profits tax rate that is 40 per cent lower than elsewhere on the mainland, while Hong Kong and Macau residents working there will be granted salaries tax rebates. The benefits are among measures aimed at turning Hengqin, a 106-square-kilometre island next to Macau's Taipa and Coloane islands, into a service industries hub by wooing investment in tourism, financial services and creative industries. The profits tax of 15 per cent compares with 25 per cent elsewhere on the mainland and is the lowest in eastern China. Zhou Jianchun, director of Zhuhai's Foreign Affairs Office, said that while the policies on customs and revenue were very similar to those at 15 other free-trade zones set up on the mainland since the early 1990s, Hengqin was aiming higher. "The major difference is that Hengqin includes high-class residential communities, shopping malls and theme parks," Zhou said. While the previous free-trade zones were set up only for manufacturing, the island aimed to attract tourism, financial services, cultural innovation, Chinese medicine and health care, scientific research and hi-tech industries. The measures were spelled out in a State Council circular on July 14. According to the circular, all goods shipped to Hengqin will be exempted from import duties, provided that they are used for production. A delegation of Guangdong officials detailed the initiatives at an investment promotion seminar held in Hong Kong yesterday. Niu Jing, director of the management committee for the Hengqin New Zone, said Hong Kong and Macau residents who worked on the island would enjoy a salaries tax rebate from the Guangdong provincial government as the mainland's rate was higher than that in the two cities. "The rebate will be used to attract talent from the two special administrative regions," he said. The standard rate of salaries tax in Hong Kong is 15 per cent, compared with a range of 5 per cent to 45 per cent on the mainland. Hengqin's gross domestic product per capita is projected to reach 120,000 yuan (HK$146,000) in 2015. The island is named in the nation's 12th five-year plan as a key area for economic co-operation by Hong Kong, Macau and Guangdong. Zhou said there would not be any casino development in either Hengqin or Zhuhai. ^ top ^



China invests heavily on protection of Tibet's intangible cultural heritage (Xinhua)
China has invested more than 60 million yuan (9.38 million U.S dollars) on the preservation and development of Tibet's intangible cultural heritage (ICH) over the past six years, a senior cultural official said Sunday. The Ministry of Culture has allocated 32.58 million yuan for the preservation and inheritance of Tibet's ICH, said Yang Zhijin, vice minister of culture, at the 3rd China Tibetan Culture Forum that opened in Lhasa on Saturday. The government of Tibet Autonomous Region also invested nearly 30 million yuan for its ICH, said Yang, who is also vice president of the Chinese Association for Preservation and Development of Tibetan Culture. Yang said his ministry will take other measures over the next five years to further promote the preservation of Tibet's ICH. Among the measures is a preferential policy toward Tibet's ICH preservation in regard to financial support. More than 3,000 people were mobilized to conduct surveys on Tibet's ICH, during which nearly 500 ICH items were recorded and more than 1,000 ICH inheritors were listed. A total of 76 ICH items, including traditional Tibetan medicine and paper, the Thangka painting and Langma dance and music, were registered as country-level ICHs, while 53 Tibetan artists were listed as country-level ICH inheritors, according to Yang. Yang said the Ministry of Culture will help improve the living and working conditions of those ICH inheritors for their teaching and exchange activities. China has also set up a research institute and a special fund for the compilation and publication of the Epic of King Gesar, the world's longest orally narrated epic poem that relates the heroic deeds of legendary lord of Gesar, Yang said. He added that the ministry will feature more Tibetan ICH items on the nationwide promotion and exhibition activities in order to introduce Tibetan culture to the entire country and the world as well. The two-day forum was attended by more than 400 Tibetan experts from 17 countries and regions. The first forum was held in Beijing in 2006, and the second was held in Kathmandu, Nepal, in 2007. ^ top ^

Hebei boss handed sensitive Tibet post (SCMP)
Beijing has replaced Tibet's party boss with the governor of Hebei province in a new round of rotations among provincial leaders in the run-up to the Communist Party's 18th National Congress in autumn next year. Xinhua quoted a party central committee statement that said Chen Quanguo, 56, had succeeded Zhang Qingli, 60, as party secretary of Tibet. Zhang "will be moved to another position", said the statement. That could either mean promotion or merely a transfer to another provincial-level post. During Zhang's term from late 2005, dozens of buildings were torched and at least 18 civilians killed in riots in the heart of the regional capital of Lhasa in March 2008. The protests erupted after the 49th anniversary of the Tibetan uprising of 1959. [...] Zhang went on to label the Dalai Lama, the exiled spiritual leader of Tibet, as a "wolf in monk's robes". [...] Chen was the senior official overseeing party personnel in Henan province for more than a decade before taking the governor's job in neighbouring Hebei in late 2009. Some critics online have questioned his accomplishments in Hebei, given his brief stint there. Although he keeps a relatively low profile, Chen visited Hebei University of Technology for lunch with students in the school canteen, according to a Beijing News report in May. [...]. ^ top ^



Centrally-administered SOEs urged to promote economic development in Xinjiang (Xinhua)
China's centrally-administered state-owned enterprises (SOEs) should play a vanguard role in leading the economic development of Xinjiang Uygur Autonomous Region, a senior official said Saturday. Central SOEs should take promoting social development for the benefit of local residents and improving living standards in the region as their due responsibilities, said Wang Yong, chairman of the State-owned Assets Supervision and Administration Commission (SASAC). "Central SOEs shouldn't follow the old path to expand blindly, abuse resources, or resort to treatment-after-pollution measures when seeking development in the region. They should take part in the construction of projects that improve local employment," Wang said while speaking at a conference of 121 central SOEs heads who were discussing building Xinjiang into an industrial highland. Investment from central SOEs to the western region will double over the next five years, compared with the 2006-2010 period, as 31 central SOEs plan to invest 991.6 billion yuan (154.86 billion U.S. dollars) in Xinjiang from 2011 to 2015, Wang said at the gathering held in Urumqi, capital of Xinjiang. About 44 central SOEs invested a total of 573.9 billion yuan in developing Xinjiang's petroleum and petrochemical, coal, power and metallurgical industries by the end of 2010, sending central SOEs' contributions to the local industrial value-added output to more than 70 percent, data from the local government showed. According to development programs drafted by the SASAC and central SOEs, central SOEs will focus on promoting high quality, high standard and cost-efficient projects in Xinjiang's petroleum and petrochemical, coal chemical and nonferrous metals sectors. ^ top ^

Chinese nuclear enterprises to contract projects in Xinjiang (People's Daily Online)
Well-known Chinese nuclear power development and construction enterprises recently gathered in Xinjiang Uyghur Autonomous Region to inspect and sign project contracts. The companies include major central state-owned companies, such as the China National Nuclear Corporation (CNNC), the China Guangdong Nuclear Power Holding Corporation (CGNPC) and the China Nuclear Engineering Group, Co. (CNEC). [...] CNNC is the main force of China nuclear industry and the principal investor of nuclear plants. In this trip to Xinjiang, CNNC has signed a total of 15 billion yuan worth of projects, including the construction of a coal mine of millions of tons, a coal-fired electricity project in Yili with two units each capable of generating 1,000 megawatts, and also the construction of the first stage of a 20-megawatt wind power project in Hami. The investments of the two aforementioned projects are 10.5 billion yuan and 4 billion yuan, respectively. CGNPC also contracted 2.4 billion yuan worth of wind power and photo electricity projects with Xinjiang for the implementation of its clean energy strategy. [...] After the Japan's Fukushima nuclear crisis, the State Council suspended the approval of nuclear power projects and has conducted safety inspections of all the operating nuclear power plants. Whether the ban on nuclear projects will be lifted and nuclear plants will be redistributed away from the coastal areas has caused speculation and concern among upstream and downstream companies and insiders. The gathering of leading Chinese nuclear enterprises in Xinjiang to contract investment projects is part of the implementation of the aid policy of central industries to Xinjiang in which the central enterprises play a leading role in promoting the fast-track development of Xinjiang Uyghur Autonomous Region. ^ top ^

Officials sent to Xinjiang for development support (Xinhua)
A total of 439 officials from several Communist Party of China (CPC) and central government departments flew from Beijing to Urumqi on Thursday to begin a three-year mission to assist in the development of southwest China's Xinjiang Autonomous Region. Before their departure, the officials went through a five-day training course where they learned about Xinjiang's developmental policies, ethnicities and religions. The officals marked the seventh batch of officials sent by the central government to serve in the region. Over 3,700 officials have been sent to the region so far. The government has been implementing a series of projects and policies to support economic and social development in Xinjiang, including a "pairing assistance" program. The program, which was unveiled by the central government at a high-level meeting in March of last year, requires 19 provinces and municipalities to support Xinjiang in building new infrastructure and promoting local industry. ^ top ^



HK's inflation rate hits 7.9pc (SCMP)
Hong Kong inflation rose to 7.9 per cent last month - the sharpest jump in 16 years - confirming what many families already feared as they struggle to keep up with the runaway cost of food and rent. The year-on-year rise in July's consumer price index was significantly higher than the 5.6 per cent increase recorded in June. The government attributed this to rises in rent and food prices as well as fees for overseas package tours - thanks to the weakening US dollar, to which the city's currency is pegged. A government spokesman warned that inflation rates were "likely to remain notable in the near term" due to expected increases in the price of food and housing. "Yet a more positive development has been the stabilisation of food prices in the international markets over the past few months," the government said in a news release. [...] You would have to go back to November 1995 - when the CPI rose to 8.4 per cent - to find a more drastic increase in inflation. The government yesterday said the rapid increase was partly due to a lower base of comparison with a year before, especially concerning public housing. The administration waived public housing rentals in July 2010 in a one-off relief measure that also made this year's increase in housing costs appear more severe. Year-on-year increases among the various CPI components were: alcohol and tobacco 20.1 per cent due to increased tobacco duty, housing 16.4 per cent, food 10.7 per cent, clothing and footwear 7.3 per cent, dining out 5.5 per cent, transport 4.8 per cent, miscellaneous goods 4.1 per cent and miscellaneous services 4 per cent. However, the price Hongkongers pay for utilities dropped, with electricity, gas and water bills falling 16 per cent, largely as a result of the government's electricity charge subsidy. If you take all the government's relief measure into account, the year-on-year rate of increase would be 5.8 per cent. [...]. ^ top ^

Beijing to bring HK courts into line (SCMP)
Beijing's concept of "state immunity" applies equally in Hong Kong, the central government says in a draft interpretation of the Basic Law, requested by the special administrative region's highest court. It is the first time Hong Kong's Court of Final Appeal has gone to the national legislature to decide on the city's mini-constitution, although Beijing has performed three interpretations in the past at the request of the Hong Kong government. The question concerns whether Congo is immune from the court's jurisdiction in a commercial case. Is the court bound to follow Beijing's position, where states are immune in all types of case, or may the SAR follow the position of "restricted immunity" - where states are not immune in commercial deals? "Restricted immunity" applied in Hong Kong before the handover. The court thinks the Basic Law is ambiguous in its mention of "acts of state such as defence and foreign affairs". But the answer is clear, according to the draft response. Li Fei, a senior state legal official, said yesterday in his presentation of the draft that Hong Kong must follow the central government's position because the question concerned foreign affairs. "[State immunity] directly impacts on a country's relations with foreign countries," he wrote. As vice-chairman of the legal affairs commission of the National People's Congress Standing Committee, Li was addressing committee members, who will vote tomorrow on its interpretation of two articles of Hong Kong's Basic Law. In the case, the United States-based fund FG Hemisphere Associates is trying to reclaim over US$100 million from the Democratic Republic of Congo. The debts are held in Hong Kong. Congo says the repayment is not enforceable as the country is immune from jurisdiction. Li said Beijing did not recognise itself being sued overseas. "Our country does not accept that foreign courts have jurisdiction over cases where our country is a defendant or cases which target our property." The final interpretation will be unlikely to deviate from the draft, although a bill theoretically allows for deliberation before voting. "Normally there won't be any deliberation and you can expect the vote will likely be unanimous," said Eric Cheung Tat-ming, assistant law professor at the University of Hong Kong. Cheung said that although the Basic Law Committee, which has six Hong Kong members, was consulted, there was no mention of any of its views in the release. "This is not surprising, because we all know that the Basic Law Committee is just a rubber stamp," he said. Elsie Leung Oi-sie, vice-chairwoman of the Basic Law Committee and former Hong Kong justice secretary, said the Basic Law Committee had already reviewed and agreed with the draft response. "While we have self-governance under `one country, two systems', when it comes to sovereignty and foreign relations it is not possible to have two positions," she said. ^ top ^



Candidate questions free-trade pact (SCMP)
Taiwan's main opposition presidential candidate, Dr Tsai Ing-wen, vowed yesterday to revisit the island's free-trade pact with the mainland and press Beijing to accept "real soveignty" for the island. Tsai also questioned the so-called 1992 consensus, which the ruling Kuomintang has used as the foundation for a series of economic agreements with the mainland, and said the policy should be replaced with a new Taiwan consensus. Under it, she said, Beijing would have to recognize Taiwan as an "independent state with real sovereignty". The candidate's remarks came during one in a series of events to detail the Democratic Progressive Party's platform on numerous issues from fiscal policy to the environment. While the DPP has long questioned the 1992 consensus, it was the first time Tsai had detailed her cross-strait views since becoming the party's presidential candidate. If elected president next year, Tsai said she would employ "democratic procedures" to review last year's Economic Co-operation Framework Agreement (ECFA), one of several deals with the mainland reached under President Ma Ying-jeou. The DPP's 10-year blueprint was composed by more than 30 of the party's political experts. It is a main component of Tsai's campaign for next year's presidential election. "There was no wording of the 1992 consensus in 1992," she told Taiwanese media. "Such a term was created [by former Mainland Affairs Council chairman Su Chi] and has only been used since 2000. "I don't think that there is a question of me recognising or accepting, because it doesn't exist," she added. On the other hand, Tsai acknowledged the significance of the ECFA to the Taiwanese people, saying the DPP would follow up on the ECFA negotiations with Beijing carefully if the party regained power next year. Ma said discarding the consensus could cause fresh instability across the strait. "The Kuomintang has reiterated and kept cross-strait ties under the policy of 'no unification, no independence, no use of force', which is the basis on the 1992 consensus, since it regained power three years ago," Ma said in Quemoy, where he attended a commemoration of the Kuomintang's 44-day artillery exchange with mainland forces in 1958. "Cross-strait tensions have been eased under the 1992 consensus," Ma continued. "We not only have to support it, but also stick to it." The island's semi-official Straits Exchange Foundation warned that Tsai's policy would destroy all cross-strait progress. Professor Xu Bodong of Beijing Union University said mainland leaders would likely ignore Tsai's words. "Tsai's comments show that she still fails to win over the average voter," Xu said. "We don't think she will win the presidential election.". ^ top ^

Mainland says Taiwan opposition leader's 10-year policy unacceptable (Xinhua)
Taiwan opposition leader's "10-year policy guidelines" are unrealistic and unacceptable, said a Chinese mainland spokesman on Wednesday. The spokesman for the State Council Taiwan Affairs Office made the remarks when asked to comment on the "policy guidelines" put forward by Tsai Ing-wen, chairperson of Taiwan's major opposition Democratic Progressive Party (DPP), who is vying for the seat of Taiwan leader in next year's election. "Various instances indicate that the DPP hasn't changed its 'Taiwan independence' stance that advocates 'one country on each side (of the Taiwan Strait), and it has declined to acknowledge the 1992 consensus," the spokesman said. "The set of policies are unrealistic, and are what the mainland can not accept," the spokesman said. "Because once the policies are implemented, it will make cross-Strait negotiations impossible to continue, and cross-Strait relations will once again become turbulent and unrestful." "We, as well as all circles in Taiwan, do not want to see any impact on the current cross-Strait negotiations and exchanges; we don't want cross-Strait relations to retrogress; we don't want any harm done to people on both sides, especially Taiwan compatriots; we don't want the fruits of peaceful development to be discarded and destroyed," the spokesman said. ^ top ^



Importers to get tax rebates (Global Times)
Natural gas importers will be given tax rebates, including pipeline gas from Central Asia and liquefied natural gas (LNG), in a move to ease losses of energy firms, according to a statement released by the Ministry of Finance Monday. The rebates of value-added tax will apply if import prices are higher than domestic wholesale prices and will be offered from 2011 through 2020, based on the proportion obtained from the price gap between imports and domestic prices divided by import prices. The proportion will be calculated every quarter. Pipeline gas imports from Central Asia before the end of 2010 can also enjoy the same tax rebates, the statement said. Previously, firms were required to pay a 13 percent value-added tax when importing natural gas. The sales price of natural gas has been kept at a low level to encourage the consumption of clean fuel, so there is a severe inversion of the import costs and domestic prices and importing firms are suffering great losses, Lü Ying, a natural gas analyst at Shanghai-based, an oil and gas information provider, told the Global Times Monday. China National Petroleum Corporation (CNPC) imported 4.3 billion cubic meters of natural gas in 2010, and incurred losses of 3.7 billion yuan ($577 million), the company said in March. It has urged the government for price adjustments and reform of the natural gas pricing mechanism since 2009. [...] From January to July 2011, China's consumption of natural gas totaled 73.4 billion cubic meters, including imports of 16.8 billion cubic meters, which doubled from a year ago, and accounted for 22.9 percent of the total consumption. Imports will account for half of China's natural gas demand by 2020, analysts said. The tax rebate can ease but not completely make up for the losses, CNPC spokesman Mao Zefeng told Reuters. The rebate can reduce CNPC's losses in natural gas imports by 10 to 15 percent, said Gordon Kwan, head of regional energy research at Mirae Asset Securities. ^ top ^

Banks must prevent asset price bubbles: regulator (Global Times)
Chinese banks need to guard against asset price bubbles and ensure investors are not taking out bank loans to fund equity investments, the banking regulator said Tuesday. Economists have warned that a sudden bursting of price bubble in the property sector is the biggest risk facing China's economy in the long term. "We must strictly control asset price bubbles and take pre-emptive steps," Liu Mingkang, Chairman of the China Banking Regulatory Commission, said in a speech posted on the agency's website Tuesday. "We must ban bank credit from entering the stock market and ban banks from providing guarantees for corporate bond issuance," Liu said. Chinese regulators have long prohibited the country's commercial banks from making loans for stock speculation. Banks must restrict lending to industries considered as energy-wasters, but they must ensure that lending growth to the farm sector and small companies not fall below the average loan expansion, Liu said. The regulator will also keep a tight grip on the establishment of non-banking subsidiaries by commercial banks, ordering banks to exit from sectors in which their units fail to meet performance targets, Liu said. ^ top ^

Land curbs to push prices up (Global Times)
The State Council's decision to control land use may lead to an increase in housing prices, and the real estate industry is expected to witness another round of price boom, an expert told the Global Times Tuesday. The central government is requiring 22 more cities to obtain approval from the State Council for the use of land for construction, including cities of Qinhuangdao, Zhenjiang, Nantong, Yangzhou and Sanya, according to a report in Economic Observer newspaper Tuesday. The government had previously required 84 cities to seek such approvals. The newly added 22 cities should incorporate the construction land use plan, including the occupied agricultural land and undeveloped land, into the annual plan of land utilization, then report it to the State Council for approval every year. [...] Yin Xufei, a real estate analyst at the CIC Industry Research Center, told the Global Times Tuesday that the cancellation of approval rights of the 22 cities means the land resources for construction will fall sharply, and the housing prices are expected to rise as a result. [...] According to a circular on intensifying land control issued by the State Council in 2006, the heads of the local governments at all levels will take the responsibility of ensuring the availability of arable land, protection area of basic farmland, overall planning of land utilization and annual plan of implementation within their administration regions. ^ top ^

China may allow FDI in RMB in Sept.: ministry spokesman (Xinhua)
China's Ministry of Commerce said Wednesday it will try to formally green light foreign direct investment (FDI) in the Chinese currency renminbi (RMB), or the yuan, in September. "The ministry has released a draft regulation on cross-border direct investment in RMB and we'll try to put it into effect in September," ministry spokesman Shen Danyang told a press conference here. The ministry posted the draft on its website on Monday night to solicit public feedback until Aug. 31. If implemented, the rules will expand channels for overseas-acquired RMB funds to flow back into the country. The move is expected to give a push to the RMB's internationalization drive. Currently, the Chinese currency cannot flow into and out of the country freely under capital accounts, which is viewed as an obstacle for internationalizing the yuan. Foreign investors will be able to make direct investments in China with RMB legally obtained overseas, according to the ministry's draft. The draft states that FDI in RMB are prohibited in negotiable securities and financial derivatives. Foreign investors cannot use overseas-obtained yuan to provide entrusted loans or to repay domestic or overseas loans. Shen said the new policy will not have a significant impact on the amount of China's foreign exchange reserves. More FDI in the yuan instead of foreign currencies may lead to smaller increments of foreign exchange reserves, but the permission of FDI in RMB may spur demand for the yuan and bring in more foreign exchanges, he said. The ministry's move follows last week's remarks by Vice Premier Li Keqiang that support will be given to Hong Kong enterprises making direct investments on the mainland in RMB. China announced on Tuesday that all parts of the country are able to use its national currency in cross-border trade settlements in another bid to encourage the internationalization of RMB. ^ top ^

China to appeal WTO rare earths ruling (People's Daily Online)
China will appeal a WTO ruling against its policy on exports of raw materials, a verdict that could potentially force the country to relax its control on rare earths, the Ministry of Commerce said yesterday. A World Trade Organization panel in July ruled that China broke trade rules by limiting exports on several industrial raw materials, including bauxite and coke, with duties and quotas. Ministry spokesman Shen Danyang yesterday said China will appeal, as he reiterated the nation's practices and policies don't violate WTO rules. China has said the policies will protect the environment and conserve natural resources. The WTO ruling is seen a victory for trade partners such as the United States and the European Union, which said China's export restrictions on raw materials are giving an unfair edge to domestic manufacturers. The ruling could also prompt the US and the EU to lodge more complains to the WTO about China's export policy on rare earths, a group of valuable elements vital in the production of hybrid cars, wind turbines and missiles. China, which supplies more than 90 percent of the world's rare earths, controls output and exports of the minerals, a move that forced manufacturers in the US and Japan to seek supplies elsewhere. China has maintained its 2011 export quota for rare earths at last year's level. China's dominant position in rare earths is partially due to Western countries shutting their own mines amid strict environmental standards and high costs, the Shanghai Metals Market said in a report yesterday. Some companies in the West have unveiled plans to restart their rare earths projects after prices surged, a move that may end China's dominance of rare earths supply within two years, the SMM said. ^ top ^

10 Chinese banks report better-than-expected profits in H1 (People's Daily Online)
Ten Chinese commercial banks reported higher-than-expected net profits of 244.7 billion yuan (72.11 billion U.S. dollars) amid government tightening measures in the first half of the year, the Shanghai Securities News reported on Friday. According to the ten banks' half-year reports released as of Tuesday, most saw year-on-year rises of over 30 percent in their first-half net profits, the report said. The increases were boosted by strong growth in the banks' net interest incomes and intermediary businesses, the report cited analysts as saying. [...]To contain liquidity, the government has adopted a prudent monetary policy and maintained a tight credit supply this year. The central bank has hiked the benchmark interest rate three times in 2011. [...] Net profits from commissions in most banks rose more than 40 percent year-on-year during the period, according to bank reports. Meanwhile, lending by banks to local governments also fell during the period as the country's regulatory authorities required commercial banks to strictly control loans to local governments' financing platforms, the report said. The ten banks include China Construction Bank, Bank of China, Bank of Communications, China Minsheng Bank, Shanghai Pudong Development Bank, China Everbright Bank, Huaxia Bank, Shenzhen Development Bank, China Merchants Bank and Industrial Bank. [...]. ^ top ^


DPRK and South Korea

Kim Jong-il visits Russian Far East (Global Times)
As part of his official visit to Russia, North Korean leader Kim Jong-il toured the largest hydropower plant of the country's Far East province on Sunday. Kim arrived at the Bureya hydropower plant, where he inspected its operation and water discharge, one day into his seven-day visit to Russia, according to the Xinhua News Agency. Korean Central News Agency said Kim's son Jong-un was not listed in the official entourage, AFP reported. Kim was received at the Novosibirsk railway station and was welcomed by Viktor Ishayev, Russian President Dimitry Medvedev's representative in the Far East, and Oleg Kozhemyako, governor of the Amur Region, while smiling Russian women dressed in red national costumes offered the high-profile guest a loaf of bread and salt in accordance with Russian tradition, AFP reported. Lü Chao, director of the Center of South Korea studies at the Liaoning Academy of Social Sciences, told the Global Times that Kim's visit to Russia was likely to bolster economic ties and for Pyongyang to win support from Moscow on the ongoing nuclear issue. Kim's plan to Bureya is not surprising, given his previous interest in the construction of the Huichon hydroelectric power plant, a key installation in Jagang Province northeast of Pyongyang, Lü said. In his first visit in nine years to Russia, Kim is expected to meet Medvedev tomorrow in Ulan Ude to discuss the economy and the Korean nuclear issue. [...]. ^ top ^

S. Korea rejects DPRK's threatened disposal of properties (People's Daily Online)
South Korea said Monday it will not accept unilateral measures announced by the Democratic People's Republic of Korea (DPRK) to dispose of all South Korean properties at a mountain resort jointly managed by the two Koreas. In a statement carried by the state media, the DPRK said that it believes South Korea "totally abandoned the protection of property and interests of enterprises" and vowed to dispose of all South Korean assets at the Mount Kumgang resort. The DPRK also ordered all South Koreans to leave the mountain resort within 72 hours. The measures, following Pyongyang's seizure of South Korean- owned properties, are seen as Pyongyang's response to Seoul's reluctance to resume the suspended tours, once a rare source of hard currency for the cash-strapped country. The assets subject to the planned disposal, including restaurants and a golf course, are believed to be worth 325.5 million U.S. dollars. Previous visits to the resort by South Korean businessmen at the request of the DPRK failed to break the impasse over the threatened disposal. "The government cannot accept North Korea (DPRK)'s arbitrary measures, and we'd like to make it clear the North should be held responsible for all consequences," Chun Hae-sung, spokesman for the unification ministry in Seoul, told reporters. "The government will seek all necessary measures including legal and diplomatic ones, and will stay in close contact with business operators involved," he added, calling Pyongyang's announcement "regrettable." The ministry oversees inter-Korean affairs. The lucrative tours to the scenic mountain just north of the border between the two Koreas, launched in 1998 amid a growing rapprochement, were suspended in 2008 after a South Korean tourist was shot dead for alleged intrusion of a restricted military zone. Fourteen South Koreans at the resort area are expected to return home by Wednesday. ^ top ^

Pyongyang willing to halt nuclear tests, Moscow says (SCMP)
North Korea is ready to impose a moratorium on nuclear missile tests if international talks on its nuclear programme resume, a Russian spokeswoman says after talks between the leaders of the two nations. Russian news agencies, meanwhile, reported that North Korean leader Kim Jong-il said his country was ready to resume talks "without preconditions". Kim met Russian President Dmitry Medvedev on a military base near the city of Ulan-Ude in eastern Siberia in his first trip to Russia since 2002. His visit comes as North Korea pushes to restart six-party nuclear talks that have long been stalled. Seoul and Washington demand that Pyongyang first show its sincerity on fulfilling past nuclear commitments. Medvedev spokeswoman Natalya Timakova said yesterday that Kim expressed readiness to return to the talks without preconditions and "in the course of the talks, North Korea will be ready to resolve the question of imposing a moratorium on tests and production of nuclear missile weapons". Medvedev said Russia and North Korea also moved forward on a proposed project to ship natural gas to South Korea through a pipeline that would cross the North. Pyongyang had long been reluctant to help its industrial powerhouse arch-enemy increase its gas supply, but has recently shown interest in the project. Seoul wants the Russian energy but is wary of Pyongyang's influence over its energy supply. Medvedev said the two countries would create a special commission to "define concrete parameters for bilateral co-operation on gas transit". He said the proposed pipeline would have an annual capacity of about 10 billion cubic metres. The two leaders also discussed restructuring North Korea's Soviet-era debt to Russia, a Kremlin official said. Deputy Finance Minister Sergei Storchak told Russian news agencies that the debt was about US$11 billion. North Korea pledged to freeze its long-range missile tests in 1999, one year after the country shocked the world by firing a missile that flew over northern Japan and into the Pacific Ocean. However, it has since routinely tested short-range missiles. It test-fired a long-range rocket in April 2009, drawing international sanctions and condemnation. An angry North Korea retaliated by pulling out of the six-party nuclear talks. Since then, the Korean Peninsula has seen more than a year of tension during which the North shelled a South Korean island and allegedly torpedoed a South Korean warship. Pyongyang is believed to have enough weaponised plutonium for at least six atomic bombs. In November, it revealed a uranium enrichment programme that could give it a second way to make atomic bombs. It has carried out two nuclear tests, in 2006 and 2009, and is believed to be working on mounting a bomb on a long-range missile. ^ top ^

Senior PLA officer meets DPRK military delegation (Xinhua)
A senior officer of the People's Liberation Army (PLA) met with a logistical delegation from the Korean People's Army (KPA) of the Democratic People's Republic of Korea (DPRK) on Thursday. The delegation was led by Jon Chang Bok, chief of the General Logistics Bureau of the DPRK's Armed Forces Department. Liao Xilong, chief of the PLA General Logistics Department, hailed the traditional relationship between the two countries, saying that military ties have played an important role in the development of bilateral relations. The PLA and the KPA, both under the leadership of their respective ruling parties, share similarities in their mission to defend their respective countries, said Liao, adding that the PLA attaches high importance to its relations with the KPA and will continue to enhance exchanges and cooperation with the KPA. He also briefed the delegation on China's social and economic development. [...] Jon said the DPRK's citizens and armed forces can learn from China's rapid growth and achievements. ^ top ^



State visit of South Korean President (Montsame)
A state visit of the President of the Republic of Korea Lee Myung-bak and his spouse Mrs. Kim Yoon-ok started on Monday, August 22 to Mongolia. The State Head of Mongolia Ts.Elbegdorj and his spouse Kh.Bolrmaa have welcomed their counterparts on the Sukhbaatar Square. During the welcoming ceremony, the national anthems of the countries were played. Present at this ceremony were G.Zandanshatar, the Minister of Foreign Affairs of Mongolia; Jong IL, the Ambassador Extraordinary and Plenipotentiary of the Republic of Korea to Mongolia and other officials. The dignitaries paid tribute to the monument of Chingis Khaan after the ceremony. Then the President Lee Myung-bak left his signature on the book of honored guests. In a scope of the state visit of the President of the Republic of Korea, the two countries signed on Monday, August 22 several documents between some Ministries. In particular, cooperation documents have been established between the Mongolian Ministry of Health and the South Korean Ministry of Health and Welfare. In accordance with the document, the Ministries will update contents of their memorandum of mutual understanding expanding the bilateral collaboration in medical aid and sciences. In addition to it, the Mongolian Ministry of Mineral Resources and Energy, and the Korean Ministry of Knowledge Economy established a memorandum of mutual understanding, with aims to intensify the economic, scientific and technological cooperation in the mineral and energy sectors, and to support activities of enterprisers and organization engaged in these spheres. In respect of this memorandum, the countries will set up a cooperation committee for the mineral resource and energy sectors, at the Ministerial level. ^ top ^

Official visit of U.S Vice President (Montsame)
The U.S Vice President Joseph Robinette Biden arrived on Monday, August 22 in Mongolia to pay an official visit. The Prime Minister of Mongolia S.Batbold welcomed Mr. Biden, with the guards of honor and with playing of the national anthems of the two countries. Present at the welcoming ceremony were Kh.Bekhbat, the Ambassador Extraordinary and Plenipotentiary of Mongolia to the USA; L.Bold, the Defense Minister of Mongolia; and D.Tsogtbaatar, the State Secretary of the Ministry of Foreign Affairs. This is the second visit of the U.S Vice President paid to Mongolia, and the first one was paid by Henry A. Wallace, the 33rd U.S Vice President in 1944. Remarks were made by Joseph Robinette Biden, the US Vice President; and S.Batbold, the Prime Minister of Mongolia during the official talks held on Tuesday, August 23. Expressing his satisfaction with visiting Mongolia, the U.S Vice President Mr. Biden underlined that the Mongolia-USA relations are based on objective interests, and it is great to say that our ties also support each other. ”Success of Mongolia for building the democracy is highly appreciated not only by the USA, but also other countries. We have been seeing the successful democracy of Mongolia for last 20 years, particularly, the elections have been carried out without injustice,” Mr. Biden stressed, adding that he visited Mongolia in order to congratulate Mongolia on a development of the democracy. The US Vice President also spoke about the close cooperation in many spheres, and expressed thanks to Mongolia for sending troops to the UN Peacekeeping operations and to other hot spots of the world fighting against terrorism. Mr. Biden wished Mongolia big success in chairmanship of the Community of Democracies and in developing the democracy with a great development. He noted the USA considers Mongolia as one of its important partners, and so the United States is ready to accept any initiatives and proposals of Mongolia concerning the USA. Moreover, Mr. Biden pointed out establishing an agreement on transparency between the countries would be a good start of creating a free trade agreement, and also promised to study a matter on the visa-free term for Mongolian citizens. After the official talks, the U.S delegation watched a small festival of Mongolian traditional sports. Present at this event were S.Batbold, the Prime Minister; G.Zandanshatar, the Minister of Foreign Affairs; and L.Bold, the Defense Minister. By this event, the US Vice President finished his official visit to Mongolia. ^ top ^

Mongolia's economy grows rapidly in second quarter (
A new report from the World Bank says Mongolia's economy is “experiencing rapid growth.” According to the report, the country's economy grew a whopping 17.3 percent in the second quarter of this year (compared to the same period last year). The growth was fueled in large part by the transportation and construction sectors, which grew at 39.9 percent and 38.4 percent, respectively. Retail and wholesale trade also showed impressive growth at 24.7 percent, as Mongolians are spending more as a result of higher incomes. And the mining and manufacturing sectors recorded respectable growth rates of 8.3 and 12.9 percent in the second quarter, respectively.The report also says unemployment in Mongolia fell from 13 percent in December 2010 to 8.7 percent in June, which means Mongolia's unemployment rate is now lower than in the United States. But the report contains some bad news as well: Inflation is rising, up 11.4 percent in June (compared to the same month last year). Core inflation, which excludes volatile energy and food prices, rose even faster, by 13.7 percent. This inflation is being stoked by increased government spending, as well as increased spending by the private sector (both producers and consumers), as shown by a 106-percent increase in imports (relative to last year). ^ top ^

Government approves new roads plan (
The Government approved a new roads plan at yesterday's meeting of the Cabinet. Under the plan, more than 6,000 km of roads would be improved or built new. A priority would be roads that connect Ulaanbaatar to the centers of aimags and to border towns. The project is to be financed by the government, subsidies from international organizations, and loans.

The first phase of the project is scheduled to be completed this year, with final completion set for 2016. One potential problem, however, is the lack of qualified workers. A survey finds that Mongolia has only about 500 qualified road engineers and about 5,000 skilled workers for road construction projects. ^ top ^


Hélène Seiler
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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