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
  25-31.8.2012, No. 438  
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Table of contents

DPRK and South Korea


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Foreign Policy

China urges Japan to take practical action to improve ties (Xinhua)
China on Friday urged Japan to take practical action to improve bilateral relations amid a territorial dispute regarding nearby islands. A resolution adopted by the Japanese House of Representatives said that as important partners with shared interests, relations between Japan and China should be deepened so as to promote regional and international peace, stability and prosperity. Since the Japanese side is willing to deepen bilateral relations, then it should take practical action to that end, Foreign Ministry spokesman Hong Lei said. However, the Japanese resolution reiterated that the Diaoyu Islands are Japan's territory and condemned the arrival of Hong Kong citizens at the islands last week. Hong said Japan's attempt to strengthen its position on the Diaoyu Islands through the resolution is "illegal and futile" and cannot change the fact that the Diaoyu Islands belong to China. The islands have been China's inherent territory since ancient times, said the spokesman. ^ top ^

Chinese UN military observers return from Syria (Xinhua)
The last four Chinese United Nations (UN) military observers finished their mission in Syria and returned to Beijing on Saturday morning. They had been among the last UN military observers in the country after the UN Security Council ended its 120-day observer mission there on Aug. 19. A total of nine Chinese officers worked on the UN observer mission and the other five had returned to China in July when the UN Security Council decided to cut the number of observers by half. The officers displayed courage and professionalism in their mission and represented Chinese people's goodwill for peace in the Middle East country, said a statement from the peace-keeping affairs office of the Ministry of National Defense. They faced dangers and challenges amid the political turmoil in Syria and won recognition from the mission and their colleagues, the statement said. China will continue taking an active part in UN peacekeeping missions and contribute to world peace and security, it said. On April 21, the UN Security Council adopted a resolution to approve the deployment to Syria of up to 300 unarmed UN military observers in order to monitor a ceasefire between Syrian government forces and armed opposition fighters. On Aug. 17, the United Nations Security Council agreed to replace the observer mission in Syria with a small civilian liaison office in Damascus. ^ top ^

China opposes application of U.S.-Japan security treaty to Diaoyu Islands (Xinhua)
China strongly opposes any application of the U.S.-Japan security treaty to China's Diaoyu Islands, a visiting senior Chinese military official told his U.S. colleagues [...] on Friday. During meetings with senior U.S. military and government officials, Cai Yingting, deputy chief of the General Staff of the Chinese People's Liberation Army, expressed China's strong concerns over issues related to China's vital and core interests, including the U.S. arms sales to Taiwan, the territorial disputes over South China Sea and the Diaoyu Islands, and U.S. close-range military reconnaissance activities directed at China. In an interview with the Chinese media based in Washington, Cai said he told his U.S. hosts that the Diaoyu Islands and their affiliated islands have been part of China's inherent territory, and all the recent illegal activities by the Japanese, including the bid to "purchase" and the right-wing activists' landing on the islands, are completely invalid. China is firmly opposed to the U.S. stance that the Diaoyu Islands fall within the scope of the 1960 U.S.-Japan Treaty of Mutual Cooperation and Security, under which Washington will provide assistance to Tokyo when the territories under Japan's administration come under armed attack, he said. The delegation also urged the U.S. side to make more efforts to ease the tensions so as to safeguard peace in the Asia-Pacific and maintaining the good impetus in the development of the overall China-U.S. relations. [...]. ^ top ^

Senior Chinese officer stresses importance of developing new-type military relationship with U.S. (Xinhua)
A visiting high-ranking Chinese Army officer on Friday stressed the importance of developing a new type of military-to-military relationship with the United States, so to boost pragmatic cooperation in various spheres. In an interview with Chinese media based in Washington, Cai Yingting, deputy chief of the General Staff of the Chinese People's Liberation Army, said that the two countries need to strive to implement the important consensus reached between Chinese President Hu Jintao and his U.S. counterpart Barack Obama on constructing a new type of relationship between big powers, on the basis of mutual respect, equality, inclusiveness and win-win. The Chinese officer said that the two sides have to make concrete efforts to overcome differences, increase mutual trust and deepen the China-U.S. military relationship, which has been repeatedly interrupted by the U.S. arms sales to Taiwan, including promoting exchange of visits by top officers, military professionals and students, and strengthening cooperation in conducting naval escort missions in the Gulf of Aden. During meetings with senior U.S. military and government officials, Cai also expressed China's strong concerns and principled stand over issues related to China's vital or core interests, such as sovereignty and security. Cai said that the delegation reiterated China's strong opposition to any application of the U.S.-Japan security treaty to Diaoyu Islands, over which China has indisputable sovereignty. He was commenting on the U.S. stance that the Diaoyu Islands fall within the scope of the 1960 U.S.-Japan Treaty of Mutual Cooperation and Security, under which Washington will provide assistance to Tokyo when the territories under Japan's administration come under armed attack. Cai emphasized that the Diaoyu Islands and their affiliated islands have been part of China's inherent territory, and all the recent illegal activities by the Japanese, including the bid to "purchase" and the right-wing activists' landing on the islands, are completely invalid. In this regard, the Chinese delegation urged the U.S. side to do more to safeguard peace in the Asia-Pacific region and maintain the overall good China-U.S. relations. [...]. ^ top ^

Nuclear arsenal is fully mobile (SCMP)
China's nuclear missiles can be launched quickly and accurately from anywhere on the mainland, a development described as being "far more mobile than imagined". The People's Liberation Army's Second Artillery Corps said yesterday it had made a "strategic transformation" in its weapons capability, and called it an historic leap forward. The news follows foreign reports last week that the corps had test-fired a new, road-mobile, third-generation intercontinental ballistic missile (ICBM) known as the Dongfeng-41 (DF-41) late last month. With an operational range of up to 14,000 kilometres and the ability to carry multiple nuclear warheads, it could reportedly threaten every American city. The PLA Daily said several brigades with the Second Artillery Corps had, this summer, successfully conducted numerous firing tests around deserts in the remote northwest, mountains and rivers in the northeast and jungles in southern areas. "One of the key messages... is telling the US that the PLA's missiles are far more mobile than they had imagined before," said Antony Wong Dong, chairman of the Macau-based International Military Association. He said the article was important for military watchers, especially given that it was published following a stepping up of defence co-operation between the United States and Japan, including the staging of island assault drills in Guam and close co-operation on the development of a US-led missile shield. [...] However, according to a report issued by the US Department of Defence about the PLA's latest military and security developments, the introduction of more mobile systems creates new command and control challenges. It said land-based mobile missiles may face problems including limited communication capacity and a lack of experience in controlling road-mobile launching systems in wartime. ^ top ^

Japanese gov't rejects Tokyo's request to land on China's Diaoyu Islands (Xinhua)
Japanese central government rejected Tokyo metropolitan government's application of landing on Diaoyu Islands Monday, said Japanese Chief Cabinet Secretary Osamu Fujimura on a press conference. Fujimura said central government does not allow any citizen landing on Diaoyu Islands in order to maintain the stability of the area, so the government rejected Tokyo's request following the consistent principle. The central government has sent written notice of the rejection to Tokyo metropolitan government on Monday afternoon. Tokyo metropolitan government said in response that it will carry on the survey of the islands in this week on the surrounding water without landing on, because it's a necessary step for buying the islands. Tokyo plans to hold another survey on Diaoyu Islands in October which the governor of Tokyo Shintao Ishihara will take part in. The central government accepted Tokyo's request last Tuesday. Ishihara announced in April that the Tokyo government plans to purchase three of the five uninhabited islands. ^ top ^

Chinese Vice Premier to visit four countries (Xinhua)
Vice Premier Hui Liangyu will make official visits to Congo, Tanzania, Kyrgyzstan and Uzbekistan from Sept. 3 to 13, Foreign Ministry spokesman Hong Lei announced Monday. Hui's visits will be made at the invitation of the Congo government, Prime Minister of Tanzania Mizengo Kayanza Peter Pinda, First Deputy Premier of Kyrgyzstan Karashev Aale and First Deputy Prime Minister of Uzbekistan Rustam Azimov, Hong said. ^ top ^

Japanese flag ripped from ambassador's car (SCMP)
A man ripped a Japanese flag from a car carrying Japan's ambassador in Beijing yesterday, triggering a protest from Tokyo in the latest flare-up of a territorial row that provoked the worst anti-Japanese protests in years. The Japanese embassy issued a statement saying the ambassador, Uichiro Niwa, was unhurt in the incident. It said two other vehicles forced his car to stop and a man got out, broke off the Japanese flag and made off with it. But Japan's Foreign Ministry later said the flag had been snatched after the ambassador's car had become stuck in a traffic jam. A ministry spokesman said it would be too strong to describe the incident as an attack. Both Japanese accounts said no one was injured and the car was otherwise undamaged. The embassy said it had "filed a strong protest with the Chinese Foreign Ministry". It said that in response a senior ministry official called the incident "extremely regrettable" and pledged efforts to ensure the safety of Japanese citizens and businesses in China. The incident comes after renewed tensions in recent months over disputed islands known as the Diaoyus in China and the Senkakus in Japan. Separately, Japan's coastguard yesterday released an edited version of video footage showing a clash between Hong Kong and mainland activists and its patrol ships near disputed islands this month. The 30-minute footage shows a clash between Japanese coastguards and activists in waters near the Diaoyus. Just days later, Japanese activists and local legislators also landed on the Japanese-controlled islands, despite warnings not to do so by authorities. ^ top ^

Japan's PM bids to defuse tensions with letter to Hu (SCMP)
Senior diplomat arrives in Beijing with message seeking to develop relations in 'stable manner'. Japan's prime minister sent a senior diplomat to Beijing yesterday with a personal letter for President Hu Jintao in what appears to be a bid to ease tensions over their territorial dispute in the East China Sea. The trip by Senior Vice-Minister of Foreign Affairs Tsuyoshi Yamaguchi came a day after a car carrying the Japanese ambassador in Beijing was attacked by a Chinese man who ripped the Japanese flag off the vehicle, prompting protests from Tokyo. Yesterday, a woman threw a plastic bottle at Japan's embassy in Beijing. She was taken away by police for questioning, mainland media reported. Japanese Prime Minister Yoshihiko Noda's letter to Hu touched on "developing Japanese-Chinese relations in a stable manner from a broad perspective", Japan's chief cabinet secretary, Osamu Fujimura, said. Yamaguchi's trip came after Tokyo demanded an investigation into Monday's flag incident. Japanese Foreign Minister Koichiro Gemba called the incident "deplorable". Protests have erupted across the mainland in recent weeks after tit-for-tat visits by activists from both countries to the disputed Diaoyu Islands in the East China Sea. The islands are known as the Senkakus in Japan. Gemba said the Japanese embassy in Beijing had taken photos of the attacker and two vehicles involved and had submitted them to Chinese police. The Global Times, a hawkish newspaper affiliated with the official People's Daily, yesterday ran a rare editorial criticising the flag-snatching in Beijing, saying it was "silly, stupid and nonsensical... a play-house performance done by a naughty child". ^ top ^

Chinese, Egyptian presidents hold talks on ties (Xinhua)
BEIJING - Chinese President Hu Jintao held talks with visiting Egyptian President Mohamed Morsi at the Great Hall of the People in Beijing on Tuesday afternoon. Hu said China understands and respects the will of the Egyptian people, and supports them to choose political system and the path of development in accordance with their country's situation. China also supports the efforts made by Egypt to safeguard national sovereignty and independence and to promote economic and social progress, Hu said. Describing China as Egypt's "good brother, friend and partner," Morsi said Egypt, at a special historical period in its national development, thanked China for its friendly policies, understanding and support. He said Egypt hopes to learn from China's successful experiences in reform and opening-up and strengthen cooperation with China. Hu underscored the important role of Egypt, as a regional power and representative developing country, in international and regional affairs. He said China always views Egypt as a strategic cooperative partner in the Arab world and Africa. He proposed four points of view to further enhance bilateral relations. First, the two countries should deepen political relations by conducting closer exchanges between leaders, governments, parliaments and political parties. The two sides should give full play to various consultation mechanisms and continue to firmly support each other on major issues concerning each other's core interests. Second, the two sides should expand economic and trade cooperation, proceed with construction on big projects such as a Suez trade cooperation area, and enhance cooperation in a variety of areas, including infrastructure construction, agriculture, transportation, energy and finance. China will encourage companies to invest in Egypt and help Egypt to train professionals, Hu said. Third, the two countries should increase cultural and people-to-people exchanges, promote dialogues and exchanges between different civilizations and deepen cooperation in the culture, health, press, technology, and tourism sectors. Fourth, the two countries should strengthen multilateral cooperation. China supports Egypt to play a bigger role in international and regional affairs and will maintain close communication with it on hot issues. Hu also called on the two countries to enhance cooperation within the framework of the China-Arab Cooperation Forum and the Forum on China-Africa Cooperation, so as to promote peace, stability and development in the region and in the world. Hailing the traditional friendship between the two peoples, Hu spoke highly of Egypt's firm adherence to the one-China policy. [...] After the talks, the two presidents witnessed the signing of several cooperation deals between the two countries in areas such agriculture, tourism and communication. During Morsi's stay in Beijing from Aug. 28 to 30, other Chinese leaders, including top legislator Wu Bangguo, Premier Wen Jiabao and Vice President Xi Jinping, will also meet with him. Morsi arrived in China on Tuesday afternoon. ^ top ^

U.S. Secretary of State to visit China next week (Xinhua)
BEIJING - U.S. Secretary of State Hillary Clinton will visit China on Sept. 4 and 5, Chinese Foreign Ministry spokesman Hong Lei said on Tuesday. Clinton will make the visit at the invitation of Chinese Foreign Minister Yang Jiechi, Hong said, adding that the two sides will exchange views on the China-U.S. relations and other issues of common concern. Some Chinese leaders will meet with Clinton during her stay in Beijing, Hong said. ^ top ^

China to invest in EU bonds if risks controlled: Premier Wen (Xinhua)
BEIJING - China is willing to continue investing in European Union (EU) government bonds on condition of fully evaluating the risks, Premier Wen Jiabao said Thursday. China will enhance communication and consultations with EU, European Central Bank, relevant monetary funds and major countries to support the debt-ridden EU members to ride out the hardships. Wen made the remarks when meeting the press after co-chairing the second round of Chinese-German intergovernmental consultations with the visiting Germany Chancellor Angela Merkel. China hopes EU could find a balance between fiscal austerity and economic stimulus, which is the fundamental way-out to the crisis, Wen said. The government should have confidence of the country, so does the financial institutions to the business, the enterprises to the market, and the consumers to the future prospects, Wen added. China's cooperation with Germany and EU should center on bolstering confidence. We should let people see the hopes, oppose protectionism and deepen collaboration to explore the market, Wen said. ^ top ^

China signs deal for 50 Airbus planes (Xinhua)
BEIJING, Aug. 30 (Xinhua) -- China and Germany signed a series of cooperative documents Thursday, including a procurement deal for 50 Airbus planes. The signing ceremony was attended by Chinese Premier Wen Jiabao and German Chancellor Angela Merkel, after both co-chaired the second round of Chinese-German intergovernmental consultations in the morning. China's ICBC Leasing and Airbus signed the procurement deal for 50 Airbus A320 planes with a worth of 3.5 billion U.S. dollars. The two countries also inked more than 10 other cooperative documents, including an agreement about Airbus plane assembling in China. The documents range from aviation, automobile, communication, energy, environment, health to maritime cooperation. Merkel arrived in Beijing Thursday morning, kicking off a two-day official visit to China at the invitation of Chinese Premier Wen Jiabao. ^ top ^

Wen holds talks with Merkel (Xinhua)
BEIJING - Chinese Premier Wen Jiabao held talks and co-chaired the second round of Chinese-German intergovernmental consultations with German Chancellor Angela Merkel here on Thursday, expressing his confidence in China-Germany cooperation and the future of bilateral ties. During the consultations, Wen said China and Germany have maintained close coordination to implement a consensus reached during the first round of Chinese-German intergovernmental consultations held in Berlin in June last year. Both sides have scored progresses in fields including electric automobiles, small enterprises and vocational education, while expanding mutual investment, Wen said. "These results are hard won as they have been accomplished under unfavorable international economic circumstances," according to the premier. "Therefore, the significance exceeds the range of the two countries." As important global economies and strategic partners, China and Germany need to make efforts to lift the confidence of the international community in order to jointly face the challenges of the international financial crisis and the European debt crisis, Wen urged. [...] This year marks the 40th anniversary of the establishment of diplomatic relations between China and Germany, said Wen. "This round of consultations is the last round between the incumbent government and the German side, and this forms a connecting link for future cooperation," he said. [...] Later this afternoon, Chinese President Hu Jintao, top legislator Wu Bangguo, Vice President Xi Jinping and Vice Premier Li Keqiang will meet Merkel. The German chancellor arrived in Beijing on Thursday morning, kicking off a two-day official visit to China. This is her sixth visit to China since she took office in 2005 and the second within this year. ^ top ^

Man arrested for attack on diplomat's car (SCMP)
A man suspected of ripping a Japanese flag from a car carrying Japanese ambassador Uichiro Niwa was arrested by Beijing police yesterday, as both countries sought to ease tensions over the disputed Diaoyu Islands, known as the Senkakus in Japan. The arrest came as Japan's senior vice-minister of foreign affairs, Tsuyoshi Yamaguchi, was in Beijing to arrange meetings with his Chinese counterparts. The Public Security Bureau in Beijing informally confirmed the arrest and detention of the suspect in a private message to Japanese embassy staff, the Asahi Shimbun reported yesterday, citing diplomatic sources. The report said Monday's incident remained under investigation. A spokesman for the embassy said it had not received any formal notification about the arrest from Beijing authorities. Sino-Japanese ties have cooled in recent months after Tokyo's city government announced it was considering buying the disputed islands. Public pressure for Beijing to take a tougher stand on the dispute is running high. Speaking at a seminar in Beijing yesterday celebrating the 40th anniversary of the re-establishment of Sino-Japanese ties, former state councillor Tang Jiaxuan said Monday's incident would harm China's interests instead of increasing patriotic sentiment. Niwa, attending the seminar, did not comment on Monday's incident or the territorial dispute but did say that continuing friendship and co-operation was the only way forward for the two countries. [...]. ^ top ^

China, India to narrow trade gap (China Daily)
Despite disputes, two nations plan to grow trade to $100b by 2015. China has promised to allow the import of more products from India, to close an existing $23.4 billion trade gap between the two countries, despite a series of trade disputes in recent months. A Chinese delegation led by Minister of Commerce Chen Deming visited India from Monday to Tuesday, and officials said that both sides have agreed to work toward a "more balanced" trade model. Chinese exports to India reached $73.9 billion in 2011, with its Indian imports worth $50.5 billion, according to statistics from the Chinese General Administration of Customs. A ministry source told China Daily that the Indian government recently submitted a list of more than 900 of its preferred export items to China. But he declined to elaborate on what specific goods China has agreed to allow more access to. Indian statistics showed it took China 10 years to rise to the largest source of India's imports, from the seventh. But trade relations between the two Asian powers have been strained after a series of spats. Chinese officials were reported by Reuters to have raised India's decision last month to impose a tariff of 21 percent on imported power equipment — a controversial move widely seen as targeting Chinese firms which have emerged as the world's main suppliers. For its part, India has long complained that its companies, from IT and services to pharmaceuticals to Bollywood filmmakers, are unfairly restricted when trying to enter the Chinese market. India primarily sells copper and iron ore to China, and imports high-end manufacturing and high-tech goods. ^ top ^

Stronger China-Europe economic cooperation conducive to boosting global economy: Chinese premier (Xinhua)
BEIJING - Premier Wen Jiabao said Thursday that stronger China-Europe economic and trade cooperation is not only conducive to the settlement of the European debt crisis, but fundamentally beneficial for the economies of Europe, China and the world. Wen made the remarks in a joint press conference with visiting German Chancellor Angela Merkel. The international financial crisis does not change the basic fact that the Chinese and European economies are highly complementary, Wen said. "We need to stick to the road of mutual benefit in order to jointly address the challenges brought by the European debt crisis," said Wen. [...] Both sides need to conduct closer financial cooperation in order to safeguard the stability of international finance and provide more stable support for economic and trade cooperation, the premier said. "China has always had full confidence in the euro," said Wen, noting the Chinese side would also like to see European countries use more Renminbi in economic and trade exchanges. ^ top ^

Chinese, German leaders suggest solar panel dialogue (Xinhua)
BEIJING - Chinese and German leaders said on Thursday that China and Europe should try to resolve their current dispute over solar panel import duty through consultations and avoid anti-dumping proceedings. "I suggest the European Commission and China try to solve the issue through communications, rather than by resorting to anti-dumping proceedings," German Chancellor Angela Merkel told reporters after co-chairing the second round of Chinese-German intergovernmental consultations in the morning. "There is still time, so the best way is consultation," she said. Chinese Premier Wen Jiabao echoed Merkel's stance, saying consultation is an effective tool to work out trade disputes. "It is also an important outcome of today's intergovernmental consultations, which I think will be exemplary to the world," he added. Germany's SolarWorld and other European solar panel makers last month filed a complaint seeking import tariffs on Chinese-made solar products. There would be a 45-day period before the EU's executive commission decides whether to start investigations. [...]. ^ top ^

U.S. defense secretary to visit China in mid-Sept. (Xinhua)
BEIJING - United States Defense Secretary Leon Panetta will visit China in mid-September, the spokesman for China's Ministry of National Defense said Thursday. The Pentagon chief's visit, which follows his Chinese counterpart General Liang Guanglie's visit to Washington in May, is part of this year's bilateral military-to-military exchanges, Senior Colonel Geng Yansheng, the spokesman, told a press conference. The two militaries will conduct exchanges on the mechanism for bilateral contact, military academies and other professional fields, and they will hold joint anti-piracy maritime exercises, Geng said. [...]. ^ top ^

Defense spokesman says missile tests targeted at no specific country (Xinhua)
BEIJING - China's Defense Ministry spokesman confirmed on Thursday that the People's Liberation Army (PLA) had conducted missile tests within national territory and clarified that they were not targeted at any one country. "We conducted some normal weapons tests within the territory recently," spokesman Geng Yansheng told a regular press conference arranged by the ministry. "These tests have no specific targets and were not targeted at any specific countries," Geng said, reiterating that the weaponry buildup is to answer the need to safeguard national security. Domestic and foreign media reports said that the PLA's Second Artillery Force had successfully test-launched several missiles, including DF-41 intercontinental ballistic missile. Others claimed the PLA's tests of JL-2 submarine-launched ballistic missiles had all failed, and that China's development of ballistic missiles was at a comparatively slow pace. [...]. ^ top ^

China, Egypt back Palestine's statehood (Xinhua)
BEIJING - China and Egypt have reaffirmed their support for an independent State of Palestine, according to a joint press communique issued here on Thursday. The independent state should have full sovereignty established on the basis of the 1967 borders, with East Jerusalem as its capital, said the communique, which also backed Palestine's participation in the United Nations and other international organizations. [...] It added that Egypt appreciates China's efforts on supporting the just cause of the Palestinian people and safeguarding peace and stability in the Middle East. ^ top ^

Wen gives Merkel straight talk on euro crisis: Frankly, I'm worried (SCMP)
Wen Jiabao voiced his fears about the European debt crisis yesterday after a meeting with visiting German Chancellor Dr Angela Merkel. "The European debt crisis has continued to worsen, giving rise to serious concerns in the international community. Frankly speaking, I am also worried," Wen said. "The main worries are two-fold. First is whether Greece will leave the euro zone, and the second is whether Italy and Spain will ask for comprehensive rescue measures." He called on Greece, Spain and Italy to embrace budget cuts and other reforms to restore confidence in the fragile euro zone. Merkel said Europe had implemented reforms to restore confidence in the euro and she wanted Greece to remain part of the monetary union. "Many reforms are going on now, and there is an absolute political will to turn the euro into a strong currency again," she said. "I am convinced that the reforms will bear fruit." Wen said he was confident the euro zone could emerge from the crisis after hearing Merkel's views and China would continue investing in the debt-stricken countries, but on the condition that "the risks involved are fully evaluated". "Honestly speaking, the implementation of the measures pledged by European countries will not be completely smooth," he said. Merkel, accompanied by a 20-member delegation of business executives on her second trip to China in six months, is hoping to strengthen trade ties and obtain assurances from Beijing that it will support the euro zone. [...]. ^ top ^

Merkel means business in Beijing with heavy-hitting delegation (SCMP)
German Chancellor Dr Angela Merkel has brought Germany's largest ever business delegation with her to China, but experts say the fast-changing global economy could cast a shadow over her mission. The chancellor arrived in Beijing yesterday accompanied by seven cabinet ministers and two dozen leading German businessmen. A separate delegation led by Foreign Minister Guido Westerwelle arrives in Hong Kong today. This is the second visit in five years by Westerwelle, who will give a luncheon speech on the debt crisis in Europe. The unprecedented high-level visits by German officials underline the country's eagerness to foster stronger ties with China. [...] Merkel's two-day visit to China got off to an auspicious start. The two governments announced a dozen major deals at a press conference by the chancellor and Premier Wen Jiabao - including ICBC Leasing's US$3.5 billion order for 50 Airbus jets. But Mark Williams, the chief Asia economist for Capital Economics, said it was hard to judge if her visit was successful based only on the deals announced. "Governments always come under pressure to demonstrate visible gains from a high-profile visit - usually in the form of orders for products which probably would have happened anyway," the London-based economist said. "But the successes of a visit lies in incremental progress." Still, the growing economic links between China and Germany - the world's second- and fourth-largest economies - are undeniable. While German manufacturers still sell more of their products to other European nations, China is expected to soon overtake the US as its largest trading partner outside the continent, according to the Association of German Chambers of Industry and Commerce. German exports to China have almost tripled in the past five years. [...]. ^ top ^

Chinese defence minister makes peace-keeping trip to New Delhi (SCMP)
While Beijing battles territorial disputes with Japan, Defence Minister Liang Guanglie makes landmark peace-keeping trip to India. Defence Minister General Liang Guanglie will signal Beijing's desire to maintain calm on the disputed Sino-Indian border in the Himalayas by including the PLA's Tibet Military Area Command in his delegation to India during a five-day visit beginning on Sunday. Liang's trip to India is the first by a Chinese defence minister in eight years and comes as Beijing grapples with territorial disputes in the South and East China seas. Liang will meet Indian Defence Minister A.K. Antony and discuss a number of security matters. The People's Liberation Army Daily said the 23-member Chinese delegation would include the commander of the PLA's Tibet Military Area Command Lieutenant General Yang Jinshan, the deputy commander of the PLA Air Force Lieutenant General Zhou Laiqiang and other senior officers. D.S. Rajan, director of the India's Chennai Centre for China Studies, said Yang's presence could be significant. "The agenda for the talks may include further strengthening of confidence-building measures already in place in the border," he said, while stressing that the territorial dispute was unlikely to come up for direct discussion. Rajan said China's keenness to maintain a stable relationship with India contrasted with its aggressive stance on the South China Sea and Diaoyu Islands. Andrei Chang, editor-in-chief of the Canadian-based Kanwa Asian Defence Monthly, said Liang's trip was aimed at preventing disputes on the SinoIndian border in the Himalayas from escalating while Beijing deals with territorial disputes with Japan in the East China Sea and some Southeast Asian neighbours in the South China Sea. "Military tensions on the Sino-Indian border in the Himalayas have never eased in the past few years," Chang said. [...]. ^ top ^


Domestic Policy

Chinese VP stresses Party building (Xinhua)
Vice President Xi Jinping on Friday called on all members of the Communist Party of China (CPC) to further improve Party construction. Xi, who is also a Standing Committee member of the Political Bureau of the CPC Central Committee, made the remarks at a working conference related to Party building ahead of the CPC's 18th National Congress. Xi said that since the Party's 17th National Congress five years ago, Party building work teams have followed the instructions of Hu Jintao, general secretary of the CPC Central Committee, to enhance the Party's work. "Distributed work has largely progressed and most projects have been finished within the five years," Xi said. Xi called on related departments to be mindful of potential dangers, remain conscious of their responsibilities and keep the overall situation in mind. Measures should be formulated to complete unfinished tasks, Xi added. Senior CPC leader He Guoqiang said at the meeting that Party building has made prominent achievements, setting up a solid foundation for the modernization of Party building. He urged relevant departments to make full use of their experience, as it will play a long-term role in Party construction. ^ top ^

Concern over mainland bridge safety (SCMP)
At least 18 bridges have collapsed on the mainland since 2007, killing 135 people, according to the records of the State Administration of Work Safety. Most had been in use for less than 15 years. The latest victims were three people killed on Friday when a 100-metre section of approach ramp snapped a bridge in Harbin, Heilongjiang. The true number of collapses could be higher because some cases are classified by the work safety agency under other categories such as natural disasters. Poor-quality construction is seldom singled out for blame by local authorities, though the collapse of a just-completed bridge in Fenghuang, Hunan, in 2007, in which 64 people were killed, is an exception. Instead flooding, overloaded vehicles or cargo ships hitting bridge supports are more often blamed. Huang Yusheng, secretary general of the Harbin city government, said yesterday that the approach ramp that collapsed on Friday was not regarded as part of the main Yangmingtan Bridge. Even if it was found to be of poor quality, it would have "nothing to do" with the landmark project. Safety experts, however, have less confidence in bridge quality than the government. Dan Danhui, associate professor with Tongji University's bridge safety department in Shanghai, said the construction of many bridges had been rushed. The situation had become particularly severe in recent years as the government put huge investment into infrastructure development to boost the economy, create jobs and keep gross domestic product growth high in the face of a global recession. "A few years ago China had only about 500,000 bridges. Now we have more than 700,000," Dan said. "No country has ever built hundreds of thousands of bridges in just a few years. With such a huge number of projects going on I am not surprised to see an increasing number of reports of collapses." Dan's concern about the rush to build bridges is shared by other industry experts. Bridge scientist Chen Zhaoyuan, a Tsinghua University professor and a member of the Chinese Academy of Engineering, published an open letter last year warning many good practices designed to ensure bridge safety had been abandoned during the rush. "Are we building too fast?" he wrote. He said that more than 10 years ago, the idea of carrying out surveying, design work and construction simultaneously was rightly regarded as irresponsible, but was now "common practice". Such haste would greatly undermine a bridge's safety, but government officials in charge of the projects often specified a deadline for completion within their term of office, Chen wrote. Dan said the philosophy of bridge designers had also shifted. "Bridge designers were less confident, and thus more fearful, in the past," he said. "Today's design philosophy is to find smart ways to cut costs while meeting the minimum safety requirements." Corruption had also led to poor-quality construction, Dan said. ^ top ^

Senior official urges deepened judicial system reform (Xinhua)
Senior Chinese leader Zhou Yongkang has urged consolidating and expanding the reform of the country's law enforcement system in order to better ensure justice for the people. Zhou, a member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, made the remarks Monday at a meeting on judicial system reform. At the meeting, officials with the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security and the Ministry of Justice delivered reports on establishing a case-oriented system, improving the monitoring mechanism over detention centers, regulating law enforcement activities and reforming the lawyer system, among other issues. Zhou hailed the past reform for optimizing the power allocation among law enforcement organs, setting up a criminal system that combined leniency with severity and strengthening the management of law enforcement groups. According to Zhou, the reform achieved the expected goals of "boosting the coherence and combat power" of political and legal teams as well as related departments' credibility. Zhou stressed that the country's judicial work must give priority to the Party's cause, people's interests and the Constitution and laws, and it must stick to China's own situations while selectively borrowing experiences from other countries. Zhou called for strengthened judicial democracy and openness to ensure people's rights to know, participate in and supervise the country's judicial cause. While urging judicial organs to identify and resolve issues in their own work, Zhou noted that various reform measures must be implemented down to the grassroots level to boost the abilities of police to investigate cases, protect people's rights and ensure social stability and harmony. In addition, Zhou called for more publicity efforts to spread the results of the judicial reform with facts and figures. ^ top ^

Two teens die as cases of fiery protests top 50 (SCMP)
Two teenagers burned to death in the southwest, taking to more than 50 the number of Tibetans who have set themselves alight in protest against Beijing's rule, rights groups said yesterday. Lobsang Kalsang, 18, a Buddhist monk, and former monk Damchoek, 17, died in hospital on Monday after setting themselves on fire in Aba town, which has become a flashpoint for protests by ethnic Tibetans. The Tibetan-inhabited areas have seen an explosion in violent protests since March last year, when the self-immolation of a monk, Phuntsog, at Aba's revered Kirti monastery, sparked riots and a police crackdown. The first recorded incident was in February 2009, and there have now been 51 such fiery protests, according to tallies compiled by overseas-based pressure groups Free Tibet and the International Campaign for Tibet. In 2009, a young Kirti monk doused himself in oil and set himself on fire carrying an image of the Dalai Lama, Tibet's spiritual leader, before being shot by police and taken to a local hospital. The next incident was not recorded until last year, but since then dozens of ethnic Tibetans, most of them young monks and nuns, have set fire to themselves. Many, though not all, have died. Experts say suicide is a major taboo in Tibetan Buddhist culture and the immolations are a sign of growing desperation among those living in the vast and remote Tibetan plateau. The two teenagers in the latest incident shouted slogans condemning Beijing's policies as they set themselves alight, Radio Free Asia said, citing two India-based monks with contacts in Aba, Sichuan province. They protested close to the Kirti monastery, which has been under intense security since Phuntsog's immolation. Free Tibet said Damchoek, who like many Tibetans used only one name, was the brother of Tenzin Choedon, a teenage nun who set fire to herself in February. Tibetans say Beijing has curbed religious freedoms and their culture is being eroded by an influx of Han Chinese. ^ top ^

Oil giant opens up more deep-sea blocks (SCMP)
CNOOC invites foreign companies to bid for more areas - including in the South China Sea - with some near, but not in, disputed areas. Top offshore oil producer CNOOC is inviting foreign companies to explore for oil and gas in another 26 blocks, including 22 in the South China Sea, although an analyst said none of these were in disputed territory. Experts said the tender, which also covers blocks in the Bohai Sea off north China and in the East China Sea, was probably the largest offered by China National Offshore Oil Corp (CNOOC) since the 1990s - a sign that the oil giant wants to boost exploration as its output growth slows. The tender comes two months after CNOOC invited international firms to bid for nine blocks in the western part of the South China Sea, a move Vietnam said was illegal as the blocks encroached on its territorial waters. China at the time insisted the tender in June was in accord with Chinese and international law and urged Vietnam not to escalate the quarrel. Huang Xinhua, a geologist at energy consultancy IHS, said none of the latest blocks appeared to be in disputed areas. One of the blocks is in northern Bohai Bay, with three in the East China Sea, 18 in the eastern part of the South China Sea and four in the western South China Sea, the company said on its website They cover a total area of 73,754 square kilometres. The three deep-water blocks in the eastern part of the South China Sea are at depths between 700 and 3,000 metres, it said, adding that foreign firms had until November 30 to view data packages for all the blocks tendered. "The tender should be CNOOC's largest in terms of the number of blocks offered since the 1990s, showing CNOOC really wants to beef up its exploration in offshore China with the help of international firms," Huang said. The three deep-sea blocks, which cover a total of 15,365 square kilometres, as well as areas in the Qiongdongnan basin in the western part of the South China Sea, were attractive as hardly any drilling had been carried out there so far, Huang said. In this round of auctions, block 65/12 is near block 65/24, which Vietnam singled out in a March as violating its sovereignty. The area sits one nautical mile from the Paracel Islands, which China and Vietnam fought over in 1974. China calls them the Xisha Islands and Vietnam calls them the Hoang Sa Islands. "China must assert its sovereignty over these blocks as preliminary geological assessments suggest huge oil and gas exploration potential," said Gordon Kwan, the Hong Kong-based head of regional energy research at Mirae Asset Securities. "China's rising global dominance can fend off any political or military challenges that could come" because of the new tenders. ^ top ^

Accident commentary a sign of party's jitters (SCMP)
A spate of fatal accidents this month has cast a pall over the upcoming 18th party congress, when the nation will name its leaders for the next decade, according to an unusual commentary by Xinhua. The article, published by Xinhua's English service on Tuesday and titled "Multiple accidents test CPC's governability", described August as a "bloody" month. It cited Sunday's highway collision and explosion near Yanan, Shaanxi province that killed 36 passengers when their bus ran into a tanker carrying highly combustible methanol, and last week's collapse of a bridge section in the northeastern city of Harbin that killed three. "For much of the general public, the more fatal accidents occur, the greater the government's credibility is undermined," the commentary said. "In the worst-case scenario, the government's failure to minimise deadly man-made accidents will mean that it loses the people's trust, which may prove to be the biggest challenge for the CPC when more than 2,000 delegates from across the country convene later this year to draw up the road map for the future of the party and the country." The commentary highlighted a difference of opinion among state media on the mainland, in such a politically uncertain and sensitive period before the power shift, according to someone familiar with the nation's propaganda machine. Professor Zhan Jiang, who teaches journalism at Beijing Foreign Studies University, said yesterday that the Xinhua commentary was "abnormal". In the lead-up to the party congress, state media has been asked to toe the line and glorify the party's rule to minimise discontent and create a "harmonious atmosphere" for the power shift, but some critical opinions do make it to print, Zhan said. "State media, such as Xinhua and the People's Daily, have become more liberal recently. Various opinions can be expressed as long as they are backed by a powerful political faction. We call it limited diversity." Zhan said Xinhua's English service may also be subjected to less censorship. Xinhua published a similar commentary in Chinese, but that version did not question the government's credibility, nor did it mention the congress. Zhang Lifan, a political affairs analyst formerly with the Chinese Academy of Social Sciences, said the commentary also revealed a lack of confidence within the Communist Party. He said that, as government officials at all levels have been told to make the party congress their top concern, many issues, such as construction quality, transport and food safety had been ignored, leading to an increase in accidents in recent weeks. "They are giving abnormal priority to a normal power shift, and that is a sign that confidence is lacking," he said. ^ top ^

China's county governments face fiscal challenges (Global Times)
County-level governments are facing financial challenges in the form of revenue shortages and poorly managed expenditures, Minister of Finance Xie Xuren said Wednesday. Tougher reforms will be needed to increase county government revenues, Xie said while delivering a report at a bimonthly session of the Standing Committee of the National People's Congress (NPC), the country's top legislature. County governments in some places have hired new staff too quickly and are not spending enough on public services, Xie said. ^ top ^

Lawmakers seek to give public more legal teeth in environmental affairs (Xinhua)
BEIJING - China's national lawmakers are debating to what extent the public should be allowed to participate in, and how much negotiating power the public should have, in environmental issues set by the government. With increasing numbers of protests against controversial government projects in China, members of the National People's Congress (NPC) Standing Committee, the country's top legislature, on Thursday agreed that a draft amendment to the Environmental Protection Law should address rising public discontent. "When the public has inadequate channels for expressing their concerns and protecting their interests, the existing laws will not work for environmental protection," lawmaker Xie Kechang said during the first reading of the draft amendment. China's Environmental Protection Law was introduced in 1979 and has stood unchanged since it was officially enacted in 1989, when the country's economy started to boom by becoming the world's leading manufacturing hub. As booming industries consume massive amounts of water, soil, minerals, labor and other resources, the public have less tolerance for, and more awareness of, hazardous pollution, which also led to the environmental protection agency being upgraded to a Cabinet-level organ in March 2008. "The law should add an open and effective procedure for the public to participate in approving a government project that may arouse environmental concerns," Xie said. The local government in the eastern city of Qidong last month canceled an industrial waste pipeline project hours after thousands of angry residents protested against the planned project. The protest came on the heels of similar demonstrations against industrial projects in the southwestern city of Shifang in July and in the northeastern city of Dalian last year. [...] Data from the Ministry of Environmental Protection showed that the number of mass demonstrations related to environmental concerns has increased at an annual rate of 30 percent. Those protests, spurred by fears of environmental degradation, have stirred nationwide discontent and stoked calls for expanding citizens' rights and sufficiently consulting with local residents when assessing the environmental impact of proposed industrial projects. [...] Thus, a new term has been added to the draft amendment, asking the Ministry of Environmental Protection to release national environmental reports and major environmental information. Individuals and organizations have the right to request environmental information from the government and its environmental protection agency at or above the county level. Such claims should be responded to within a set time limit, according to the draft amendment. The draft amendment also introduces a nationwide environmental monitoring network and data system accessible to the public. ^ top ^



Over 1 million vie for 20,000 car plates in Beijing (China Daily)
Winning rate for Beijing's car registration lottery has dropped to less than 2 percent in August, marking the lowest rate since the car plate lottery scheme was launched last year, local authorities said Sunday. Among the accumulated 1.05 million private car applicants, only 19,926 were given the right for car registration Sunday when the city's 20th license plate lottery was held, a spokesman with the Beijing car registration lottery office said. The Beijing municipal government ushered in the car plates lottery scheme in January last year to limit the number of vehicles on the road. Under the scheme, only 240,000 new private car plates are issued every year, and 20,000 every month. About 200,000 people applied for car registration in January last year when the first license plate lottery was held in the city. But the winning rate has been shrinking with the growing number of applicants. Beijing now reports more than 5 million vehicles, statistics with the Beijing Municipal Traffic Management Bureau show. ^ top ^



City cracks down on dirty vehicles (Global Times)
The local government plans to get about 200,000 heavily polluting vehicles off the streets over the next three years to improve air quality in the city, the local environmental authority announced Monday. "Motor vehicle exhaust emissions have become the main source of air pollution in city. They account for 25 percent of the city's PM 2.5 density," said Cai Zhigang, an official from the pollution prevention department of the Shanghai Environmental Protection Bureau. [...] "If successful, the city's PM 2.5 density might fall by 10 percent," Cai told the Global Times. The bureau estimated that about 230,000 vehicles registered in Shanghai fail to meet the national emission standards that the city adopted in 1999. Those vehicles are responsible for more than half of local exhaust emissions, though they only account for 12.5 percent of all vehicles registered in the city, according to a news release from the bureau. The local government plans to attack the problem in phases. It aims to get 150,000 vehicles off the road by the end of 2014 and another 50,000 off the road by the end of 2015. To meet this target, the local government will offer a subsidy to the owners of vehicles that cannot meet local emission standards. Starting September 1, vehicle owners can receive a subsidy ranging from 3,000 ($472) to 32,000 yuan for each vehicle they scrap, according to the bureau. [...] "The size of the subsidy depends on the type of vehicle, when it was purchased and which emission standard it meets, but we did refer to prices on the second-hand car market when we created the policy," Cai said. The local government has banned vehicles that fail to meet local emission standards from entering the area inside of Middle Ring Road. As part of the new plan, it intends to prevent them from venturing inside Outer Ring Road after 2014. The local government is also working to remove heavily polluting vehicles from its fleet. All government-owned vehicles that cannot meet emission standards will be phased out over the next two years with special funds, Cai said. ^ top ^



Crackdown on anti-Japanese protesters (SCMP)
Riot police yesterday used force to disperse hundreds of anti-Japanese protesters in an apparent move to stop any nationalist sentiment getting out of hand in the industrial city of Dongguan, near Guangzhou. Yesterday's crackdown was in marked contrast to recent demonstrations that appeared to have the tacit support of the authorities. About 500 protesters waving Chinese flags and chanting anti-Japanese slogans set off from the city centre at 1pm along busy Hongfu Road towards Dongguan city government plaza, where they were blocked by police. Riot police soon began to round up the crowd, which led to scuffles with angry protesters. Some in the crowd were seen throwing water bottles and tree branches at police. The protest came a day after Premier Wen Jiabao's visit to Guangdong on Friday and Saturday. [...]. The previous Sunday, thousands of protesters took to the streets in Guangzhou and Shenzhen with tacit government permission and roads were sealed off to make way for the marchers. Shenzhen police intervened only when the demonstration turned violent in the afternoon, as Japanese-named businesses and cars were vandalized. [...]. ^ top ^



Beijing to stick to Tibet approach (Globaltimes)
A senior official denied Thursday that China would adopt a new approach to the Tibet issue, in response to the Dalai Lama's reported claim that he had seen "encouraging signs" in China's attitude toward Tibet. The Dalai Lama said Wednesday that some Chinese officials seemed to agree that a new approach needed to be adopted to deal with the issue of Tibet, and the "Tibet government-in-exile" is "ready for full cooperation with them" if they are "thinking more realistically," Reuters reported. He added that he had received a stream of visitors from China, and some of them claimed they had connections with senior officials of the Communist Party of China, according to Reuters. Xu Zhitao, an official with The United Front Work Department of the CPC Central Committee, denied any such recent visits, adding that there would not be any negotiations at least until the end of the year. "China will continue to be flexible with the Dalai Lama, but it seems that no result will come out if he does not change his attitude toward some fundamental issues," said Xu. The central government has insisted that the Dalai Lama or his "Tibet government-in-exile" cannot represent the Tibetan people, and there can only be discussions on how the Dalai Lama should "stop his separatist speeches and win the trust of the central government as well as the forgiveness of the Chinese people." [...] Since 2002, the Chinese government has negotiated with representatives of the Dalai Lama on 10 occasions, including the latest in 2010, but no breakthroughs were reached because of "sharply divided" views, Xinhua reported. [...]. ^ top ^



HK Financial Secretary to attend APEC meeting in Russia (Xinhua)
Hong Kong Financial Secretary John Tsang Chun-wah will leave Hong Kong next Tuesday for the Asia- Pacific Economic Cooperation (APEC) Finance Ministers' Meeting in Moscow of Russia. In Moscow, Tsang will take the opportunity to meet senior representatives of Russia's financial and business sectors to strengthen bilateral economic relations. Russia is an important emerging market. Bilateral trade between Hong Kong and Russia has shown rapid growth in recent years. Tsang will return to Hong Kong on Sept. 1. In his absence, the Secretary for Financial Services and the Treasury, Professor K C Chan, will act as Financial Secretary. ^ top ^

ASEAN to decide on Hong Kong's request for accession to ASEAN-China FTA in Nov. (Xinhua)
Cambodian Prime Minister Hun Sen, the chair of ASEAN in 2012, on Monday advised the ASEAN economic ministers to submit the studies on the impacts of Hong Kong's accession to the ASEAN-China Free Trade Agreement (ACFTA) to ASEAN leaders in November for their decision. "For the benefits of increasing market access to Hong Kong which is one of the 10 largest trading partners of ASEAN, and based on positive studies made on the impacts of Hong Kong's accession to the ACFTA, I'd like to request the ASEAN economic ministers to make recommendations on legal implication, impacts, and challenges pertaining to the Hong Kong's accession to ASEAN leaders at the 21st ASEAN Summit to be held in November for decision making," he said in his opening address at the 44th ASEAN Economic Ministers Meeting and related meetings. Hong Kong expressed its interest to join the ACFTA to the Secretary-General of ASEAN in October 2011. Hong Kong's accession to the ACFTA could result in a number of benefits for both Hong Kong and ASEAN member states. Given its strategic position as a business and financial center in the region, Hong Kong could enhance its role as trade facilitator between Chinese mainland and ASEAN countries by joining the ACFTA. In particular, Hong Kong's accession would allow for the further development of the trade between Hong Kong and ASEAN. Founded in 1967, the Association of Southeast Asian Nations (ASEAN) groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. ^ top ^

Controls pledge over Shenzhen visitor influx (SCMP)
As protests gain momentum, Leung seeks to allay fears that border city's relaxed travel permit rules will see Hong Kong swamped. Hong Kong will control the number of people entering the city, Chief Executive Leung Chun-ying said yesterday amid growing pressure to delay the relaxation of permit rules that will allow millions more mainlanders to pay multiple visits. "On the one hand we will control the number of people coming in," Leung said. "At the same time we will also step up facilities in various districts." But he gave no details and immigration officers said controls would be difficult to impose without changes to the law. Government opponents and allies, meanwhile, were preparing to mount a protest today calling for postponement of Shenzhen's decision to offer multiple-visit permits for Hong Kong to its 4.1 million non-permanent residents from next month. Previously these were available only to the border city's 2.8 million holders of hukou or residents' permits. Non-permanent residents had to return to their home provinces to apply. The likely influx following Shenzhen's announcement of the relaxation last week - apparently without consulting the Hong Kong government - fuelled concerns about inflation and further strain on infrastructure. Green Sense protested outside the Immigration Department yesterday, demanding controls on the number of visitors crossing the border. The Democratic Party will protest today, citing concerns over inflation and disturbance to city neighbourhoods. The pro-government New Territories Association of Societies, whose honorary advisers include Tam Yiu-chung, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, will call for postponement of the permit rule changes. Secretary for Commerce and Economic Development Greg So Kam-leung said he would exchange views with the Security Bureau and mainland authorities on possible controls. But the chairman of the Immigration Service Officers Association, Ngai Sik-shui, said it would be a complicated issue. "Anyone with the right passport and permit, and with a genuine purpose for travelling, is allowed into Hong Kong," he said. The Immigration Ordinance would have to be amended before any new controls were introduced, he said. University of Hong Kong associate law professor Benny Tai Yiu-ting said Hong Kong was entitled by law to impose immigration controls but there were bigger political concerns. "If Hong Kong bluntly rejected the relaxation, would it affect its relationship with Shenzhen?" he asked. Executive Councillor Bernard Chan said it was time for the Hong Kong and Guangdong governments to communicate on social issues. ^ top ^

China supports HK's access to FTA with ASEAN: minister (Xinhua)
SIEM REAP - China supports Hong Kong's access to the China-ASEAN Free Trade Zone (FTA) as it facilitates the economic integration of the southeastern Asian nations, said the Chinese Minister of Commerce Chen Deming here on Wednesday. Chen made the remarks when speaking to the media at the sidelines of the on-going 44th ASEAN Economic Ministers Meeting in Cambodia's tourist City of Siem Reap. Chen said that Hong Kong's access to the FTA is listed as one of the widely discussed topics during the ministers' meetings. Some of the ASEAN nations had voiced their desires to initiate the negation about Hong Kong's entrance. "Hong Kong is a very important economy in east Asian area in terms of trade and investment," said Chen, adding, "its access to the China-ASEAN FTA will positively facilitate the regional economic integration." According to Chen, Hong Kong's economic advantages lie in its investment environment, strong service industry and its ability to develop the international market. "However, some ASEAN nations have to carefully assess Hong Kong 's access to the FTA as their interests might be hurt by the latter's high level of economic openness and freedom," Chen added. Addressing the opening ceremony of the ministers meeting on Monday, Cambodia's Prime Minister Hun Sen appealed to the ministers to finalize the discussions of Hong Kong's access of FTA and submit it to the ASEAN summit in November for the final approval. ^ top ^

HK gov't unveils new measures to push down house prices (Xinhua)
HONG KONG, Aug. 30 (Xinhua) -- Hong Kong Chief Executive CY Leung unveiled 10 new measures to expedite the sale of subsidized and private residential units to meet public demand, including switching the rent-to-buy scheme to direct sale. Leung, together with Secretary for Transport & Housing Anthony Cheung and Secretary for Development Paul Chan, announced the measures at a press conference on Thursday. Leung said the government is very concerned about the recent surge in property prices, and he hopes the measures meet public aspirations. Under the new measures, The My Home Purchase Plan will be amended by changing the rent-to-buy scheme, to sell the first batch of 1,000 flats in Tsing Yi directly. The flats will be available early next year, and families who earn 40,000 HK dollars (5,155 U.S. dollars) or less a month will be eligible to apply. Another 830 unsold Home Ownership Scheme flats, including 825 in Tin Shui Wai, will also be sold early next year. [...]. ^ top ^



Mainland, Taiwan experts envision closer cooperation in service sector (Xinhua)
Experts from the Chinese mainland and Taiwan met at a cross-strait forum on Monday, highlighting the service industry's new opportunities arising from the mainland's drive to stimulate domestic consumption in the wake of the global financial crisis. Song Xiaowu, president of the mainland-based China Society of Economic Reform, said the mainland and Taiwan can work together to explore the potential of the service sector. He said that the island can use its expertise to tap the vast mainland market, including offering home care services for the rapidly aging population. Wu Chung-Shu, president of Taiwan's Chung-Hua Institution for Economic Research, said the mainland and Taiwan should be more open to economic cooperation. "It is wrong to think that the transfer of technological know-how from Taiwan to the mainland will dent the competitiveness of Taiwan's companies," he said. The Chinese mainland has vowed to boost the contribution of the service sector to the overall economy from 43 percent in 2010 to 47 percent by 2015. The mainland economy, which has long relied heavily on exports and investments in infrastructure, is now facing the challenges of excessive energy consumption and environmental degradation as a result of its rapid growth. Economists believe that a more developed service sector will lessen the adverse effects of fast economic growth and help improve the welfare of the people. Cross-strait trade and investment relations have developed steadily in recent years. The two sides have signed numerous agreements guiding business ties since 2008. Many mainland and Taiwanese businesses have called for closer cross-strait trade and investment ties to dodge the global economic crisis and stimulate economic growth. ^ top ^



Chinese more willing to keep foreign currencies (Xinhua)
Chinese people were more willing to keep foreign currencies and sell their yuan-denominated assets in July, data from the State Administration of Foreign Exchange (SAFE) has indicated. Individuals and institutions exchanged 127.5 billion U.S. dollars in foreign currencies for Renminbi through Chinese banks, while buying 127 billion U.S. dollars of foreign currencies from financial institutions during the month. This resulted in a foreign exchange surplus in banks of 500 million U.S. dollars, according to SAFE. Although Chinese banks swung back to a foreign exchange surplus in July from a 3.6-billion-U.S.-dollar deficit in June, the amount of surplus has narrowed sharply from 5.1 billion dollars in May, 7.8 billion in March, 4.4 billion in February and 19.4 billion dollars in January. The banks reported a foreign exchange deficit of 3.7 billion U.S. dollars in April. Zhao Qingmin, a financial researcher with the China Construction Bank, said banks will no longer see huge foreign exchanges surplus as the market expects the yuan to devalue in the coming months. "Now the Chinese enterprises and residents are more willing to keep their wealth in foreign currencies due to such a market expectation," Zhao said. [...] In the January-July period, overseas business-related proceeds of domestic institutional and individual clients via banks totaled 1.44 trillion U.S. dollars, with 1.35 trillion U.S. dollars paid to overseas businesses, SAFE data showed. Banks' forex surpluses, which make up part of China's foreign exchange reserves along with current account surpluses and foreign direct investment inflow, do not include banks' own foreign exchange transactions or interbank transactions, according to SAFE. ^ top ^

Yuan tipped to replace U.S. dollar, Euro in southeast Asia (Xinhua)
China's currency could be eventually used as an alternative to the U.S. dollar and Euro by southeast Asian countries, experts said. Phathanaphong Phusuwan, a senior official of the Bank of Thailand, said in a seminar on Thai-Chinese trade, investment and finance relations on Saturday that the yuan would likely be used more between China and ASEAN member states in the long run. In the panel discussion co-hosted by the National Research Council of Thailand, Huaqiao University and the Thai-Chinese Culture & Economy Association here, the official of the Thai central bank commented the Chinese currency could possibly replace the U.S. dollar and Euro when it comes to trade, financial and money-exchange dealings throughout the ASEAN community, due in part to the unresolved economic and financial problems in the United States and the European Union. "In the long run from 2015 onwards, trade with Asia will largely increase under the ASEAN-China Free Trade Area agreement, which will influence the use of the yuan and the local currencies. The yuan is then a good alternative for the international trade in the future," said the official, referring to the year in which the regional bloc will become an ASEAN Economic Community. Nevertheless, he said, the role of the Chinese currency in Thailand and other ASEAN states will remain limited in the short and medium terms. Thai merchants have increased their use of the yuan in trade, following the easing of restrictions by the Chinese government, he said. [...]. ^ top ^

Slowdown hits key export hub (China Daily)
An increasing number of companies in Wenzhou, a key manufacturing and export region, have gone out of business, amid difficulties that are even "more serious" than the 2008 financial crisis, an industry leader said. The alert came as Premier Wen Jiabao warned over the weekend that the economy still faces downward pressure. Wenzhou, Zhejiang province, is often referred to as a hub of small and medium-sized enterprises. But it has witnessed a rise in bankruptcies that is even "more serious" than the 2008-09 financial crisis, Zhou Dewen, chairman of the Wenzhou SME Development Association, said. "We have about 3,000 members and more than 10 percent have closed down and about 20 percent are struggling," Zhou said. Many SME owners requested financial assistance and advice from the association, he said. Larger companies are also feeling the heat. According to a report released by the financial and economic committee of Zhejiang Provincial People's Congress, 140 out of 3,998 large enterprises in Wenzhou closed in the first half of the year while 57 percent of those large companies cut production. [...] Ye Jianqing, chairman of Wenzhou Zhenqing Optical, has witnessed a similar trend. "The price of our products keeps declining as China is no longer the only place with low costs," Ye said. [...] After a tour to Zhejiang province on Aug 14 and 15 and another to Guangdong, from Friday to Saturday, Wen called for measures to meet economic goals and warned that the economy could still face turbulence. "Downward pressure is still a major factor and the slowdown may continue for a while," he said. This will affect exports, and "the third quarter will be a critical period" for China to realize the year's trade growth target, Wen said. The target is to expand foreign trade by 10 percent. During the first seven months of this year, China's exports rose by 7.8 percent from a year earlier and imports increased by 6.4 percent year-on-year. In July, export growth slumped to 1 percent, the lowest since 2009. "It will be difficult to meet the 10 percent target," said Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation, a think tank affiliated to the Ministry of Commerce. An index measuring manufacturing activity, published by HSBC, fell to a nine-month low in August, signaling manufacturing may be contracting at a faster pace. "Manufacturing may deteriorate further, until the end of the year, affected by a faster drop in new orders and no significant signs of improvement in the global economy," said Ma Jinlong, an economist and former director of the Wenzhou government's economic research center. [...] During the second quarter, the economy grew by 7.6 percent year-on-year, the least in three years. The government has rolled out a series of measures to stimulate the slowing economy and provide support to companies, including expanding fiscal expenditure, improving loan procedures and lowering tax burdens for companies. Some global institutions, including Bank of America and Deutsche Bank, reduced their forecast for China's economic growth in 2012 to 7.7 percent. Earlier this year, Wen set a target of 7.5 percent for GDP growth. But Wen said "China's economic fundamentals haven't changed, conditions are good and these positive factors will help stabilize growth''. ^ top ^

China launches $372 bln pollution reduction drive (Global Times)
The Chinese government announced on Sunday that it will spend 2.36 trillion yuan ($372 billion) on energy conservation and emission reduction during the country's 12th Five-Year Plan (2011-15). The State Council recently approved the plan, which set a goal of cutting pollution emissions by 8 to 10 percent by 2015 through 10 major projects in energy saving renovation, technology promotion, water recycling and river pollution treatment, according to a report released Sunday on the website of the National Development and Reform Commission (NDRC). The government also plans to reduce energy consumption per unit of GDP by 16 percent, and reduce energy consumption per unit of industrial output by 21 percent. "The new policy can promote the development of new energy through financial support and creating good opportunities for energy enterprises through preferential measures," said Pang Jun, professor at the School of Environment and Natural Resources at the Renmin University of China. "However, apart from the government's financial support, the ability to absorb capital from local enterprises and private investors is significant for the long-term development of environmental protection companies," Pang said. Wu Changhua, director at the Climate Group (China), said that the government has to continue working on specific measures on the details of financial subsidies, technology direction and taxation support, which can fully promote energy conservation and pollution reduction nationwide. ^ top ^

China approves new state-level SEZ in Gansu (Xinhua)
LANZHOU - China's State Council, or the cabinet, has approved establishment of a state-level "new area," a type of Special Economic Zone, in northwestern Gansu Province, the fifth of its kind in the country. Lanzhou New Area (LNA), located in Qinwangchuan Basin in the north of the provincial capital Lanzhou, will serve as an important industrial platform and growth engine to boost the economic development of China's northwest, said an official with the provincial city government on Wednesday. According to the State Council's reply to the new area's establishment application issued on Aug. 20, LNA is expected to focus on strategic adjustment of economic structure and develop a circular economy and energy-saving industries with local characteristics, according to the official. Covering an area of 806 square km, 100,000-population LNA has attracted 90 investment projects so far, with a total volume of 70.7 billion yuan (11.13 billion U.S. dollars), according to statistics released by its management committee. China currently has four state-level new areas including Shanghai's Pudong New Area, Tianjin's Binhai New Area, Chongqing's Liangjiang New Area and Zhoushan Islands New Area in Zhejiang Province. ^ top ^

China's outbound direct investment slows in 2011 (Xinhua)
BEIJING, Aug. 30 (Xinhua) -- China's outbound direct investment (ODI) hit a record high but grew at a slower pace in 2011, according to a government report released on Thursday. The country's ODI increased 8.5 percent year on year to 74.65 billion U.S. dollars in 2011, ranking sixth worldwide, said the report jointly released by the Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange. The annual growth was much milder compared with the 21.7-percent rate recorded in 2010. About 80 percent of the ODI in 2011 went to developing countries, with investment in Europe, Oceania and Africa accelerating and that in North America decreasing, according to the report. China's ODI in Europe rose 22.1 percent year on year to 8.25 billion U.S. dollars in 2011, while that in Oceania surged 75.6 percent to 3.32 billion U.S. dollars and that in Africa jumped 50.4 percent to 3.17 billion U.S. dollars. ODI in North America fell 5.3 percent year on year to 2.48 billion U.S. dollars in 2011. [...] By the end of 2011, China's ODI had accumulated to 424.78 billion U.S. dollars and Chinese investors had set up about 18,000 enterprises overseas, employing 888,000 foreigners with a total asset value of nearly 2 trillion U.S. dollars. [...]. ^ top ^

Weak demand slows China's textile production (Xinhua)
BEIJING - Less-than-satisfying demand both at home and abroad caused industrial production growth in China's textile sector to slow in the January-July period, data released Thursday showed. The sector's gross industrial output expanded 10.9 percent to 3.15 trillion yuan (497 billion U.S. dollars) in the first seven months, down 18.8 percentage points year on year, according to Sun Huaibin, spokesman for the China National Textile and Apparel Council (CNTAC). [...] Domestic sales of China's textile companies reached 2.58 trillion yuan in the first seven months, up 12.5 percent year on year. However, the growth rate was down 20.3 percentage points year on year, the data showed. During the same period, the country's exports of textile garments rose by a marginal 0.3 percent to 141.58 billion U.S. dollars, down 25 percentage points compared to the same period last year, Sun said. The CNTAC forecast that the textile industry will continue to face heavy pressure and slowing industrial production in the future. ^ top ^


DPRK and South Korea

DPRK leader signs order of battle against possible attacks by South Korea, U.S. (People's Daily)
Kim Jong Un, top leader of the Democratic People's Republic of Korea (DPRK), has signed an order of battle to counter possible attacks by South Korea and the United States, the official news agency KCNA said Sunday. Seoul and Washington are staging large-scale war drills targeting the DPRK, Kim said Saturday during a speech marking the 52nd anniversary of the start of the "military-first revolutionary leadership" of his late father Kim Jong Il. "If the enemies fire even a single shell on our inviolable territory and territorial waters, the Korean People's Army (KPA) should deal prompt deadly blows at them and make an all-out counter-offensive to achieve national reunification," Kim was quoted as saying. The KCNA said Kim examined the operation plan and signed it. He also asked the KPA to stay on high alert against "reckless moves" by the enemies. Kim, also supreme commander of the KPA, vowed on Aug. 18 to "turn the west sea into a graveyard of the invaders" during a visit to a front-line artillery unit near the tense western sea border. The South Korea-U.S. joint war games, code-named Ulchi Freedom Guardian, started on Monday and would last for 12 days. Some 56,000 South Korean troops and 30,000 U.S. soldiers are involved. The two countries said the exercises were "defensive in nature.". ^ top ^

DPRK's avant-garde economic zone aspires for new development (Xinhua)
PYONGYANG - Rason Economic and Trade Zone, an avant-garde special economic zone of the Democratic People's Republic of Korea (DPRK), is hoping to push its own development by a high-profile trade fair. The second Rason International Trade Fair showcased electrical equipment, light industrial products, machinery, commodities, cars and motorcycles, both domestic and foreign-produced. China-made cars decorated with red flowers and parked outside the Rason exhibition hall were one of the most popular exhibits, attracting inquiries from many DPRK companies and other exhibition-goers. Those attending ranged from representatives of manufacturers, who paid close attention to product design and quality, to casual viewers, particularly women, who paid more attention to the food, clothes and cosmetics stands. The fair, which was held on Aug. 20-23, attracted more than 110 companies from the DPRK, China, Russia, the Czech Republic and Sweden. At the opening ceremony, a senior local official said the DPRK government would protect foreigners' investment and legitimate rights under laws and regulations in a bid to woo more foreign investment. A promotional video on the special zone's natural geographic conditions, the current development and long-term planning was also screened during an investment-related seminar for exhibitors, companies and foreign investors at the fair. The Rason zone, which is next to Yanbian Prefecture in northeast China's Jilin province, was established in 1991 to boost economic growth through foreign investment, and has a strong Chinese presence. Cars with Chinese license plate are visible in the city, China's currency, Renminbi, is used in the local market, and road signs are in both Korean and Chinese. Chinese tourists have flocked to a beach in the northern part of Rason city, and staff at one hotel said rooms were packed with Chinese customers. Moreover, China has played a key role in infrastructure and transportation projects, which have been increasing in the zone. China would build No. 4 to 6 piers at Rajin Port in Rason, DPRK's major ice-free harbor adjacent to China and Russia, and was using No. 1 and 2 piers, while Russia had leased No. 3 pier, said an official in charge of foreign affairs of the port. Meanwhile, the renovation of a cross-border railway linking Rajin to Russia's Far Eastern border town of Khasan is under way, and a 50-km two-lane road from Rason to Huichun in China's Jilin Province has been built, which will further boost bilateral trade between China and the DPRK. ^ top ^

S. Korea to improve readiness against DPRK's localized provocations, cyber attacks (Xinhua)
SEOUL - South Korea will enhance military capabilities against localized provocations by the Democratic People's Republic of Korea (DPRK) and bolster missile and cyber warfare capabilities, the defense ministry said Wednesday. Under the latest defense reform plan recently submitted to President Lee Myung-bak, military strategies will be based on the so-called "active deterrence" policy which allows preemptive strikes on the DPRK at the onset of aggression, the ministry said in a statement. The military will also boost its readiness against localized provocations, especially around front-line islands near a tense western sea border with the DPRK, the scene of deadly naval skirmishes between the estranged neighbors. The blueprint, which aims to deliver on a set of reform goals by 2030, laid out plans to expand cyber warfare capabilities by increasing the number of personnel at the Cyber Command to 1,000. The proposal, which underwent several revisions since it was initially drawn up in 2005, is also focused on changes to the military's command structure as South Korea prepares to retake the wartime operational control from Washington by 2015. [...]. ^ top ^



Government palace now open to the public (UB Post)
On Saturday August 25, the new government has assembled for the first time. During the assembly, the new government opened the State Ceremony and Honor's Hall of the government Palace and discussed the petroleum and diesel supply, this year's harvest, industry and agriculture, the power supply, road, transportation, construction, urban development and winter preparations. The new government, headed by N.Altankhuyag, made a key decision to open the Government Palace to the public. This decision was made to allow the public to see the statues of great Chinggis Khaan and other heroes as well as historically significant artefacts and gallery in the State Ceremony and Honor's, which was previously closed to the public. In other words, starting from August 26, at 11:40 am, the public will be able to enter the Government Palace from the south side during certain hours and see the state museum where many cultural, traditional, state, civil relations artefacts and evidence are displayed, as well as pay respects to the statue of great Chinggis Khaan and the nine white flags of the state. No fees are required for citizens to enter the Government Palace. This decision was made by the government with the hopes to instil pride of our history, culture and nation as well as to educate and show tourists about the tradition and heritage of our national. This year is the 850th anniversary of the birth of the great Chinggis Khaan. Furthermore, every Saturday and Sunday at 11:40 am, the honorary guards will pay a tribute to the statue of Chinggis Khaan, which means during this time, people will be able to take pictures with the honorary guards. The government also informs the press that the honorary guards will perform a flag ceremony during each holiday special event at 09:00 am. ^ top ^

Harvest to be collected shortly (UB Post)
The Minister of Industry and Agriculture Kh.Battulga has introduced the estimations of this year's harvest. The harvesting this year will be conducted shortly as planned. The Minister of Roads and Transportation A.Gansukh, Minister of Mining D.Gankhuyag and Minister of Power and Energy M.Sonompil were given commissions to prepare the construction of roads and bridges, power and energy supply and petroleum and fuel needed for transporting the harvest. This year, Mongolia has planted 306 thousand hectares of wheat, 16 thousand hectares of potato, seven thousand hectares of vegetables, 32 thousand hectares of oil plants, 11 thousand hectares of nutritional plants and 712 hectares of fruit. The press and information department of the government informs that this year was plentiful in rain and that if the weather continues to be good, the harvesting work will be ready by September 10. ^ top ^

Kharkhorum will cooperate with Iranian Province (MONTSAME)
Kharkhorum city of Mongolia and Zanjan region of Iran established a sisterhood relationship on August 30. The memorandum on it has been signed by the Foreign Affairs Minister of Mongolia, L.Bold and a governor of Zanjan province Mohammed Radfi Nejad. ^ top ^

Future Peace Ambassadors assembled in Mongolia (UB Post)
A total of 104 kids from Japan, China, Russia, South Korea, North Korea and Mongolia have gathered together to celebrate world peace and friendship for the ‘Kids' Asian Union Camp 2012' assembly, which was held for the 12th time in Mongolia. The JCI organization in Mongolia organized the event which has the aim of promoting understanding about peace, solidarity and friendship between the above mentioned countries from young age. Board Member of JCI, T.Odnyam, stated that children attending the event aged between 6 to 12, lived together and helped each other while making friends. Children made and offered each other their country's traditional meals and foreign kids were introduced to customs, traditions and the lifestyle of Mongolia. On Monday, the kids expressed their opinions by doing drawings at Sukhbaatar Square. Mongolian kids drew some paintings and narrated it with ‘We do not need gold! We need water!' and South Korean kids with ‘Don't throw garbage in the river!' One student from ‘Orchlon' secondary school Ts.Enkhjin said, “I am attending this activity for the second time. I lived together with kids from Japan and South Korea and we made very good friends. Being friends means not quarreling. Let's create good things together.” Miroslova Cherdonova commented that, “It was nice and very interesting to live with my Mongolian, South Korean and Chinese friends in a Mongolian ger. Learning each others' culture, history and traditions and befriending each other is one of the base factors of peaceful coexistence, to dream and live happily. ^ top ^

MNT 9.2 billion for local election (NEWS.MN)
A.Bakei, Chairman of Standing committee on State Structure met with N.Luvsanjav, chairman of General Election commission (GEC) and Ch.Sodnomtseren, secretary of GEC and changed a view on upcoming local election preparation. According to the draft of law on Local election which submitted to the parliament local election scheduled in November. A.Bakei noticed that GEC should present required budget for local election as soon as possible. “Irregular session of parliament which scheduled start on August 29 will discuss an amendments to the 2012 budget. The discussion of budget include expenditure of local election” said A.Bakei. Chairman of GEC N.Luvsanjav expressed to be prepare ballot list need more time. “To print 50 different ballot list for June 28 election was spent 10 days. For local election needed to print almost 1000 different ballot list. Therefore GEC needed help from local governors. GEC suggested to the representatives of local governor's administration came to Ulaanbaatar and confirm ballot list of their certain constituencies” said N.Luvsanjav. According to the draft law on Local election around MNT 9.2 billion will spent to the local election.

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Daniel Stadelmann
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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