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
  30.3-5.4.2013, No. 469  
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DPRK and South Korea


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Foreign Policy

Commentary: Xi's maiden foreign tour historic, fruitful (Xinhua)
Chinese President Xi Jinping concluded his maiden foreign tour as China's head of state Sunday, which has been widely perceived as historic and fruitful. Xi visited Russia, Tanzania, South Africa and the Republic of the Congo on March 22-30, and attended the fifth BRICS summit on March 26-27 in Durban, South Africa. From the historical perspective, Xi's talks with top leaders of the four countries and his speeches delivered in Russia, Tanzania and the Republic of the Congo have shown China will unswervingly follow the path of peaceful development, cherish its traditional friendship with Africa and strengthen ties with neighboring countries such as Russia. All four countries attached great importance to Xi's visit, which laid the foundation for the success of the tour. In Russia, besides two banquets held separately by President Vladimir Putin and Prime Minister Dmitry Medvedev, President Xi was also invited to visit the Russian Defense Ministry, a first for a foreign head of state. Tanzanian President Jakaya Mrisho Kikwete and Congolese President Denis Sassou Nguesso met Xi at the airport, and South African President Jacob Zuma described Xi's visit as "absolutely important." The top Chinese leader also sent a clear message to the international community that China and Africa have been "a community of shared destinies," and they will forever be reliable friends and sincere partners. As for the tour's fruitfulness, China signed dozens of cooperation agreements in the fields of trade, energy, science and technology, agriculture and culture with the four countries. During the BRICS summit, which groups Brazil, Russia, India, China and South Africa, the leaders agreed to set up a BRICS development bank, a Contingent Reserve Arrangement, a business council and a think tank council, and unveiled an action plan on further cooperation in nearly 20 fields. Moreover, Xi's trip has contributed to enhancing China's friendship with other BRICS members and African countries. In addition to talks within BRICS, Xi had a breakfast meeting with leaders from 14 African countries, with the discussions focused on how to promote China-Africa relations. The Chinese president also pledged to provide zero-tariff treatment for 97 percent of the exports to China from the least developed nations that have diplomatic ties with China, and all related measures would be in place by 2015. Xi's remarks, like "Whether the shoes fit or not, only the wearer knows" and "Domestic affairs of a nation should be decided by its own people, international issues should be discussed by the countries concerned," which are widely applauded on the Internet, have brought him closer to ordinary people in the four countries. Xi's visit has promoted the overlap of the Chinese dream of national rejuvenation and the world's dream of pursuing prosperity, and the trip will be recorded in China's diplomatic annals. ^ top ^

Chinese army urged to strengthen combat preparedness (Xinhua)
A senior Chinese military official has called on the armed forces to strengthen combat preparedness and ensure victories in wars. Fan Changlong, vice chairman of the Central Military Commission (CMC), made the remarks during an inspection tour of troops stationed in east China's Jiangsu, Fujian and Zhejiang provinces. The army should always maintain its readiness and fighting abilities to ensure victory, Fan said. He urged all military staff to comprehend and implement the key points conveyed in a speech last month by Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee and chairman of the CMC. "Military officers and soldiers must be absolutely loyal, pure and reliable, and firmly follow the directions of the Central Committee of the CPC, Central Military Commission and chairman Xi," Fan said. Fan is also a Political Bureau member of the CPC Central Committee. He urged military staff to step up training, especially in complex situations such as electromagnetic environment and field operations. Training must be strict and targeted to meet real wartime needs rather than a show, he said. ^ top ^

Xi meets Saudi Arabia deputy defense minister (Xinhua)
Chinese President Xi Jinping on Tuesday met with Khalid Sultan, deputy defense minister of Saudi Arabia. Xi, also chairman of the Central Military Commission, reviewed the smooth growth of China's ties with Saudi Arabia since the two countries forged diplomatic relations in 1990, citing frequent high-level visits, fruitful cooperation in trade, the economy and energy, and close coordination in international affairs. Xi underscored China's commitment to developing stronger ties with Saudi Arabia. On the military front, he noted that China and Saudi Arabia have worked more closely in recent years. The stronger military cooperation between China and Saudi Arabia benefits the bilateral relations and works for world and regional peace and stability, according to Xi. The president called for more joint efforts to upgrade military-to-military relations. Khalid underlined the solid friendship between the two countries and bilateral efforts to safeguard world and regional peace and stability. The Saudi deputy defense minister said Saudi Arabian leaders place great importance on developing ties with China and would like to deepen bilateral friendship and cooperation. Khalid arrived in Beijing on Monday for a four-day China visit. ^ top ^

Signs of thaw appear in Sino-Japan relations ahead of Beijing visit (SCMP)
China and Japan are showing signs of thawing relations, as the two Asian powers have resumed cultural exchanges after their long and heated row over disputed islands in the East China Sea. The former president of Japan's House of Councillors, Satsuki Eda, is to visit Beijing this month and meet with Chinese Education Minister Yuan Guiren and Culture Minister Cai Wu, the Kyodo News Agency reported yesterday. Eda, who now heads the Japan-China Friendship Centre in Tokyo, was also planning to meet with newly appointed foreign minister, Wang Yi, a fluent-Japanese speaker, the report said. The report came during a visit to Japan by Li Xiaolin, the president of the Chinese People's Association for Friendship with Foreign Countries and the youngest daughter of former president Li Xiannian. Li reportedly went to Japan on Sunday and planned to stay until Friday to "participate in cultural events". She was expected to give Japanese political figures a message from President Xi Jinping about bilateral ties. […] Yang Bojiang, director of Japanese studies at the China Institutes of Contemporary International Relations, called the recent visits warm-ups for future meetings between the countries' leaders. "Neither side wants the overall trend of improving relations to be disrupted by the territorial dispute," Yang said, adding that cultural and non-governmental exchanges were of mutual interest to both countries. Exchanges between the two countries have been significantly reduced since Japan's purchase last year of uninhabited islands in the East China Sea that are known to Beijing as the Diaoyus and to Japan as the Senkakus. The tensions have fuelled fears of a military confrontation between the countries. Most recently, Japan's coastguard reported that three Chinese surveillance vessels were patrolling near the contested islands in a show of force. It was the 35th such incident since Japan moved to assert its control in the area. […] Liang Yunxiang, an international relations specialist at Peking University, said the resumption of cultural exchanges were a sign that all-out war is not a possibility between China and Japan, and even that a small-scale conflict is unlikely. […]. ^ top ^

China, ASEAN agree to develop code of conduct in South China Sea (Xinhua)
All participants in the 19th China-ASEAN (Association of Southeast Asian Nations) Senior Officials' Consultation have agreed to work toward a code of conduct in the South China Sea. A Chinese Foreign Ministry press release on Tuesday said after the conclusion of the consultation it was agreed that all parties will commit themselves to fully implement the Declaration on the Conduct of Parties in the South China Sea. They will make joint efforts toward "a code of conduct in the South China Sea" and continue to exchange views on the issue. According to the press release, China and ASEAN also agreed to co-host celebrations on the 10th anniversary of the establishment of the China-ASEAN strategic partnership and further expand friendly communication and cooperation in all fields. ^ top ^

North Korea's nuclear games endanger China (Global Times)
The constant rhetoric of war from North Korea following the latest UN condemnations may seem ridiculous to most people. But it has its own logic, and not an insane one. In fact, the third nuclear test, the satellite launch last December, and the recent overwrought language on the US-South Korea joint drills, all reflect North Korean leader Kim Jong-un's hopes to kill two birds with one stone. Internationally, North Korea aims at dragging the US back to negotiation table and gaining more aid from the US by playing the nuclear card. Despite North Korea's tests and warnings, Kim expressed his eagerness to get a phone call from US President Barack Obama during former NBA star Dennis Rodman's North Korea visit in late February. Internally, Kim can consolidate his leadership through the series of tough actions against the US and South Korea. The shake-up of the military last July, with the top commander Ri Yong-ho relieved of all his duties, showed the power struggle in the core leadership after Kim was sworn in as the top leader. The decades-long "military first" policy has already helped the military grow into the mightiest interest group in North Korea, and one whose support Kim desperately needs. Kim also knows that North Korea has little chance to experience Iraq or Libya's fate because of China. The Sino-North Korean Mutual Aid and Cooperation Friendship Treaty signed in 1961 declares the two countries should "guarantee to adopt immediately all necessary measures to oppose any country or coalition of countries that might attack either nation." Hence China will try its best to stop any military attacks against North Korea to avoid being involved in unnecessary military confrontation with its trade partners like the US and South Korea, and to avoid the huge economic and human losses that the Korean War (1950-53) caused. North Korea still carries strategic importance to China. And the point is underestimated by those Chinese scholars who advocate abandoning North Korea. North Korea still acts as a buffer. If North Korea collapses and Kim is replaced by a pro-US regime, it will pave the way for the US to redeploy its forces in South Korea to China's northeast border, which will be a big security danger when the US and China lack military mutual trust. China also has to keep the Northeast stable. A flock of North Korean refugees would throw the region into disorder and disrupt an economy that is now aspiring to take its old place as China's industrial heartland back. Therefore, a key priority for China is to ensure the Kim regime's survival and prevent North Korea from collapse. But should China continue to be a patron of North Korea, no matter what it does? Even if North Korea's nuclear development is only targeted at the US, its nuclear programs will bring huge risks to China rather than the US. The third nuclear test in February was conducted only just over 100 kilometers away from China's northeast border. Though Chinese authorities appeased the public by swearing the mountains along the border could effectively prevent nuclear radiation spreading to China, the possibility that nuclear leakage may pollute underground water can't be ruled out. The underground water safety is not only closely linked with the Northeast China's drinking water, but also a hidden danger for China's food safety and even food security. In as early as 2010, the Chinese central government issued a document pointing out that Northeast should be built up as a pillar of national food security. In 2011, the total grain output of the Northeast reached 108 million tons, accounting for one-fifth of the nation's total. Japan's Fukushima nuclear disaster is the latest lesson. Fukushima prefecture, where agriculture is a pillar industry, is highly contaminated. Food production has been severely impaired. China can't afford to risk a replication of the Fukushima disaster in the Northeast. What China should do now is to protect North Korea by offering nuclear umbrella just as the US does to Japan and South Korea, but also force it to accept China's advice to abandon nuclear programs. If a fourth nuclear test is conducted, China will face greater risks than any other country. ^ top ^

Chinese, Canadian PMs pledge to lift ties (Xinhua)
Chinese Premier Li Keqiang and Canadian Prime Minister Stephen Harper agreed Tuesday to advance relations between their countries and enhance cooperation in various areas. During a telephone conversation, Harper said Canada hopes to build upon its good ties with China and further advance bilateral relations by strengthening communication and promoting cooperation in trade, investment and other areas. For his part, Li noted that bilateral ties have made headway in recent years, with remarkable breakthroughs in trade and economic cooperation, and are now at a new historical starting point. China values its relationship with Canada, and stands ready to work with the Canadian side to enhance political mutual trust, accommodate each other's concerns, and elevate their strategic partnership to a higher level on the basis of mutual respect and equality, he said. China and Canada are two countries in the Asia-Pacific region, which has extremely high potential for further development, the Chinese premier said. The two sides should tap their complementary strengths, jointly create a market of fair competition, and cooperate in high-tech and other fields, he added. They also should promote the dynamic balance in bilateral trade, deepen and enrich cultural and people-to-people exchanges, and actively expand converging interests so as to translate their enormous cooperation potential into tangible win-win results, Li said. The two also exchanged views on international issues of mutual interest. ^ top ^

Gillard leads delegation to Beijing in bid to put Australia at centre of Asia (SCMP)
Australian Prime Minister Julia Gillard will lead a heavyweight team to China today touting not just better ties and trade but also the ambition of putting Asia at the heart of Australia's future. "I'll be leading the most senior Australian political delegation ever to visit China," Gillard told foreign correspondents on the eve of her departure. "I will be among the first Western leaders to meet the new leadership," she noted. Foreign Minister Bob Carr, Trade Minister Craig Emerson, who is also responsible for Australia's Asian Century policy, and Financial Services Minister Bill Shorten are among senior politicians on the six-day trip. "I'll be promoting our trade and economic interests and sharing perspectives on global and regional economic and security challenges," Gillard said. She will meet President Xi Jinping at the Boao Forum for Asia in Hainan and will have talks in Beijing with Premier Li Keqiang. Gillard said she wanted not only "to celebrate our existing strong relationship and its underpinnings … but to look ahead to how we can build the comprehensive relationship envisioned in our Asian Century white paper, including how leaders can help deliver a relationship of greater depth and durability in a more complex future". "The timing of this visit so soon after the new leadership has entered into office is deliberate and reflects the importance of our rapidly evolving relationship with China," she added. "And more broadly, it reflects the centrality of Asia in the story of our nation for the 21st century." [...] Gillard underlined that her second visit to China followed trips to India, Japan, Indonesia, South Korea, Malaysia, Vietnam and Singapore as her government sought to bolster Australia's standing in the region. [...] China is Australia's largest trading partner, with two-way goods and services worth A$128 billion. It also provides the greatest number of overseas students to Australia, with 150,000 enrolments in 2012, and is the second largest source of overseas visitors - with 626,000 last year. ^ top ^



Domestic Policy

China steps up monitoring after more H7N9 bird flu cases (Xinhua)
Authorities in Chinese regions have ordered health institutions to step up monitoring of H7N9 bird flu as four more cases were reported Tuesday. Four people in east China's Jiangsu Province have been confirmed as being infected with the lesser-known H7N9 bird flu, bringing the total number of infections in the country to seven. Statistics on pneumonia cases caused by unknown reasons will be reported daily in Shanghai where two people died from the first known human infections of the bird flu strain, the municipal government said in a press briefing Tuesday. [...] The health authorities in Jiangsu have designated 16 leading hospitals to accept new cases in a bid to offer better treatment and reduce the mortality rate. The health bureau in Beijing has ordered hospitals to include the testing of H7N9 bird flu in routine monitoring and to train hospital staff on how to treat pneumonia caused by unknown factors. Health authorities in Shandong Province have ordered morning tests of fever, cough and other respiratory symptoms at schools, nurseries and poultry farms. The four patients, from four cities in Jiangsu Province, are in critical conditions and under emergency treatment, the Jiangsu provincial health bureau said Tuesday in a statement. The four were confirmed as human infections with H7N9 avian influenza by an expert team summoned by the provincial health bureau, based on clinical observations, laboratory tests and epidemiological surveys Tuesday afternoon, the statement said. No mutual infections were discovered among them. A total of 167 people who had come into contact with the four showed no symptoms of fever or respiratory illnesses, it said. […] On Sunday, three H7N9 bird flu cases were reported, two in Shanghai and one in Anhui, the first human infections of the bird flu strain. The two in Shanghai died and the one from Anhui is in critical condition and under treatment in Nanjing. It is unclear how the three got infected, and no mutual infections were discovered among them, said the National Health and Family Planning Commission Sunday. No abnormalities were detected among 88 of their closest contacts. The subtype of H7N9 bird flu virus has not been contracted to human beings before. The virus shows no signs of being highly contagious among humans, according to the clinical observation on the cases' close contacts. However, as only three cases of human infection of H7N9 have been found, relatively little research has been done on it. […]. ^ top ^

Experts expect drought to last until May (China Daily)
The severe drought in parts of northwestern and southwestern China is likely to continue into May because of the hot, dry weather, authorities said. Higher temperatures and low rainfall are forecasted for those regions this month and next, the State Flood Control and Drought Relief Headquarters said on Tuesday. By Tuesday, about 6.61 million people, mainly in Yunnan, Gansu, Henan, Sichuan and Hubei provinces, did not have adequate drinking water because of the drought, which has also affected 7.3 million hectares of farmland, the agency said. "At present, the drought in the whole country is light compared with previous years," said Zhang Xu, an official at the agency, at a news conference in Beijing. "But it is severe in some provinces, such as Yunnan and Sichuan." Zhou Xuewen, who is in charge of project planning at the Ministry of Water Resources, said that the weather and lack of efficient reservoirs are the main reasons for the continued drought in parts of China's southwest in recent years. China launched a plan to construct water conservancy projects in Yunnan, Guizhou, Sichuan, Guangxi and Chongqing to improve water storage capacity in 2010. "The construction of large- and mid-sized reservoirs always takes three to four years, so there will be some wait before those projects can be used for drought relief," Zhou said. Authorities' top concern now is guaranteeing a sufficient supply of clean drinking water, he said. Since the drought has not struck the major grain-producing areas, it will have only a limited effect on grain production, he added. ^ top ^

China suffers smoggiest March in 52 years (Xinhua)
China has just faced its smoggiest March in 52 years, announced the China Meteorological Administration (CMA) on Tuesday. Nationwide, an average of 3.3 smoggy days were registered in March, 1.1 days more than the same period in normal years, the CMA said. Meteorologists attributed the record to ridges of high pressure that took control of the weather in most parts of the country. There was no strong wind to disperse the smog, said Chen Zhenlin, an official from the CMA. Since the beginning of this year, smog has engulfed large areas of China on 10 occasions, mostly in its central and eastern regions. The polluted air usually lingered for more than three days. It stayed for up to 15 days in some areas. The air pollution reduced visibility on roads and led to a surge in respiratory illnesses, particularly among children and the elderly. The causes of the smog are rather mysterious, though experts continue to cite excessive emissions and terrain conditions that trapped pollution when there was no ample wind to clear it. ^ top ^

Let internal factions emerge as step to political reform, writer urges (SCMP)
The Communist Party should allow internal factions to campaign openly for their political ideals as a first step towards political reform and building constitutional democracy, says an expert on the party's history. The party does not allow members with different political leanings to organise themselves but stresses individuals must be loyal only to the party, says Yang Jisheng, a 72-year-old retired Xinhua journalist. Political activities organised by individual members are seen as a cardinal sin of "splitting the party" and are strictly forbidden. "But in reality, it's impossible not to have factions in a party," said Yang, a liberal-leaning party member of 49 years. Yang believes that enabling members with different aspirations to legitimately form factions and engage in their own political campaigns, and even elections, would usher in much-needed checks and balances within the party - a necessary step in reining in rampant graft and restoring its legitimacy in the eyes of ordinary people. It would be "a big step forward" if the party constitution could acknowledge the existence of factions and set rules for political competition, Yang says. Having competing factions would create the conditions for multi-party democracy in the future, he adds. […] Yang says there are huge risks in enacting political reform in a country like China, but holding back from reform means social conflict will only escalate into political instability. But if the party could initiate gradual political reform, it would be the least costly and most positive solution for the country and its people. "If it can carry out top-down reform of its own accord, it will cause the least shock [to the political system]," Yang said. Democratisation initiatives within the party - such as separating the functions of the party and the state, direct election of people's congress representatives and party cadres, and granting members genuine freedom to air dissenting views - are all necessary steps towards political stability, Yang argues. Rampant corruption among officials is a key source of social discontent and there is little political accountability under the one-party rule. Top leaders have often warned against the danger of graft. In President Xi Jinping's first speech to the elite Politburo as party chief in November, he said corruption could "doom the party and the state". However, gradually introduced political reform would avert such a fate, Yang says. […] Yang adds that the Nationalist Party, or the Kuomintang, gave up one-party rule decades after fleeing to Taiwan, but still managed to return to power in democratic elections. "If you don't go through this transformation, it's impossible to spurn the corrupt forces," Yang said. "But when you have stepped down, you really have to genuinely work for the interest of the people, or else you won't be in power again." Yang's best-known book, Tombstone, which chronicled the Great Famine (late 1958 to 1962) that claimed at least 36 million lives, notes the dangerous consequences of unchecked power under Chairman Mao Zedong's rule. The central government needs to relinquish more control over the economy and the administration of the country, Yang says. The latest government restructuring plan to merge several ministries in an effort to cut bureaucratic red tape will be futile if the government fails to extricate itself from what should be left to the private sector, he adds. "Our government is omnipotent - it has too much administrative power," he said. "If this power isn't curbed, if its job functions don't change, then the amalgamation wouldn't be very meaningful." Beijing's excessive administrative power over an array of sectors has resulted in rampant corruption, with many officials trading on their connections to wield influence in politics and business to accumulate vast wealth. The national leaders should differentiate between "what a government should or should not do" if they want a genuine market economy and lean government, says Yang, who has long insisted that political reform and market economy go hand in hand. "A small government is a strong government," he said. ^ top ^

Journalist suspended over FT article asking China to abandon North Korea (SCMP)
A deputy editor at a newspaper affiliated with the Central Party School has been suspended from duty over an article he wrote for the Financial Times on February 27 calling for China to abandon North Korea, according to a person close to him and a media report. Deng Yuwen, a deputy editor at the Study Times, told South Korea's Chosun Ilbo that he had been suspended indefinitely because of the controversial article but was still being paid by the newspaper. "I was relieved of the position because of that article, and I'm suspended indefinitely," Chosun Ilbo quoted Deng as saying. "Although I'm still being paid by the [newspaper], I don't know when I will be given another position. In an opinion page article in the Financial Times, Deng said. North Korea's third nuclear test was a good moment for China to re-evaluate its long-standing alliance with the Kim dynasty and he gave several reasons why China should give up on Pyongyang and press for the reunification of the Korean peninsula. "A state-to-state relation based on ideology is dangerous because China and North Korea, two socialist countries, differ much more than China disagrees with the West," Deng wrote. "Another reason is that a national security strategy regarding North Korea as a geopolitical ally is out-dated because such an alliance would draw China into a war with the United States over North Korea's nuclear programme." […] Deng told Chosun Ilbo the foreign ministry was "very upset" by the article and called the Central Party School to complain. […] Deng's call for China to abandon North Korea underscores rising discontent in the Chinese intelligentsia over how little sway Beijing now holds over its increasingly provocative long-time ally. Zhang Yunling a Chinese Academy of Social Sciences specialist in Asia-Pacific affairs, said Beijing's policy on North Korea had hit a snag and China's endorsement of the latest United Nations resolutions against the North indicated a shift in China's long-term stance. However, Zhang said that engaging North Korea was still in the best interests of all countries involved. "What does a suggestion of abandonment mean exactly? Did he imply Beijing was ready for a war in the region by abandoning North Korea?" Zhang asked. ^ top ^

Air pollution sped death of 1.2 million in China (Global Times)
PM2.5, airborne particles with a diameter of less than 2.5 microns, contributed to the deaths of 1.2 million people in China in 2010, according to a report released Sunday by a US research institute. The report by the Health Effect Institute, a nonprofit organization, makes fine particle air pollution the fourth leading cause of premature death in the county that year. Nearly half of the deaths were caused by brain diseases related to blood circulations, 23 percent from heart diseases and about 16 percent of the deaths were caused by chronic pulmonary diseases, according to the report. A poor diet, high blood pressure and smoking were the top three contributions to premature death in the country in 2010. Fine particulate outdoor and air pollution caused the premature deaths of 3.2 million people worldwide, collectively reducing their lives by 7,600 years, said the report. The report added that two thirds of the world's health concerns caused by air pollution occurred in developing nations in South, Southeast and East Asia. Bob O'Keefe, vice president of the institute, said during a press conference Sunday that the report shows air pollution currently affects people in China and other developing countries in Asia the most. "It means that we have to take effective actions to reduce people's exposure to air pollution," he added. Earlier this year, major cities in northern parts of the country such as Beijing weathered periods of heavy smog, and PM2.5 and its health hazards have become a top concern for the public. On several occasions this year, PM2.5 readings in Beijing reached 1,000, while a recommended reading for good health suggested by the World Health Organization is 20. "Such large scale smog has rarely been seen in the world, as the combined pollution involving PM2.5 and ozone have hampered the economic development in regions including the Capital Economic Circle, the Yangtze River Delta and the Pearl River Delta," Hao Jiming, a researcher with the Chinese Academy of Engineering, said Sunday. ^ top ^

2 cities in bid to cool real estate market (China Daily)
Authorities in Guangzhou and Shenzhen, two large cities in Guangdong province, announced detailed regulations on Sunday to further cool the real estate market amid expectations of rising property prices this year. According to the regulations, Guangzhou, the provincial capital, will provide land for residential use of up to 5.95 square kilometers this year, up 1.47 sq km compared with the average during the past five years. Those without hukou in the city are permitted to buy houses after they have continually paid tax or social security fees there for one year or longer two years before they buy a house. "The measures are aimed at better cooling down the property market by providing more land for residential use," said Huang Wenbo, spokesman for the Guangzhou Land Resources and Housing Administrative Bureau. Land for construction of small- and medium-sized dwellings will account for at least 70 percent of the total for residential use, according to the regulations. The regulations in Guangzhou did not mention detailed measures to limit property prices. But Huang said the city's rules are strictly in line with the central government's policies. "We will strictly implement the 20-percent tax on capital gains from property sales," he said. In contrast, authorities in Shenzhen have planned to limit the price increase of new properties below the city's per capita disposable income target, which was set at 9 percent by the local people's congress earlier this year. However, authorities in Shenzhen did not explain how they will implement the 20-percent tax on capital gains from property sales. The southern special economic zone also planned to build some 40,000 units of affordable government-subsidized properties this year. Before Guangzhou and Shenzhen's detailed rules, Beijing, Shanghai and Chongqing, along with Hefei in Anhui province and Xiamen in Fujian province, also announced on Saturday how they will implement the central government's regulatory plan set earlier in March. In Beijing, single adults with the capital's hukou — household registration — are allowed to buy only one apartment, as opposed to two previously. Meanwhile, banks in Shanghai will be banned from giving loans to residents who own two apartments and are attempting to buy more. The city will strictly follow the 20 percent tax policy and increase the down payment and mortgage rates for second-home purchases, depending on market conditions. Zhou Feng, a senior manager with the real estate agent MyTopHome in Guangzhou, said transactions of secondhand properties in the city will decline after the rules are announced. "A large number of residents sold their properties before the regulation finally took force. So transactions in the following months will decrease," he said. Transactions of pre-owned homes in the city's Huangpu district have increased dramatically since the central government announced further policies to cool the real estate market, with deals for 2,680 homes signed, sources with the Guangzhou Municipal Land Resources and Housing Administrative Bureau said. Due to relatively lower property prices in Guangzhou compared with Beijing and Shanghai, the regulations in the southern Chinese city were slightly loose, he said. "Most buyers in Guangzhou have not owned property before. So there is high demand for houses, rather than investment property," Zhou told China Daily. Internet users said the latest rules announced by major cities were just more of the same. […]. ^ top ^

Urbanisation leaving some homeless (SCMP)
Twenty minutes' drive from Shanghai's glitzy financial district, dozens of migrant workers are preparing to abandon homes in old shipping containers, as one of the more unusual solutions to China's housing shortage faces the wrecking ball. Cheap, crowded neighbourhoods are being cleared across China as part of a stepped-up "urbanisation" campaign by China's new leaders. The country aims to spend an estimated US$6 trillion on infrastructure, including housing, as a projected 400 million people become urban residents over the next decade. But in an ironic twist, the clearance of so-called "villages within cities" removes cheap housing stock for the very people targeted to fuel that migration, without providing sufficient replacement units. The land is sold by municipalities to developers who generally erect expensive apartment towers. That throws into question how the government can achieve its ambitious goal. "On the one hand, the law doesn't allow former farmers to expand housing for migrant workers, on the other hand local governments don't have the money to build affordable housing either," said Li Ping, senior attorney for Landesa Rural Development Institute in Beijing. About 130 million Chinese migrants live in tiny, sub-divided rooms rented out by former farmers whose villages have been swallowed by sprawl, according to government surveys. Policies to provide government-built housing while razing these shabby "villages within cities" result in a net loss of housing units, according to urban planners and academics, while choking off the private rental market that for decades has enabled China's massive urban migration. The dilemma poses harsh choices for those who have made lives in the cities on the slimmest of margins, such as the migrants in the converted shipping containers in Shanghai. "They can't just come and ask me to move. I have so many products here that I sell. So much stuff worth at least tens of thousands of yuan," said Li Yanxin, a migrant from nearby Anhui province who runs a small convenience store out of his container. His profits - and therefore his ability to pay for his teenager's education - depend on the low rent he found in the container village. Local officials put muscle behind a policy of clearing such sites, often declaring these dwellings illegal by noting non-agricultural land allocated to villagers cannot be used for commercial purposes. Land reclassified as "urban" can be sold at a huge profit. "Not everyone can live in a high rise. Especially those of us who work in recycling businesses," said Zhang Baofa, who rented out the used shipping containers in one of the more creative solutions to Shanghai's shortage of cheap housing. Local officials, embarrassed by photos of the container village circulating on the internet, have vowed to remove the site within days. On Thursday, after four years of operation, they declared Li's store to be unregistered. "This is zoned as village land. I borrowed the land, bought the containers. I rented it out. I would know if it were illegal," Zhang said. Chinese cities lack the visible slums of other developing countries, thanks in part to communities such as Xinzhuang in Beijing that collectively house about 3.4 million migrants just within the capital. A high whitewashed wall and strip of green lawn hide Xinzhuang's 10,000 residents from surrounding luxury apartment blocks. Three black chickens scratch along a filthy gutter of blue-grey water next to the public latrine. Rooms of about 12 square metres house families of three, for an affordable 500 yuan (HK$625) a month. "A regular apartment would be more comfortable, but it's about 2,000 yuan a month. That's too much for the type of people who live here. They want to save what they can. We fill the lowest niche," said landlord Dong Gang, whose former farmhouse is now a two-story concrete structure divided into about 30 makeshift rooms. He has rented them to migrants for 20 years. "In Beijing over the last two years they've been 'cleaning up' crowded tenements, which raises rents and forces many out," said Hu Xingdou, a specialist in migrant issues at the Beijing Institute of Technology. ^ top ^

We don't need no reeducation (Global Times)
"It's worse than being in prison!" This is one way that 49-year-old Li Long described the year he spent in a labor reeducation center in Nanjing, Jiangsu Province. Li finds it difficult to talk about this period of his life, during which he worked 15 hours a day on a shoe assembly line with a 30-minute break for eating, smoking and so-called rest. He is, however, eager to explain that the accusations against him were fabricated and how he is trying to prove his innocence through subsequent lawsuits. "I was sentenced to labor reeducation because I reported gangsters and local government officials who protected them," he told the Global Times. "And I will fight using the law as my weapon to defend my rights." Li was once a local business owner in Nanjing. […] But his life changed on April 10, 2003, when a dozen gangsters broke into his house and held his nephew and sister-in-law at gunpoint. The problems began in 1999 when he refused to move out of his 1,000-square-meter house in Nanjing's Xuanwu district. Following the 2003 incident, thugs followed and harassed Li and his family. He received an eviction order from the Xuanwu district government in May 2006 which said he had to move out of his house or it would be forcibly demolished. Li filed a lawsuit a month later against the district government demanding that the court overturn the administrative order, to no avail. After an unsuccessful appeal, Li petitioned the National People's Congress and Jiangsu Provincial People's Court, which instructed the Nanjing Intermediate People's Court to rule the order illegal by 2008. Over the course of his legal activities, Li, who has only a junior high school education, learned to use a computer and posted reports identifying the gangsters that broke into his house and the officials who protected them. In September 2009, Li was taken to the Xuanwu district police station for an interrogation, where he says an officer struck him several times and laughed at his attempts to file a lawsuit against government officials. The officer had also told Li that nothing would ever come of his complaints, even if he were to commit suicide in Tiananmen Square. Later, he wrote online that he would rather jump than keep quiet about the injustice. In 2010, the court finally ruled that the forced demolition order was illegal, but Li's nightmare had only just begun. "Several police officers stormed in when I was having dinner with some friends on April 16, 2010. They pointed three submachine guns at me and said if I moved a muscle, they would open fire," Li said, recalling the incident that took place nearly three years ago. He said it still feels like it happened yesterday. "I knew it was about the online posts, but I was not afraid of them because I didn't violate any laws," Li said. Police officers then took him to a detention center, where he stayed until April 27. He was then told that he would be sent to a labor reeducation center for his online activity and that his words had disturbed the public order. Li and his lawyers tried to show that he was being held against the law, but authorities refused to recognize their argument. An official at the detention center actually called Li's fiancée to say he would be released on April 27 as Li was arguing for his innocence. Detention center authorities promised him his freedom under the condition that he drop his lawsuits against government officials, police and gangsters. Li refused and was put into a forced labor center on May 27 without a formal notice from the city's committee, which is supposed to make such decisions. "I worked 15 hours a day and only got a three-day break for the Spring Festival. I worked nonstop on other holidays. If I got sick, I still had to work," Li said, adding that a fellow inmate once broke a finger on the assembly line and had to keep working after receiving very basic medical treatment. "Men made shoes and women made jeans. Six yuan ($1) in food subsidies was allotted from the government every day, but the center used less than half of the money and fed us boiled vegetables without using a single drop of oil. The output was sold to foreign countries but we didn't get paid and no one knows where the income goes," Li said. He said he also discovered that many of his fellow inmates were placed in the reeducation center without due process. Li has prepared more than 100 pages of documents in relation to his case, and he can spout off legalese in a way that makes the listener forget his humble education. With 23 administrative suits and two civil cases of his own, Li never imagined that others would approach him for help. It came as a surprise that he was building a reputation as a petition pioneer online. After he was released from the detention center in April 2011, strangers began seeking his help. "I helped them write about their cases online because I do believe this helps. I offered them free representation in court because there are things that lawyers are afraid to say but I am not," Li said, adding that he assisted in over 30 cases since his release. Newly elected Chinese Premier Li Keqiang said at his debut press conference that a plan to reform the labor reeducation system will be released by the end of 2013. For Li, this is a ray of hope. "I have learned legal language with help from some lawyers, but most of the victims I know are legally mute. I hope the efforts of the new government will be implemented and that more people can reclaim their freedom," Li said. ^ top ^

New gov't tests first major reform in agriculture (Xinhua)
The State Council, or China's cabinet, on Wednesday rolled out its first major reform in agriculture since inauguration, experimenting schemes to accelerate modern agriculture. [...] Regions where conditions permit will be picked to carry out the pilot program involving nine major tasks to boost modern agriculture through comprehensive and coordinated agricultural reforms. The experiments in agriculture are restricted only in Heilongjiang Province, one of the country's top grain production regions in northeast China, according to the statement. Large-scale farming in different forms will be supported by the government, as farmers are encouraged to grow their joint partnership, family farms or cooperatives at a time when most rural young and middle-aged labor force are leaving the countryside and seek job opportunities in cities. The government has pledged deeper reforms in rural land management system to speed up the transfer of rural land to improve efficiency and promote large-scale commercial farming. The seizure of collectively owned rural land will be subject to strict management, according to the statement. Most rural land in China is owned collectively by a village, and farmers get contractual rights over some plots. As part of the pilot comprehensive agricultural reforms, the government also vowed to improve financial services in rural areas, increase compensation for major grain-producing regions, boost agriculture-related technological innovation, enhance the supervision over food safety and push forward the integration of rural and urban areas. [...] The State Council's experiments in agriculture come as some economists say the Chinese economy has reached a stage where reforms must be accelerated urgently as the demographic dividend, defined as a large proportion of the workforce in the entire population, is starting to dwindle sharply in the country. [...]. ^ top ^



Shanghai begins culling poultry; one contact shows flu symptoms (Xinhua)
Authorities in Shanghai on Thursday closed a live poultry trading zone in an agricultural products market and began slaughtering all birds there after detecting H7N9 bird flu virus from samples of pigeon from the market. Meanwhile, a person who had close contact with a dead H7N9 bird flu patient in Shanghai has been under treatment in quarantine after developing symptoms of fever, running nose and throat itching, the Shanghai Municipal Health and Family Planning Commission said late Thursday. China's Ministry of Agriculture said Thursday it found the H7N9 virus from pigeon samples collected at the Huhuai wholesale agricultural products market in Songjiang district of Shanghai. After gene sequence analysis, the national avian flu reference laboratory concluded that the strain of the H7N9 virus found on pigeons was highly congenetic with those found on persons infected with H7N9 virus, the ministry said. The Shanghai municipal agricultural commission said it has ordered proper disposal of the culled birds, their excrements and contaminated food as well as disinfection of the market and vehicles that carried them and other things that have contacts with them. The commission will also investigate and track where the pigeons came from, it said. Shanghai reported two more deaths from the H7N9 bird flu Thursday, bringing the death toll from the new deadly strain to five around the country. […] China's health authorities have promised transparency and cooperation to the World Health Organization in regards to human infections of the new strain of bird flu. The Chinese Center for Disease Control and Prevention said Wednesday that no human-to-human transmission of H7N9 has been discovered and no epidemiological connection between these cases has been found. Health authorities and hospitals in many Chinese provinces have been on high alert for the virus. ^ top ^

Shanghai begins poultry slaughter after bird flu found (SCMP)
[...] The total number of confirmed cases now stands at 14, including six from Shanghai, according to Xinhua, which cited health authorities. Four of the deaths have occurred in the commercial hub, while the other was reported in the neighbouring province of Zhejiang on Wednesday. Chinese authorities are trying to determine how exactly the new variety of bird flu infects people, but say there is no evidence yet of human-to-human transmission. [...] The first two deaths occurred in February but were not reported by authorities until late March. Officials said the delay in announcing the results was because it took time to determine the cause of the illnesses. [...] The World Health Organisation on Wednesday ruled out the possibility of a pandemic because the sub-type is not thought to be transmitted from human to human, unlike the more common H5N1 strain. But health experts have emphasised the need to quickly identify the source of the virus and its mode of transmission to reduce human exposure. [...] In another development, a man in the central province of Hunan died from H1N1 (swine) flu on Wednesday, Xinhua reported. [...]. ^ top ^

Shanghai announces anti-pollution measures tougher than Beijing's (SCMP)
A contingency plan to deal with hazardous air pollution was released by the Shanghai municipal government yesterday. Though it came nearly six months after a similar plan in Beijing, Shanghai's plan features measures that are considerably tougher than those in Beijing. According to the plan, published on the website of the Shanghai Environmental Protection Bureau, the government intends to issue a public alert and take its most comprehensive emergency action when the air quality index exceeds 300. By comparison, the index must hit 500, the highest level of the pollution index, before Beijing takes its most stringent steps to reduce pollutants in the air. During such an emergency, the Shanghai government plans to boost output of natural gas power plants, in order to reduce emissions from coal-fired power plants. In addition, more electricity would be bought from other provinces, and authorities would require all coal-fired plants in the city to use their cleanest coal. When the pollution index hits 300 in Beijing, the government checks to ensure that all coal-fired power plants are using mandatory pollution-reduction devices. But it is not until the index hits 500 that some building activities, such as excavations and demolitions, are suspended completely. In Shanghai, nearly all building projects will be forced to temporarily cease operations when the index hits 300. Shanghai said it would also halt production in industries related to chemicals, steel, oil refinery and cement manufacturing on bad air days. Both cities have also promised to reduce the number of government cars on the road by 30 per cent, but Shanghai went a step further by banning all heavy trucks carrying dust-causing materials when the pollution index hits 300 - a step Beijing does not take even when the index reaches 500.. ^ top ^



Tibetan political prisoner Jigme Gyatso released after 17 years (SCMP)
Noted Tibetan political prisoner Jigme Gyatso has been freed after 17 years in prison on charges of endangering national security and separatism, an overseas Tibetan spokesman and a US-backed broadcaster said. The 52-year-old former monk had returned to his hometown in an ethnic Tibetan area in the northwestern province of Gansu, Tashi Phuntsok of the self-declared Tibetan government-in-exile in India said yesterday. He said Jigme Gyatso had been released a year early, probably because of poor health due to harsh treatment. Radio Free Asia also reported the release, saying he appeared "very weak" when he returned home on Monday after being freed two days earlier from Chusul prison near Tibet's regional capital, Lhasa, where many political prisoners are held. It said friends reported him as walking with a limp and complaining of problems with his heart and vision, and other physical issues related to poor nutrition or lack of medical treatment. It was not possible to confirm Jigme Gyatso's release. Chusul prison has no listed phone number and government and police in Lhasa said they had no information on the case. Tibet remains off-limits to foreign reporters without special permits. Jigme Gyatso was among Tibet's better-known political prisoners, with numerous organisations including Amnesty International and the European Union calling for his release. Arrested in a crackdown on dissent in 1996, he was sentenced to 15 years on charges of "inciting splittism" and the now-abolished crime of "counter-revolution". Initially held at Lhasa's notorious Drapchi prison, he was among prisoners who were reportedly beaten and tortured after a pro-independence protest in 1998 coinciding with a visit by EU delegates. In 2004, his term was extended by three years after he shouted slogans in prison in support of exiled Tibetan spiritual leader the Dalai Lama, who fled to India amid an abortive uprising against Beijing's rule in 1959. Beijing has crushed waves of anti-government activism among Tibetans. ^ top ^

Official stresses Party-people ties in Tibetan-inhabited areas (Xinhua)
Senior political advisor Du Qinglin has stressed forging closer Party-people ties and hardening local residents' common understanding of safeguarding ethnic solidarity and national unity in Tibetan-inhabited regions. Du made the remarks during an inspection tour to the Tibetan autonomous prefectures of Ganzi and Diqing, in southwest China's Sichuan and Yunnan provinces respectively, between March 29 and April 1. According to an official statement Xinhua obtained Monday, Du visited farmers' households, schools and monasteries where he held face-to-face talks with Party cadres, farmers and herdsmen, and people from religious circles. Du, vice chairman of the National Committee of the Chinese People's Political Consultative Conference and a member of the secretariat of the Communist Party of China (CPC) Central Committee, called for greater efforts to consolidate the foundation of CPC-people ties. He encouraged authorities to explore ways for local economic and social development that match local conditions, with an aim to increase people's income and make them become better off. "Greater strength should be exerted to solve the problems of healthcare, education and employment, which are among the people's top concerns," he said, stressing that efforts to win people's support and to improve their well-being should be combined. Extending greetings to grassroots-level cadres and CPC members, Du urged them to serve local people with emotion and responsibility. He called for the cultivation of a number of capable and passionate cadres to enhance the Party's public support. He also urged efforts to step up administration of religious affairs in accordance with the law, and bring the positive role of religious personages and believers in facilitating economic and social development into play.. ^ top ^

Total of 66 Tibet landslide bodies recovered (SCMP)
Chinese rescue crews have recovered a total of 66 bodies in the aftermath of a huge landslide in Tibet that buried more than 80 mine workers, state media said on Wednesday. A total of 83 people were buried on Friday when a vast volume of rock crashed down a mountainside east of the Tibetan capital Lhasa, burying a mineworkers' camp. The latest number of recovered bodies, reported by China's official news agency Xinhua, would mean that 17 were still missing. Rescue operations resumed on Tuesday morning after being suspended a day before due to fears of more landslides in the area. The chances of finding any survivors are regarded as slim, state media has reported. Experts from the ministry of land and resources were investigating the cause of the landslide. Mountainous regions of Tibet are prone to such disasters, which can be exacerbated by heavy mining activity. In recent years China has discovered huge mineral resources in Tibet, including tens of millions of tonnes of copper, lead and zinc, and billions of tonnes of iron ore. ^ top ^



Kyrgyzstan sets sights on Xinjiang coal market (SCMP)
Kyrgyzstan is aiming to become a major coking coal supplier to the Xinjiang Uygur autonomous region. But the goal will only be realised if a railway is built to link China to the landlocked and mountainous nation in Central Asia to allow low-cost transport of bulk commodities. State-owned China Road and Bridge Corporation was completing a feasibility study on a railway that would link China's far-western rail terminus at Kashgar in Xinjiang to the Kyrgyz-Uzbek border town of Kara-Suu, said Kyrgyzstan's Economy Minister, Temir Sariev. [...] The proposed line would make much of Kyrgyzstan's stranded minerals economic, and together with freer intra-regional trade, could raise the annual trade volume between China and Kyrgyzstan - estimated at some US$10 billion - by 30 to 40 per cent. Sariev said the proposed railway had a capacity to move 15 million tonnes of bulk commodities a year, and that much of it could be used by Australian-listed Celsius Coal, which has a coking coal project in Kyrgyzstan. Celsius chairman Alex Molyneux said the firm planned to begin mining coal used to smelt steel on a commercial scale in 2015, with annual output of one to two million tonnes. It would be trucked to Xinjiang, where annual steel output was projected to rise to 35 million tonnes in 2015 from 12 million tonnes last year, he said, adding that although Xinjiang is coal-rich, it lacks high-quality coking coal used in steel-smelting. Existing supply comes mainly from distant Shanxi province. If the proposed railway is completed in late 2016, Celsius plans to expand the mine's output to between five and eight million tonnes a year from 2017. ^ top ^



Parallel trading of baby milk formula still rampant despite Hong Kong restrictions (SCMP)
Parallel trading at the border is still active despite the Hong Kong government's restrictions on exporting baby milk formula, with traders mobilising a large number of travellers to beat the two-tin limit. A check of the mainland side of the Lo Wu border checkpoint at the weekend found several dozen traders with trolleys full of milk powder. They were collecting different brands and handing out cash to travellers. One trader hinted that they were selling their products at a higher price to mainlanders after the new restrictions took effect. "The running costs are higher," he said. "It's more costly to do this [business] than before." He offered Friso stage two infant formula to a Post reporter for 240 yuan (HK$300), compared with the standard market price of HK$246. Tins of Friso stage three formula were sold for 230 yuan, compared with the standard Hong Kong price of HK$216. "They are all from Hong Kong, you can check the labels," he said. When asked whether they needed more people to carry milk formula from Hong Kong, the trader said: "I will buy from you if you bring [infant formula] here." During the conversation, a man who had travelled from Hong Kong was seen handing over two tins of formula to the trader, who then paid him. The robust grey market in infant formula from Hong Kong is in sharp contrast to abundant supplies offered in Shenzhen supermarkets. Foreign brands such as Mead Johnson, Friso and Nestle - in mainland packaging - have been left on the shelves. "Parents want to buy those from Hong Kong," a Walmart worker said. The new restriction has sparked debate after 12 mainland visitors carrying rice-based baby cereal across the border were wrongly arrested. An amendment is likely to clarify the ban covering "all substances in powder form that are or appear to be for consumption by a person aged under 36 months, and are or appear to be milk or milk-like substances in powder form to satisfy wholly or partly the nutritional requirement of a child". ^ top ^



China home sales set to fall 50pc after new curbs (SCMP)
Home sales across mainland cities this month are expected to drop as much as 50 per cent from last month, after local authorities announced detailed measures to cool the property market. Whether or not there will be an accompanying drop in home prices will depend on how municipal governments implement the measures, according to analysts. As of the end of last month, mainland cities such as Beijing, Shanghai, Chongqing, Xiamen, Hefei, Tianjin, Guangzhou and Shenzhen had met a central government deadline on issuing detailed property-cooling measures. Beijing, Shanghai and Chongqing announced tougher measures while other cities' policies are relatively loose, said Zhang Dawei, research director at property agent Centaline Property Agency's mainland division. "No matter whether they unveiled very tough or relatively loose measures, it will hit buying sentiment," said Zhang. He expects sales transactions to drop as much as 50 per cent from those of last month. Attempts to rein in the housing sector caused a frenzy of home sales last month. For example, sales of second-hand homes in Beijing jumped 332 per cent, compared to February, to 43,780 units, according to 5i5j Real Estate. Average prices of new homes in 100 major cities rose 1.06 per cent month on month in March, having risen for 10 consecutive months, the China Index Academy said. Average prices went up 3.9 per cent year on year, the Academy said. In February, home prices rose 2.48 per cent. Agents generally expect home prices to stabilise now that the detailed measures have been announced. "It depends on how the local governments implement the measures," said Zhang. If the local governments strictly carry out those measures, prices may drop, he said. Yang Hongxu, the research director at consultancy E-house (China), wrote on his microblog yesterday that Beijing and Shanghai had clearly stated that a 20 per cent capital gains tax would be imposed on second-hand homes. Measures from other cities were less stringent. Yang said, therefore, he did not expect the measures to have a big impact on the price of homes. Guangzhou announced new policies on Sunday night, the deadline set by the central government to unveil price targets and measures to cool home prices. The Guangzhou regulations did not mention detailed measures to limit property prices. But a city official told mainland media that the government would strictly implement the 20 per cent tax on capital gains from property sales. Shenzhen did not explain how it would implement the 20 per cent tax. ^ top ^

Manufacturing index points to growing recovery (China Daily)
Industrial activity maintained a moderate recovery in March, with economic indicators reflecting positive growth. "The economic environment in Europe seems to have improved, but it has not brought us the sharp increase in orders we had expected for the first quarter," said Zhang Wenhua, owner of a company in Nanjing, Jiangsu province that exports machinery to Europe. "We just hope there will be more growth in the next three months," Zhang said. The purchasing managers index, a measure of economic expansion and contraction, reached 50.9 in March, slightly above the equilibrium mark of 50. The index rose to an 11-month high after hitting 50.4 in January and 50.1 in February. It has remained above 50 for six consecutive months. The National Bureau of Statistics and the China Federation of Logistics and Purchasing reported on Monday that PMI subindexes for manufacturing output rose to 52.7, overall new orders to 52.3, and export orders to 50.9, the highest since May. The PMI for small enterprises jumped to 49.3 from 46 in February, reaching a 12-month high, though still in contraction. The PMI for large companies was 51.4, up from 51.3 in February, and that for medium-sized companies was 50.3, up from 48.8 in February. The slow recovery surprised some analysts, who expected the manufacturing PMI to rise to somewhere around 52 in March as many factories resumed full production after pausing for Chinese New Year in February. Lu Zhengwei, chief economist of Industrial Bank, said trends will continue toward moderate recovery. China needs to maintain steady macroeconomic policies, "neither too loose nor too tight", Lu said. The subindex of raw material purchasing prices dropped to 50.6 in March from 55.5 in February, and the raw material inventory also shrank by 2 points to 47.5. Liu Ligang, chief economist in China with ANZ Banking Group, said Chinese factories' willingness to increase inventories of raw materials was still weak, which is also expected to add downside pressure to global commodity prices. Liu is worried about the economy's growth momentum. "Compared with the extent of the after-holiday rebound in past years, the recovery in March was noticeably weaker, resulting in an average PMI of 50.5 in the first three months, the same as the average in the fourth quarter of 2012," he said. HSBC Holdings Plc also released a separate manufacturing PMI reading based on its own survey, which posted 51.6 in March, up from 50.4 in February and 52.3 in January. "China's recovery continues, and it is mainly driven by the gradually improving domestic market demand," said Qu Hongbin, chief China economist at HSBC. "The decline in input prices suggests a modest pace of demand recovery and moderating inflationary pressures. This, plus the lingering external headwinds, implies that Beijing policymakers should keep a relatively accommodative policy stance in place," he said. Lian Ping, chief economist with Bank of Communications, predicted that industrial output may rebound slightly in March to 10.1 percent year-on-year from 9.9 percent during January and February. "In the first quarter, industrial production may be described as sluggish, as demand was weak in both the domestic and overseas markets. Also, investment in the manufacturing sector remained far from strong," Lian said.In the coming few months, investment in infrastructure and properties is likely to accelerate, responding to the government's urbanization boost. With the steady pace of recovery in the US and Europe, this may also help China's overall economy improve, according to Lian. The economist forecast that China's GDP may grow by 8.1 percent year-on-year in the first quarter, up from 7.9 percent in the last quarter of 2012. ^ top ^

China needs to rebalance economy: economists (Xinhua)
China needs to continue to rebalance its economy and reduce dependence on exports to achieve sustainable development, an economist said here on Thursday. China cannot continue to depend on "overseas demand" for economic growth and needs to "shift away from reliance on exports of low value-added goods," Victor K. Fung, chairman of the Fung Global Institute, said at the ongoing annual conference of the Institute for New Economic Thinking (INET), which lasts from Thursday to Saturday. China has no longer been the factory of the world because of higher production costs and has focused more on domestic consumption to boost economic growth, said Fung, who is also chairman of the Fung Group which comprises major subsidiaries in trading, logistics, distribution and retailing. [...] "The alternative for China is China itself," Fung said, adding that the country needs to strengthen its service industry to speed up economic rebalancing. China is the only major emerging economies with service sector accounting for less than 50 percent of gross domestic product, data showed. Nobel prize-wining economist Micheal Spence shared the view with Fung, adding that the country needs to improve its social security system and allow more competition to encourage innovation. The INET is a New York City-based economic research and education foundation designed to broaden and accelerate the development of a new field of economic thoughts that will lead to the real-world solutions to the great economic and social challenges. [...]. ^ top ^


DPRK and South Korea

North Korea economic reformer, sacked in 2007, back as premier (SCMP)
North Korea shifted temporarily from weeks of warlike rhetoric yesterday, appointing a new premier seen as an economic reformer, after a high-level declaration that nuclear-bomb building and a stronger economy were the nation's top priorities. The US, meanwhile, made its latest conspicuous display of firepower, announcing it had sent F-22 stealth fighter jets to participate in annual US-South Korean war games that Pyongyang calls preparation for an invasion. And the new South Korean president, who has a policy meant to re-engage Pyongyang with talks and aid, told her top military leaders yesterday to set aside political considerations and respond strongly should North Korea attack. The re-emergence of Pak Pong-ju as premier at an annual spring parliamentary session is seen by analysts as a clear signal that leader Kim Jong-un is moving to back up vows to focus on strengthened economic development. The UN says two-thirds of the country's 24 million people face regular food shortages. Pak served as the North's premier in 2003-07, according to Seoul's Unification Ministry. He was sacked because of a proposal for an incentive-based hourly, rather than monthly, wage system deemed too similar to US-style capitalism, Japan's Mainichi reported in 2007. Pak replaces Choe Yong-rim, who is 82. "Pak Pong-ju is the face of economic reform, such as it exists - reform with North Korean characteristics as they say," said John Delury, a North Korea analyst at Seoul's Yonsei University. Economic changes won't be radical, Delury said, and, for the time being, they're mostly aspirational. One change could entail a shift of part of the country's massive military spending into the economy as a whole. The announcement came on Sunday, when Kim presided over a separate plenary meeting of the Central Committee of the ruling Workers' Party, a top decision-making body tasked with organising and guiding the party's major projects. The meeting set a "new strategic line" calling for building a stronger economy and nuclear arsenal. […] Pyongyang has reacted with anger over routine US-South Korean military drills and a new round of UN and US sanctions that followed its February 12 underground nuclear test, the country's third. Analysts see a full-scale North Korean attack as unlikely and say the threats are more likely efforts to provoke softer policies towards Pyongyang from a new government in Seoul, to win diplomatic talks with Washington and to solidify the young North Korean leader's military credentials at home. While analysts say that North Korea's threats are largely brinkmanship, there remains some fear that a localised skirmish might escalate. "I believe that we should make a strong and immediate retaliation without any other political considerations if [the North] stages any provocation against our people," South Korea president, Park Geun-hye, said yesterday. Naval skirmishes in disputed Yellow Sea waters off the Korean coast have led to bloody battles several times over the years. Attacks blamed on Pyongyang in 2010 killed 50 South Koreans. Deputies to North Korea's Supreme People's Assembly gathered in Pyongyang yesterday. Under late leader Kim Jong-il, North Korea had typically held a parliamentary meeting once a year. But Kim Jong-un held an unusual second session last September in a sign that he was trying to run the country differently from his father, who died in late 2011. ^ top ^

US says no North Korean troop action to back up rhetoric (SCMP)
The White House said on Monday that despite days of bellicose rhetoric, North Korea had yet to back up its threats to the United States and South Korea with mass troop mobilisations or movements. With tensions on the Korean peninsula rising ever higher, Washington reiterated that it took Pyongyang's war talk seriously but also noted that threats and warnings were nothing new from the isolated state. “Despite the harsh rhetoric we're hearing from Pyongyang, we are not seeing changes to the North Korean military posture, such as large-scale mobilisations and positioning of forces,” White House spokesman Jay Carney said. “We haven't seen action to back up the rhetoric,” Carney said, adding, “what that disconnect between the rhetoric and actions means, I'll leave to the analysts to judge.” Washington has warned North Korea that it will take robust efforts to defend its allies in Asia and repeatedly tells Pyongyang to stand down its nuclear program and that its “unproductive” rhetoric is self-defeating. Earlier, the US military said it had deployed stealth fighters to South Korea as part of a joint military exercise that has triggered dire North Korean threats of armed retribution. Two F-22 Raptor fighters arrived in the South on Sunday to participate in the annual “Foal Eagle” exercise that will last until April 30, a spokesman for the US forces in South Korea said. In an earlier show of force, Washington last week dispatched two nuclear-capable B-2 stealth bombers from their base in Missouri on a 13,000 mile round trip over South Korea. On Saturday, North Korea declared it had entered a “state of war” with South Korea and warned Seoul and Washington that any provocation would swiftly escalate into an all-out nuclear conflict. South Korea and the United States have met the near-daily threats from Pyongyang with their own warnings of severe repercussions, fuelling international concern that the situation might spiral out of control. The crisis will be top of the agenda when South Korean Foreign Minister Yun Byung-se meets US Secretary of State John Kerry at the State Department on Tuesday, officials said. Kerry will also directly intervene in the crisis in his debut trip to Asia since taking over from Hillary Clinton, which begins next week and includes stops in South Korea, Japan and China. “This will be very much front and centre, and particularly in Beijing,” State Department spokeswoman Victoria Nuland said. ^ top ^

North Korea moves medium-range missile to east coast (SCMP)
North Korea has moved a medium-range missile to its east coast, South Korea said on Thursday as the United States strengthened its Pacific missile defences amid intensifying threats from Pyongyang. Seoul's defence minister Kim Kwan-Jin said the missile could reach a “considerable distance” but not the US mainland. [...] North Korea, incensed at fresh UN sanctions and South Korea-US military drills, has issued a series of apocalyptic threats of nuclear war in recent weeks. Early on Thursday its military said it had received final approval for military action against the United States, possibly involving nuclear weapons. [...] US Defence Secretary Chuck Hagel said Pyongyang's increasingly bellicose threats combined with its military capabilities represented a “real and clear danger” to the United States and its allies South Korea and Japan. The Pentagon said it would send ground-based THAAD missile-interceptor batteries to protect bases on Guam, a US territory some 3,380 kilometres southeast of North Korea and home to 6,000 American military personnel. “They have nuclear capacity now, they have missile delivery capacity now,” Hagel said on Wednesday. “We take those threats seriously.” [...] The Intelligence analysis quoted by South Korea's Yonhap news agency said the east coast missile was believed to be a Musudan which has an estimated range of around 3,000km or more. Yonhap quoted sources as saying Pyongyang is likely to fire it around the middle of April, when North Koreans celebrate the birthday of their late founder Kim Il-sung. A provocative missile test-fired into the sea over Japan is one scenario that analysts have said the North could choose to exit the crisis with a face-saving show of force. [...] The European Union called on Pyongyang to stop stoking tensions and re-engage with the international community. Russia's foreign ministry termed the North's neglect of UN resolutions as “categorically unacceptable”. [...] North Korea blocked access to its Kaesong joint industrial zone with South Korea Thursday for the second day running, and threatened to pull out its 53,000 workers in a furious reaction to the South's airing of a “military” contingency plan to protect its own workers there. [...] “The full closure of the complex is set to become a reality,” a spokesman for the North's Committee for Peaceful Reunification of Korea said. The North says the South Koreans currently in Kaesong can leave whenever they want. About 200 departed Thursday but some 600 remain to keep the factories running. [...] Apart from its threats of nuclear attack, the North also warned this week it would reopen its mothballed Yongbyon reactor – its source of weapons-grade plutonium that was closed in 2007 under an aid-for-disarmament accord.[...]. ^ top ^



Japan's Shinzo Abe seeks Mongolia's backing over East China Sea islands (SCMP)
Japanese Prime Minister Shinzo Abe has sought support from Mongolia in Tokyo's territorial row with Beijing over disputed East China Sea islands. Abe arrived in the Mongolian capital on Saturday seeking closer trade and diplomatic ties with the mineral-rich nation, a potentially important strategic partner due to its location on China's northern border and diplomatic ties with North Korea. "I asked for Mongolian support relating to the Chinese situation, and Mongolia expressed its understanding of the Japanese position," Abe said, referring to the islands that China claims as the Diaoyus and Japan as the Senkakus. "I understand the Mongolian situation regarding this issue," he said after holding talks with Mongolian President Tsakhia Elbegdorj and Prime Minister Norov Altankhuyag. Abe, a hawkish prime minister who has not held summit meetings with Chinese leaders since he took power in December, also said "the door is open for talks" with Beijing. During his visit, the first by a Japanese prime minister in nearly seven years, Abe is also aiming to develop closer economic links with his host country. Mongolia has huge mineral deposits at its disposal, and Japan is aiming to secure more fuel resources abroad after its nuclear power plans were affected following the Fukushima nuclear crisis, triggered by an earthquake and tsunami in March 2011. "As Mongolia is rich in natural resources, Japan's technological co-operation will lead to a win-win for both countries," Abe said, according to Kyodo news agency. China is Mongolia's leading trade partner and source of foreign investment. ^ top ^

Mongolia to ease foreign investment law (
Cabinet Minister Ch.Saikhanbileg last week submitted a revised draft of the “Law on Regulation of the Foreign Investments in the Strategically Significant Industries” to parliament. The law in question currently requires foreign investors to obtain parliamentary approval when contributing more than a 49 percent stake or investing more than 100 billion MNT (70 million USD) in “strategic sectors,” which include the mineral resources, banking, finance, media, and telecommunications industries. Aiming to ease conditions that may currently be discouraging investors, the amended law would increase the foreign investment threshold to 1 trillion MNT (719.7 million USD). The government clarified that the main target of the law is foreign state-owned investors, not private companies. “If the new bill is passed in the upcoming parliament spring session, the procedure to obtain permissions on foreign direct investment in strategic sectors will be easier and more promptly resolved,” said Minister Ch.Saikhanbileg. The existing investment law, passed last May, is believed to have effectively blocked Chinese state-owned steel giant CHALCO from investing in SouthGobi Resources, as parliament denied approval for this investment. According to the Bank of Mongolia's figures, foreign direct investment dropped 17 percent in 2012. This coincided with moves by the government that are believed by critics to have deterred investments in copper and coal. ^ top ^

Mining Minister continues push for changes to OT investment agreement (
Mining Minister Davaajav Gankhuyag has issued a decree to amend the Oyu Tolgoi investment agreement “The decree says, based on the discussion with investors, changes have to be made to the agreement,” said Gankhuyag. “In my opinion, this agreement is not a good one.” The minister said the issue of taxes should be considered first. All parties have agreed to work towards greater transparency in investment expenses to identify where greater-than-expected costs may have originated. He claimed that development had exceeded the costs stated in the original play by USD 80 million. The Minister added that all these factors have made it obligatory that the government implement his decree.. ^ top ^


Anna Boffo
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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