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
  29.7-2.8.2013, No. 486  
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Table of contents

DPRK and South Korea


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Bilateral Issues

Dining on herbs and mud, China's ultra-rich discover Switzerland (SCMP)
A Swiss bank has paid for some 20 "high net-worth" clients from mainland China to travel to its Alpine headquarters and collect mud and grass that they will later eat. The invitation reflects how the central European country has found a unique way to appeal to an increasing number of mainland VIP tourists roaming the world for a novel experience. Among the quirky tour options, visitors can be guided by a "crazy cook who calls himself an alchemist", said Peter Zombori, founder of Premium Switzerland, a service provider that caters to the ultra-rich. Avant-garde chef Stefan Wiesner, owner of the Gasthof Rössli hotel, "takes groups on horses, rides with them into nature, collects herbs and soil, and he puts the meat into the soil and prepares lunch for them", said Zombori. "We kind of force them to do that," he said. "They don't have that in mind right away. If you live in Beijing, there is no nature. It's just big skyscrapers and lots of traffic." Of the 500 to 600 clients Zombori said he had hosted last year in Switzerland, 40 were Chinese with assets above US$50 million. A year earlier, the figure was only 15. An additional 100 to 120 Chinese of his clients last year were affluent with a "few million plus", he said. The number of Chinese visitors to Switzerland reached 60,821 in May, an increase of 18 per cent from a year earlier, according to the Swiss Federal Statistical Office. Swiss media have also noted the booming trend. About 100 buses of Chinese tour groups cross from Switzerland into Italy every week, Swiss daily Tagesanzeiger has reported. And 8 per cent of the guests at the Crowne Plaza hotel in Zurich are Chinese, the local Neue Zürcher Zeitung said last month. The number of Chinese tourists in Switzerland's commercial hub increased some 40 per cent last year, from 2011. But the Alpine nation, known for its discreet bankers and dashing timepieces, has set its sights on China's richest. China has an estimated 1.3 million millionaires and 851 households with more than US$100 million in private wealth, the Boston Consulting Group said in May. Chinese account for 4.5 per cent of summer guests at the Kempinski Grand Hotel des Bains, one of Saint Moritz's finest, said the hotel's Betina Welter. "The number of Chinese individual guests has been continually increasing," she said. Unlike Zombori's Russian or Arab clients, who travel on their own account, most Chinese VIP visits are by invitation from banks, he said. "It depends on the efforts of the Swiss banks. They are very much focused on the Chinese market," he said. The typical wealthy Chinese tourist spends three to four days in the country, and then travels to Milan, London, Paris or Germany's Trier, where Karl Marx was born. Zombori rents out chalets that cost HK$250,000 to HK$2 million a week. He also organises tours to watch manufacturers and cheesemakers, as well as hikes through the pristine Alps. He hosted his first Chinese client five years ago and recalls how over the years, the Chinese have continued to surprise him. His first Chinese client, "the owner of a very large internet search engine, was not our typical Chinese top VIP". "He was low-key, until he passed a watch store and spontaneously bought two watches the price of a house," he said. One Chinese family chose to travel by train from Paris on their first trip to Europe, which Zombori facilitated. He took them to Gstaad, a picturesque mountain village of 7,000 inhabitants, where the son asked to buy a Ferrari. The father and son left the village for Milan in a red two-seater, while the rest in their group took the train to the northern Italian city, Zombori said. Another recent trend is seeing rich Chinese heading to Switzerland for medical treatment including post-cancer rehabilitation and as an anti-stress remedy, he said. A week-long stay can cost HK$420,000. The next challenge for Switzerland will be to convince China's richest to enroll their children into Swiss boarding schools, some of the world's most prestigious and expensive private schools. But, Zombori said, it's difficult to convince Chinese to stay in the country long-term. "It's so clean that you can eat from the street, but I could imagine that Switzerland is not the most dynamic place," he said. "It's a place of escape. They are happy to go back to their culturally safe environment." ^ top ^


Foreign Policy

China, EU reach deal on solar panel dispute (Xinhua)
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products and the European Commission have reached a deal to resolve a dispute involving solar panels. "After weeks of intensive talks, I can announce today that I am satisfied with the offer of a price undertaking submitted by China's solar panel exporters," EU Trade Commissioner Karel De Gucht said in a statement, referring to an agreement for a minimum price for China's imports. "We found an amicable solution... that will lead to a new market equilibrium at sustainable prices," De Gucht said. The Commissioner said the next step for him is to table this offer for approval by the European Commission. Further details of the legal acts concerning the undertaking arrangement can only be released following their adoption by the Commission. The Chinese Ministry of Commerce, meanwhile, said China welcomes the deal which "showcased pragmatic and flexible attitudes from both sides and the wisdom to resolve the issue." According to the Ministry of Commerce spokesman Shen Danyang, resolving the trade dispute is conducive to an open, cooperative, stable and sustainable economic and trade relationship between China and the EU. He added that China is willing to further promote exchanges and cooperation with the EU side in the photovoltaic industry field. Chinese solar panel production quadrupled between 2009 and 2011 to more than the entire global demand, and the Commission accused China of dumping its solar panels at below the cost of production in Europe. The European Commission on June 4 decided to impose provisional anti-dumping duties on imports of solar panels, cells and wafers from China. Starting from June 6, EU imports of Chinese solar products was subject to a punitive duty of 11.8 percent until August 6, from when on, the duty would have been raised to 47.6 percent if the two sides could not sort out the dispute through negotiations. ^ top ^

Japanese envoy Akitaka Saiki in Beijing to discuss summit (SCMP)
Japanese Vice-Foreign Minister Akitaka Saiki arrived in Beijing yesterday for discussions with senior Chinese officials about a high-level summit between top leaders of the two nations. Saiki's two day-trip is the latest effort by Japanese Prime Minister Shinzo Abe to improve Sino-Japanese relations that have been soured by a bitter territorial row over the Diaoyu Islands, known as Senkakus in Japan, in the East China Sea. Saiki and his Chinese counterpart Zhang Yesui are expected to discuss the prospects of a summit between Abe and President Xi Jinping. Abe told reporters yesterday that Japan intended "to promote unconditional, frank dialogue between the foreign ministers and leaders of the two nations. Kyodo said Abe wants to tell the Chinese side that he hoped to meet Xi at the sidelines of G20 summit in Russia in September.[...] Abe has extended goodwill gestures to Beijing following Japan's upper house election on July 21, which his ruling bloc won in a decisive victory. But the Abe also said Japan would not set any pre-conditions for the dialogue, a remark observers said was likely to be rejected by Beijing, which has said high-level talks would be held only when Japan acknowledged that sovereignty was disputed.In an inspection of two small islets close to the Diaoyus on July 17, Abe warned of a heightened security risk because of "provocations" from Beijing. Japan's Defence Ministry last week issued a policy report repeating concerns about China's military build-up. The ministry also said it would consider buying unmanned surveillance drones and beef up ability to transport troops to far-flung isles that stretch all the way to the northwest of Taiwan. [...] Lian Degui, deputy director of Japanese studies at the Shanghai Institutes for International Studies, said Saiki and Zhang would seek "middle-ground" on whether the islands' territorial rights were in dispute. ^ top ^

China drops Europe wine dumping inquiry after solar panel deal, says EU (SCMP)
China has agreed to discuss dropping its inquiry into whether Europe is dumping wine, the EU's trade chief said on Monday, after EU and Chinese officials made a deal to avoid tariffs on solar panels from China. After resolving their biggest trade dispute yet, Beijing and Brussels will tackle accusations that French, Spanish and Italian wine is being exported for sale at below the cost of production, as well as another dispute over exports of polysilicon, a raw material used in solar panels. “There is a window for discussions between the European Union and Chinese [wine] producers,” EU Trade Commissioner Karel De Gucht told a news conference. “The Chinese government has promised to facilitate such discussions,” he said. China's openness to resolving a string of related disputes could signal an easing of tensions between two of the world's biggest economies, but their relationship remains delicate as both sides seek to protect industries from unfair competition. [...] De Gucht said he remains ready to launch an investigation into Chinese mobile telecom equipment producers suspected of dumping and illegal subsidies, after first warning Beijing of a possible inquiry in May.[...] The wine dispute dates back to the EU's initial plan to impose punitive duties on solar panels in June, when China launched an anti-dumping inquiry into European wine sales in a retaliatory move that could lead to duties on exporters in France, Spain and Italy.[...] China is the world's biggest importer of Bordeaux wines and consumption soared 110 per cent in 2011. France called the decision to consider duties “inappropriate and reprehensible”. China's commerce ministry could not confirm any freeze into its wine investigation.[...] “The relevant investigation is still proceeding regularly,” Yao Fengwen, a lawyer with Bo Heng (Beijing B&H Associates) law firm. Wine sales are only a fraction of overall exports to China, but the threat of duties appeared to be symbolic because France and Italy were in favour of hefty levies on Chinese solar panels, while Germany and Britain opposed them. An official at Germany's economy ministry said Berlin had been reassured that “it is part of the current agreement that China abstains from measures relating to polysilicon”. Germany's Wacker Chemie is the world's second biggest maker of polysilicon and would be hurt by any tariffs in China. Beijing placed duties on US and South Korean polysilicon exports earlier this month. ^ top ^

Beijing and Canberra to resume trade talks (Global Times)
Canberra is committed to pushing forward a long-running free trade agreement with Beijing, the Australian foreign minister said on Tuesday, days before the two countries are scheduled to hold another round of FTA talks. The agreement can help raise bilateral relations to a new level, though "without an FTA, our trade relationship with China has flourished", Bob Carr said in an exclusive interview with China Daily in Chengdu, Sichuan province, the second leg of his 10-day trip to China. "Leaders agreed that negotiations would be undertaken in a pragmatic and flexible way," Carr said. "Australia is seeking to conclude a comprehensive agreement that would benefit both parties." [...] The two countries began formal negotiations in 2005, but a breakthrough has been elusive because of differences over issues such as further opening up markets for each others' agricultural products and the threshold under which China's State-owned enterprises can invest in Australia. Currently, a review of the investment is required if it's made by a State-owned enterprise, while a privately owned Chinese company can invest up to A$248 million ($224 million) in Australia without being reviewed. "We of course welcome the Chinese government's commitment to the negotiations, which have been difficult because of the range of interests and sensitivities on both sides," Carr said. Australia welcomes Chinese investment, Carr said, adding that the country has pledged to further tap into Asian markets' potential, with China as one of its major targets. This year "will likely mark something of a turning point in the bilateral relationship," Carr quoted Australian Prime Minister Kevin Rudd as saying. "The intense investment phase of the mining boom appears to be coming to an end, but let's keep in mind there's still plenty of upside," he said. Australia has been one of the most favored destinations for Chinese investment for years. Chinese direct investment to Australia last year increased by 21 percent from 2011 to $11.4 billion, in fields ranging from mining to the food industry. However, Canberra has banned some Chinese companies' bids on projects due to "security reasons", including the case of Chinese telecommunications firm Huawei, which was barred from bidding on the $38 billion nationwide high-speed Internet network in March last year. Yang Baoyun, an Asia-Pacific studies professor at Peking University, said Canberra's efforts to reduce discriminatory regulations while strengthening trust in Chinese investment are key to moving cooperation forward. "Australia would like to invite more investment from China to boost its economy, which is indeed highly complementary to China's, but it also tends to dismiss cooperation with China due to insufficient trust in the country," Yang said. [...]. ^ top ^

China needs strengthened army, though it seeks no hegemony (Xinhua)
Eighty-six years since its foundation, the People's Liberation Army (PLA) has become a relatively modern power. Although China does not intend to seek hegemony, it needs a stronger army to safeguard its development. Thursday marks the 86th anniversary of the establishment of the PLA. From Aug. 1, 1927, the army has experienced revolutionary and warring years, and a number of conflicts with China's neighbors after 1949. With the present 2.3 million personnel, the PLA has risen from rags to a strong power corresponding to the country's more than three decades of economic boom times. It is now equipped with a newly-commissioned aircraft carrier, while other advanced weaponry, including a J-20 stealth fighter jet and large military transport aircraft, are in development. The increased military power of the PLA has stirred up unease among some of China's neighboring countries and the traditional power -- the United States. However, in an important period of strategic opportunities, China still needs a stronger military to safeguard its security and ever-increasing national interests, so as to help the country achieve modernization. In a commentary published on Thursday, the PLA Daily said national defense and the building of the army is at a new starting point, facing precious opportunities and a complicated domestic and exterior security environment as well. Since the reform and opening up policy in the late 1970s, China has stopped being a closed country. Instead, its economic and cultural engagement in the world has resulted in an expansion of its interests overseas, not to mention some countries' illegal claims over China's territories. In the meantime, the complicated national conditions have dictated that the PLA is needed in multiple purposes domestically, from disaster relief, to maintaining stability and national unity. The ruling Communist Party of China (CPC) decided at an important congress last year that the country will build a moderately prosperous society in an all-round way by 2020. A stronger army can serve as a stabilizer and safeguard for this process. The CPC has also put forward the concept of the "Chinese Dream," which refers to a great rejuvenation of the Chinese nation, and also an idea inspiring individuals to achieve their own ambitions by personal efforts. At the end of last year, Chinese President Xi Jinping said in regards to the military, the Chinese Dream could be a dream of building stronger armed forces. He added that a strong national defense and a powerful military are necessary in the course of building a prosperous country. A stronger army serves China's development, and is not a resort for the country to seek hegemony like rising powers in history. Chinese leaders have reiterated many times the promise that the country will never seek hegemony as it gains power. [...]. ^ top ^

Japan urged to make substantial efforts to improve China ties (Xinhua)
A Chinese Foreign Ministry spokeswoman on Thursday urged Japan to make substantial efforts to improve bilateral ties rather than chanting empty slogans. Spokeswoman Hua Chunying said Japan caused the current difficult situation in bilateral relations, "so the Japanese side should correct their mistakes and make substantial efforts to get rid of the obstacles in the way of the development of bilateral relationship." Relations between China and Japan soured following the Japanese government's unilateral move to "nationalize" part of the Diaoyu Islands last September. Recently, the Japanese side has repeatedly called for a dialogue with China soon without any conditions. "It will not help to solve the problem with only empty slogans calling for a dialogue," said the spokeswoman. Hua said China is firm in its stance on safeguarding the sovereignty of the Diaoyu Islands. Meanwhile, it proposes resolving the problem via dialogue. The problem is that the Japanese side keeps acting provocatively while chanting empty slogans "without any sincerity for dialogue at all," Hua said. "The Japanese side should rectify their attitude and be as good as their words to create a necessary environment for dialogue between the two sides," she said. Hua said a high-level dialogue can come only after adequate preparations, but the Japanese side has consistently evaded the Diaoyu Islands issue, unwilling to recognize the dispute itself or to conduct a serious dialogue about the problem. The Japanese side should face history and facts and be sincere about resolving the problem through dialogue. Hua said China-Japan strategic and mutually-beneficial relations are based on the principles established in the four political documents signed between the two countries. The documents include the China-Japan Joint Statement inked in 1972, the China-Japan Treaty of Peace and Friendship of 1978, the China-Japan Joint Declaration of 1998 and a joint statement on advancing strategic and mutually-beneficial relations in a comprehensive way that was signed in 2008. To advance the China-Japan relationship in a healthy and stable way, she said, the two sides should take history as a mirror and appropriately handle problems affecting bilateral ties. ^ top ^

China's maritime rights and expansion push could lead to tension with neighbours (SCMP)
China's ambitious push to boost its marine economy and maritime rights is rising higher on the new leadership's agenda, but observers say the campaign could lead to more friction with its neighbours. President Xi Jinping told a Communist Party Politburo meeting on Wednesday that becoming a maritime power was a priority, and vowed to further explore maritime resources and boost the proportion of the marine economy in the nation's gross domestic product. "Oceans and seas have an increasingly important strategic status regarding global competition in the spheres of politics, economic development, military and technology," Xi said. The marine economy comprises various industries, including tourism, and accounted for 9.6 per cent of China's GDP last year. An official think-tank estimated that the proportion would jump to 12.4 per cent by 2020. "The ocean will be prominent on the policy agenda of the Chinese government," said Wang Hanling, a maritime expert at the Chinese Academy of Social Sciences. "More effort will be put into formulating maritime strategy and law enforcement." Zhuang Guotu, director of the Centre for Southeast Asian Studies at Xiamen University, said most of China's international trade was conducted by sea, so maritime security was rapidly becoming a major diplomatic issue. As a result, he said, China's maritime reach was expanding, and it has led to conflicts with neighbours. "Security is increasingly important, especially as confrontations between China and its neighbours intensify," he said. "China needs to ensure that trade routes at sea will not be blocked." China can't afford to have its claims to waters off its borders challenged further, Zhuang said, warning that this could trigger a "setback" in the nation's maritime expansion plans. Professor Gao Shu, who specialises in oceanic affairs at Nanjing University, said territorial disputes would not affect China's maritime strategy, as Beijing needed to seek out more natural resources to fuel its booming economy. Meanwhile, the Philippines' top diplomat said yesterday that he and his Vietnamese counterpart had discussed how they could co-operate in their territorial disputes with China. Foreign Affairs Secretary Albert del Rosario said he and Vietnamese Foreign Minister Pham Binh Minh agreed in Manila yesterday to ask the Association of Southeast Asian Nations to seek early negotiations with Beijing on a legally binding accord to prevent a major conflict in the South China Sea. Del Rosario said China's offer to jointly develop disputed areas was also discussed. ^ top ^

China condemns US resolution on territorial sea dispute (SCMP)
China said on Thursday it had lodged a formal complaint with the United States after the US Senate passed a resolution expressing concern about Chinese actions in the disputed East and South China Seas. The US resolution, passed on Monday, listed several examples of worrying Chinese behaviour, including China's issuing of an official map defining the contested South China Sea as within its national border and of Chinese surveillance ships entering waters disputed with Japan in the East China Sea. China has repeatedly urged the United States not to get involved in either dispute. The above resolution proposed by a minority of senators took heed of neither history nor facts, unjustifiably blaming China and sending the wrong message “The above resolution proposed by a minority of senators took heed of neither history nor facts, unjustifiably blaming China and sending the wrong message,” China's Foreign Ministry said in a statement. “China expresses its strong opposition, and has already made stern representations with the US side. We urge the relevant senators to respect the facts and correct their mistakes in order to avoid further complicating the issue and the regional situation,” it added. Territorial claims by Japan and China over uninhabited islets and the resource-rich waters in the East China Sea, as well as China's claims over the South China Sea, rank as some of Asia's biggest security risks. Chinese President Xi Jinping told his Politburo on Wednesday the country wanted to resolve its maritime territorial disputes peacefully and through talks, but would not compromise on sovereignty and had to step up its defensive capabilities. Tension over the East China Sea has escalated this year, with China and Japan scrambling fighter jets and ordering patrol ships to shadow each other, raising fear that a miscalculation could lead to a broader clash. The Philippines and Vietnam have also accused Beijing of becoming more aggressive in their disputes with China in the strategically located and energy-rich South China Sea. ^ top ^

China sails through 'first island chain' (China Daily)
The Chinese navy has fulfilled its long-held dream of breaking through the "first island chain blockade", and its vessels have gained access to the Pacific Ocean through various waterways along the route, military observers said on Thursday. They made the remarks in interviews with China Daily to mark the 86th anniversary of the founding of the People's Liberation Army. "The Chinese navy has the capability to cut the first island chain into several pieces," said Du Wenlong, a senior researcher at the PLA's Academy of Military Science. [...] The "first island chain" refers to the first major archipelagos off the East Asian continental mainland, including the Japanese archipelago, Ryukyu Islands, China's Taiwan and the northern Philippines. In the 1950s, Washington came to regard the chain as an important barrier to contain China and other communist countries. The United States and allied countries installed a strong military presence and advanced weapons at bases along the line. The PLA's anniversary came four days after five Chinese warships finished a historic trip, during which the Chinese navy for the first time entered the Pacific through the Soya Strait, known in Russia as La Perouse Strait, between the Russian island of Sakhalin and the Japanese island of Hokkaido. The Chinese vessels passed through the strait to train in the West Pacific after a joint naval drill with Russia in the Japanese Sea. It was the first time the Chinese navy has conducted high-sea training right after a major drill, with no rest. [...] Japan sent frigates and aircraft to monitor the Chinese fleet at a short distance. [...] President Xi Jinping vowed on Wednesday to protect China's maritime interests and be fully prepared for the complex issues in the region. He made the pledge while chairing a group study session of the Political Bureau of the Communist Party of China Central Committee to discuss a roadmap for China to become a maritime power. "We love peace and will remain on a path of peaceful development, but that doesn't mean giving up our rights, especially those involving the nation's core interests," Xi said. "China is growing into a global power and should have a navy that fits its status," said Wu Dahui from Tsinghua. "The further our navy can go, the further we can push out the security threats.". ^ top ^


Domestic Policy

China to start nationwide audit of government debt (Xinhua)
China's top auditing body, the National Audit Office (NAO), announced Sunday that it will conduct a nationwide audit over government debt. "In line with a request of the State Council, the NAO will organize auditing agencies across the country to carry out an audit of government debt," the national auditor said in a one-line statement on its website. The office does not provide any other details, nor a timetable, for the audit. The NAO has previously conducted two rounds of audit over local government debt. A nationwide audit conducted in 2011 found that China's local governments' debt totaled 10.7 trillion yuan (1.73 trillion U.S. dollars) at the end of 2010. In early June this year, the NAO said that a follow-up audit found liabilities of 3.85 trillion yuan owed by 36 local governments by the end of 2012. The debt amount was 12.94 percent higher compared with that at the end of 2010, according to the office. Combined debt of the 36 local governments accounted for 31.79 percent of the 10.7 trillion yuan back then. The Chinese central government has repeatedly stressed the urgent need to guard against financial risks, including the local government debt problem. Liu Jiayi, auditor general with the NAO, warned at a session of China's top legislature in late June that local governments must improve their debt management in order to handle escalating growth in local debt. As Sunday's statement did not specify the audit target, analysts said that all government debt, including that at central and local levels, is likely to be covered in the forthcoming audit. ^ top ^

Security tightens around Beidaihe ahead of Communist Party conclave (SCMP)
The resort community of Beidaihe has seen tightening security in recent days - one of several signs that Communist Party chiefs would soon be arriving for their annual policy conclave there. Increased numbers of armed police have been seen in the vicinity of a private Beidaihe beach. Also, 200 "model workers" - people the party has recognised for their contributions to society - have recently arrived for holiday in the area, the China News Service reported. Last year, President Xi Jinping held a meeting with grass-roots workers in the resort ahead of the "summer summit", when the party attempts to thrash out issues in advance of its formal fall meetings. State-broadcaster CCTV reported yesterday that Xi visited troops in Beijing command ahead of holiday Army Day on Thursday, calling on the soldiers to be loyal to the party. The party chiefs may discuss the case of disgraced Chongqing party chief Bo Xilai, but analysts said the saga would not be a focus since his corruption indictment has been filed. ^ top ^

Xi: Troops must strictly follow CPC leadership (Xinhua)
Chinese President and Chairman of the Central Military Commission Xi Jinping has stressed efforts to ensure that troops strictly follow the leadership of the Communist Party of China (CPC). He made the comments during a tour of the Beijing Military Area Command on Monday. The Beijing Military Area Command, which is based in the capital, has a special status and role, as well as a special mission, and it faces a special environment, said Xi, who is also general secretary of the CPC Central Committee."We must make sure that troops obey the command of the Party and are absolutely loyal and reliable," he said. Xi said the Beijing Military Area Command must fulfill its duties and missions, focus on improving its capabilities related to fighting wars and unswervingly improve its work style. Xi called for unremitting efforts to arm servicemen with socialist theories of Chinese characteristics and ensure their purity, reliability and firmness in ideological fronts. Officials and soldiers, "especially those medium-level and senior officials," should be educated on consciously sticking to political belief, political stance as well as political discipline, he said. "They should maintain high-level unity with the CPC Central Committee and the Central Military Commission any time and under any circumstances, and resolutely obey their command," he said. Currently and in the near future, an important task in the regard is to strengthen efforts of promoting the goal of building a strong military, Xi said. Xi said combat capability is the only and fundamental measure of the troops, urging accelerated steps to enhance the military's strength based on information technology. Training bases should be well used for warfighting-oriented exercises, he added. Xi stressed that directives issued by the CPC Central Committee and the Central Military Commission should be strictly followed and the ongoing "mass line" campaign should be carried out in a down-to-earth manner. The CPC committees at various levels in the military and military officials are both organizers and participants of the campaign, and should take the lead in work style improvement, he said. ^ top ^

2,290 disciplined for excessive extravagance (China Daily)
More than 2,000 Party and government officials have been punished as of late June for breaking new Party rules against extravagance and excess formality, an official from China's top anti-graft agency said on Monday. A total of 2,290 officials violated the guidelines, said Xu Chuanzhi, head of the department responsible for the supervision of Party officials' work habits under the Central Commission for Discipline Inspection of the Communist Party of China. The CPC Central Committee issued the guidelines in December to improve Party work habits. The commission publicized eight typical cases, in which officials had misappropriated public funds for entertainment purposes or illegally accepted cash and gifts. In one of the cases, an official from Qingshan district of Wuhan, the capital of Hubei province, received a grave warning for taking 10 civil servants sightseeing to Hainan province at public expense. Anti-corruption authorities ordered those officials to pay for their trips, the commission said. In another case, Wang Qinsheng, deputy head of the Hunan provincial department of justice, received a warning for accepting money and gifts at his son's wedding in January, the commission said. The official was exposed in an online post that accused him of taking bribes at the event. The post also pointed out that more than 20 police vehicles and 100 officials from judicial authorities attended the wedding. The Hunan Party Commission for Discipline Inspection announced afterward that Wang received around 140,000 yuan ($22,800) from 78 people at the wedding, and the official has turned over the money to the commission. In the wake of that scandal, the Hunan Party Commission for Discipline Inspection released the draft of a new rule last week that bans officials from accepting bribes at birthday celebrations and their family members' weddings and funerals. In response to some people's claims that accepting gifts and money at birthday celebrations and wedding ceremonies is a private issue and should not be banned, Hunan's anti-graft agency said on Monday that the officials can either accept the ban or resign. The release of typical cases and the number of officials punished is a regular occurrence that aims to push forward the Party's campaign to improve work habits. The guidelines include reducing traffic controls imposed for officials' convenience, banning red-carpet arrangements, and resisting extravagant and bureaucratic visits and meetings. The CPC Central Committee also initiated the "mass line" campaign in mid-June. The campaign, which is scheduled to run a year, requires officials to give top priority to the interests of the people and maintain close ties with the public. The Central Commission for Discipline Inspection of the CPC asked officials and Party members to stick to the eight bureaucracy-busting guidelines, eliminate improper work habits and firmly carry forward the "mass line" campaign, the statement said. It also urged disciplinary authorities at all levels to strengthen inspection and supervision and punish those violating the anti-bureaucracy rules. A new regulation in Nanjing, Jiangsu province, forbids government employees from preventing people from making complaints to city leaders, reported on Monday. The regulation rules that no complaints from people to city officials are to be prevented during fact-finding missions or inspections of grassroots units in Nanjing. There should be no time limit for meetings during inspections or symposiums, according to the regulation. City leaders are required to schedule at least one day a season to receive visits from the public — or go to grassroots units — to hear their suggestions. The regulation was drafted because of public complaints during the city's mass line campaign, which refers to the guideline to prioritize and protect the interests of the people. ^ top ^

China's leaders vow steady growth - and some reforms (SCMP)
The nation's top leaders pledged to maintain steady economic growth while deepening fiscal and financial reforms, setting the tone for policymaking in the second half of the year. The direction outlined in a Politburo meeting chaired by President Xi Jinping yesterday suggested Beijing remains committed to, and confident of, meeting its annual growth target but appeared to rule out any massive monetary or fiscal stimulus measures in the months to come. Keeping policies stable with some fine-tuning should create a favourable environment for the annual policy conclave among Communist Party chiefs due to be held in the northern coastal resort of Beidaihe, where the leaders will discuss their policy agenda for a crucial party assembly this autumn. "Conditions are there for the economy to develop continuously and healthily. In the second half, China's economy will maintain a generally steady development," the top leaders said in a statement posted on the government's website. "Fine-tuning will be done with appropriate timing and appropriate magnitude." In contrast to recent months, there were no expressions of concern about the "downward pressures facing the economy", which may bolster market confidence in the leaders' willingness to take action as needed to stabilise growth. The statement also reinforces recent remarks by Premier Li Keqiang that the government would ensure that growth and employment stay above certain limits. A Xinhua article said the official bottom line for growth is 7.5 per cent this year and 7 per cent in the long run. "Policymakers appeared to shift their focus slightly towards economic growth, but the aim seems to be to stabilise the economy rather than drive a rebound," said Wang Qinwei, an economist at Capital Economics in London. Mainland economic growth slowed to 7.5 per cent in the second quarter from 7.7 per cent in the first, after the economy registered its slowest growth in 13 years last year. The Politburo pledged to maintain reasonable investment growth, push forward with urbanisation and promote a "steady and healthy development" of the property market. It also said it would upgrade industries and deepen market-oriented reform of both fiscal and financial systems, but indicated it would act cautiously. Wang said the government would likely target selected sectors with assistance similar to the "small package" unveiled by the State Council last week, when the cabinet eased the tax burden for microbusinesses and decided to accelerate railway investment in poorer regions. In a meeting last week with leaders from non-Communist parties, Xi said Beijing would continue to push for economic restructuring through reforms and opening up. "Such thoughts have been accepted by more and more regions and enterprises," Xi was quoted as saying in a separate statement also posted yesterday, highlighting a growing social consensus in favour of reform. His words, however, also suggest that significant resistance to reform remains. ^ top ^

Efficiency versus justice (Global Times)
"For the sake of the rule of law and the sake of justice, the re-education through labor system must be abolished." These were the closing words of an essay penned by Wang Gongyi, the former director of a research institute under the Ministry of Justice, which were published in the Study Times - a publication affiliated with the Party school of the Communist Party of China (CPC) Central Committee - on July 8. It wasn't the first time he had written on the controversial re-education system; in comments reported earlier this year he pointed out that decision of abolishing the system represents a choice between justice and efficiency. This difficult choice, coupled with the uncertain signals being sent from the top leadership, the legal gray-zone that the re-education through labor system occupies, and the vested interests involved have conspired to make reform a difficult task. Authorities are now hesitant to publicly announce progress made on reforming or closing down the re-education system. Yunnan and Shandong provinces, for example, have issued notices of reducing the number of crimes that warrant sending people to these camps. Reports released in July indicated that Shandong camps had consistently been reducing the number of people entering camps every month. But when contacted about the reforms, authorities refused to comment. When Meng Jianzhu, secretary of the Commission for Political and Legal Affairs of the CPC Central Committee announced in January that the system would face a "stop," most interpreted this to mean the system is potentially facing the chopping block, or at least, serious reform. Critics and victims of the system were cautiously optimistic. "Does this mean we won't risk being threatened if we report misbehavior or try to petition?" asked Li Ping (pseudonym), a 50-year-old petitioner who spent almost two years in a Liaoning Province re-education camp in 2009. Li said she reported corruption in a State-owned enterprise, and ended up in a labor camp where she had to work 10 hours a day for around 10 yuan ($1.63) a month. One critic of the system is Hu Xingdou, a professor with the Beijing Institute of Technology. "Reform, or even abolishment, is a trend in the system. I've noticed that many local governments have already taken steps to reform, such as reducing the number of people in camps," he said. In February, Yunnan Province announced that certain offenses, largely related to political activities, would no longer warrant time in re-education camps. These offenses included threatening stability, causing unrest via petitioning, and smearing the image of officials. Other crimes however, such as theft, can still result in re-education through labor, but the authorities said the assessment process has become stricter. [...] The system of re-education through labor was created in the 1950s in a bid to punish and educate "counter-revolutionaries" and people found guilty of other political crimes. After the reform and opening-up policy in 1979, detainees began to include people guilty of minor crimes, those with mental disorders and those who were accused of causing social instability. Jiang [Mingang, a law professor with Peking University,] pointed out that a key reason why the system remains in place is because it fills gaps between the criminal law and regulations regarding public security. "There are no proper punishments for some offenders who can't be punished according to the law, such as stealing low value goods," Jiang said. The legal quagmire caused by the re-education through labor system is a complex one. Wang told the IBTimes in January that police aren't necessarily dedicated to bolstering the rule of law. "The main obstacle preventing the abolishment of the re-education system is the conflict between public security organs and the judiciary," he said. "Decisions regarding re-education are made by police. They pursue efficiency and want to solve social problems as quickly as possible. But that causes issues such as infringements of human rights and wrongful convictions. If we abolish the system, then using legal procedures slows down a lot of things," Wang said. In a few cases, darker motives than a desire for efficiency may be involved. According to a Southern Weekly report five police officers in were convicted in May for embezzling money that was meant to be paid to detainees at a re-education camp in Luzhou, Sichuan Province. The report said that little "re-education" took place at the camp, and instead it was used for cheap labor. [...] Wang said that in order to abolish the system, the government would have to take a number of measures. New laws would need to be written to fill in gaps in the system, with some offences requiring jail time and some deserving fines. He also said that progress would need to be made on a system of community service, as well as a more efficient court system to quickly deal with minor crimes. An improved system for dealing with juvenile offenders was also suggested. [...] Other experts believe the re-education system reflects deeper issues facing the nation. "The difficulties in reforming or abolishing the re-education system show how complicated Chinese society has become and how difficult it is to implement not just this reform but any reforms in China," said a commentary by the Wuhan-based Changjiang Daily. ^ top ^

Beaten watermelon vendor suffered 'brain vessel rupture' (SCMP)
An autopsy on a watermelon vendor in Hunan who clashed violently with city patrols has concluded he died from a ruptured brain blood vessel, caused by external force, Xinhua has quoted local police as saying. But the seller, Deng Zhengjia, also suffered from a pre-existing vascular malformation in his brain that was the result of a congenital disease, the autopsy report said. It gave no further details about the "external force". Deng and his wife were selling watermelons at a scenic spot in Linwu, a county under Chenzhou, early on July 17, when they were approached by a patrol of urban management officers, known as chengguan, who are responsible for clamping down on illegal street vendors. Eight officers beat Deng, 56, and his wife, while one of them hit Deng's head with a metal weight, The Beijing News has quoted a witness as saying. An ambulance arrived, but Deng was already dead. The autopsy report said the multiple injures Deng suffered to his head, shoulders, neck, back, waist and arms were "relatively minor" and "non-fatal". Xinhua also quoted Yao Xiaoxi, a chief neurologist at the No 1 People's Hospital in Chenzhou, as saying that given the vascular malformation, the rupture could have happened on its own. The doctor's comments were attacked in internet postings, as a possible attempt by local authorities to shift the blame. "This means he always had this disease of vascular malformation and he would have died anyway?" one blogger wrote. The reliability of autopsy reports have come under question recently after several cases in which dissidents or activists died in suspicious circumstances while in custody. Deng's autopsy was performed by Chenzhou police authorities and pathologists from Sun Yat-sen University in Guangzhou, the same agency that handled the autopsies for Li Wangyang and Xue Jinbo, who both died in suspicious circumstances involving the authorities. Yuan Yulai, a lawyer with Zhejiang Zhixing law firm, said authorities were failing to address underlying social problems and instead treated the cases as isolated incidents. "The authorities are dying to keep up the pretence at all costs," Yuan said. "But as civil rights awareness continues to grow among the public, confrontations between authority and the public will intensify.". ^ top ^

Nationwide commentary lashes out at party's critics (SCMP)
A commentary carried on major mainland news portals yesterday hit out at advocates of Western-style political reform and warned that democracy would leave China in the same weakened state as it has Russia. The commentary, which accused intellectuals of sowing seeds of unrest on social media, was posted on Xinhua's website amid growing calls for political reform. It comes as Communist Party leaders prepare for their annual conclave in Beidaihe to debate contentious policy issues. Public intellectuals have been creating rumours and negative news on Weibo to create an impression that China will collapse soon "Public intellectuals have been creating rumours and negative news on Weibo to create an impression that China will collapse soon," it said. "They have been promoting European- and American-style capitalist constitutionalism. They have been fanning the public to hate the current leadership." The article, which was signed Wang Xiaoshi, appears to have originated July 15 with post on a personal blog registered to someone by the same name. It was picked up by Xinhua's website and featured prominently on many news portals yesterday. The piece warned that a Soviet-style collapse of the Communist Party would leave China poor, weak and miserable. It cited a series of statistics to illustrate how Russia has suffered from democracy the subsequent fall of the Soviet Union. "The Soviet Union has disintegrated into fifteen separate countries and its gross domestic product has reduced by half overnight after the democratisation," the article said. "The once great power [became] a second- or third-class nation." China would be even worse off, the writer warned, because it lacks Russia's plentiful natural resources. Russia has 40 times more oil and 193 times more natural gas, it said. "What we can live on? And how many times we will be worse than [Russia]?" it asked. Analysts said the article might reflect concern by some conservative officials ahead of a series of important high-level meetings, including the upcoming session of the Communist Party's Central Committee. It will be Xi Jinping's first since becoming party chief in November. "I guess it proves that over two decades after the fall of the USSR China continues to be haunted by its fate and has never really had closure on why this happened and what it's real implications were for China," said Kerry Brown, of the University of Sydney's China Studies Centre. "The only consensus seems to be that, for the doctrine of Communism, this was a bad thing.". ^ top ^



Officers suspended after alleged beating (China Daily)
About 10 government officers were suspended on Sunday as an investigation continued into allegations the father of a 9-year-old girl was beaten because they sold lamps on the street as the girl's summer holiday project in Beijing's Shichahai area. A joint investigation team has been set up by legal affairs, supervision and police departments as well as lawmakers and political advisers. On Sunday the Xicheng district government released an initial report of the case on Sina Weibo, a micro blog platform. According to the report, four people were injured, including the father and three government officers in Shichahai area, a famous tourism destination in Beijing's downtown area. Tian Yudong, the father, also posted on Sina Weibo that he had started a project with his daughter, a third-grade pupil, on July 16. They sold lamps on a street in Shichahai near their home with the project aimed at improving the girl's social abilities. On Thursday night, a law enforcement team including chengguan officers, or urban management officers, and officers from the Shichahai tourism management office asked them to stop the operation for the second time since they started the project, according to Tian's micro blog posts. An argument ensued that deteriorated into a physical altercation between the officers and Tian. Tian said he suffered cuts and bruising and has a lump on the back of his head. Three tourism management officials also suffered injuries and reported the case to local police on Friday, said Sun Jinsong, head of Xicheng district's publicity department. Sun said chengguan officers did not beat Tian and the fight was only between him and the tourism management officers, who have no urban management law enforcement rights. The Shichahai area is unique in Beijing because it is an open tourism area, where chengguan work with tourism management officers to maintain order. Further investigation will focus on who started the fight and those responsible will be punished, Sun said. The case triggered heated discussion online about the behavior of government officers as well as of Tian's project. He wrote on his micro blog that he had learned that selling goods on the street might violate city regulations but the project aimed to let his daughter experience society, which he thought was a different case. "I did not expect that government officers would beat me so severely in such a famous scenic spot in Beijing," Tian wrote on Sunday in a post. Tian, the deputy head of a magazine in Beijing, asked the chengguan to release related recorded footage of the incident to give the public a complete picture. Mo Yuchuan, a law professor at Renmin University of China, said that although some street vendors conduct illegal business operations, chengguan and other government officers should persuade them to stop rather than react to them with violence. ^ top ^

Beijing police arrests airport blast suspect (Xinhua)
Ji Zhongxing, who was suspected of setting off a home-made explosive at the Beijing Capital International Airport, has been arrested, police said Tuesday. The Chaoyang district procuratorate approved Ji's arrest on Monday, the airport police said. Ji, a 33-year-old wheelchair-bound man from Shandong Province, confessed that he prepared and carried the explosive and leaflets to Terminal 3 of the airport and triggered the explosive device on July 20, the police said. Ji said he did this for personal purposes, the police said. He has been in custody since July 21. According to earlier reports, the explosion caused no casualty except Ji who injured himself. ^ top ^

Beijing sees decline in tourists (China Daily)
The capital is attracting fewer tourists compared to this time last year and tourist complaints concerning the city have risen over the last six months. The capital attracted 2.14 million tourists during the first six months of this year, a 14.3 percent decrease from the same period last year, according to the Beijing Municipal Bureau of Statistics. The decline started in 2012 when the city welcomed 5 million tourists, down 3.76 percent from 5.20 million in 2011, according to the authority. Meanwhile, the capital city's tourist satisfaction index stood at 75.28 in the second quarter. This marked a drop from 80.97 in the first quarter, according to the China Tourism Academy. The score was the lowest since the academy started the quarterly survey in 2009. To combat the downward trend, the Beijing Commission of Tourism Development held a conference in July to discuss possible remedies. [...] A weak global economy has played a part as has an appreciating currency, said Zhang Hui, a tourism management professor at Beijing Jiaotong University. More importantly, services in many Chinese cities do not meet the standards of the West, and scenic spots can be overcrowded, said Zhang. [...] Complaints focused on the environment at scenic spots and urban management, said Chen Xu from the China Tourism Academy. "Chinese cities, including Beijing, have not established a system that can provide solid services for individual tourists,"[...]. ^ top ^

Smoggy Beijing to lay more greenways (Xinhua)
China's capital city will build over 1,000 kilometers of greenways in the coming five years to ease air pollution, the Beijing municipal government announced on Tuesday. Costing 3 billion yuan (485.7 million U.S. dollars), the project will create a network of greenways that will connect over 200 parks, scenic spots and historical sites in the city, according to the Beijing Municipal Development and Reform Commission. The park-like paths will offer more space for pedestrians and cyclists, who often complain about their lanes being occupied by motor vehicles during rush hours or traffic jams, thus encouraging more citizens to travel in a greener way, said Xiao Huili, an official with the commission. Official statistics show that 5.2 million vehicles were registered in Beijing by the end of last year, while a report issued by the Chinese Academy of Sciences in February revealed that vehicle exhaust is among the top sources of air pollution in Beijing. Xiao said the greenways will also serve to improve the environment and help alleviate the choking smog that has plagued the megacity that is home to over 20 million people. Construction is expected to start this year in the city proper and will later expand to the suburbs. ^ top ^

Beijing police seek terrorism charge for singer Wu Hongfei (SCMP)
Beijing police have requested rock singer Wu Hongfei be formally arrested for spreading "terrorism information", after she wrote on her microblog she wanted to blow up government buildings, her lawyer said, quoting a police officer. But the lawyer, Chen Jiangang, said Chaoyang district prosecutors had not yet received the request letter, but it may still be in transit, he said. The prosecutor should make a formal decision on the arrest within seven days upon receiving the letter. Chen said he applied for bail yesterday but hadn't received an answer. Wu was initially held on suspicion of "picking quarrels and provoking troubles". Wu was detained by police on July 21, hours after an angry petitioner detonated a homemade bomb at the Beijing airport. On her Weibo account, Wu wrote to her nearly 120,000 followers: "The places I want to blow up include a residential committee at the Beijing Personnel Exchange Centre and the f***ing [sic] Housing commission offices. And there's one person I want to bomb, I won't tell who he is. You'll find that in the news." About 12 hours later, she wrote: "I want to fry the chicken wings, tomato chips and steamed bun in the McDonald's next to the residential committee at the Beijing Personnel Exchange Centre." In Putonghua, the words "fry" and "blow up" use the same character. Chen said Wu, who had expressed regret over her remarks, insisted she had not committed a crime. "As a musician, she is feeling extremely depressed and quite low in the past year due to her album," she said. If Wu is convicted of the charge of "making up false terrorism information", she could face up to five years in jail. ^ top ^



Over 10 die of heatstroke in "hottest Shanghai summer" (Xinhua)
Over ten people in Shanghai have died of heatstroke in the east China city's unprecedented summer heat, local health officials said Tuesday. The Shanghai Municipal Center for Disease Control & Prevention said the persisting high temperatures this summer have caused a spike in the number of heliosis patients in the city. But center officials declined to disclose the specific number of deaths. Temperatures in Shanghai surpassed 39 degrees Celsius on Tuesday, the 8th straight day for temperatures to rise above 38 degrees Celsius, the Shanghai Meteorological Center said. The center said that with 24 days of temperatures at or above 35 degrees Celsius monitored so far, this July has been the hottest for the financial and business center since weather records started 140 years ago. In an eye-catching demonstration of the hot weather, a reporter from a Shanghai TV station successfully barbecued pork slices on outdoor marble in just ten minutes. The disease control and prevention center said over 30 percent of the patients who died were hit by summer heat when they were indoors. A doctor from Shanghai Minhang District Center Hospital said three elderly patients have died of sunstroke at his hospital, while two others were in life-threatening condition. The doctor surnamed Zheng advised all elderly citizens not to avoid using air conditioning, referring to widely held belief among elderly Chinese that air conditioning is unhealthy or a waste of money. Heat waves continued to scorch many parts of China on Tuesday, triggering level two emergency response to heat from the China Meteorological Administration (CMA). The emergency response covers provinces including east China's Anhui, Jiangsu, Zhejiang and Jiangxi, central China's Hunan and Hubei, south China's Fujian, and Shanghai and Chongqing municipalities. ^ top ^


DPRK and South Korea

South Korea offers final talks on Kaesong joint industrial zone (SCMP)
South Korea has proposed "final" talks with the North over the fate of the shuttered Kaesong joint industrial zone, suggesting it may permanently close the estate if the negotiations fail. The latest offer came after six recent rounds of talks aimed at reviving the Seoul-invested complex in North Korea produced few signs of progress. "We are offering the final talks to discuss the issue (of Kaesong)," said Ryoo Kihl-Jae, Seoul's unification minister in charge of cross-border affairs. Seoul would send a formal proposal across the border today, he said, without elaborating on when the talks would be held. The Kaesong complex, built in 2004 as a rare symbol of cooperation, survived previous crises. But it eventually became the most high-profile casualty of two months of elevated tensions after a nuclear test by the North in February which sparked international condemnation. Production at the estate, 10 kilometres over the border, has been suspended since North Korea withdrew its 53,000 workers from the zone in April. Ryoo reiterated that the South wants the North to accept responsibility for what Seoul insists was the unilateral closure of Kaesong by Pyongyang and give a written guarantee that it will never happen again. "Otherwise, we will be left with no choice but to make a grave decision to prevent even bigger damages on our companies in the future," he said. The North has said it was not responsible for the shutdown, arguing that its hand was forced by hostile South Korean actions and intimidation - in particular, a series of joint military exercises with the United States. Meanwhile, in an apparent gesture to lure Pyongyang to a fresh round of negotiations, Ryoo said Seoul would approve five shipments of humanitarian aid for the North worth 1.4 billion won (HK$9.7 million). The latest sixth round of talks held on Thursday ended in a bitter mood, with no date set for another meeting and the North's officials accusing their Seoul counterparts of being "arrogant". ^ top ^

Jimmy Carter to travel to North Korea for talks on US prisoner (SCMP)
Former US President Jimmy Carter is planning to visit North Korea soon to try to win the release of a US citizen being held by the reclusive state, Yonhap news agency reported yesterday. Carter has made contact with the North and is likely to make the trip in a personal capacity to secure the release of Kenneth Bae, a source in Washington was quoted as saying."The issue of Kenneth Bae, who has been held in the North for nine months, is becoming a burden for the US," the source said. "Even if Carter's visit materialises, it will be focused on the issue of Kenneth's Bae's release more than anything else." Bae, who is in his mid-forties, was sentenced in May to 15 years hard labour by North Korea's supreme court after being detained in November as he led a tour group through the northern region of the country. North Korea said Bae was participating in activities designed to overthrow the government, by infiltrating at least 250 students into the country. Bae has acknowledged to being a missionary and has said he had conducted services in the North. His arrest and conviction came as the North and the US remain locked in a diplomatic stand-off surrounding Pyongyang's missile and nuclear tests and its claim that the US was plotting to attack the country.In 2010 Carter helped earn the release of another American, Aijalon Mahli Gomes, who had been sentenced by the North to eight years hard labour for illegally entering the country. ^ top ^

DPRK top leader mourns fallen Chinese fighters in Korean War (Xinhua)
Kim Jong Un, top leader of the Democratic People's Republic of Korea (DPRK), visited a cemetery on Monday to mourn fallen Chinese fighters in the Korean War, the icial news agency KCNA reported on Tuesday. Kim, together with senior officials, paid silent tribute to fallen fighters of the Chinese People's Volunteers (CPV), including Mao Anying, son of late Chinese leader Mao Zedong. A wreath in the name of Kim Jong Un and a wreath in the name of the Central Military Commission of the Workers' Party of Korea were laid before the cemetery and the grave of Mao, located in Hoechang County, South Phyongan Province. "The noble self-sacrificing spirit of the fallen fighters of the CPV who devoted their precious lives on the Korean front will always be remembered by the service personnel and people of the DPRK," said Kim. He underscored the need to preserve and manage well the Hoechang Cemetery, and set practical measures to spruce up all the cemeteries of fallen fighters of the CPV across the country. Kim added that "it is the common responsibility, strong sense of moral obligation and mission of the two parties and two peoples of the DPRK and China to convey the revolutionary spirit and undying feats of the martyrs of the CPV down through generations." He also visited the Songhung Revolutionary Site, where the Command of the CPV was located, nearby the Hoechang Cemetery.. ^ top ^

The money merry-go-round in North Korea: only foreign exchange, please (SCMP)
Chinese yuan, US dollars, euros and tea bags. Money can come in many forms in North Korea, but as a foreign visitor you'll probably never even see a local banknote, let alone use one. Pretty much any hard currency is welcome in a country with anaemic foreign reserves. Tourists, although few in number, represent a valuable cash source. For those who do choose to visit, every transaction – no matter how small – must be made in foreign exchange, further narrowing options in what is already among the most restrictive countries in the world. There are not many places to spend money in the capital Pyongyang. As a foreigner, the choice is reduced further by the need to find somewhere that takes foreign currency and – importantly – is capable of giving change. This is not such a problem in the large hotels and restaurants that cater to foreigners, but elsewhere it can get complicated. Goods and services are mostly quoted in Korean won, so any purchase must begin by converting into the preferred currency of payment. US dollars and euros are widely accepted but not always widely available, so change is often given in the most popular foreign currency, Chinese yuan, requiring a further conversion. If the amount of change is negligible, a tea bag or two is often tendered as a substitute. The only appearance of the Korean won is in the price list. Otherwise it is almost totally invisible. Reports suggest that it is not particularly popular with North Koreans either. There are varying estimates on the amount of hard currency in circulation, but some analysts in South Korea put it as high as US$2 billion. This in a country with a gross national income of less than US$30 billion – which is equivalent to just 2.6 per cent of South Korea's GNI estimated at US$1.15 trillion. Public faith in the local currency was shattered following a disastrous revaluation implemented in 2009 in a backlash against emerging private markets that wiped out personal savings and triggered rare public protests. The popularity of foreign currency – in particular the Chinese yuan – is problematic for the authorities, who are concerned at the possible rise of a second-tier economy over which they have little control. Payment aside, shopping around in the capital Pyongyang is not a simple proposition for visitors, who are not allowed to leave their hotels without the government minder appointed to their group or delegation. The daily itinerary is pre-set and requests to diverge from it in any meaningful way are not entertained gladly. Eventually persuasion may yield a taxi ride to a department store, but not necessarily one that offers much of a window into the consumer lifestyle of the average Pyongyang resident. In the Rak Won Department store, next door to the ticket office of the national carrier Koryo Air, staff easily outnumber the shoppers. The products, spread thinly over two floors, range from a long shelf full of cheap Chinese candy to luxury imported goods that include foreign liquor and unlikely items like top-range German Wusthof chef's knives. The prices are clearly prohibitive to ordinary North Koreans and the staff's insouciance at the arrival of a small team of overseas journalists with cameras and video equipment suggested that foreign customers were not the exception. Further arm-twisting resulted in a hurried visit to the much larger and far more popular Kwang Bok department store, where escalators moved shoppers across three floors built around a central atrium decorated with national flag bunting. The arrival of foreign journalists was noted immediately with a flustered store manager engaging the minder in an intense discussion before the tour was allowed to go ahead. The store was crowded with Sunday shoppers, and had a canteen serving duck, crab and fish that was obviously popular with couples and family groups. There was a queue for a counter serving beer and soju liquor, and dispensed by a cashier sitting under a television screen showing a Korean war movie. On the third floor, a children's play area with plastic slides and climbing frames, was ringed by a skirting board with coloured illustrations of armed soldiers, tanks and fighter planes. As the showpiece capital, Pyongyang is home to the North Korean elite and living standards for most of the city's residents are way above those who live elsewhere. According to the World Food Programme, around two thirds of the nation's 24 million population are still chronically food insecure. ^ top ^



Aichi Prefecture of Japan is interested in receiving coal from Mongolia (Info Mongolia)
Minister of Foreign Affairs L.Bold visited Aichi and Oita Prefectures of Japan on July 20-24, 2013. Minister L.Bold met with Governor of Aichi Prefecture Hideaki Omura on July 21 and both sides agreed to cooperate to increase the number of Mongolian students and trainees, develop trade, investment, and culture relations, and establish direct flights. During the meeting, Chairman of Chubu Electric Power Co., Inc. Mr. Fumio Kawaguchi stated his interest to purchase large amounts of coal from Mongolia and sell small and middle sized aircrafts to Mongolia if the transit transportation issues were resolved. He also informed the Minister that the Nagoya University will open a branch school in Ulaanbaatar City. Minister of Foreign Affairs L.Bold visited the Oita Prefecture on July 22-24 to meet with Governor of Oita Prefecture Katsusada Hirose, Head of the Citizen's Assembly of the Prefecture and Oita Association for Mongolia relations H.Kondo, and Head of the Oita-Bayankhongor Association H.Kageyama and exchanged views to broaden and develop relations and cooperation. Within the meeting framework, Governor Katsusada Hirose and Head of the Citizen's Assembly of the Prefecture Mr. Kondo will lead a 20 people delegation to Mongolia and agreed to hold "Mongolia-Oita Cooperation Forum", spread the "Oita Brand" movement experience in Mongolia, increase the number of Mongolian students and trainees, protect mineral water sources, carry out underground energy research in Mongolia, and develop tourism. ^ top ^

Oyu Tolgoi expansion put on hold (
Turquoise Hill Resources, operator of the massive Oyu Tolgoi mine in Mongolia, dropped 18% after controlling company Rio Tinto said its putting on hold a $5 billion underground expansion of the mine. Rio Tinto said in a statement it has been notified by the Government of Mongolia that the terms of the project financing provisionally secured for the underground development of Oyu Tolgoi will need to be approved by the Mongolian Parliament: "The Mongolian Parliament is currently in summer recess and the parliamentary approval process may take some time to work through. Rio Tinto remains committed to working with the Government of Mongolia to secure project financing. However, in view of the current uncertainty, including continued discussions with the Government on a range of other issues, all funding and work on the underground development will be delayed until these matters are concluded and a new timetable has been agreed." Mongolia owns 34% of Oyu Tolgoi located in the South Gobi desert and the government of the Asian nation has been at loggerheads with Turquoise Hill, owner the remainder of the mine, for months. The Asian nation twice held up shipments from the $6.6 billion mine which is set to contribute as much as a third of the nation"s economy if the second phase underground expansion were to go ahead. Turquoise Hill losses accelerated in afternoon trade with shares in the company changing hand for $4.47, a four-and-a-half-year low. The Vancouver-based firm is now worth $4.8 billion on the Toronto big board after losing 37% of its market value this year. The counter peaked at $28 a share in February 2011. Apart from disagreement over Oyu Tolgoi"s expansion, which Turquoise Hill (then Ivanhoe Mines) has been advancing for more than a decade, cost overruns, the employment and pay of Mongolian workers, contractors and corporate governance, taxation and the repatriation of earnings also remain sticking points. Mongolia has also long coveted a bigger slice of the mine and has twice in the past couple of years floated proposals to take majority control. Vancouver-based Turquoise Hill said yesterday Oyu Tolgoi will produce 75,000 to 80,000 tonnes of copper in concentrate this year. At full tilt, the mine is set to produce more than 1.2 billion pounds of copper worth over $4 billion at today"s prices, 650,000 ounces of gold ($800 million) and 3 million ounces of silver (under $100 million) each year. ^ top ^

Ex-president N.Enkhbayar pardoned (Montsame)
Former president of Mongolia N.Enkhbayar has been freed from the prison. Being sentenced for two years and some months since April of 2012 for corruption cases, he has been released as such thanks to the current Head of State Ts.Elbegdorj's grant of pardon. The decree was issued on Thursday. N.Enkhbayar, a chairman of the Mongolian People's Revolutionary Party (MPRP), served as the Prime Minister in 2000-2004, the Speaker of parliament in 2004-2005, the President in 2005-2009. ^ 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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