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
  15-19.4.2013, No. 471  
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DPRK and South Korea


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Foreign Policy

French FM hails ties between China, France (Xinhua)
Visiting French Foreign Minister Laurent Fabius on Friday hailed bilateral ties with China as French President Francois Hollande will visit the country. The incoming visit will make Hollande the first head of state from major Western countries to visit China after China's new leadership took office, reflecting the depth of France-China ties, Fabius said. France is discussing with China on planning celebrations to mark the 50th anniversary of the establishment of diplomatic relations between the two countries in 2014, he said. Talking about bilateral trade, Fabius said ways for resolving the French trade deficit with China should be sought during bilateral trade development. Meanwhile, he expressed hope that both countries can boost cooperation in areas including aviation and aerospace, nuclear energy, agriculture, food processing, medicine and health, and they could beef up two-way investment, honoring a principle of reciprocal equity and openness. Fabius started a two-day visit to China on Friday. The trip will take him to Shanghai as well as Beijing. ^ top ^

France plans yuan swap line, report says (SCMP)
France intends to set up a currency-swap line to make Paris a major offshore yuan-trading hub in Europe, competing against London, China Daily yesterday cited Bank of France governor Christian Noyer as saying. Yuan deposits in Paris amount to 10 billion yuan (HK$12.4 billion), making it the second-largest pool for the currency in Europe after London. Almost 10 per cent of Sino-French trade is settled in renminbi, according to French data cited by the newspaper. "The Bank of France has been working on ways to develop an RMB liquidity safety net in the euro area with due consideration of a supporting currency-swap agreement with the People's Bank of China," Noyer said. French Foreign Minister Laurent Fabius announced that President Francois Hollande would visit Beijing by the end of this month. Fabius wrapped up his own two-day visit to Beijing yesterday. The yuan's internationalisation and bilateral financial cooperation could be among the main topics during Hollande's visit, the paper said. The planned swap line would be the latest in a string of bilateral currency agreements that China has signed in the past three years to promote use of the yuan in trade and investment. It follows a similar step by the Bank of England to set up a reciprocal three-year yuan-sterling swap line. ^ top ^

Kerry seeks China roadmap (Global Times)
John Kerry, the US' top diplomat, visited China on Saturday during an Asian tour seeking to ease tensions on the Korean Peninsula. Analysts see the event as tone-setting for bilateral relations between China and the US after both countries welcomed new administrations. Chinese President Xi Jinping called on both sides to promote dialogue, respect each other's core interests and properly handle differences. He said China and the US must pave the way for the development of a new type of relationship between the two countries. "This visit is quite meaningful. As the importance of China and its role in the Asia-Pacific region is growing fast, Kerry's visit indicates a new mild era for Sino-US relations, or even a mild era for the whole region, is approaching," Zhao Yongsheng, visiting scholar at Johns-Hopkins University, told the Global Times on Sunday. High level talks between the world's two most powerful economies were held during Kerry's visit. In his first visit as the new US Secretary of State, Kerry said he's looking to "expand dialogue and set a roadmap" with China. Chinese Premier Li Keqiang called for closer economic ties, and a "shared responsibility" for maintaining peace and stability. Kerry echoed these thoughts, urging both sides to enhance cooperation. Li said he hoped that "the US side could take substantial actions to lift the ban on the export of high-tech products to China." "The new partnership will be based on increasing economic competition and decreasing military threats and conflicts between the two countries. The two keywords for this partnership should be mutual trust and mildness," Zhao said. Before Kerry's visit, US Treasury Secretary Jacob Lew, acting as US President Barack Obama's special envoy, came to China in March while Tom Donilon, the US National Security Advisor, will come to China in May. "Bilateral relations face many challenges but these aspects also brew positive ways to push the two countries to improve relations," Han Lei, chief of the Beijing-based Carnegie-Tsinghua Center, told the Global Times. The two countries will hold their fifth China-US Strategic and Economic Dialogue in July in the US, Chinese foreign ministry spokesman Qin Gang said on Saturday. Kerry told the Global Times that the US welcomes private capital from China to invest in the country though some State-owned enterprises are assessed carefully in the US. As the US proceeds with its pivot back to Asia, regional issues will be key in bilateral talks. Territorial disputes in the South China Sea and East China Sea, Internet security, climate change and the Iran and Syria problems will need the US and China to work together, Han said. "After Kerry took over as Secretary of State, the strategy of restructuring the balance of power in Asia hasn't changed. But instead of restraining China's development, the core of the US' Asia strategy will be boosting cooperation with China to reach a win-win situation," Han added. Xi stated he sought to build a new form of relationship with Washington centered on core interests when he met Lew in March but this time reiterated a new partnership and stood firm on his desire to see ties improve. Kerry then headed to Japan on Sunday after China and the US vowed to work together to try to defuse tensions on the Korean Peninsula. Kerry called it a "critical time" for the development of China-US ties, and for resolving tensions on the Korean Peninsula. He said that China had made an unprecedented joint statement to abide by the international community's resolve to denuclearize the peninsula. Chinese Premier Li said while meeting Kerry that troublemaking on the Korean Peninsula issue would harm the interests of all. "North Korea's current belligerent behavior is alarming but not incomprehensible. Its actions look more like desperation than intrinsic menace. Let us hope that Kerry and Xi can respond with maturity and reason," John Steinbruner, a professor of public policy at the University of Maryland, told the Global Times. Experts stated China would likely play an important part in working with other countries in denuclearizing the Korean Peninsula. However, Zhang Liangui, an expert on the Korean situation, told the Global Times earlier that China's hands are tied on the issue since North Korea has successfully conducted nuclear tests. ^ top ^

China and Iceland ink free trade pact as Beijing seeks influence in the Arctic (SCMP)
Iceland became the first European nation to sign a free trade deal with China yesterday, offering hope to the small North Atlantic country for its recession-battered economy and giving Beijing a leg up in its drive for more influence in the Arctic. The China-Iceland free trade pact will lower tariffs on a range of goods and is expected to boost seafood and other exports from the remote Nordic state to the world's second-largest economy. [...] Premier Li Keqiang told Sigurdardottir [the Icelandic Prime Minister] the agreement was "a major event in China-Iceland relations". "It also signals the deepening of our relationship, especially our economic relationship which has been lifted to a new height," Li said during talks after a welcoming ceremony at the Great Hall of the People in Beijing. [...] "It's important for Iceland to conclude pacts like this to strengthen trade following the economic collapse," Sigurdardottir said. The free trade agreement will "increase the soundness of business transactions and presumably the interest among Chinese and Icelandic companies that are co-operating" in geothermal power. China sees a range of opportunities in the Arctic and will continue to expand its research in the area and conduct further expeditions, said Leiv Lunde, director of the Oslo-based Fridtjof Nansen Institute. "It's attractive also for all the resources, but China is already a major shipping nation... and Chinese companies are now very eagerly awaiting policy signals from the Chinese government on what kind of priorities they will give to the Arctic," said Lunde at a conference yesterday on Arctic issues in Shanghai. China is seeking permanent observer status in the Arctic Council, a body that includes Iceland and decides on policy in the region. A decision on China's bid is due next month, and it has received strong support amid the prospects of heavy Chinese investment in the region's mining industries, as advertised by its proposal to sink US$2.3 billion into Greenland to secure 13.6 million tonnes of iron ore per year. ^ top ^

French president to visit China (Xinhua)
French President Francois Hollande will pay a state visit to China from April 25 to 26, a Chinese Foreign Ministry spokeswoman announced Monday at a regular press briefing. According to Hua Chunying, Chinese President Xi Jinping will hold talks with Hollande during his visit. Premier Li Keqiang and Zhang Dejiang, chairman of the Standing Committee of the National People's Congress, will also meet him respectively. The two sides will exchange views on China-France ties, China-EU relations, as well as international and regional issues of common concern, she said. Hollande will also pay a visit to Shanghai, she added. ^ top ^

PLA strives for transparency (China Daily)
China declassified a host of details on its military on Tuesday, a move experts suggest is a big stride by the armed forces to boost transparency and openness. In a white paper titled "The Diversified Employment of China's Armed Forces", which was published by the State Council Information Office, the PLA disclosed the strength and formation of its ground force, air force, navy and missile arm. The structure and missions of the Armed Police Force and Chinese militia were also made public. According to the document, the eighth of its kind issued by the Chinese government since 1998, the mobile operational units of the PLA ground force consist of 18 combined corps and several independent combined combat divisions or brigades. These units have a strength of 850,000. The paper for the first time unveils the designations of combined corps and the military command that directs them. It also reveals that the PLA navy has 235,000 people in active service, and the air force has 398,000 servicemen and servicewomen. In addition, there is an airborne corps under the air force's control. The PLA second artillery force, the country's core force for strategic deterrence, has an arsenal of Dongfeng (East Wind) ballistic missiles and Changjian (Long Sword) cruise missiles. It is the first time that the Chinese military has publicly mentioned the codenames of its missiles. "This is the first time that the Chinese government has issued a white paper that focuses on one of the specific factors of its armed forces," said Senior Colonel Wen Bing, a researcher at the national defense policy research center under the PLA Academy of Military Science. "The release of the document is of great importance for enhancing the system of white papers on national defense and expanding military transparency." Wen said the international community has some concerns over China's increasing use of its armed forces, so the Chinese government decided to explain the diversified missions of its armed forces, such as in disaster relief, high sea escorts as well as joint drills with foreign militaries. "(The paper's) content will help to better understand China's resolve to uphold peaceful development," he said. Senior Colonel Hou Xiaohe, a strategy expert of the PLA National Defense University, said: "The disclosure of a lot of previously classified information, like the combined corps' designations and the strength of each military branch, is in response to the international community's attention. Moreover, the move signals that China now has the confidence of being a responsible power." The white paper says China advocates a new security concept featuring mutual trust, mutual benefit, equality and coordination, and pursues comprehensive security, common security and cooperative security. "China will never seek hegemony or behave in a hegemonic manner, nor will it engage in military expansion," the white paper says. However, it warns that China still faces multiple and complicated security threats and challenges. The paper also mentions the determination of China's armed forces to protect the country's "national security interests" in outer space and cyberspace. "The pledge is in accordance with our armed forces' new missions under new circumstances," said Senior Colonel Meng Xiangqing, who specializes in defense strategy at the PLA National Defense University. "As the strategic competition has been intensifying around the globe, the range of each country's national interests is also expanding." He noted China has been facing diversified safety challenges and remains a major victim of cyberattacks. "Therefore we must ensure that the Internet and outer space will be used for peaceful purposes and in the interests of all people." "China's security interests stretch from the land to the sea, to outer space and cyberspace, from territorial security to overseas interests, and from traditional areas to nontraditional fields," said Major General Chen Zhou, director of the PLA Academy of Military Science's national defense policy research center. […] "We have been witnessing a remarkable surge in issues concerning overseas resources, strategic routes on the sea and citizens living abroad, so the armed forces must strengthen their overseas operational capabilities to safeguard our country's overseas interests," he added. Yang Yujun, spokesman for the Defense Ministry, said on Tuesday that military transparency is closely related to national security and has no universal definition, adding that no country can boast complete transparency of military affairs. China is open and candid in its armed forces' strategic purposes and military capability, according to the spokesman. China has established strategic consultation mechanisms with 23 countries, and has explained its defense policies, security concerns and the military's missions via various channels including senior leaders' speeches, multilateral meetings and interviews with the media, Yang said. "It is fair to say that China has been highly transparent in its military affairs.". ^ top ^

Third victim killed in Boston Marathon bombings identified as Chinese citizen (SCMP)
The third victim who died in the Boston Marathon bombings was identified as a Chinese citizen and a student at Boston University, the Chinese Consulate in New York said. Boston University has confirmed that one of its graduate students was killed by the blasts without identifying the victim. The university said the identification was still pending permission from the family. Several media outlets have identified the student by name. The victim is said to be from Shenyang, Liaoning, and a graduate of the Beijing Institute of Technology. Over the last hours, hundreds of condolence messages have been posted on the reported victim's Sina Weibo microblog. The Chinese victim is one of three people killed by the twin blasts. The other two are eight-year-old Martin Richards and Krystle Campbell, 29, both from Boston. More than 170 people were injured; some remain in critical condition. The third victim was one of three friends at Boston University who "watched the race near the finish line", the university said. Among the three friends was Zhou Danling, another Chinese graduate student at Boston University, who was injured and is now in stable condition at Boston Medical Center. Zhou was previously reported to be in a coma, according to news reports. The third person was unharmed. A team led by deputy consul general Zhong Ruiming of the Chinese Consulate General in New York was in Boston to investigate the situation and assist relatives of the victims, the consulate said in a statement. ^ top ^

Diaoyu Islands part of China's territory: experts (Xinhua)
Historical materials indicate that the Diaoyu Islands and their adjacent islets are part of China's territory, experts said Wednesday. Cross-Strait experts refuted Japan's so-called "occupation" and "Terra nullius" claims to the islands, as well as its effective control of the islands. They made the remarks at an international symposium in Taipei that focused on issues related to the Diaoyu Islands. "Although the Diaoyu Islands are uninhabitable, they are not Terra nullius," said Song Chengyou, director of the Research Institute for Northeast Asian Studies with Peking University. Song added that the Diaoyu Islands and their affiliated islets have been an integral part of China's territory since the Ming Dynasty (1368-1644), and the islands were first discovered, named and owned by the Chinese. The sovereignty belongs to China. Even the Japanese agree, he explained. "Illustrated Outline of the Three Countries" (1875) by Sendai scholar Hayashi Shihei is the earliest piece of Japanese literature to mention the Diaoyu Islands. In the "Map of the Three Provinces" and "36 Islands of Ryukyu" included in the book, the islands are painted the same color as the Chinese mainland, indicating that the Diaoyu Islands were part of China at the time. The main reason that Japan claims sovereignty of the islands is "occupation." However, "occupation" follows the premise that the islands are "Terra nullius," said Chen Chun-i, an international law expert with Taiwan's Chengchi University. But the "Terra nullius" claim goes against historical materials, Chen added. As for Japan's "prescription" claim of the sovereignty of the islands, Chen argued that the premise of the claim is admitting the islands are not "Terra nullius," which presents a paradox for Japan itself. ^ top ^

Anniversary voyage near Diaoyus not all it seems (SCMP)
Two People's Liberation Army Navy ships patrolled waters near the disputed Diaoyu Islands yesterday - the 118th anniversary of China's ceding of the chain to Japan. Missile destroyer Lanzhou and missile frigate Hengshui from the navy's South Sea Fleet patrolled the area around the islands in the East China Sea, the navy website said. However, China Central Television said the ships only "entered" non-disputed waters about 70 nautical miles from the islands, which Japan calls the Senkakus. The appearance of the PLA ships near the Diaoyus coincided with the date of the signing of the Treaty of Shimonoseki in 1895, in which the Qing dynasty government was forced to cede Taiwan and all its affiliated islands, including the Diaoyus, to Japan and pay a war indemnity of 7,450 tonnes of silver to Japan. The treaty, called Maguan in China, was signed between the Empire of Japan and the Qing government after China's Beiyang Fleet, dubbed the most powerful navy in Asia at the time, was annihilated by the Japanese navy during the first Sino-Japanese war, which lasted from August 1894 to April 1895. "The PLA Navy's remarkable appearance near the Diaoyus on such a memorable date doesn't only just aim to remind today's PLA Navy never to forget their predecessor, which underwent such a historical humiliation 118 years ago, but it also helps Beijing seek legitimacy for its dream of becoming a maritime power in the international world," said Shanghai-based naval expert Professor Ni Lexiong. Senior Colonel Li Jie, a researcher at the PLA Navy's Military Academy in Beijing, said it was "a coincidence" that the PLA Navy had shown up near the Diaoyus on the 118th anniversary of the treaty's signing. [...] The PLA Navy website said the ships entered the waters near the Diaoyus via Japan's Miyako Strait on Tuesday, the same day the Defence Ministry issued its eighth biennial white paper. [...] Many Chinese internet users and military enthusiasts lauded the patrol, with the military page receiving nearly 12,000 messages by yesterday morning. But when internet users wrote later of their disappointment upon learning that the ships had only sailed in non-disputed waters, their comments were deleted. Japan's Defence Ministry confirmed the two Chinese warships did not enter Japanese waters near the Diaoyus, the Kyodo news agency said. [...]. ^ top ^

Sino-Gulf FTA 'may be signed this year' (China Daily)
A free trade agreement between China and the Gulf Cooperation Council may be concluded this year, the United Arab Emirate's ambassador to China told China Daily. "We are near to achieving the FTA between the GCC and China, with a few items including tariff issues to be resolved soon thanks to strong bilateral will," Omar Ahmad Adi Al Bitar said. The envoy added that he hopes this year will not pass before the two sides conclude the agreement. Established in Abu Dhabi in 1981, the GCC is a political and economic union of Arab states comprising the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Kuwait and Qatar, accounting for more than 60 percent of the trade volume between China and the Arab League. China and the GCC launched free trade agreement negotiations in 2004, with both sides reaching consensus on most areas of goods trade after four rounds of talks. Discussions on service trade are continuing. Trade between China and the GCC mainly centers on the oil, mechanical and textile sectors. Data from the Ministry of Commerce show that Sino-GCC trade totaled $133.8 billion in 2011, accounting for 68.3 percent of trade between China and the Arab League. By the end of 2011 bilateral investment reached $4.1 billion. The UAE and Saudi Arabia are now major export destinations for China, with its exports to the two countries accounting for more than two-thirds of exports to the GCC. China will overtake India to become the UAE's biggest trading partner by 2015, when trade between the two countries will reach $60 billion in value, Al Bitar said. China is the UAE's second-largest trading partner, with trade between the two countries valued at $40 billion in 2012, according to the latest data from the UAE embassy. [...] China mainly exports electronic products, steel and cameras to the UAE. The Gulf nation is planning to explore China's Muslim food market, valued at $2.5 billion in 2011 and increasing by 10 percent annually, according to a report from the UAE Ministry of Foreign Trade. UAE foreign trade is expected to reach $449.6 billion in 2013, an 18 percent growth year-on-year. The country also plans to boost its exports of gold, jewelry and precious-metal products to the Asian, European and American markets. China surpassed the United States to become the world's largest net importer of oil, rising to 6.12 million barrels in December last year, and that of the US dropping to 5.98 million barrels for the same period, according to Chinese customs and the US Energy Information Administration. [...]. ^ top ^

Xi meets with Nepalese political party leader (Xinhua)
Chinese President Xi Jinping met with Puspa Kamal Dahal Prachanda, chairman of the Unified Communist Party of Nepal (Maoist), on Thursday and pledged to boost cooperation. Xi, also general secretary of the Communist Party of China (CPC) Central Committee, said China attaches great importance to bilateral ties with Nepal, appreciates Nepal's adherence to the one-China policy and supports Nepal's efforts to achieve national progress and development. China is ready to work together with Nepal to cement their neighborly friendship and boost reciprocal cooperation to further advance the two countries' comprehensive cooperative partnership, which features a permanent friendship, Xi said. The China-Nepal friendship is not only in the fundamental interests of the two countries and peoples, but also conducive to stability and development in the region, he added. In pursuit of common development, Xi said China will continue to seek peaceful development and win-win cooperation with Nepal and other neighboring countries. During the meeting, Xi also said the CPC will increase exchanges with the Unified Communist Party of Nepal (Maoist) and other major Nepalese political parties to further strengthen the friendship between the two sides. Hailing the traditional friendship between the two nations, Prachanda thanked the Chinese side for its selfless assistance to Nepal. He added that to bring the Nepal-China friendship to a higher level, he looks forward to more financial and technical support from China as well as more practical cooperation between the two sides on infrastructure, water conservancy projects and tourism. Prachanda said Nepal will continue to firmly adhere to the one-China policy and he believes that the "Chinese dream" of national rejuvenation will be realized under the leadership of the CPC Central Committee with Xi as the general secretary. ^ top ^

Beijing hits out at Japan over island jet missions (SCMP)
China accused Japan of raising regional tensions yesterday, citing its increased use of fighter jets to monitor Chinese aircraft that approach a cluster of islands claimed by both countries. The remarks from Foreign Ministry spokeswoman Hua Chunying came one day after Japan's Ministry of Defense said it had dispatched fighter jets in response to Chinese planes 306 times in the 12 months through March 2013, up from 156 the previous year. Chinese aircraft have steadily increased patrols over the East China Sea, where the Japanese-controlled islands are located. There has been only one report of a Chinese plane violating Japanese-claimed airspace over the uninhabited islands, known as the Senkakus in Japan and the Diaoyus in China. "We all know Japan has continuously provoked and escalated tensions over the Diaoyus," Hua told reporters at a regularly scheduled news conference. Hua said that China is determined to defend its claim to the islands, but wants to solve the issue peacefully through dialogue and negotiation, a reference to Beijing's insistence Tokyo at least formally concede the islands' ownership is in dispute. "What Japan needs to do is not send more planes, but show sincerity and action and talk with China," Hua said. [...]. ^ top ^


Domestic Policy

Premier calls for deepened reform (China Daily)
China should promote economic transformation and upgrading through deepened reform while maintaining stable economic development, Premier Li Keqiang said over the weekend. [...] "Overall, the Chinese economy had a smooth start in 2013. But many uncertainties, both at home and abroad, still persist and make the overall situation quite complicated," Li said. The consumer price index, the major gauge of inflation, grew 2.1 percent in March from a year earlier, compared with 3.2 percent in February, the National Bureau of Statistics said last week. China's imports rose 14.1 percent from a year earlier, which trade officials attributed to stronger domestic demand. Meanwhile, exports grew 10 percent year-on-year despite still weak global demand, a performance that boosted officials' confidence they can achieve the 2013 trade growth target of 8 percent. But the producer price index decreased 1.9 percent from a year earlier, reflecting operational difficulties and pressure on profit growth in the industrial sector amid weak market demand. "To better grasp the curve of the economy, it is imperative to strengthen foresight," Li said, adding that this will be crucial for the sustained development of the economy. Macroeconomic decision-making, according to Li, requires keeping a steady footing and eyeing long-term economic upgrades. While effectively coping with short-term problems and maintaining stable growth, more effort should be made to improve the quality and benefits of development, with a focus on promoting economic restructuring and upgrading, expanding employment and increasing people's incomes, he added. Lu Zhengwei, chief economist at the Industrial Bank, said government leaders have noticed short-term concerns but put more attention on long-term problems, especially the construction of a sound system. "That makes us more confident in the country's development in the coming 10 to 20 years," Lu said. Li said the impetus for sustained development lies in deepening reform, urging targeted policies to cure not only "symptoms" but deeply rooted problems in the economy. "If temporary policies have to be carried out, they should not set up barriers for promoting market-based reform in the future," Li said, calling for making long-term effective policy arrangements to unleash the dividends of reform and boost the sustained development of the economy. ^ top ^

Hong Kong expert warns new bird flu virus could become a pandemic (SCMP)
The deadly new bird flu may pose a bigger threat to humans than the H5N1 bird virus that has killed hundreds of people worldwide, a University of Hong Kong microbiologist warned yesterday. Ho Pak-leung became the first expert to publicly express fears it could become a pandemic. [...] Ho said the new virus showed a higher ability to be transmitted rapidly from birds to humans and to spread geographically. And because infected birds appeared healthy, it was also harder to detect. [...] The number of confirmed H7N9 cases has reached 63 - and 14 have died, according to the national health commission. [...]. ^ top ^

Death toll hits 16 in China bird flu outbreak (SCMP)
H7N9 bird flu has claimed two more lives in Shanghai, Chinese state media said, bringing the death toll from the disease to 16. China has confirmed 77 human cases of H7N9 avian influenza since announcing two weeks ago that it had found the strain in people for the first time. [...] Eight of the people reported on Tuesday to have contracted H7N9 bird flu were said to be in critical condition. [...] Health authorities in China say they do not know exactly how the virus is spreading, but it is believed to be crossing from birds to humans, prompting mass culls in several cities. Experts fear the prospect of the virus mutating into a form easily transmissible between humans, which would have the potential to trigger a pandemic - but the World Health Organization (WHO) has said there is no evidence yet of such a development. International experts are preparing to head to China to probe the outbreak, the WHO said on Tuesday. The mission, including four international flu specialists, is due to arrive in the coming days for a week-long investigation. […] Chinese state media on Monday urged people to keep eating chicken and help revive the poultry industry, which lost 10 billion yuan (US$1.6 billion) in the week after the virus began infecting humans. ^ top ^

New rules for NGOs to improve operations (China Daily)
China is set to issue revised administrative regulations by the end of 2013 that will remove what is arguably the biggest obstacle to launch an NGO on the mainland, a senior official from the Ministry of Civil Affairs told China Daily in an exclusive interview. The legislative amendment is expected to assist the registration of hundreds of thousands of NGOs. The amendment will also articulate rules for overseas NGOs to set up branches, and for expats to launch NGOs on the Chinese mainland, Wang Jianjun, director of the Bureau of Administration of NGOs under the ministry, told China Daily. Wang said the number of calls and visits to the bureau for inquiries has tripled since the State Council pledged in early March to boost the development of civil societies as part of its plan to restructure and transfer more government functions. The plan states that establishing four categories of NGOs — industrial associations, charities, community services and organizations dedicated to promoting science and technology — will entail direct registration with civil affairs authorities, abandoning pre-examination and approval by other regulators. Wang regards the plan as "a major breakthrough" for the development of NGOs in China, predicting that empowered civil societies will be a driving force for the country's development in the coming three decades. There were more than 490,000 NGOs on the mainland at the end of 2012, of which 85 percent were of the above four types, according to the ministry. Wang said at least 1 million NGOs either operate without legal identities or have to register as companies under the current registration policy. […] Nineteen provinces have been encouraged to launch pilot programs for direct registration since 2011. South China's Guangdong province rolled out the direct registration policy in July for eight types of NGOs, and last year saw 4,200 NGOs registered in the province. Liu Zhouhong, secretary-general of the Narada Foundation, a private charity in Beijing, said the real effect of the national reform on registration should be measured over time. "There are many other barriers in terms of registration for NGOs. Some local registration authorities may feel reluctant to grant too many NGOs legal identities, worrying that they will be blamed for overseeing malpractice by registered organizations," he said. In addition, some registration requirements, such as benchmarks for seed capital, facilities and personnel, seem difficult to meet for many small grassroots NGOs, he said. "Plus, registration is one, but not the only, factor for the thriving of NGOs in China. We are concerned about whether the government will abolish the tax for donations and whether NGOs can enjoy a looser policy for fundraising," he added. Wang pointed out that pre-examination and approval by other regulators will still apply to religious, political, legal and foreign NGOs' representative offices. The revised regulations will also make it easier for the establishment of charitable foundations and chambers of commerce by allowing applicants to register at all levels of civil affairs authorities, Wang said. Now, to launch such organizations, the applicants can only register with the civil affairs departments of the central government or provincial government, he explained. Given China's increasing connection with the outside world, Wang promised clear rules to guide foreign-funded NGOs and expats' activities in the nonprofit field. To encourage NGOs to play a bigger role in the management of social affairs, Wang said the government will design an index to show what government functions can be transferred to NGOs. The index will be made public and will be adjusted over time. He added that the government will expand NGO participation in politics by increasing representatives from the NGO sector in the Party congress, legislature and political advisory body. "Meanwhile, we will work hard to change the status quo of 'strict registration, loose supervision', but keep a closer eye on NGOs after simplifying the registration procedures," he said. Civil affairs authorities are building an online platform to make information about NGOs public, including their financial reports, results of annual reviews and their donations to ensure NGOs operate openly and to facilitate supervision from the public and media, he said. ^ top ^

China dismisses NYT's Pulitzer-winning report on Wen (SCMP)
China dismissed a New York Times report that exposed the wealth amassed by the family of former Premier Wen Jiabao as having “ulterior motives” on Tuesday, after it won a Pulitzer Prize. The story, which was published in October last year, alleged close relatives of Wen have made billions of dollars in business dealings. It provoked anger from authorities in China, who said it was part of a “smear” by “voices” opposed to the country's development. The Times' Chinese and English websites were subsequently blocked in China and remain inaccessible. “Our position towards this issue is very clear. We believe the relevant report by the New York Times reporter is with ulterior motives,” foreign ministry spokeswoman Hua Chunying said at a regular press briefing on Tuesday. The Time's Shanghai bureau chief David Barboza, who wrote the story, told AFP that he was “honoured” after the report won the award for international reporting. The Pulitzer jury on Monday called it a “striking exposure”. The newspaper won four awards in the 97th annual Pulitzer Prizes, awarded by Columbia University in New York. The most prestigious prizes in US journalism, the awards can bring badly needed attention to newspapers and websites competing for readers in a fragmented media industry, where many are suffering from budget constraints. The Pulitzer board on Monday noted that David Barboza's reporting was accomplished “in the face of heavy pressure” from Chinese officials. Two reporters for The New York Times, David Barstow and Alejandra Xanic von Bertrab, won the Pulitzer Prize for investigative reporting for their reports on how Wal-Mart used widespread bribery to dominate the market in Mexico. Their reporting resulted in changes in company practices, it said. The staff of The New York Times won the Pulitzer Prize for explanatory journalism for its coverage of business practices by Apple and other technology companies that “illustrates the darker side of a changing global economy for workers and consumers”, it said. John Branch of The New York Times won the Pulitzer Prize for feature writing for his “evocative narrative” about skiers killed in an avalanche, it said. ^ top ^

40pc of bird flu victims haven't touched poultry (SCMP)
A top mainland scientist said 40 per cent of the people who have tested positive for the new, deadly strain of bird flu had no recent contact with poultry, and so it is still unclear how they contracted the virus. The remark by Dr Zeng Guang, chief of epidemiology at the Chinese Centre for Disease Control and Prevention, came as Shanghai and Zhejiang authorities announced five new cases of H7N9, bringing the number of confirmed cases to 82, with 17 of them fatal. […] The Ministry of Health cited Feng Zijian, director of the CDC's office of emergency response, as saying the source of the illness was hard to pinpoint. He noted that during the last major bird flu outbreak, which involved H5N1, half of the victims could not remember whether they had come in contact with poultry or other birds. Still, he said he believed that all infected during this outbreak must have come in contact with an environment contaminated by fowl, or in contact with birds directly. […] The first person infected in Beijing, a seven-year-old girl, left hospital yesterday. A four-year-old boy in the capital infected with the strain but not displaying symptoms remained in quarantine. Health authorities hope the boy will help doctors understand the virus. He was identified as a carrier via a random blood test of people in or near the poultry industry. Hunan this week became the sixth major region to officially announce a case of H7N9 - a two-year-old child whose sex was not given […] Meanwhile, a research team in Hubei province has a new theory regarding the evolutionary path of the bird flu strain. Professor Xue Yu, a biologist at Huazhong University of Science and Technology in Wuhan, said researchers believed the deadly virus evolved after Chinese birds came in contact with birds from East Asian countries such as South Korea. Xue's analysis was in line with other studies on the mainland, including by researchers at the Chinese Academy of Sciences, that suggested the decisive element of the deadly virus came from East Asian countries. But it differs from a theory put forward by Japanese researchers, which blames birds migrating from Europe. ^ top ^

Li calls for policies to encourage spending (China Daily)
Premier Li Keqiang called for better efforts to ensure growth and boost domestic consumption, as the State Council met to review the economy's performance and map out its policy focus in the coming months. The State Council met two days after the release of quarterly GDP figures, which some observers described as below their expectations. The National Bureau of Statistics reported on Monday that GDP growth in the first quarter was 7.7 percent year-on-year, compared with 7.9 percent in the fourth quarter, and 7.4 percent in the third quarter of 2012. Li said first quarter growth was at a "reasonable level". While pointing out the general steadiness of the economy's progress and positive signs in the urban job market, the premier acknowledged "new contradictions" and that there is still room to tap the country's potential in industrialization and urbanization. The premier said China is at a critical period in its transformation from an economy primarily led by manufacturing and exports to one driven more by services and domestic consumption. The State Council expressed readiness to make greater headway in reforms, while keeping macroeconomic policies largely steady. It stressed that greater effort must be made to combine the use of "proactive fiscal policy", which often means government-planned investment in public projects, and "prudent monetary policy", which means caution in the overall management of credit supply. Five near-term tasks were mapped out by the State Council. The first is to introduce more consumer-friendly policies to encourage people to spend more on medical care, personal development during retirement and cultural interests. In the meantime, adequate funds will sustain the development of urban roads and rail transport, as well as public environmental facilities. Second, the country's agricultural base should be protected so that an ample supply of farm products can help it steer clear of risk from abrupt price rises. Third, more is to be done to improve the general welfare by providing jobs, medical care, financial support to students from low-income families and government subsidized housing units. Fourth, reforms will reduce the number of official approvals, adjust the tax system and pricing practice for key production materials, further liberalize interest rates, move toward renminbi convertibility in the capital account and open up service industries. Fifth, the State Council also highlighted the need to control the risk of local government indebtedness. Jin Liqun, chairman of the board of supervisors of China Investment Corporation, said on Wednesday that economic growth may remain moderate for the next five years — lower than 8 percent year-on-year — as the advantage of abundant inexpensive labor recedes. "China's economy should depend on creating more jobs by upgrading its industrial structure. Excessive reliance on investment in infrastructure construction is unsustainable," said Jin, who was also former vice-minister of finance. The new leadership faces more challenges from social equity issues, an enlarged wealth gap and employment pressure, and a modest growth pace indispensable to solve those problems, he said. Jin said the shadow banking system and increasing local debt are worrisome. Over the next decade, a growth rate of 7 percent may be acceptable by the government, said Ma Jun, chief economist in China with Deutsche Bank. "Labor costs will continue to rise because of the persistent decrease of the labor population. The Chinese labor force is predicted to fall by 200 million in the next 30 years," Ma said. Giordano Lombardo, deputy CEO of Pioneer Investments, an Italian investment bank, said Chinese manufacturing is moving toward the upstream industrial chain, which "is an inspiring improvement". ^ top ^

Top Chinese legislator stresses promoting rule of law (Xinhua)
Top Chinese legislator Zhang Dejiang has stressed promoting the rule of law in national governance and social administration. During his three-day visit to Shandong Province that started Monday, Zhang, chairman of the Standing Committee of the National People's Congress (NPC), called on deputies to people's congresses at all levels to stick to the rule of law and uphold the authority of the Constitution and the laws. The key to comprehensively promoting the rule of law is to improve lawmaking, Zhang said, urging scientific and democratic legislation, as well as increased and orderly participation from the public. Legislative procedures should be enhanced, including improved argumentation, research and evaluation of lawmaking, as well as increased legislation in major fields, he said. Zhang also urged strict law enforcement, law-based administration and judicial justice to protect the interests of the public and maintain social order. During his visits to enterprises, the countryside and communities in Shandong, Zhang urged efforts to speed up the transformation of the economic growth pattern, safeguard food security and improve people's livelihoods. ^ top ^

China confirms 87 H7N9 cases, 17 deaths (Xinhua)
During the 24-hour period ending at 5 p.m. on Thursday, China confirmed five new cases of human H7N9 avian influenza, including one in Shanghai, one in Jiangsu, two in Zhejiang and one in Henan. The National Health and Family Planning Commission said in its daily update on H7N9 cases that a total of 87 H7N9 cases have been reported in China, including 17 that have ended in death. Of the total, six H7N9 patients have been discharged from hospitals after receiving treatment, and the other 64 patients are being treated in designated hospitals, according to the commission. [...]. ^ top ^



Taxi fares will rise in Beijing, but drivers still grumbling (Global Times)
The news that taxi fares are set to rise in Beijing, despite earlier denials that an increase was on the cards, has not appeared to cheer up the capital's cabbies. Beijing traffic authorities confirmed Friday that the fare increase will start in June, after they gather public feedback. Taxi drivers have said they fear the monthly quota they pay to cab companies will increase, and the three-yuan fuel subsidy will be cut. While traffic authorities have not confirmed what the fares will rise to, reports have suggested that flagfall will increase to 15 yuan ($2.4), and price per kilometer will rise from 2 yuan to 2.4 yuan. A taxi driver from Beijing Beifang Taxi Company, surnamed Li, said that although he looks forward to a rise in fares, he doubts his income will increase. "The taxi fare should be increased since it's been the same since 2005," he said. "If the quota increases then it won't have any affect on our income. Canceling the three-yuan oil subsidy will make the situation worse," Li said. Taxi drivers pay a monthly quota of 5,175 yuan to cab companies. Flagfall has been 10 yuan for three kilometers since 1998. [...]. ^ top ^

Western phase of Line 14 opens (Global Times)
The Beijing Municipal Commission of Transport on Wednesday announced the opening of the western phase of Subway Line 14, the Legal Mirror reported. Qilizhuang, the phase's only station not in operation, is expected to open at the end of this year. The phase starts at Xiju, an interchange station linked to Line 10, and runs west to Zhangguozhuang. Phase I of the line opens May 5. ^ top ^



Amid a sea of troubles, Canton Fair is still the best show in town (SCMP)
The spring session of the twice-yearly Canton Fair opened yesterday with officials talking up efforts to boost slackening exports. Some overseas buyers attending China's oldest and largest trade expo remained cautious about China's surging labour costs, but were generally optimistic about the country's export prospects. China's export growth slowed in March to 10 per cent from a year earlier, following a year-on-year gain of 21.8 per cent recorded in February. The US$880 million ease up was the country's first trade deficit since February last year. [...] "Costs have risen by between 10 per cent and 20 per cent compared to last year, but we will continue sourcing from the mainland because value for money is still good compared with products from Japan, Taiwan and Korea," Lin [a Taiwanese car accessories merchant] said. "[Mainland] China is still the world's factory. This position won't change for at least three to five years. Its manufacturing is moving up the value chain so it is normal to see some of the labour-intensive and low-end production lines moving to countries like Vietnam," he said. [...] Yasushi Kato, executive officer of Nitto Kogyo Corporation, which produces high-end internet, electrical and lighting products, said business had been affected by Sino-Japanese territorial disputes. "Local governments in China are not allowed to bid for our internet data centre products so we are working with other Japanese firms to focus on southeast Asian markets," he said. ^ top ^



Chinese influence in Nepal stems Tibetan refugee influx (SCMP)
The wind-scoured desert valley in Chosar, Nepal, just south of Tibet, was once a transit point for the Tibetan yak caravans laden with salt that lumbered over the icy ramparts of the Himalayas. In the 1960s, it became a base for Tibetan guerillas trained by the CIA to attack Chinese troops occupying their homeland. These days, it is the Chinese who are showing up in this far tip of the Buddhist kingdom of Mustang, northwest of Kathmandu. Chinese officials are seeking to stem the flow of disaffected Tibetans fleeing to Nepal and to enlist the help of the Nepalese authorities in cracking down on the political activities of the 20,000 Tibetans already here. China is exerting its influence across Nepal in a variety of ways, most involving financial incentives. In Mustang, China is providing US$50,000 in annual food aid and sending military officials across the border to discuss with local Nepalis what the ceremonial prince of Mustang calls "border security". Their efforts have borne fruit. Nepali police regularly detain Tibetans during anti-China protests in Kathmandu, and have even curbed celebrations of the birthday of the Dalai Lama, the Tibetan spiritual leader, according to Tibetan residents of Nepal. In the first eight months of 2012, the number of Tibetan refugees crossing the Himalayas into Nepal was about 400, half as many as during the same period in 2011. Tibetans blame tighter Chinese security in Tibet, as well as Chinese-trained Nepali border guards. The Nepalese government has also refused to allow 5,000 refugees to leave for the United States, even though the American government has said it would grant the refugees asylum. "Nepal used to be quite easy for Tibetans to get jobs here and integrate into the community," Tashi Ganden, a former monk and prominent political prisoner in China, said as he sat on a cafe rooftop in the bustling Tibetan Boudhanath neighbourhood in Kathmandu. "That was before the Chinese influence." Nepal is one of the world's most impoverished countries, made poorer by a decade-long civil war between Maoist guerillas and the military that ended in 2006. The nation is bordered by India and China, and Nepali leaders have sought to use China as a counterbalance to long-running Indian influence. In recent years, China has poured in aid, infrastructure expertise and, in Lumbini, believed to be the birthplace of Buddha, investment in Buddhist sites. [...] Shankar Prasad Koirala, the joint secretary of the Ministry of Home Affairs, insisted Nepal had not turned its back on the refugees. "The government of Nepal is assisting them and treating them on humanitarian grounds," he said. The earliest Tibetan refugees arrived in Nepal in 1959, when the Dalai Lama fled Tibet, and they settled in refugee camps. The population was bolstered by more recent political refugees. The Tibetans used to be given refugee cards that guaranteed them some rights, but Nepal ended that practice in 1998. For decades, there had been an understanding that Nepali border guards would allow refugees they encountered to continue on to sanctuary. But now Tibetans suspect that the low numbers of refugees reaching Kathmandu could be in part a result of guards sending back Tibetans they catch, especially since China is now involved in border security training. ^ top ^

Dalai Lama visit cancelled by Sydney University (SCMP)
One of Australia's most exclusive universities has called off a talk to students by the Dalai Lama, prompting accusations it is bowing to China which has branded the exiled Tibetan spiritual leader a dangerous separatist. Sydney University, ranked in the world's top 50, cancelled the June visit by the Nobel Peace laureate to avoid damaging China ties, including funding for its cultural Confucius Institute, Tibetan activists and Australian lawmakers said. "As a democratic country, we should be encouraging more open and frank discussion about the current situation in Tibet, not banning the country's spiritual leader from addressing students and staff at universities," said Greens Senator Sarah Hanson-Young, whose party wields the balance of power in the upper house of parliament. Prime Minister Julia Gillard was heavily criticised for refusing to meet the Dalai Lama during a 2011 visit to avoid damaging two-way trade worth US$120 billion last year. This month she led a trade delegation to meet Chinese Premier Li Keqiang, with both countries agreeing to a new strategic partnership including yearly talks between both leaders on foreign policy and economics. China's human rights record in Tibet remains a controversial issue in Australia, a close US ally, and Sydney University's new Institute for Democracy and Human Rights organised an on-campus talk by the Dalai Lama during his 10-day visit. This was overturned by a decision to move the event off campus after the university warned organisers not to use its logo, allow media coverage or entry to the event by free Tibet activists. Emails from university Vice-Chancellor Michael Spence, obtained by Australian television, expressed relief at the outcome, with Spence reportedly praising it as "in the best interests of researchers across the University". A university spokesman said senior academic management never received an official request to host the Dalai Lama, but acknowledged a decision was taken to move the event. "The university decided that there was a better way of doing it. A small group, a small section of the student body, was really not the best thing," the spokesman said. Kyinzom Dhongdue, a pro-Tibetan independence spokeswoman for the Australia Tibet Council, said the university had given in to China, which was a major focus of academic studies. "They have compromised their academic freedom and integrity, and it also sends a disheartening message to the Tibetan people," she said. More than 100 Tibetans have set themselves alight since 2009 to protest Beijing rule, mostly in Tibetan areas of Sichuan, Gansu and Qinghai provinces. Most have died. ^ top ^



Media censorship of terrorism on Chinese soil only feeds the rumours (SCMP)
On March 26, the news website Tianshan, run by the Xinjiang regional government, reported that local courts had sentenced 20 men to jail terms of up to life imprisonment for promoting terrorism and inciting secession. Of these, 19 individuals in four groups were found guilty of organising, leading or participating in terrorist organisations. The groups were accused of spreading multimedia materials related to the East Turkestan Islamic Movement and the Islamic Movement of Uzbekistan, both considered terrorist organisations by China, the US and the United Nations. Although the Chinese-language report did not mention the ethnicity of these criminals, their distinctive names and religious affiliations indicate they are most likely Uygurs. Uygurs and the ethnic Han do not co-exist as harmoniously as Chinese TV programmes and films like to display. The region has been hit by ethnic violence from time to time, the worst of which in recent years was the July 2009 riots in Urumqi, Xinjiang's capital, in which 197 people died, mostly Han. Heavy security since then has not prevented sporadic terrorist attacks. In mainland China, terrorism is perceived as the violent expression of Uygur ethnic separatism and religious extremism fostered by international connections. The terrorist threat primarily emanates from the East Turkestan independence movement. Although most independence organisations disclaim violence, a tiny number of small groups may present a risk high enough to require a large-scale response. While the Chinese government accords a high priority to the fight against terrorism, its anti-terrorism efforts are often accompanied by low media coverage. In all likelihood, the authorities' strict control of information is the result of a carefully orchestrated strategy. China started its anti-terrorism campaign long before the September 11 attacks on the US. Chinese officials began speaking of terrorist violence in the late 1990s, but they moderated their statements probably for fear of scaring away investors. Another reason was a fear of internationalising the issue of "East Turkestan", a term so sensitive that its use was not allowed in the official media. After 9/11, America's global "war on terror" prompted China to openly confirm the existence of terrorism and declare the government's determination to address this problem. Except for the deadly July 2009 unrest, where the authorities' style of openness by inviting foreign journalists to the crime scene surprised the public, details about terrorism have usually been concealed or censored. Controlling information about terrorist attacks has an obvious advantage. To effectively terrorise, this kind of political violence needs to reach an audience far beyond those directly affected in the attacks. For this reason, terrorists need the help of the media to spread their message and generate fear. Media coverage serves as the "oxygen" of terrorism. By cutting the supply, the authorities hope to ward off the serious social and political repercussions of attacks. Yet media censorship also has its disadvantages. People can still get their information on the internet. And, in the absence of reliable sources of information, baseless rumours may spread and trigger greater anxiety. And if the people are unaware of the truth and excluded from discussions on policy changes, the authorities will find it even more difficult to deal with such crisis situations, let alone eliminate the root causes of terrorism. The current media policy against terrorism is not helpful. In fact, it may be counterproductive. A more productive approach would be for the government to gradually loosen its control on information. This is especially important because the media, as a public watchdog, offers an indispensable forum for the Chinese people, together with their government, to seek a better solution. In the final analysis, freedom of the press is a fundamental human right and one of the foundations of a democratic society. Although the Chinese constitution promises to protect press freedom, this right is not adequately respected in political life or legal practice. In this respect, it shares the same fate as that of many other human rights on the books. This situation will change over time as people begin to take this freedom more seriously. Even if the government does not act on its own initiative, media censorship regarding terrorist activities will probably be eased, little by little. As the first step, relevant information should be made available to researchers. China is far from being a liberal state. It has made impressive legal progress in the past few decades; still, for cultural, historical and political reasons, it continues to flout the rule of law. In the future, China will have to combat terrorism with one hand tied behind its back, just as most liberal states do. (Editor's note: The author, Zhou Zunyou, is a Chinese researcher and head of the China section at Germany's Max Planck Institute for Foreign and International Criminal Law). ^ top ^



HK transgender woman sues for right to marry man (Global Times)
A transgender woman who has been twice turned down by Hong Kong courts to have the right to marry her boyfriend took her case to the Court of Final Appeal, which predictably did not deliver a verdict on Tuesday, the Hong Kong-based Mingpao Daily reported. The court case is the first of its kind in Hong Kong, where transsexual people are forbidden from obtaining a marriage license. The woman, who the newspaper referred to only as Ms W, has twice lost her suit against the local civil administration, which refused to grant her and her boyfriend a marriage license some three years ago. The lower courts denied her the right to marry saying that marriage implies conceiving children. Monica Carss-Frisk, the lawyer representing the marriage registration authority in Hong Kong, argued that marriage is between a natural-born man and a natural-born woman and granting a transgender a marriage license is no different than a same-sex marriage, which is outlawed, the news portal reported. The woman's lawyer, David Pannick, argued that it's ridiculous that the law would allow his client to marry another woman even though she is one. The trial sparked heated online discussion. Peng Xiaohui, a sexologist with Central China Normal University, told the Global Times on Wednesday that Chinese people's attitudes toward other people's sexual orientation are changing faster than the legal system. "People with higher education tend to have more tolerance but there is a long way to go to change the discriminatory situation transsexuals face," Peng added. While same-sex marriage is still not permitted on the mainland, heterosexual marriages involving a transgender partner are. The first transgender marriage on the Chinese mainland took place in Nanjing in May, 2009, the Jiangnan Times reported. ^ top ^



Mainland Chinese travel boom is a mixed blessing for Taiwan (SCMP)
Taiwan's once-quiet travel industry is embracing a steady increase in tourist arrivals from the mainland, but faces new strains from the growing influx of visitors, who threaten to overrun the island's prized landmarks. With 2.58 million arrivals from the mainland last year - much of that during its three week-long national holidays - businesses from tiny inns to big airlines have made space for more visitors, travel industry watchers say. Mainland arrivals to Taiwan are up 45 per cent from 2011. In 2008 only a trickle of cross-strait tourists was allowed. [...] Taiwan opened regular group tours from the mainland in 2008 as the island's president, Ma Ying-jeou, struck deals designed to help the island's economy. [...] This month, bird flu deaths on the mainland put Taiwan on alert, and it stepped up screening of mainland arrivals at airports. [...] Taiwan's government still maintains limits on the number of mainland tourists it allows in, citing concerns over illegal overstaying and undercover political activity. But the limits have risen since 2008 under pressure from the travel industry. ^ top ^

First live-fire drill in five years as part of Taiwan's Han Kuang exercises (SCMP)
Taiwan has begun its largest military exercises since 2008, which will today see a live-fire drill on Penghu Island in the middle of the Taiwan Strait. The drill will review the armed forces' ability to defend Taiwan against a simulated attack by mainland forces. It is the first time since Ma Ying-jeou became Taiwanese president in 2008 that the annual Han Kuang exercises will see the firing of live ammunition. The exercises, which began on Monday, are the island's most important war games involving the army, air force and navy. The holding of the live-fire drill follows the release yesterday by Beijing of its annual white paper on defence, which lists Taiwan's independence as the "biggest threat to the peaceful development of cross-strait relations". Taiwan's Mainland Affairs Council said promoting the peaceful development of cross-strait relations was a key policy of the government. "Our two sides should continue to make positive contributions and efforts to promote cross-strait peace through negotiations, dialogue and exchanges," the council, which charts policy towards the mainland, said. It said Ma's government would firmly maintain its stance of promoting cross-strait peace. In an hour-long videoconference yesterday with US academics, Ma called for the peaceful resolution of maritime disputes, including that surrounding the Diaoyu Islands in the East China Sea, which are claimed by Beijing, Tokyo and Taipei. Accompanied by Yen Ming, Taiwan's chief of general staff, Ma is scheduled to inspect the live-fire drill today on Penghu in his capacity as the military commander-in-chief. Since Ma replaced pro-independence Chen Shui-bian as president, he has adopted a policy of engaging Beijing, leading to the signing of 18 non-political co-operation agreements and warming cross-strait ties. Taiwan's defence ministry noted that the resumption of the live-fire drill was a response to opinions voiced by various groups in society, including the local media and lawmakers, who have accused the military of neglecting national defence. The live-fire drill, which involves 7,682 servicemen, is aimed at testing the military's ability to counter possible amphibious landings by People's Liberation Army troops, according to Taiwan's military. "The military will also test the Thunderbolt-2000 multiple-launch rocket system," said Tseng Fu-hsin, assistant deputy chief of general staff for operations and planning. He said a total of 145 pieces of equipment, including army tanks and naval frigates, would be tested during the five-day exercises. ^ top ^



China GDP growth stumbles in first quarter to 7.7pc (SCMP)
China's economic recovery unexpectedly stumbled in the first three months of this year as the annual rate of growth eased back to 7.7 per cent from the 7.9 per cent pace set in the final quarter of last year, official data showed on Monday. The figures, announced by the National Bureau of Statistics, were weaker than market expectations in the consensus Reuters poll of a 8.0 per cent expansion. Many investors had been primed for an upside surprise versus the consensus after a first-quarter surge in liquidity in the economy and an uptick in export growth nurtured a belief that a policy-induced recovery that had snapped seven straight quarters of weakening expansion in the fourth quarter would accelerate again. China's full-year annual growth of 7.8 per cent last year was the weakest since 1999. Other data released alongside GDP showed industrial output grew 8.9 per cent in March from a year ago, versus expectations of 10.0 per cent showed in the Reuters poll. Retail sales in March rose 12.6 per cent on a year ago versus an estimated 12.5 per cent in the Reuters poll. Fixed-asset investment grew 20.9 per cent in the first quarter from a year earlier, versus an expected 21.3 per cent. The government only publishes cumulative investment data. ^ top ^

Reform set to broaden yuan range (China Daily)
China will continue to broaden the permitted fluctuation range of yuan trading as the next step in deepening currency reform, a central bank official said on Tuesday. "Market-oriented progress in interest rate and currency exchange rate reform will provide huge opportunities as well as challenges for the country's payment and settlement system," said Wang Yu, deputy director-general of the research bureau of the People's Bank of China. She made the remarks while attending a forum in Beijing, without elaborating as to what extent and when the monetary authorities would make new adjustment to the range. Last April, the central bank allowed the yuan to fluctuate by 1 percent from a daily midpoint, doubling the previous 0.5 percent. It was the first time since May 2007 that the trading band was widened. The yuan rose to a 19-year high on Tuesday after the central bank set a record fixing against the dollar for the third consecutive trading day. The yuan strengthened to 6.1831 per US dollar in Shanghai, against a reference rate of 6.2408, according to the China Foreign Exchange Trade System. It touched 6.1800 earlier, the highest level since the government unified official and market exchange rates at the end of 1993. Wang said the central bank would also improve the foreign exchange market to promote currency reform, by introducing more market players and trading methods, broadening the allowed trading scale, and reducing trading costs. As China continues to reform the yuan and promote international use of the currency, it needs to further open and diversify the domestic payment and settlement industry, the Chinese Academy of Social Sciences said in a report released on Tuesday. Cheng Lian, a senior financial analyst at the major think tank for the Chinese government, said that without the firewall of the yuan's inconvertibility under the currency account, an over-concentrated payment and settlement system would expose the economy to greater financial risks than a scattered and diversified system. According to the report, State-owned banks' contribution to total capital flows dropped to 36 percent by the end of 2011 from the 44 percent in 2007, while that of urban commercial banks rose from 7 to 10 percent. "Although China is likely to witness the rapid development of the payment and settlement sector, especially driven by e-commerce, a more modernized system would have some negative influence on the monetary authorities and affect the effectiveness of policies," said Zhang Chengsi, a professor of finance at Renmin University of China. He said it might add to market complexity by enlarging the money multiplier and introducing more liquidity risks. Wu Xuchuan, a division head at the central bank's research bureau, said the development of the payment and settlement market would pose a challenge to the central bank, which should respond to this by adjusting monetary policy targets and strengthening regulation in a timely manner. ^ top ^

China to adopt VAT in rail transport, postal and telecom sectors (Xinhua)
China is preparing to extend value-added tax (VAT) reforms to the rail transportation, postal and telecommunications sectors. A related plan is likely to come out at the end of this year or early next year, Minister of Finance Lou Jiwei and head of the State Administration of Taxation Wang Jun said in an interview Tuesday. In an effort to avoid double taxation on businesses, the government introduced a pilot plan that replaces the business tax with a value-added duty that is charged only on the added value of each link in the production chain. By the end of February, the plan had eased taxes by more than 55 billion yuan (8.8 billion U.S. dollars) for businesses in nine regions that are experimenting with the new practice, while small taxpayers there saw an average cut of 40 percent, Wang said. ^ top ^

Suntech may sell Italian assets to fund restructuring (China Daily)
China's cash-strapped solar giant Suntech Power Holdings Co Ltd appears to have found an alternative to selling its bankrupt Wuxi subsidiary to fund its own restructuring plan. The company could sell solar power generation assets in Italy. Reports said selling the assets may generate hundreds of millions of dollars that would help ease the company's debt woes, but some industry insiders doubt if it could strike a satisfactory bargain, due to its urgent demand for cash. "We intend to operate GSF for the time being and will consider all options to maximize the value for our stakeholders," Suntech's spokesman said on Wednesday when asked whether the company would sell its 88.15 percent stake in Global Solar Fund Sicar (GSF Sicar), a Luxembourg-based fund specializing in the development of solar power projects mainly in Italy. Media reports said the fund carries an enterprise value of up to $800 million, including more than $600 million in loans from China Development Bank. The fund also owns 142-megawatt solar projects in Italy, 141 mW of which is now connected to the grid, the Suntech spokesman said. Ocean Yuan, president of Grape Solar, an importer of solar panels based in Eugene, Oregon, said: "The Italian solar farm was built with around $600 million in loans when solar panel and inverters prices were at a higher level than they are today. Therefore, the net equity Suntech put into the project is worth nothing now." Gu Limin, an analyst with IHS iSuppli market research firm, said: "Suntech lacks positive messages nowadays, and there is no good news coming from the ongoing restructuring of its Wuxi subsidiary. It will be hard to find a strategic investor coming up with a generous offer." Media reports have suggested previously that billionaire Warren Buffett could come to Suntech's rescue, igniting hopes that it could find the capital it needs for a turnaround plan. Shares in Suntech rallied after those reports. Yuan said compared to the Wuxi subsidiary, which is a manufacturer, it is more likely that Buffett's Berkshire Hathaway could negotiate a deal with Suntech for the Italian solar farm at a deep discount. Suntech Power had total debts of $2.2 billion at the end of March 2012. It announced that its biggest subsidiary, Wuxi Suntech, had filed for bankruptcy last month after defaulting on $541 million of its dollar-denominated bonds. [...]. ^ top ^

FDI surge a show of confidence (China Daily)
Foreign direct investment in China continued to increase in March, an indication of global confidence in the world's second-largest economy, officials said. Inbound FDI increased 5.65 percent last month from a year earlier to $12.4 billion, the Ministry of Commerce said on Thursday. Shen Danyang, a spokesman for the ministry, predicted steady growth in FDI in the coming months as a result of China's efforts to optimize its foreign investment structure. March saw the second consecutive month of growth for China's FDI. In February, it rose 6.3 percent, the first gain after an eight-month slump. Shen attributed the increase to China's "timely adjustment of macroeconomic policy, and improving advantages as a foreign investment destination". For the entire first quarter, the nation's inbound investment gained 1.4 percent year-on-year to $29.9 billion, the ministry said. China's outbound direct investment in the non-financial sector in the first quarter saw strong growth, gaining 44 percent to $23.8 billion, it said. The European Union boosted its investment in China by 45 percent to $2.05 billion in the first quarter. FDI from the US and Japan increased by 18.5 percent and 10.5 percent to $1.06 billion and $2.29 billion. The boost in FDI came despite a deceleration in China's economic growth to 7.7 percent in the first three months of this year, down from 7.9 percent in the final quarter of 2012. The growth showed global companies' confidence in China, a top researcher said. "The Chinese government, newly elected by the National People's Congress in March, recently sent a positive signal to foreign companies in which they were welcomed to play a key role, rather than a marginal role, in China's next stage of development and reform," said Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation. During a recent meeting with executives from a host of multinationals attending the China Development Forum, Premier Li Keqiang pointed out that China will expand domestic consumption by opening up further to foreign businesses. [...]. ^ top ^


DPRK and South Korea

Defiant North Korea readies mass parade for founder Kim Il-sung (SCMP)
North Korea prepared for the annual celebration of its founder's birth on Monday, having rejected talks with South Korea aimed at reducing tensions and reopening a joint industrial park between the two countries. The North has threatened for weeks to attack the United States, South Korea and Japan since new UN sanctions were imposed in response to its latest nuclear arms test in February. Speculation has mounted of a new missile launch or nuclear test in a bid to either force Washington to hold talks with Pyongyang or to shore up the leadership of Kim Jong-un, the grandson of the reclusive state's founder. The third Kim to rule in Pyongyang attended a midnight celebration of his father and grandfather's rule with top officials including his kingmaker uncle Jang Song-thaek and the country's top generals. [...] North Korea has repeatedly stressed that it fears Washington wants to invade it and has manipulated the United Nations to weaken it. At the weekend, Pyongyang rejected an overture by new South Korean President Park Geun-hye as a “cunning” ploy. “We will expand in quantity our nuclear weapons capability, which is the treasure of a unified Korea... that we would never barter at any price,” Kim Young-nam, North Korea's titular head of state, told a gathering of officials and service personnel applauding the achievements of Kim Il-sung. Kim Il-Sung's birthday is usually marked with a mass parade to showcase the North's military might. In last year, following the death of his father, the 30-year old Kim Jong-un made a public speech, the first in living memory for a North Korean leader. ^ top ^

S.Korea deeply regrets over DPRK's refusal of dialogue offer (Xinhua)
South Korea on Monday expressed deep regrets that the Democratic People's Republic of Korea (DPRK) had rejected its dialogue offer. "We came to judge that North Korea (DPRK) refused our government's proposal for dialogue," Kim Hyung-seok, spokesman at the Unification Ministry, told a press briefing. "We deeply regrets over such a refusal." [...] The South Korean presidential office said in a statement posted on its website that "it is very regrettable for North Korea to deny our government's dialogue proposal," urging Pyongyang to take responsible action to solve the problem of workers at the Kaesong Industrial Complex. A week earlier, the DPRK decided to withdraw all its workers from the joint industrial park at the DPRK's western border town of Kaesong, effectively suspending operations of 123 South Korean companies stationed there. [...]. ^ top ^

DPRK vows "military demonstration" in response to South Korean hostility (Xinhua)
The Democratic People's Republic of Korea (DPRK) threatened Tuesday to start "military demonstration" in response to South Korea's hostility, said the official Korean Central News Agency (KCNA). "We will start military demonstration to defend our supreme dignity," the KCNA quoted an ultimatum issued by the Korean People 's Army's supreme command, and condemned anti-DPRK gatherings in Seoul as Pyongyang was celebrating Kim Il-sungs birthday anniversary. The ultimatum added that "if Seoul really intends to conduct a dialogue, it should drop its confrontational attitude and apologize for its past crimes." [...] Earlier this week, South Korean President Park Geun-hye and Unification Minister Ryoo Kihl-jae separately urged Pyongyang to enter talks. South Korea's defense chief said Monday that DPRK is seen ready to launch missiles, but he noted that there are no signs of a full-scale war. ^ top ^

North Korea won't give up nuclear arsenal ahead of any talks (SCMP)
After weeks of issuing war cries, North Korea has options to dial down tensions with the US and South Korea, but is unlikely to be tempted by Washington's offer to restart negotiations on its nuclear programme. Despite Pyongyang's threats, South Korea's new government has offered talks on the joint industrial park shut by the North during the latest stand-off. And a US decision to postpone a long-range missile test this month could provide a pretext for the North to declare a symbolic victory. Through it all, the US has made it clear that the door remains open for talks - a point hammered home by Secretary of State John Kerry during his trip to Northeast Asia. The problem is that the offer of talks has a precondition that the government of Kim Jong-un won't swallow. The US is adamant the North must recommit itself to giving up nuclear weapons, as it did in a 2005 agreement arising from the so-called six-party talks - aid-for-disarmament negotiations hosted by China and joined by Japan, Russia and South Korea that have been suspended for four years. But Pyongyang has made it increasingly clear it won't negotiate away its atomic arsenal, which it views as a guarantee that Kim's authoritarian regime won't go the same way as those in Iraq and Libya that were toppled in US-backed invasions. Although the belligerent rhetoric pumped out by North Korea subsided a little while the country commemorated the 101st birthday anniversary of founding leader Kim Il-sung, it was back to business as normal yesterday. North Korea's military threatened the South with imminent "sledgehammer" retaliation unless Seoul apologised for anti-Pyongyang protesters burning effigies of its revered leaders. Seoul called the ultimatum regrettable and absurd. Pyongyang has consistently rejected Seoul's offer of talks and could test-fire two medium-range missiles reportedly readied on its east coast. Even in the feverish climate stoked by the North's threats, policy experts are urging the Obama administration to show more flexibility in its dealings with Pyongyang. [...]. ^ top ^

North blocks South Koreans taking supplies to Kaesong workers (SCMP)
North Korea barred a delivery of supplies to South Koreans in the closed Kaesong industrial zone yesterday, as the South's president said it was time to stop rewarding Pyongyang's provocations. A delegation of 10 businessmen representing the 123 South Korean firms in Kaesong had applied to travel to the zone to bring food and other daily necessities to their staff and to inspect their facilities. "North Korea informed us that the request for a visit... had been turned down," said Unification Ministry spokesman Kim Hyung-seok. "It is very regrettable that the North has rejected the request and disallowed a humanitarian measure," Kim said. North Korea has blocked access to Kaesong - which lies 10 kilometres inside its border - since April 3 amid soaring military tensions on the Korean peninsula. South Koreans in Kaesong at the time were told they could leave when they wanted, but as of yesterday there were still 200 of them remaining. The North withdrew all its 53,000 workers and suspended operations in the zone on April 8. [...] Three cars crossed back into South Korea from Kaesong yesterday, all laden with bundles of products and personal belongings squeezed into every available seating space and tied onto the roof. Oh Heung-gi, a 50-year-old clothing firm employee, said the situation was increasingly difficult for those holding out. [...] "It's not like anyone is starving, but the food is clearly running out and what's left isn't up to much," a Unification Ministry spokeswoman said. [...] On Tuesday, North Korea said the South was seeking to shift responsibility for Kaesong's closure, which Pyongyang insists was forced by Seoul's policy of "confrontation" and its "warmongering" statements. "The puppet regime can never escape from the criminal responsibility for putting Kaesong in this grave situation," said Pyongyang's state body overseeing special economic zones. Neither of the Koreas has allowed previous crises to significantly affect the complex, which is seen as a bellwether of stability on the Korean peninsula. South Korean President Park Geun-hye, who was elected on a promise of greater engagement with Pyongyang, said Seoul would not be intimidated into a dialogue. "We must break the vicious cycle of holding negotiations and providing assistance if [North Korea] makes threats and provocations," Park told a gathering of foreign ambassadors. Kaesong is a crucial hard currency source for the impoverished North, through taxes and revenues, and from its cut of the workers' wages. The accumulated turnover since 2004 stands at US$1.98 billion. ^ top ^

North Korea sets out tough pre-conditions for talks (SCMP)
North Korea laid down rigid pre-conditions yesterday for dialogue with Seoul or Washington, including the scrapping of UN sanctions and a guaranteed end to South Korea-US joint military drills. The list of demands from the North's top military body was swiftly rejected as "incomprehensible" by South Korea which, together with the US, has made any talks conditional on the North taking steps towards denuclearisation. Dialogue has become the new focus of a blistering rhetorical battle that has sent military tensions soaring on the Korean Peninsula ever since the North carried out its third nuclear test in February. Some analysts see the North's engagement in a debate over dialogue - no matter how unrealistic the conditions - as a welcome shift from the apocalyptic threats of nuclear war that have poured out of Pyongyang in recent weeks. "I don't think Pyongyang really expects these conditions to be met," said Yang Moo-Jin, a professor at the University of North Korean Studies in Seoul. "It's an initial show of strength in a game of tug-of-war that at least shows a desire to have a dialogue down the line," Yang said. The first step demanded by the North's National Military Commission was the withdrawal of "cooked up" UN sanctions that were imposed after the nuclear test in February. North Korea has repeatedly cited the sanctions as a prime trigger for the current crisis. The other main bone of contention has been ongoing joint South Korea-US military drills, which have involved the deployment of nuclear-capable B-52s and B-2 stealth bombers. Both countries must provide international guarantees that such "nuclear war drills" will never be repeated, the commission said. "Dialogue and war games can never go together," it added. South Korean Foreign Ministry spokesman Cho Tai-Young called the North's pre-conditions "absurd" and said it was time for Pyongyang to choose engagement with the international community over provocation. "We strongly urge the North to stop making such incomprehensible demands and to make the wise choice we have repeatedly urged," Cho told a press briefing. Daniel Pinkston, a North Korea expert with the International Crisis Group, ruled out any suggestion that the North was softening its position and said those hoping a dialogue might emerge were being wilfully naive. The North, Pinkston argued, had bound itself to a course that could only end with its recognition as a nuclear power - a status that is anathema to the United States and its allies. "What is there to even talk about?" Pinkston said. "The North has burned its bridges. Any reversal could only be made at immense domestic cost to the regime. And there is no way any US administration is going to sit down and confirm a change in the status quo.". ^ top ^




Special traffic restrictions to apply on April 27 and 28 (UB Post)
The Ulaanbaatar City Governor's Office has announced that special vehicle restrictions will be applied on the weekend of April 27 and 28 to manage traffic flow during the upcoming “VII Ministerial Conference of the Community of Democracies,” which will be held in Ulaanbaatar at the end of the month. Organizers of the conference expect around 1,000 foreign participants to attend the conference, including foreign relations ministers and other high ranking figures from some 30 countries. Given the high number of participants and heightened security, which will result in the closure of some roads, the Ulaanbaatar City Governor's Office and the Traffic Police Department held joint talks last week to discuss ways to ensure a smooth flow of traffic. According to the current plan, vehicles will be restricted based on the numbers of their state license plates. Further details will follow regarding the exact restrictions, but the restrictions are likely to be similar to those applied on two weekends leading up to Tsagaan Sar. On those weekends, vehicles with license plates ending in even numbers were not permitted on the roads on Saturdays and vehicles with plates ending in odd numbers were not permitted on the roads on Sundays. ^ top ^

Resignation of Prime Minister to be discussed (
The Standing Committee on State Structure will hold a meeting to discuss whether or not to demand the resignation of Prime Minister Norov Altankhuyag and to make a draft law to amend the law on political parties at 2:00 pm today, April 16th. MPP submitted a petition to the Speaker Zandaakhuu Enkhbold for the resignation of Prime Minister Norov Altankhuyag collecting 25 MPs signatures in parliament last Friday. Speaker Zandaakhuu Enkhbold said the issue would be discussed during a plenary session and Standing Committee meeting this week. Therefore the Standing Committee on State Structure will discuss the issue today. ^ top ^

Oyu Tolgoi LLC is being audited and it would be clear the reasons for an alleged 2 billion USD cost overrun, said Minister Ch.Ulaan (InfoMongolia)
Minister for Finance Ch.Ulaan reported on policy and implementation being carried out to date by the Ministry and the Government, also gave answers on current economical situation of Mongolia during a press conference held at the Ministry of Foreign Affairs on April 17, 2013. On the question were the foreign investments being decreased, Minister Ch.Ulaan clarified as follows, “In 2010, foreign investments were estimated at 1.6 billion USD, the volume reached at 4.6 billion USD in 2011 and declined to 3.8 billion USD in 2012, but the later amount does not comply with the Foreign Investment Law. In addition, the Oyu Tolgoi Investment Agreement was established unfruitful to civilians and it was approved on many grounds. For instance, during the project implementation the investment was exceeded by over 2 billion USD budget, which means Mongolians' debt is increased accordingly, moreover the period of Mongolia's net profit is extended by another 30 years. Therefore, we need to look over the agreement and an investigation team comprised of authorities from Ministries of Mining, Economic Development and Finance, also General Agency for Specialized Inspection, and “Erdenes Oyu Tolgoi” in collaboration with a team from “Rio Tinto” are investigating why the primary investment have been overrun so far, and currently we are conducting an audit at the Oyu Tolgoi company. Oyu Tolgoi has invited an international auditor company and all procurement documents are being checked now. As soon as the audit completes it would be clear the reasons for an alleged 2 billion USD cost overrun at the mine. Also, it is true that Mongolia pays 260 million MNT per day for “Chinggis” Bond's interest, but there is no worry, because it is being arranged. As of today, Mongolia's total debt is estimated at 9.8 trillion MNT (approx. 7 billion USD) and it is legalized not to exceed over 50% of Mongolia's GDP, and we are following the regulations". ^ top ^

Mongolia Introducing New Investment Law to Attract Investors-Deputy Minister (
The Mongolian government plans to submit a new investment law for parliamentary approval by this summer that aims to give foreign investors more assurance about the rules governing their investments, Mongolia"s deputy minister of economic development said Wednesday.
"We want to send a very strong message [regarding] the stability and in the clarity of treatment of foreign investors in Mongolia," Chuluunbat Ochirbat told journalists on the sidelines of the Mongolia Investor Summit here. He said the government has already drafted the law and plans to hold a cabinet-level discussion over the next couple of weeks with a view to submitting it to parliament for approval before the spring plenary session closes on July 10. The draft law aims to reverse the recent downturn in foreign direct investment after stricter controls were applied last year. "In the last year, Mongolia approved in a very rash move [a foreign direct investment that]... has affected very badly the economic situation," he said. The government is trying to reverse that trend. He said the draft law will allow private investment of any size without parliamentary approval although investment coming from state-owned enterprises will still require parliamentary approval. ^ top ^


Andrin Eichin
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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