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
  24-28.6.2013, No. 481  
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Table of contents

DPRK and South Korea


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Foreign Policy

China 'gravely concerned' on cybersnooping by US, called world's 'biggest villain' (SCMP)
China said on Sunday that it was “gravely concerned” over cyberattacks by US government agencies after new allegations that they had snooped on Chinese targets. Foreign ministry spokeswoman Hua Chunying said the latest reports “again proved that China is the victim of cyberattacks, and we have already lodged representations to the US side”, according to state news agency Xinhua. The remarks followed new claims by former US spy Edward Snowden that US spies had hacked the prestigious Tsinghua University in Beijing -- home to one of six “network backbones” that route all of mainland China's Internet traffic -- and the Hong Kong headquarters of Pacnet, which operates one of the Asia-Pacific region's largest fibre-optic networks. Earlier on Sunday, Xinhua called the United States the world's “biggest villain” for IT espionage, after the new allegations emerged. [...] The comments came after the United States slapped an arrest warrant on Snowden on Friday, and White House National Security Advisor Tom Donilon said the charges “present a good case for extradition under the treaty, the extradition treaty between the United States and Hong Kong”. [...] Xinhua noted that the United States was now trying formally to extradite Snowden from Hong Kong, where he has gone to ground. “But for other countries, Washington should come clean about its record first. It owes too an explanation to China and other countries it has allegedly spied on. It has to share with the world the range, extent and intent of its clandestine hacking programmes,” it said. The United States and China are both victims of hacking and have to work together on the issue, Xinhua said. But it stressed: “The ball is now in Washington's court. The US government had better move to allay the concerns of other countries.” Pro-Beijing Hong Kong lawmaker Regina Ip, a former secretary for security who sits on the Executive Council, said protections for political asylum-seekers were written into the US extradition treaty in “black and white”. Washington may threaten Hong Kong with a withdrawal of visa-free access to the United States for its residents, she said on the Commercial Radio station. But Ip emphasised: “We have laws, and the United States should also be aware of it.”. ^ top ^

Myanmar president meets Chinese state councilor (Xinhua)
Myanmar President U Thein Sein met with visiting Chinese state councilor Yang Jiechi in Myanmar's capital Nay Pyi Taw on Monday. Noting that China and Myanmar are traditionally friendly neighbors, Yang stressed that the two countries should firmly grasp the correct direction of their bilateral ties from a strategic and long term point of view and properly implement the important consensus reached between the heads of state of the two countries, continuously expand the common interest and deepen the China-Myanmar Comprehensive Strategic Cooperation Partnership. Yang called for maintenance of reciprocal visits at high level and boost strategic link, deepening practical cooperation, ensuring smooth implementation of major cooperation projects to realize mutually beneficial win-win status to benefit local people. He also called for personal and cultural exchange to deepen mutual understanding and friendship between the two peoples. He emphasized strengthening of coordination and consonance in regional cooperation, saying that next year, Myanmar will be alternate chair of the Association of Southeast Asian Nations ( ASEAN) and China would like to push along with Myanmar the development of China-ASEAN ties. Yang stressed that China respects Myanmar's sovereignty and territorial integrity and support it to pursue a path of development that conforms to its status, hoping and supporting Myanmar's social stability, economic development and livelihood improvement. Speaking of Myanmar's national reconciliation process, Yang hoped the government and the Kachin side could maintain the trend of peace talks and reach ceasefire agreement as early as possible to realize eternal peace and stability in the north and China-Myanmar border areas. In this regard, China would continue to play a construction role, he added. U Thein Sein said Myanmar and China are friendly neighbors and good friends. He expressed thanks for the valuable support and assistance long rendered by the Chinese side. He recalled that Myanmar always supported China whenever major issue that linked with China's core interest arose. In the course of Myanmar's reform and development, U Thein Sein hoped that by applying China's experience of success, Myanmar wishes to jointly implement well the Action Plan of Comprehensive Strategic Cooperation Partnership and strengthen neighborly and friendly cooperation. Extending invitation to Chinese leader for early visit to Myanmar, U Thein Sein thanked China's assistance for its economic development and livelihood improvement. He voiced Myanmar's welcome of investment from China, promising to create good investment environment and ensure the smooth launching of the two countries' cooperation projects. Touching on Myanmar's efforts in seeking domestic peace and stability, U Thein Sein said it would continue to push the peace process to realize peace in the north and ensure tranquility in the border areas between the two countries. During his visit, Yang also had talks with Myanmar Vice President U Nyan Tun and met Speaker of the House of Representatives U Shwe Mann. […]. ^ top ^

Beijing made decision on Edward Snowden leaving Hong Kong, say analysts (SCMP)
Beijing interceded to allow whistle-blower Edward Snowden's dramatic flight from Hong Kong, calculating that infuriating the United States for now was necessary to prevent deeper corrosion in their relationship, analysts and media said yesterday. And Beijing exploited the cyberspying revelations to put the US on the back foot. State media called Washington a villain for its alleged hacking of Chinese targets, when the United States has long portrayed itself as a victim of Chinese cybersnooping. The Hong Kong government insisted that its decision to let the 30-year-old Snowden fly out on Sunday was governed strictly by the law, after a provisional US arrest warrant purportedly failed to meet its judicial requirements. But for many observers, such a high-profile case - carrying the potential to destabilise Sino-US ties for years if Snowden had fought a lengthy legal battle in Hong Kong - must have provoked intense interest among the city's overseers. Professor Shen Dingli, director of American studies at Shanghai-based Fudan University, said he believed the decision leading to Snowden's departure was definitely made by the central government in Beijing. […] China's Foreign Ministry on Monday sidestepped allegations that it orchestrated Snowden's departure, which infuriated Washington after it had requested his arrest and extradition. Spokeswoman Hua Chunying refused to directly comment on the affair at a regular press briefing in Beijing, or provide details on any role Beijing played in Snowden's flight to Moscow on Sunday. […] Niu Jun, a professor of international relations at Peking University, agreed that Beijing must have been involved in Snowden's departure "to a certain degree", because Hong Kong wouldn't deal with a diplomatic case like this "without the instructions of Beijing". "However, the Snowden case won't affect the Sino-US relationship in the long run, as long as Beijing doesn't get involved too deeply in it," Niu said. "Now that Beijing has already let Snowden go, it won't be a problem." […]. ^ top ^

Hague seeks to calm the waters over Tibet (SCMP)
British Foreign Secretary William Hague told his Chinese counterpart Wang Yi yesterday that "London recognises Tibet as part of China", Xinhua reported. The phone conversation followed reports that British Prime Minister David Cameron abandoned a trip to China in April to meet the new administration under President Xi Jinping after Beijing expressed its displeasure at a meeting Cameron held with the Dalai Lama in May last year and said he was unlikely to be granted meetings with senior leaders. Xinhua quoted Hague as saying "Britain does not support Tibet's independence" and that London "has fully realised the sensitivity of Tibet-related issues and is willing to handle them properly on the basis of respecting China's concerns". Wang said respecting and taking care of each other's major concerns were preconditions for maintaining mutual political trust and developing ties, Xinhua reported. It said the two men also discussed how to improve Sino-British relations, as well as other issues of mutual concern. In April, French President Francois Hollande became the first foreign head of state to visit Beijing after the new leadership took over. In May, Premier Li Keqiang skipped Britain on his maiden European trip. Hague's conciliatory remarks may pave the way for Cameron to visit Beijing later this year. ^ top ^

China, India to hold talks on border issues (Xinhua)
Special representatives from China and India will meet to discuss border issues from Friday to Saturday in Beijing, a Foreign Ministry spokeswoman said on Tuesday. Chinese State Councilor Yang Jiechi and Indian National Security Adviser Shiv Shankar Menon will attend the boundary talks, known as the 16th meeting between special representatives on Chinese-Indian border issues, according to spokeswoman Hua Chunying. When asked to comment on the results of the previous 15 rounds of talks, Hua said that the two neighboring countries "have kept effective communication on border issue" and the border region had "generally maintained peace and stability." Hua quoted Chinese Premier Li Keqiang as saying during his India visit in May that, the cooperation and development between China and India constitutes the cooperation and development among more than one third of the human population. "The growth of Chinese-Indian relations complies with common interests of both and we are willing to make efforts together with India to maintain the sound growth of bilateral ties," she said. The upcoming meeting is an important high-level contact after Li's India visit. "Both sides will continue to maintain the momentum of border talks and commonly safeguard peace and tranquility along the border region in accordance with the consensus and requirements made by both leaderships," she said. She pointed out that the border issue "is a complicated matter left by history and both have made a long-term endeavor to tackle the problem." During the previous talks, the two sides had signed a political guideline to the border issue and reached initial consensus on the framework to find a solution. "We are willing to make good use of the current mechanism and strive to seek a fair and rational solution acceptable by both on the basis of the agreements already inked," she said. Before reaching a final solution, efforts should be made to "maintain peace and stability along the border region and maintain the development momentum of bilateral ties," she said. ^ top ^

Hollande: Settle trade disputes through talks (Xinhua)
French President Francois Hollande on Tuesday hoped to settle trade disputes between China and the EU through negotiations, especially the recent trade frictions on China-made solar panels imported into the European Union. Hollande was speaking in a meeting at the Elysee Palace with members of the China Entrepreneur Club (CEC) who are in Paris to attend the fourth International Capital conference (ICC). The French head of state hoped trade disputes between China and Europe to be solved through consultation, stressing the need to create favorable conditions to faciliate mutual investment on both sides. Speaking to 40 enterprisers of China's largest private enterprises, Hollande introduced reforms made by the French government aimed at strengthening competitiveness and attractiveness to accommodate more international investment and create new jobs. The president noted that France is the first destination in Europe for Chinese investment, and also a gateway into the EU and other markets, promising that his country will continue to work to create a better investment environment for Chinese enterprises. Hollande said France supports the internationalization of the RMB, including the creation of a currency swap line with China which will allow the Bourse de Paris (security exchange of Paris) to compete with London, becoming the yuan overseas trading center. Hollande called for the strengthening of the partnership between Europe and China to rebalance economic and trade exchanges, allowing the global economy to return to sustainable and durable growth. The president finally expressed his commitment to the Sino-French comprehensive strategic partnership, a relationship based on mutual trust, economic reciprocity and mutual benefit of research. The fourth International Capital Conference started Monday in Paris. The two-day ICC was organized by Cavendish Group in partnership with China Entrepreneur Club and the French Foundation of Prospective and Innovation. More than 300 Chinese and Western business leaders of all economic sectors attended the meeting. ^ top ^

Vice-finance minister Li Yong becomes first mainland Chinese to head a UN agency (SCMP)
Vice-Finance Minister Li Yong has been elected director general of the United Nations' Industrial Development Organisation (Unido) - the first mainlander to head a UN agency - state media reported. The 62-year-old ran against five other candidates and secured the required two-thirds of the vote from Unido's 53-member board in Vienna on Monday, China Central Television reported. He is expected to be officially appointed to the post at Unido's general conference on Friday and serve a term of four years. Li has been a vice-finance minister and a member of the People's Bank of China's monetary policy committee for a decade. Established in 1966, Unido became a specialised agency under the UN in 1985. It works to help developing countries achieve sustainable industrial development. Its chief is equivalent in rank to the UN's undersecretary general. The organisation is headquartered in Vienna and has 172 member states. Li was quoted by CCTV as saying that Unido faces many challenges, including the provision of better services for member states, which would be a top priority when he took office […] He said the least developed countries needed to start industrialisation, and middle-income countries should further boost industrial development. He added that his winning the post showed China's strong support for Unido. The other candidates were from Afghanistan, Cambodia, Italy, Poland and Thailand. Current Unido head, Kandeh Yumkella of Sierra Leone, ends his term this month. Li started as a researcher at the finance ministry's Research Institute for Fiscal Science in 1984. Between 1985 and 1998, he worked at China's permanent mission to the UN, the office of the World Bank's Chinese executive director, and the finance ministry's World Bank department. He was then secretary general of the Chinese Institute of Certified Public Accountants before being made an assistant finance minister in 2000. […]. ^ top ^

China, EU hold human rights dialogue in SW China (Xinhua)
China and the European Union exchanged in-depth views on human rights issues during the 32nd round of the EU-China Dialogue on Human Rights in Guiyang, capital of southwest China's Guizhou Province. The two-day dialogue that opened on Monday was co-chaired by Li Junhua, director-general of the Department of International Organizations and Conferences of the Chinese Foreign Ministry, and Gerhard Sabathil, director for North-East Asia and the Pacific at the European External Action Service of the EU. China and the EU introduced the latest progress they have made in human rights-related issues and exchanged views on issues such as cooperation in the fields of human rights, minoritiy and criminal punishment. Li said at a Tuesday press conference after the dialogue that China has carried out human rights dialogues with nearly 20 countries and organizations. He suggested that China and the EU adhere to three basic principles on the mode of development in the field of human rights -- namely, upholding the spirit of equality and mutual respect, pinpointing the dialogue goals the two sides expect to achieve and addressing differences properly. Sabathil said the EU-China human rights dialogue has entered a comparatively mature stage. He also expressed the hope that the next round of the human rights dialogue will be held in Brussels by the end of this year. Both parties said the frank and in-depth dialogue enhanced mutual understanding. ^ top ^

Park sees blueprint for ties (China Daily)
Republic of Korea President Park Geun-hye said on Wednesday that Seoul and Beijing will outline a blueprint for common prosperity. Park made the remarks in an exclusive interview with China Daily on the eve of her four-day state visit, which begins on Thursday. Her meeting with Chinese counterpart Xi Jinping will also put Korean Peninsula and Northeast Asia regional affairs on top of the agenda. This is her first visit to China since taking office and her second overseas trip, following a visit to the United States last month. [...] "We will have in-depth discussions about how to give concrete substance to the (South) Korea-China strategic cooperative partnership, how to work together for peace and stability on the Korean Peninsula and in Northeast Asia, and how to promote bilateral cooperation on the international stage." Park, who is familiar with Chinese culture and speaks fluent Mandarin, said she is "filled with special emotion" about the visit in her capacity as president, though she has visited China on several occasions. [...] She is being accompanied by a sizable business delegation of 71 entrepreneurs. Park took 51 entrepreneurs to the United States last month, while former ROK president Lee Myung-bak brought a 36-strong business delegation to China when he visited five years ago. Beijing's ties with Seoul got a late start in 1992 when diplomatic ties were established, but relations have surged rapidly. China is now the ROK's biggest trading partner and investment destination. According to the Chinese embassy in Seoul, two-way trade reached a high of $256.3 billion in 2012, which also saw about 7.2 million visits between the neighbors. "Over the past 20 years, (South) Korea-China relations have made remarkable progress. Now is the time for our two countries to elevate the bilateral relationship to a new height," Park said. Referring to bilateral FTA talks, she said she "believed it is high time for our two countries to seek a new framework of economic cooperation commensurate with our economic status in the international community". "If a free trade agreement is concluded, it would make it possible for our two countries to enter one another's domestic market and would make a great contribution to the stable expansion of bilateral trade." Beijing and Seoul started FTA negotiations last year. They are expected to discuss the free trade pact during Park's visit. Park added that though Seoul and Beijing are "very closely related economically and culturally", some have made note of the fact that "the level of bilateral cooperation in politics and security lags relatively behind that in the economy and culture". "If we continue to further promote cooperation in the fields of the economy and society while deepening the extent of mutual cooperation in politics and security at the same time, our two countries will be able to carve out a new future for Northeast Asia," she said. Referring to another top priority of her talks with Xi — the Korean Peninsula situation — Park said she anticipated the meeting to be "a time for reaching consensus on the trust-building process" on the peninsula. She has pushed forward the "Korean Peninsula trust-building process" since taking office, aimed at containing Pyongyang's nuclear development, pushing its cooperation with Seoul and gradually building trust between the two. [...] Despite the current adverse conditions, Park said she has "a dream of ushering in a new era on the Korean Peninsula by building a regime of sustainable peace on it". She said the door for dialogue between Seoul and Pyongyang remains open, though the ROK will still give "stern" responses to Pyongyang's "provocations. ^ top ^

China reiterates opposition to Philippines' seizure of Ren'ai Reef (Xinhua)
A military spokesman said Thursdaythat China remains opposed to the Philippines' illegal seizure of Ren'ai Reef. In 1999, a Philippine warship was grounded on Ren'ai Reef. China has repeatedly asked the country to retrieve the ship, but the Philippines has ignored China and continued to illegally occupy the reef, Defense Ministry spokesman Yang Yujun said at a regular press conference. Yang said the Philippines has made multiple efforts since May to continue the illegal grounding of the Philippine vessel. "The Philippine side has promised to withdraw the warship but has failed to do so thus far," Yang said, adding that the grounding seriously violates China's territorial sovereignty and the principles of the Declaration on the Conduct of Parties in theSouth China Sea (DOC). "The Philippine side must honor its promise and stop taking anyaction that encroaches on China's territorial sovereignty," Yang said. ^ top ^

China to send security force for peacekeeping mission in Mali (Xinhua)
China will send peacekeepers to Mali and it is the first time that China's armed forces dispatch security forces for peacekeeping mission, a Ministry of National Defense official said on Thursday. At the request of the UN, the Chinese government will dispatch nearly 400 servicemen to join the UN Multidimensional Integrated Stabilization Mission in Mali (MINUSMA), including engineering, medical and guard teams, Ministry spokesman Yang Yujun said at a monthly press briefing. Yang said there is no so-called combat forces in UN peacekeeping forces, responding to a reporter's question. The main purpose of the UN peacekeeping forces is to help relevant countries to restore and maintain peace, prevent wars and monitor ceasefires, Yang said, noting that peacekeeping personnel should not be directly involved in military conflicts in host countries. "The Chinese security force is actually a guard team that will mainly be responsible for the security of the MINUSMA headquarters and the living areas of peacekeeping forces," he said. The Chinese peacekeepers will abide by UN peacekeeping regulations and play a constructive role in safeguarding peace and stability in Mali and the region as a whole, Yang added. Also on Thursday, Foreign Ministry spokeswoman Hua Chunying said China has so far dispatched more than 20,000 military personnel, police and civil affairs officials for UN peacekeeping missions, which makes it the biggest contributor to peacekeeping missions among the five permanent members of the UN Security Council. "A total of 1,645 military personnel and policemen are currently participating in nine missions," she said. Last week, UN Secretary-General Ban Ki-moon praised China's participation in UN peacekeeping efforts during a visit to a peacekeeping training base in Beijing. "China will continue to actively participate in UN peacekeeping missions and make contributions toward promoting the UN peacekeeping drive and maintaining peace and security around the world," Hua noted. ^ top ^

China, ROK agree to push for completion of free trade pact (Xinhua)
China and the Republic of Korea (ROK) on Thursday agreed to push for the completion of a bilateral free trade agreement (FTA). The consensus was reached during talks held between President Xi Jinping and ROK President Park Geun-hye. The two sides reconfirmed that the goal of creating a China-ROK free trade zone is to reach a high-level and comprehensive free trade pact. The two leaders welcomed the progress that has been made in FTA negotiations and instructed negotiation teams on both sides to strengthen their efforts in order to push the negotiations into their next phase, according to a joint statement issued Thursday. The two sides agreed to extend their currency swap arrangement and discuss the possible expansion of their swap volume. They also vowed to deepen bilateral financial and monetary cooperation. In the joint statement, the two sides pledged to enhance economic and trade cooperation, as well as coordination on macroeconomic policies. They will expand cooperation in the areas of information and communication technology, energy, environment and climate change, according to the statement. The two sides will also strengthen and expand communication channels in order to share experience in the areas of health, food security and demographic changes, it said. During their talks, Xi and Park also agreed to enhance people-to-people exchanges between the two countries. They decided to establish a joint committee on people-to-people exchanges and agreed to expand exchanges in education, culture, media, tourism, youth and local regions. The two sides will beef up bilateral consular cooperation to facilitate personnel exchanges and safeguard the security, legitimate rights and interests of their people, according to the statement. ^ top ^

Xi Jinping and Park Geun-hye push for North Korea nuclear talks (SCMP)
China and South Korea agreed yesterday to push for the removal of nuclear weapons from the Korean peninsula through six-party talks, President Xi Jinping said at a summit meeting with South Korean counterpart Park Geun-hye. "We, on both sides, consistently agree to continue to realise the denuclearisation of the Korean peninsula and firmly protect peace and stability on the peninsula," Xi said at a joint appearance with Park, who arrived in Beijing for a four-day visit. Park said: "We have agreed that under any circumstances, North Korea's nuclear [weapons] are unacceptable and confirmed that the denuclearisation of the Korean peninsula is of common interest for the two countries." In a statement released later, the two leaders said they had agreed to strive for an early resumption of the six-party talks. The other four countries involved in the talks, which have been stalled for more than four years, are the United States, Russia, North Korea and Japan. Although Park was accompanied by a large business delegation, Pyongyang's nuclear programme is widely believed to have dominated the talks. Professor Lin Xiaoguang, a specialist in international relations at the Central Party School, said the interests of the six parties varied, but those of South Korea and China were "heading in the same direction - denuclearising North Korea with peaceful talks, and that has become the common ground for the two countries". Mainland experts on international relations say Park's foreign policy is distinctly different from that of predecessor Lee Myung-bak, who leaned more heavily on Washington. Park took office in February amid threats of war by North Korea. Xi became president in March. Park was called "an old friend of the Chinese people" by Xi during the meeting. Professor Liu Jiangyong, of Tsinghua University, said Park was "much more calm and restrained than Lee in handling North Korea nuclear issues, which would push North Korean denuclearisation in the right direction". Lin said Pyongyang would see Park's visit and her good relationship with China as pressure on North Korea. Xi has backed tougher economic sanctions against Beijing's traditional ally. China and South Korea signed agreements in various fields, including energy, trade, technology and oceanic co-operation. China is now South Korea's biggest trading partner. ^ top ^

Chinese vessels put Japanese on alert around Diaoyus (SCMP)
Three Chinese government ships entered waters around the disputed Diaoyu Islands in the East China Sea yesterday, the Japanese coastguard said. The Chinese surveillance vessels approached within 12 nautical miles of the island of Uotsurijima in the island chain - known as the Senkakus in Japan - shortly before 8.30am and left three hours later, the coastguard said. There have been several similar incidents in recent months. Yesterday's took place after former Japanese prime minister Yukio Hatoyama came under fire in Japan this week for saying he understood China's claim to the islands. Hatoyama told Hong Kong-based Phoenix Television on Tuesday it was "unavoidable" that China believed Japan "stole" the islands. The remark raised eyebrows in Japan. On Wednesday, Japan's top government spokesman, Yoshihide Suga, declared himself dumbfounded. Goshi Hosono, secretary general of the centre-left Democratic Party of Japan, which Hatoyama helped found, said the remark was "extremely inappropriate" and urged him to reflect on what he had said. However, Hatoyama reiterated the conciliatory stance in Beijing yesterday and said both sides should set aside the dispute. "The pressing issue is to encourage the Abe administration to amend its attitude towards other Asian countries, particularly on its view of the history, and to co-operate with other neighbours," he said in a speech delivered at the World Peace Forum. "Referring to the East China Sea Peace Initiative proposed by Taiwanese President Ma Ying-jeou, Japan, China and Taiwan should put their territorial disputes aside and instead focus on issues such as fisheries and environmental protection." It has long been Beijing's stance that both sides should acknowledge the dispute and set it aside until later. Hatoyama criticised the decision by a large number of Japanese government politicians to worship at Tokyo's controversial Yasukuni Shrine, which honours Japan's 2.5 million war dead, including 14 class A war criminals from the second world war. He also attacked Prime Minister Shinzo Abe's refusal to acknowledge Japan's past invasions of Asian countries. "As a result, not just China and South Korea, but also the US are jointly concerned over his administration's handling of its relationship with other Asian countries," Hatoyama said. In a recent defence white paper, the Japanese government urged Asian countries and the international community to step up their guard against China's growing military muscle. ^ top ^


Domestic Policy

Anti-graft campaign in China claims another big fish (SCMP)
A former vice-governor of Sichuan province, who for years was the aide of the Communist Party's former top security official, has been placed under investigation. Guo Yongxiang, 64, chairman of the Federation of Literary and Art Circles in Sichuan, was being probed by the party's Central Commission for Discipline Inspection for serious violations of party discipline - a common euphemism for corruption - according to China Central Television, which cited unnamed sources within the top graft-busting agency. The semi-retired official appears set to be the sixth vice-ministerial-level official brought down since early December, following the downfalls of Liu Tienan, former deputy chief of the National Development and Reform Commission; Li Chuncheng, former deputy party secretary of Sichuan; Wu Yongwen, former deputy head of the People's Congress in Hubei; Yi Junqing, former director of the party's Central Compilation and Translation Bureau; and Ni Fake, former vice-governor of Anhui. As part of a nationwide graft-busting push, the party's general secretary, Xi Jinping, vowed in January to crack down on corrupt officials - regardless of whether they were high-ranking "tigers" or low-ranking "flies" - two months after taking over the top post from Hu Jintao. According to their official profiles, Guo and former security tsar Zhou Yongkang worked together for 12 years, until 2002, when Zhou became a member of the Politburo as head of the Public Security Ministry. In 1990, Guo was working at the Shengli Petroleum Administration Bureau, which was then affiliated with China National Petroleum Corporation (CNPC), of which Zhou had already been deputy chief for two years. And in 1998, when Zhou was promoted from general manager of CNPC to being the minister for land and resources, Guo followed him and worked as director of the ministry's general office. In 2000, a year after Zhou was appointed party secretary of Sichuan, Guo was named deputy secretary general of the provincial party committee under Zhou's leadership. Zhou became a member of the Standing Committee in 2007 and oversaw law enforcement. He retired after the 18th national congress in November. ^ top ^

Democratisation of China inevitable, blind activist Chen Guangcheng says (SCMP)
Democratisation of the mainland was "inevitable" as the growing demands of ordinary people for rights put immense pressure on the government, blind legal activist Chen Guangcheng said yesterday. […] Chen is on a two-week visit to Taiwan at the invitation of a local human rights group. Taiwanese President Ma Ying-jeou's spokeswoman said Ma had no plan to meet Chen but welcomed his visit. She said Ma hoped Chen could "visit as many places as possible and experience the state of civil society, democracy and human rights" in Taiwan. Chen said it was not too important whether Ma saw him or not, but people should see it in the context of "the struggle between the free and autocratic worlds". Ma has been trying to improve ties with Beijing. Chen said the success of democracy in Taiwan was "causing fear" among the mainland authorities. Claims that democracy was unsuitable for Chinese society were "a lie". He urged Hongkongers and Taiwanese to be vigilant in protecting their rights. If Hong Kong did not influence China with its rule of law, the mainland's "rule of man" would overcome Hong Kong, he said, and "if Taiwan's democracy cannot influence and help improve the mainland, autocracy will encroach on Taiwan". Chen accused Beijing of spending billions of US dollars every year on "stability maintenance" - the detention, harassment and surveillance of dissidents and activists to stop their rights advocacy. A self-taught legal activist, Chen spent years in extra-legal detention and more than four years in jail for exposing forced abortions in rural Shandong province. "No other regime in the world is more vigilant against its own people," he said. […] In Beijing, foreign ministry spokeswoman Hua Chunying, when asked to comment on Chen's visit to Taiwan, said "every Chinese citizen has obligations to abide by the constitution and laws of China and refrain from doing things that will hurt the national interest", Associated Press reported. ^ top ^

China leader Xi Jinping seeks unity and discipline among top cadres (SCMP)
Communist Party chief Xi Jinping yesterday ordered members of the powerful Politburo to uphold the unity and authority of the party's central leadership amid a round of campaigns to clean up the party and consolidate Xi's hold on power. "Comrades of the Politburo should take the lead to maintain the authority of the party Central Committee and be highly consistent with the committee in thinking, politics and action," Xinhua quoted Xi as saying. Politburo members should be voluntarily bound by party discipline and thoroughly carry out party leadership decisions, he said, adding "to establish the good image of being highly united with the Politburo with concrete action, serious and major matters must be reported". The warning was made during a four-day meeting that ended yesterday, during which the 25-member Politburo discussed how to fight bureaucracy and formalism - a campaign initiated by Xi in December. During the meeting, Xi told the Politburo to carry out "friendly and honest criticisms" and self-criticism to unite comrades. Politburo members should also make it a priority to "stand firm in politics and improve their political acuteness", he said, meaning being loyal and alert to party directives. The meeting was held shortly after Xi launched a year-long "thorough clean-up" of undesirable work styles such as formalism, bureaucracy, hedonism and extravagance as well as a "mass line campaign" to better engage the public and gain their support. Xi said Politburo members should set an example to officials at different levels by "implementing the dos before asking others to do so, and certainly do not do something themselves if they don't want others to do it", the meeting was told. Party members would be required to reflect on their own practices and correct misbehaviour, so as to reinforce the "mass line" of the party's 80 million members. The mass line is party jargon coined by Mao Zedong to describe the need to stay in touch with the public. "The meeting is about strengthening party discipline - especially the most senior members - ahead of the mass-line campaign and anti-corruption storm," said Professor Li Chengyan, from Peking University's school of government. "Xi used a lot of terms that were widely used by Mao Zedong in political movements in his day. Although the term sounds the same, I believe there are some differences. Mao's era stressed the theory and people were encouraged to read a few books and study the theories. Now it's more about the actions." Li said the keynote of the mass-line campaign was fighting corruption, which would involve power struggles in the party. He said the meeting was held to ensure "the centre of power is united, the execution of Xi's policy is not distorted and political discipline is respected in the process of carrying out his policy". Li said Xi's warning about the need to "maintain the authority of the central leadership" could be targeting specific behaviour or talk by senior party members but might also be just a general warning that party members should not repeat the mistakes of disgraced former Chongqing party secretary Bo Xilai, who was a Politburo member before his downfall last year. ^ top ^

China's Shenzhou-10 returns to earth after longest manned space mission (SCMP)
China's Shenzhou-10 spacecraft returned to earth on Wednesday, state TV footage showed, as the country completed its longest manned space mission. The re-entry capsule of Shenzhou-10 spacecraft lands in Inner Mongolia. Photo: XinhuaThe spacecraft, carrying three astronauts including China's second woman to go into orbit, landed on Chinese soil, live footage showed, after the 15-day mission seen as another step in Beijing's goal of building a permanent manned space station by 2020. It landed at 8.07am on the grasslands of north China's Inner Mongolia region, footage showed. Technicians quickly gathered to open the craft's hatch though the crew did not immediately emerge. China first sent a human into space only in 2003 and its capabilities still lag behind the US and Russia. But its programme is highly ambitious and includes plans to land a man on the moon. Beijing sees its multi-billion-dollar space programme as a symbol of its rising global stature, growing technical expertise, and the Communist Party's success in turning around the fortunes of the once poverty-stricken nation. ^ top ^

Court rejects rape, murder confession (Global Times)
A prosecutor in Hebei Province Tuesday rejected a suspect's confession to a 1994 murder and rape, which could prove a miscarriage of justice that led to the execution of another man. The high-profile case was heard in Handan by Hebei Provincial High People's Court after a six-year gap since the first trial in 2007. Wang Shujin, 46, who was convicted of raping and murdering three women from 1994 to 1995, confessed in 2005 that he raped and killed another woman, surnamed Kang, in a village near the provincial capital of Shijiazhuang in August 1994. The confession came a decade after another man, Nie Shubin, was executed for the same crime in 1995, raising questions as to whether Nie was wrongly convicted. According to a live broadcast of the trial on Sina Weibo, the court said Wang made the confession to appeal for a lenient sentence. However, the provincial procurator said during the hearing that Wang did not commit the crime, citing significant discrepancies between his testimony and the facts, such as the cause of death and the time it was committed. The procurator said Wang did not know that the woman was strangled by a shirt. However, Nie's mother Zhang Huanzhi, who has been trying to clear her son's name, claimed that an item of clothing presented during the hearing was not the one the police asked her to identify, reported. Zhang Sizhi, senior consultant at law firm Wu Luan Zhao Yan, who represents Nie's mother, told the Global Times Tuesday that the procurator's statement made it more difficult to exonerate Nie, who was executed at the age of 20. "Wang's confession should have helped to make things right, however, it now seems we will miss the opportunity," he said. The case has aroused attention among the public and is regarded as a test of judicial justice in China. Addressing public doubts over the six-year gap between the trials, an unidentified judge at the provincial high people's court told the Yunnan Information Daily that the court carried out extensive investigations in a responsible manner, which led to the long time span. According to Zhang Sizhi, the court only held the hearing under the huge pressure of public opinions and possibly due to a leadership change in the Supreme People's Court (SPC). In 2007, the SPC instructed the Hebei high court to process the appeal of Nie's mother, but no reinvestigation took place in the past six years. "No matter whether Wang is convicted or not, Nie's grievance should be redressed, because the ruling couldn't be justified," the lawyer said, also demanding publication of a long overdue 2005 probe result from Hebei's political and legal affairs authorities into the case. "Misjudged cases are unavoidable, but I'm most furious about the refusal to correct the errors," he said. ^ top ^



Six die in shooting rampage in Shanghai (SCMP)
A rare shooting rampage that shocked the nation and left six people dead, five of them by gunshot wounds, prompted a swift response by municipal leaders and the Ministry of Public Security. A 62-year-old man, identified only by his surname, was caught on Saturday evening at the Shanghai Guangyu fine chemical company in the Baoshan district of the city, where the shooting began in the afternoon, according to a statement by municipal authorities. The sixth victim was allegedly beaten to death by the suspect. Four other people were shot and injured. At an emergency meeting yesterday, the ministry said it would launch a more comprehensive campaign on gun management across the country, where firearms are tightly controlled and citizens who have hunting permits must apply at their local police station for permission to own a hunting rifle. Meng Jianzhu, the head of the Communist Party's Central Political and Legal Affairs Commission, and Public Security Minister Guo Shengkun also vowed to fight against all violent activities that jeopardise public safety, according to a statement released on the ministry's website. Top security tsars called for a thorough investigation into the shooting. After allegedly using unspecified tools to beat his colleague to death in the factory over an economic dispute, the suspect retrieved a hunting rifle that had been hidden in his dormitory, authorities said. He then asked a driver to take him to a suburban part of Pudong district. There he allegedly shot dead the driver, drove the vehicle back to Baoshan, killed a soldier who was guarding the entrance to a barracks and stole his gun. Authorities said the suspect then returned to the factory and shot dead three more people with his hunting rife, including a manager who may have also been one of the factory's owners. Police said they captured the suspect in the factory and seized the guns. The Shanghai Evening News reported that the suspect worked as an office manager, was trusted to operate the factory two years ago, and had a long-running dispute with the manager who was killed. ^ top ^



Pearl River Delta vegetables contain excessive amounts of arsenic, other poisons (SCMP)
Even as worries over last month's cadmium-tainted rice revelations still linger, Guangdong residents were confronted by new concerns that as much as one-fifth of the Pearl River Delta's vegetables contain excessive amounts of heavy metals. The widespread vegetable contamination was detailed by a provincial agriculture official last week while attempting to raise awareness about the worsening problem of farmland pollution in the province. The official, Yu Jiane, said the spread of heavy metals used in manufacturing, such as arsenic, cadmium, copper and mercury, was a "regional problem, covering a large area" after Guangdong's decades-long industrial boom. "As a result, about 10 to 20 per cent of vegetables grown in nine vegetable production centres, including Dongguan, Conghua and [Guangzhou's] Panyu [district], were tested to contain more heavy metals than the country's safety levels allow," Yu was quoted as saying by the Nanfang Daily, a provincial mouthpiece. Traces of lead, chromium, zinc and nickel were also found in some vegetables. Such heavy metals can accumulate in the body over years, causing organ and nerve damage, and even cancer. The mainland has been repeatedly beset by food safety scares, which have become a major source of public unhappiness in recent years. Last month, anger erupted online after the Guangzhou government said nearly half of rice samples collected from local markets in the first three months of the year tested positive for cadmium. Ma Jun, director of the Institute of Public and Environmental Affairs, said pollution in the Pearl River Delta was among the worst in the country due to its large concentration of electronics manufacturers, electroplating plants, and leather and textile workshops. [...] A report released by the State Oceanic Administration earlier this month found that the Pearl River discharged more than 3,700 tonnes of heavy metals into the South China Sea last year. [...] "There have been various studies of the situation of heavy metals pollution in Guangdong and the rest of the country, but no full-scale findings were released until now," Ma said. "As a result, contaminated land is still used for crop growing, which can be harmful for public health. "Therefore it is urgent for the government to release such information - even though the findings may at first lead to some strong public reactions before follow-up treatment and restoration can continue," he said. Heavy metal contamination is exacerbated by severe acid rain caused by factory and car emissions, Yu said. Almost half of the precipitation that falls in the province is acidic, with the highest concentrations in Foshan, Qingyuan and Shaoguan. The increased acidity in farm soils not only leaches out some essential nutrients, but increases the mobility of some heavy metals, including cadmium, nickel and copper. [...]. ^ top ^



US Ambassador Locke on 3-day trip to Tibet, embassy confirms (SCMP)
American Ambassador Gary Locke has travelled to Tibet on a rare diplomatic visit to the restive autonomous region to "increase his familiarity with local conditions", the US embassy in Beijing confirmed yesterday. Locke was accompanied by family members and embassy staff on three-day trip, organised by the local government, in and around Lhasa. He will return to Beijing today. US embassy spokesman Justin Higgins said it was the first time authorities had approved an embassy request to visit Tibet since September 2010. The visit is the first by an American official to the autonomous region since 2010. Locke's trip comes amid a wave of self-immolations in Tibetan-populated parts of neighbouring provinces and speculation that Beijing may be loosening its hardline policies in such areas. On Wednesday, Radio Free Asia reported that Qinghai and Sichuan provinces had implemented an "experimental" policy allowing Tibetan residents to openly worship their exiled spiritual leader, the Dalai Lama, including displaying his portrait. While the RFA report sparked optimism among some international observers, others say that expectations of a major policy shift towards the greater Tibetan region may be premature. "The report has to be considered in the context of self-immolations," said Tashi Phuntsok, information and international relations secretary of the Tibetan government-in-exile in Dharamsala, India. "We have noted reports from the Amdo and Kham areas, both incorporated in Sichuan and Qinghai provinces, but these are local rather than a widespread policy change." The policy shift had been reported in the areas where self-immolations had escalated, Phuntsok said, and was likely to be a pragmatic response from local officials to deal with the worsening situation on the ground. Meanwhile, Cai Ang Tai, deputy head of the Qinghai Provincial Buddhist School, where RFA reported the new policy had been announced during a conference, denied any such meeting had been held. When asked for comment, several Tibetan monasteries said they were not allowed to discuss the issue and that requests for information should be referred to government officials. Locke visited Tibetan-populated areas in Sichuan last year, but this is his first visit to Tibet. Foreigners wanting to travel there require a special government permit. Locke's visit comes only a week after Rigzin Wangmo, a daughter of the late 10th Panchen Lama, travelled to Lhasa on her first visit for several years. Thousands of Tibetans greeted her outside Jokhang Palace before being dispersed by police, a well-connected source said, adding that the Communist Party's United Front Work Department had blocked her from entering the region for many years. The International Campaign for Tibet said the most recent self-immolation, on June 11, took the number of victims in the past four years to 120. ^ top ^



Riots in China's Xinjiang region kill at least 27 (SCMP)
Riots in China's ethnically divided Xinjiang region on Wednesday left 27 people dead, according to state media which said police opened fire on “knife-wielding mobs”. It was the latest spasm of violence to hit the troubled western region, which is about twice the size of Turkey and is home to around nine million members of the mostly Muslim Uygur ethnic minority. Police shot at “mobs” who had attacked police stations, a local government building and a construction site, the Xinhua news agency said, citing local officials. “Seventeen people had been killed... before police opened fire and shot dead 10 rioters,” it said. The mobs were also “stabbing at people and setting fire to police cars”, the report said. Nine police or security guards and eight civilians were killed before police opened fire, the report said, adding that three other people were taken to hospital with injuries. The clashes occurred early Wednesday in an area about 100 kilometres (60 miles) from the desert city of Turpan and about 250 kilometres from the regional capital Urumqi. The reason for the violence was not immediately clear, and police in Turpan refused to comment when contacted by AFP. Many of Xinjiang's Uygur community complain of religious and cultural repression by Chinese authorities, and the region is regularly hit by unrest. Dilshat Rexit, a spokesman for the World Uyghur Congress, an exile group branded by Beijing as “separatist”, said “continued repression and provocation is the cause of conflict”. His comment came in a statement sent to AFP after news of the violence emerged. China reported that 21 people died in clashes between police and locals in the region in April, which the government said were caused by “terrorists”. Chinese authorities have often blamed such violence in the region on “terrorists”, and a court in Xinjiang recently jailed nine people for “religious extremism”. China said clashes in 2011 that killed 19 were organised by terrorists who trained in Pakistan and were part of a separatist movement seeking an independent state in Xinjiang. Uygur rights groups have dismissed the claims of terrorism, citing economic inequality and religious repression as causes of unrest. The region's worst ethnic violence in recent years occurred in July 2009, when riots involving Uygurs and settlers from China's Han ethnic majority killed around 200 people in Urumqi. Those clashes lead to a major security push in the region, which rights groups have said led to intense monitoring of Uygurs by security forces. [...] The region saw more than half of China's trials for the charge of “endangering state security” last year, but is home to less than two per cent of the country's population, suggesting “ethnic discrimination”, the Dui Hua Foundation advocacy group said. [...] According to official figures, 46 per cent of Xinjiang's population are Uygur, while another 39 per cent are Han Chinese, after millions from the majority group moved there in recent decades in search of jobs. The Han settlement drive, which has been mirrored in Tibet, has fostered tensions with the existing community. [...] Information about unrest in Xinjiang is tightly controlled by China's ruling Communist Party -- and the government blocked Internet access across the region for several months following the clashes in 2009. ^ top ^

Death toll from Xinjiang attacks rises to 35 (SCMP)
Beijing yesterday raised the death toll from a series of attacks in Turpan, Xinjiang, on Wednesday from 27 to 35. Twenty-four were killed by rioters, including two policemen, Xinhua said, adding that 16 of them were Uygurs. Police killed 11 rioters, while 21 police officers and civilians were injured. Xinhua said an unspecified number of "mobsters" stormed the government office, the police station, the People's Armed Police base and a construction site in Lukqun township, Shanshan county, at around 5.50am on Wednesday. The authorities did not mention that a PAP base was also among the targets of attacks until yesterday. It said four suspected rioters who were injured had been detained. It was the first Chinese-language report on the incident released by Xinhua, which carried an English report roughly seven hours after the attacks. Neither report mentioned the number of attackers, their ethnicity or what caused the attacks. But yesterday's report branded the incident a "violent terrorist attack". A visitor to Turpan yesterday said he saw a roadblock with armed police officers and about 20 police vehicles. A resident said a helicopter arrived on the scene along with many police and soldiers. The Global Times, a tabloid affiliated with the People's Daily, yesterday quoted an unnamed regional official as saying that "earlier this year local police handled a case in which a store was attacked, which might have triggered that violence". The attack came less than two weeks ahead of the fourth anniversary of ethnic clashes between Han Chinese and Uygurs in Urumqi, the regional capital, which left nearly 200 dead. Two months ago, 15 policemen or officials and six assailants were killed in another conflict in Bachu county, Kashgar, which involved attackers armed with knives and axes and the burning of a house. A Lukqun resident told the South China Morning Post by phone that local officials had told people to stay at home and be vigilant soon after the violence on Wednesday, adding that dozens of militia soldiers from his village were patrolling the streets. It was the deadliest unrest in the region since the media-savvy Zhang Chunxian became regional party secretary in April 2010, less than a year after the bloody clashes in Urumqi. The mainland authorities said clashes in 2011 that killed 19 were organised by terrorists who trained in Pakistan and were part of a separatist movement seeking an independent state in Xinjiang. But they did not give further details about the motive and background of the assailants in Wednesday's attack. Many Uygurs chafe at the central government's restrictions on their culture, language and religion. Beijing says it grants them wide-ranging freedoms. ^ top ^



'US failed to give Hong Kong crucial information' for Snowden arrest (SCMP)
Hong Kong has hit back at US criticism over the way it handled whistle-blower Edward Snowden, saying Washington failed to provide crucial information it needed to legally detain or prevent the former CIA analyst from leaving the city. Reliable sources with knowledge of the government's handling of the case have told the Post that a lack of detailed evidence to support the charges Washington outlined against Snowden and insufficient passport information - including Snowden's full name and passport number - meant they were duty-bound under Hong Kong laws to seek more details. The White House said it did not accept Hong Kong's explanation, warning the decision to allow Snowden to leave had harmed Sino-US relations. Responding to allegations by the US that Hong Kong had allowed Snowden to leave the city despite the revocation of his passport, the Hong Kong Immigration Department said: "So far no notification has been received from the US government of Mr Edward Snowden's passport being revoked." WikiLeaks founder Julian Assange said Snowden had left Hong Kong with a refugee document supplied by Ecuador, which is considering Snowden's application for asylum. The sources also told the Post the Hong Kong government had to ensure key information such as the accurate and full passport number of Snowden and his name were provided, because if the details were not all present and correct they could face a legal challenge at a later date. [...] Hong Kong barrister Michael Blanchflower, SC, explained that the US government was required to provide specific information. This would include: the criminal charges in the US, the issuance of a warrant of arrest in the US, a description of the person, the information that the person was believed to be in Hong Kong, and also information supporting the charges to give Hong Kong an idea of the underlying conduct alleged to satisfy criminality. Commenting on Snowden's case, Chief Executive Leung Chun-ying said Snowden had left Hong Kong through a "lawful and usual channel", though he realised "there have been expressions of displeasure on the part of... the United States". Leung said the Hong Kong government was still processing the request by the US government for the provisional arrest when Snowden left Hong Kong. Therefore, there was "no legal basis" to stop him from leaving. He insisted Hong Kong followed the law in handling the case. [...] The US Department of Justice said senior US officials had been in touch with their Hong Kong counterparts since June 10. [...] The US Department of Justice has denied there was anything missing in its request. In unusually direct criticism of Beijing, White House spokesman Jay Carney said the US did not accept explanations the decision was simply a determination handed down by local Hong Kong authorities. "We are just not buying that this was a technical decision by a Hong Kong immigration official," he said. "This was a deliberate choice by the government to release a fugitive... and that decision unquestionably has a negative impact on the US-China relationship. The Chinese have emphasised the importance of building trust. They've dealt that effort a serious setback.". ^ top ^



PV companies strive to survive China-EU dispute (Xinhua)
China's solar panel producers are trying to further develop the domestic market amid an ongoing trade dispute with the EU. The country's photovoltaic (PV) companies will likely experience an industry reshuffle, according to industry insiders who added that the companies should shift to the domestic sector to offset export losses. Following an anti-dumping duty recently imposed by the EU, the price of Chinese PV cells has exceeded that of products from the Republic of Korea (ROK) and Taiwan in the EU market, said Liu Jianli, marketing director for the Linuo Power Group. Based in east China's Shandong Province, Linuo is a leading provider of solar photovoltaic power generation systems. China and the EU hope to solve the dispute through price undertaking talks, Commerce Minister Gao Hucheng said Friday at a press conference following a session of the China-EU Trade and Economic Joint Committee. Earlier this month, the EU imposed an interim anti-dumping duty of 11.8 percent on imports of all Chinese solar panel products, including panels, cells and wafers. The duty may be raised to an average of 47.6 percent two months after going into effect if both sides fail to come to an agreement. Analysts said the government is encouraging mergers and restructuring, as well as decrease overcapacity, in order to aid the struggling industry. In December 2012, the government issued policies to support the sector, include setting on-grid electricity prices according to local conditions and subsidizing the use of PV-generated power. Giving more power to market forces and reducing government interference have also been part of the government's efforts. "We are focusing on the domestic market by promoting ground power stations, rooftop 'power plants' and household power plants for more customers," said Zhou Guangyan, president of Linuo. Zhou said residential customers can profit by selling household-generated power to utility companies. According to a report released by the National Energy Administration last August, China will have 21 million kilowatts of installed solar power generation capacity by 2015, six times more than the current amount. The government also hopes to boost the share of distributed PV power plants as part of the country's total installed PV power capacity to 50 percent this year. "This is the right choice for us, as China's PV generation capacity is still in its infancy compared with the massive consumption of conventional energy," Zhou said. "We are still confident in China's PV industry, as we will get past temporary overcapacity and overexpansion by seizing the domestic market," said Huang Ming, chairman of China Himin Solar Co., Ltd. ^ top ^

Sinopec buys Angola oil field stake for 1.52 bln USD (Xinhua)
China Petrochemical Corp. (Sinopec Group), the country's top oil refiner, on Monday announced that it has signed a deal with U.S. oil giant Marathon Oil Corp. to buy its oil and gas field in Angola for 1.52 billion U.S. dollars. According to the deal, Sinopec Group will purchase Marathon's 10-percent stake on the Angolan Block 31 field through its subsidiary Sonangal Sinopec International Ltd. The Angolan Block 31 field, operated by British Petroleum (BP), has estimated proven and probable (2p) oil reserves of 533 million barrels, Sinopec said. Together with the 5 percent stake in Block 31 field Sinopec purchased from French oil major Total in 2011, Sinopec's stake in the block will reach 15 percent upon the completion of the Marathon deal. The deal is subject to approval by the Chinese and Angolan governments. ^ top ^

Liquidity squeeze bleeds equities (China Daily)
The central bank hinted on Monday it won't shore up liquidity to address the credit crunch, a move analysts said reflects top policymakers' increasing tolerance for slower growth. The central bank said on Monday in a circular that the liquidity level of the financial system was "reasonable" and urged lenders to strengthen their control of credit expansion. The announcement took a heavy toll on the stock market. The benchmark Shanghai Composite Index plummeted 5.3 percent on Monday to close at 1963.23, its biggest daily loss in nearly four years. Bank shares led the losses, with investors concerned over the cash squeeze that has seen banks put the brakes on new lending, which has in turn been a drag on the economy. Analysts said the bank sent a clear signal that the worst phase of the liquidity squeeze in the past several weeks is over. Interbank rates have been hitting highs since the middle of the month. "Seasonal liquidity pressure is not expected to ease significantly until early July after the reporting period," said Wang Lei, a bank analyst at Aijian Securities. "We have studied the central bank's circular carefully and find the message it delivers is that banks must rely on what they have now to resolve their liquidity problems," said a senior manager with a Shanghai-based bank. "We believe that policymakers have made it explicit that banks must find ways to sort out their own problems." Jason Yue, senior analyst with an investment company in Shanghai, said the market was expecting an injection of liquidity by the central bank. Yue said it appears authorities want to maintain a prudent position and reduce leveraged operations. Premier Li Keqiang said at a State Council meeting last week that banks must make better use of existing credit, and step up efforts to contain financial risks. Rating agency Moody's Investors Service said in a report on Monday that the government was doing the right thing. "We think it is prudent for China to curb its credit growth to more sustainable levels to prevent a buildup of excessive leverage. Therefore, we regard China's latest moves as credit positive for the health of the Chinese banking system overall," said the report. But it said banks hold significant amounts of assets that theoretically could be used to obtain liquidity from the People's Bank of China. "We think it is unlikely that the PBOC would allow systematically important banks to get into serious and sustained liquidity problems," said the report. "Small and medium-sized banks are likely to aim to strengthen their liquidity buffers by competing more aggressively for deposits to reduce dependence on the interbank market, which will reduce net interest margins and curtail lending growth." Share prices of several banks dived on Monday. Ping An Bank plunged to the daily loss limit of 10 percent, hitting 10.15 yuan ($1.65) per share before trading was suspended. Industrial Bank also lost 10 percent on Monday to 13.89 yuan per share. China Minsheng Banking Corp Ltd lost 8 percent to 7.22 yuan per share. The country's new cabinet may tolerate a lower growth rate for the rest of 2013 while it prepares to launch new programs, economists said. "As the medium-term view for China's potential growth has dropped to 7-8 percent and the new leaders are increasingly aware of this, we think Premier Li's ‘bottom line' for growth has fallen to 7 percent from 7.5 percent," said Chang Jian, a senior economist with Barclays Bank. GDP grew 7.7 percent in the first quarter, slowing from 7.9 percent in the last quarter of 2012. In the last few weeks, many investment institutions have cut growth forecasts for China. HSBC and Barclays lowered their predictions for China's 2013 GDP growth to 7.4 percent, below the government's target of 7.5 percent. Three months ago, most international investors were confident in seeing 8 percent growth. Zhang Zhiwei, chief economist in China with Nomura Securities, said there was even a 30 percent possibility of quarterly growth falling below 7 percent later this year. The National Bureau of Statistics will release second-quarter GDP numbers on July 15. ^ top ^

PBOC ends credit crunch, needs to go further (Xinhua)
China's central bank took a sharp turn Tuesday evening, when it promised to inject money into a temporary liquidity shortage after rejecting banks' pleas for cash over the past two weeks. The move has been interpreted as regulators' decision to end the credit crunch that caused interbank rates to surge to double digits and pounded the stock market into bearish territory. The People's Bank of China, or PBOC, has changed its stance, as starving the financial system of cash has been crippling the economy in a broader scope. The Shanghai Composite Index reported its biggest slump in four years on Monday, after the PBOC published an internal notice implying tight liquidity. The benchmark further tumbled 6 percent Tuesday before reversing the retreat on rumors of a declaration of support, which was issued by the bank on Tuesday night. [...] The benchmark seven-day fixing repo dipped 78 base points to 7.22 percent as of 11:30 am Wednesday, and the Shanghai Interbank Offered Rate (SHIBOR) overnight rate slid 18 base points to 5.55 percent at the same time. The SHIBOR overnight rate shot up to 25 percent last Thursday, when banks rushed to each other for money. Banks with aggressive off-the-balance-sheet lending felt the pain of the cash squeeze when they borrowed money at exorbitant rates while watching stock prices plummet. "Regulators have successfully warned the market," said Li Xunlei, chief economist with Haitong Securities. "Changing the stance is the right decision. After all, the central bank has an obligation keep the financial system afloat with liquidity." China Minsheng Banking Group, a mid-sized bank, promised to clear all excessive non-standard assets in an investor meeting held after its stock price plunged 10 percent on Monday. In a report, Barclays warned that medium and small banks have higher interbank assets as a percentage of their total assets than large banks. Another factor forcing the PBOC to dial back its tight liquidity stance was that the market reacted to regulators' call in a way that was the opposite of what regulators had hoped for. In desperate need of cash, banks rolled out massive wealth management products (WMPs) to attract deposits, and the yields of these investments grew much higher than previous ones, thus posing greater risks. The average yield of WMPs has been climbing for four weeks, according to Bankrate, a WMP aggregating website. Citic Bank issued a four-month WMP with an interest rate of 6 percent, while Huaxia Bank produced a 72-day WMP with a rate of 7 percent, which doubled China's benchmark deposit rate. The central bank relented on its stance of a tightened credit crunch, as economists warned that a prolonged credit crunch would put the brakes on the economy, which is already facing mounting downward pressures. Some banking executives told the press that they will have to raise interest rates if interbank lending remains high. A rising interest rate would be the last thing Chinese companies want to see during their battle with growing overcapacity. Goldman Sachs trimmed its forecast on China's GDP growth from 7.8 percent to 7.4 percent due to the recent monetary tightening. Meanwhile, Moody's warned that keeping the banking system short of liquidity would entail risks that could have credit negative implications. [...] The stand-off in the money market is believed to be part of the PBOC's commitment to containing runaway credit growth and reducing financial risks accumulated in shadow banking. They have not finished the job, but the battle is nearing an end. [...] Analysts say regulators must be prepared to defuse the fundamental catalysts for the explosive growth of shadow banking, which would mean liberalizing interest rates, curbing local governments' wild investments and improving the transparency of WMP sales. Chinese banks are only allowed to offer PBOC-guided rates to depositors, and those interest rates are flat with the rate of inflation, which has bolstered Chinese depositors' readiness to turn to WMPs that offer higher returns. [...] As the medium, banks further complicate the issue by selling short-term WMPs to finance long-term projects, as longer maturity yields higher returns. When the WMPs are due, banks just go to the interbank market and borrow money to repay investors. The interbank borrowing costs before the credit crunch were around 3 percent, but banks can charge 10 percent interest on a loan to an LGFV. "To squeeze the pimple of over-leverage, we need an overhaul of the current fiscal system," said a well-respected researcher at a think tank of the State Council, who requested anonymity in discussing the matter. "As the financing vehicles of some governments in western China can take on interest rates as high as 18 percent, how can the money go to the real economy?" the researcher asked. ^ top ^

GDP target in sight for 2013 (China Daily)
China's economic growth will pick up in the third quarter despite the recent liquidity crunch, and the government's full-year target of 7.5 percent expansion can be achieved, Bank of China Ltd said in a quarterly report on Wednesday. The GDP growth rate will reach 7.8 percent in the third quarter, with 7.6 percent growth for the second half overall, according to the report. The first-quarter expansion of the world's second-largest economy moderated to 7.7 percent amid sluggish external demand and soft investment. "Acceleration of urbanization, a rally in consumption, an export recovery and base factors will support economic stability in the coming months," the bank said. It added that if any new stimulus policy is introduced this year, growth might even reach 8 percent. The report noted that manufacturers have nearly ended de-stocking and industrial output is expected to rise by 9.5 percent in the third quarter, slightly faster than in the second quarter. But increased unemployment and financial risks such as shadow banking, local government debts and rising bad loans call for precautions, said Zhou Jingtong, a senior analyst at BOC. [...] Investment in infrastructure may help the economy recover in 2013, with fixed-asset investment in infrastructure up some 30 percent year-on-year in the first half, said Pu Yonghao, regional chief investment officer for Asia Pacific at UBS Wealth Management. "However, China's economic growth may continue to slow in the second half of 2013, according to statistics for power consumption and freight loading, which measure real economy activities," Pu said. Exports in the second half may not help, while the real estate industry faces critical challenges, he said. Several financial institutions have cut their forecasts for China's 2013 and 2014 growth amid the worst cash crunch in the interbank market in nearly a decade. Cao Yuanzheng, chief economist of BOC, said the liquidity problems are temporary and won't affect the real economy that much, though they will affect banks' financing costs. Pu said the causes of the liquidity crunch include a narrowing trade surplus, reflecting less active exports, and an aging population that is drawing down savings to cover living expenses. Low funding costs in recent years have led to overcapacity and speculation, and the current move to bring funding costs to reasonable levels are also an attempt to squeeze overcapacity and speculation out, he said. Cao said the most practical way to strike a balance between curbing off-balance-sheet lending expansion and supporting economic growth is to securitize the shadow banking assets and float them transparently in the market. [...]. ^ top ^


DPRK and South Korea

North and South Korean websites still offline after war anniversary hack attack (SCMP)
Several North and South Korean websites that went offline on a war anniversary remained shut down on Wednesday, a day after what Seoul partly blamed on a hacking attack. The shutdown appeared to be less severe than one in March, and some government and private sector sites were operating again. The main page of the presidential Blue House was restored, but websites for the prime minister's office, the science ministry and South Korea's spy agency remained offline. The conservative South Korean newspaper Chosun Ilbo was back online. North Korea's national airline, the Rodong Sinmun newspaper, the North's official Uriminzokkiri site and Naenara, the country's state-run internet portal, had been shut down on Tuesday, and all but Air Koryo were operational a few hours later. Seoul blamed hacking for the shutdown of the South Korean sites, and National Intelligence Service officials said they were investigating what may have shut down the North Korean websites. North Korea has not commented. The shutdowns occurred on the 63rd anniversary of the start of the Korean War, which both countries commemorated. They also are preparing for the 60th anniversary of the end of the fighting July 27, a day North Koreans call “Victory Day” even though the Korean War ended in a truce, not a peace treaty. It wasn't immediately clear what or who was responsible for the shutdowns. Several Twitter users purporting to belong to the Anonymous hackers' collective claimed they attacked North Korean websites, but they did not respond to attempts by The Associated Press to communicate with them. Shin Hong-soon, an official at South Korea's science ministry in charge of online security, said the government was not able to confirm whether these hackers were linked to the South Korean attacks. [...]. ^ top ^



"Mongolians in Deel" festival to run (Montsame)
A festival “Mongolians in Deel” will take place on July 13. It will be co-organized by the Administration of Ulaanbaatar city and Mongolian Tourism Association for the 7th time in order to advertise Mongolian traditional costumes to the foreign tourists and travelers. During the festival, a parade of people dressed in deel will run, and a concert of Mongolian national songs and dance will be organized on the Sukhbaatar square. During the festival, various events will be held such as a fashion show of the traditional costumes, a circus performance, a fair of Mongolian ger (traditional dwelling) and a tournament of ankle-bone shooting. ^ top ^

The Anti-Corruption Authority investigates MP S.Bayartsogt (
The Anti -Corruption Authority has started an investigation into S.Bayartsogt after the Prosecutor General"s Office accepted the investigation request made by the ACA. After it was revealed that MP S.Bayartsogt fail to include his secret Swiss bank account and offshore entity in the income and asset declaration as a State official, the Ethic`s Sub-Committee of Parliament discussed the issue. The Ethic`s Sub-Committee of Parliament agreed the issue was a ethic failure but decided that was not a good reason to dismiss S.Bayartsogt from his MP position. S.Bayrtsogt confirmed that he did make a mistake by failing to include his offshore company and Swiss bank account and submitted his resignation as Deputy Speaker. The Parliament accepted his resignation. The resigned Deputy speaker spoke about his offshore entity saying “I should have included my Legend Plus Capital Limited offshore company in the income and asset declaration.” But he said he didn't use the offshore entities to avoid taxes because the venture didn't produce any income. If the Prosecutor General"s Office believes that a criminal proceeding is necessary the Office will submit a request to dismiss him as a Member of Parliament. ^ top ^

President of the sixty-seventh session of the United Nations General Assembly Vuk Jeremic visited Mongolia on June 21, 2013 (Info Mongolia)
Speaker of the State Great Khural (Parliament) Z.Enkhbold received Mr. V.Jeremic at Sukhbaatar Square and together, they paid their respects to the Monument of Chinggis Khaan. The delegation led by Member of Parliament, Minister of Foreign Affairs L.Bold were present in the meeting between Speaker Z.Enkhbold and President V.Jeremic. During the meeting, Speaker Z.Enkhbold noted the importance of the joint Declaration on “Mongolia's nuclear-weapon-free status” between the five permanent members of the UN Security Council that was ratified during the 67th session of the UN General Assembly and the Declaration “Community's Attainments and Global Challenges” on the issue of Education for Democracy. Mr. V.Jeremic stated that the resolutions presented together with Mongolia when he received the Presidency of the UN General Assembly were historically significant documents that influenced the rise of Mongolia's reputation and universally accept and respect Mongolia and pointed out the importance of Mongolia's democratic President's initiative and leadership in the achievements at international level. They also discussed the preparations of the 68th session of the UN General Assembly in September and Mongolia's report during the session of the national implementation of the 3 resolutions initiated by Mongolia. The Speaker announced Mongolia is planning to actively participate in the discussions regarding development objectives after 2015, sustainable development objectives, and the support of the development of disabled citizens. During the visit, Mr. V.Jeremic called upon the President of Mongolia. President Ts.Elbegdorj informed President of the UN General Assembly about his intention to have a convention ratified on the control of alcohol use and how the World Health Organization and other countries are supporting his proposal and requested from Mr. V.Jeremic to support Mongolia's initiative to establish an independent organization in the field of water under the UN jurisdiction, to broaden international cooperation in this and environmental sector, and to ratify the convention on the control of alcohol use. ^ top ^

Preliminarily, candidate from Democratic Party - Tsakhia ELBEGDORJ has won in the 2013 Presidential Election of Mongolia (Info Mongolia)
The Sixth Presidential Election of Mongolia was held throughout the country on June 26, 2013 between 07:00 am and 10:00 pm, and according to the General Election Commission of Mongolia (GEC) as of 10:00 pm by Ulaanbaatar time (GMT +8) - 1,224,940 citizens have participated in the voting out of registered 1,856,190 citizens with 63.89% of attendance, excluding Uvs, Khovd and Bayan-Ulgii Aimags (GMT +7) due to time zone differences. Chairman of the GEC Ch.Sodnomtseren made a statement at 01:30 am (June 27), he noted that data was received from 1,839 Precinct Election Commissions out 1,896 Commissions, where the candidate promoted from Democratic Party (DP) incumbent President Tsakhia ELBEGDORJ received 614,964 votes, where second candidate from the Mongolian People's Party (MPP) a Member of the State Great Khural (Parliament) Badmaanyambuu BAT-ERDENE received 514,375 votes and the third candidate current Minister of Health Natsag UDVAL promoted from Mongolian People's Revolutionary Party (MPRP) has received 79,833 votes respectively. In addition, votes given by Mongolian citizens residing abroad were counted, where DP candidate Ts.Elbegdorj has collected 2,739 votes out of registered 4,242, MPP candidate B.Bat-Erdene received 1,283 votes and MPRP candidate N.Udval received 182 votes respectively. ^ 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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