Foreign Policy

• Chinese premier meets members of global think tank (Xinhua)
• China's neighborhood diplomacy promotes regional peace (Global Times)
• China, Liechtenstein to enhance cooperation (Xinhua)
• Senior Chinese diplomat to attend Iran talks (Global Times)
• Senior CPC official meets Lao delegation (Global Times)
• China set to deepen UNESCO cooperation (Global Times)
• Chinese president meets Brazilian VP (Global Times)
• Chinese State Councilor meets Cuban, Argentine FMs, vows to further China-Latin American cooperation (Xinhua)
• Chinese Premier voices hope to advance BIT negotiation (Xinhua)

Domestic Policy

• Xi promises deep reforms (Global Times)
• New warning on overcapacity (China Daily)
• Symbols of Chinese government bombed for second time (SCMP)
• Taiyuan ticket ID check (Global Times)
• Attacks show dangerous trend of private grievances turning into public violence in China (SCMP)
• Key Party meeting to forge China's future, but don't expect major political reforms (SCMP)

Beijing

• Beijing's Party chief vows to strengthen security after Tian'anmen terror attack (Xinhua)
• Beijing to cut new car registration quota by 37.5 pct (Xinhua)

Shanghai

• Shanghai air pollution hovers near index's limit (SCMP)

Xinjiang

• Member of Party's executive body in Xinjiang replaced (Global Times)
• In Xinjiang capital Urumqi, poverty greater threat than radical Islam (SCMP)

Hongkong

• Delta free-trade zone with Hong Kong and Macau could be years away (SCMP)

Taiwan

• Taiwan, Singapore sign free trade agreement (SCMP)

Economy

• Xi: China confident of sustainable economic growth (Xinhua)
• Summit held to boost closer cross-Strait economic cooperation (Xinhua)
• Will China's third plenum be an economic turning point? (SCMP)

DPRK and South Korea

• Envoy visits N.Korea over Six-Party Talks (Global Times)

Mongolia

• Ministry provides update on mining plans and current statistics (UB post)
• Mongolia's new investment law 'will boost property sector' (news.mn)

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Chinese premier meets members of global think tank (Xinhua)
2013.11.02
Chinese Premier Li Keqiang held a meeting with some members of the 21st Century Council, a global think tank, in Beijing on Friday, a press release from Li's office said Saturday Li met the members, mainly former political figures from different countries, Friday afternoon ahead of the opening ceremony of a 21st Century Council conference from Friday to Sunday in Beijing, said the release. During the meeting, Li reiterated that China will continue pushing ahead with the drive of reform and opening up, and the country is ready to work with all other countries to create a peaceful and stable international environment in pursuit of reciprocity. Li hoped the 21st Century Council will play a more important role in promoting mutual understanding and cooperation between China and other countries. Ernesto Zedillo, Chairman of the 21st Century Council and former Mexican President, said on behalf of the participants of the meeting that the think tank stands ready to increase exchanges with the Chinese side for a better understanding of China. Zedillo also pledged that the 21st Century Council will work to push ahead with global governance and spur all countries to address global challenges in joint efforts. The 21st Century Council is a non-governmental forum composed of former heads of state, top global intellectuals and entrepreneurs. Founded in 2011, it is becoming a platform for dialogue and action that is dedicated to addressing key challenges of global governance. ^ top ^

China's neighborhood diplomacy promotes regional peace (Global Times)
2013.11.03
China has long pursued a neighborhood foreign policy of building friendship and partnership with its neighboring countries. This policy has now gained new attention and momentum since President Xi Jinping reiterated at a recent conference here China's commitment to good-neighborliness. Maintaining a peaceful and stable neighborhood is necessary for China's development. It is also necessary for regional stability and world peace. Since the beginning of this year, China has vigorously advanced its neighborhood diplomacy with several important events. Xi and Chinese Premier Li Keqiang have visited about a dozen neighboring countries to build mutual trust, expand consensus, deepen cooperation and enhance bilateral ties. Meanwhile, leaders of China's neighboring countries have paid frequent visits to China. October 22 alone witnessed the arrivals of three of them, namely, the prime ministers of Russia, India and Mongolia. China is endeavoring, with concrete actions, to build mutually beneficial ties with its neighbors. This year, China has established strategic partnerships with Turkmenistan and Kyrgyzstan, and upgraded its bilateral ties with Indonesia and Malaysia to comprehensive strategic partnerships. The China-initiated outlines for implementing the Treaty on Long-Term Good-Neighborliness, Friendship and Cooperation Between the Member States of the Shanghai Cooperation Organization (SCO) were approved at the 13th SCO summit in the Kyrgyz capital of Bishkek, laying a more solid foundation for deeper cooperation between SCO members. A peaceful environment brings real benefits to China and its neighbors, including closer bilateral ties, stronger economic and trade links, and more cultural and people-to-people exchanges. Not long ago, Chinese leaders also proposed a series of strategic concepts aimed at promoting regional prosperity and development, including a Silk Road Economic Belt with Central Asian countries, an SCO development bank and a 21st-century maritime Silk Road with Southeast Asian countries. Looking into the future, China has called for concerted efforts with the Association of Southeast Asian Nations (ASEAN) to build a China-ASEAN community of common destiny. While carrying out extensive cooperation with neighboring countries to create a favorable environment for development, China does not dodge conflicts and differences. Instead, it actively pushes for peaceful solutions. Chinese leaders have on various occasions stressed the principle of "proper control and constructive solutions" to show sincerity and determination. As Xi has repeatedly pointed out, the Asia-Pacific region is big enough for all countries to develop, and countries in the region must promote regional cooperation with a more open mind and greater enthusiasm. Differences exist in every bilateral relationship. Seeking common ground while reserving differences is the path toward peaceful co-existence. China advocates a new security concept of mutual trust, mutual benefit, equality and coordination, and upholds a security philosophy of comprehensive security, common security and cooperative security, in order to enhance strategic mutual trust. China has launched consultations with ASEAN on formulating a code of conduct in the South China Sea, China and Vietnam have agreed to establish a maritime work group for joint development at sea, and China and India have signed an agreement on border defence cooperation. Thanks to the concerted efforts from the countries concerned, significant progress has been made in solving some maritime and border disputes, which has set examples for similar issues. Of course, "noises" can be heard as China grows. But China's concrete actions have demonstrated that it seeks no hegemony, and those "noises" have a dwindling audience. China's image of peaceful development and prosperous co-existence is prevailing. The increasingly closer win-win interaction between China and its neighboring countries is steadily pushing forward the great cause of building a harmonious region. ^ top ^

China, Liechtenstein to enhance cooperation (Xinhua)
2013.11.05
Chinese Vice Premier Liu Yandong on Tuesday called on China and Liechtenstein to enhance cooperation. Liu made the remarks while meeting with Liechtenstein's Crown Prince Alois. Liu hailed the diplomatic relationship between China and Liechtenstein, adding that China hopes to work with Liechtenstein to enhance bilateral cooperation and to benefit the two peoples. Liu said the China-Liechtenstein relationship shows the philosophy that all countries, big or small, are equal in the international community. Alois spoke highly of China's rapid development since its reform and opening up, and said Liechtenstein is willing to enhance mutual understanding and pragmatic cooperation with China. ^ top ^

Senior Chinese diplomat to attend Iran talks (Global Times)
2013.11.05
A senior Chinese diplomat will lead a delegation to the talks between world powers and Iran on November 7 in Geneva, Foreign Ministry spokesman Hong Lei said on Tuesday. Pang Sen, director-general of the department of arms control of the Foreign Ministry, will head the delegation. Talks will be between the five permanent members of the United Nations Security Council -- Britain, China, France, Russia and the United States -- plus Germany, and Iran. Iran and the P5+1 had their last round of talks October 15-16. Iranian nuclear talks have entered a new stage where core issues will be addressed, Hong said. He added that it is China's hope that parties will stick to the principles of step by step and reciprocality, be pragmatic and constructive in the talks so that progress could be made and a comprehensive, long-term and proper solution to the Iranian nuclear issue is made possible. "China is willing to work with all the parties in this regard," Hong said. ^ top ^

Senior CPC official meets Lao delegation (Global Times)
2013.11.05
Senior Communist Party of China (CPC) official Wang Qishan on Tuesday met with a Lao delegation at the Great Hall of the People in downtown Beijing. The delegation was headed by Bounthong Chitmany, president of the Central Control Committee of the Lao People's Revolutionary Party (LPRP), to attend a seminar on improving party conduct and building a clean government. Wang, a member of the Standing Committee of the Political Bureau of the CPC Central Committee, recalled Lao President Choummaly Saygnasone's visit to China in September. During Choummaly's Beijing visit, Chinese President Xi Jinping, also general secretary of the CPC Central Committee, and the Lao leader set the direction for the development of the relationship between the two parties as well as the two countries, Wang said. Choummaly is also general secretary of the LPRP Central Committee. Wang, also secretary of the CPC Central Commission for Discipline Inspection, said the two ruling parties are faced with the same mission of self-discipline, and the two discipline bodies must fulfill their due responsibilities. Wang said he looks forward to more effective exchanges between the two parties on party discipline. Echoing Wang, Bounthong said the Lao side is willing to increase exchanges and boost cooperation with the Chinese side on improving party conduct. ^ top ^

China set to deepen UNESCO cooperation (Global Times)
2013.11.07
China is willing to deepen cooperation with the United Nations Educational, Scientific and Cultural Organization (UNESCO) after Hao Ping was elected president of its 37th general conference in Paris. He is the first representative from China to be elected president of UNESCO's general conference since the organization was established in 1946, foreign ministry spokesman Hong Lei told a daily news briefing Wednesday. With the development of a multi-polarized world, developing countries, as represented by China, have played an increasingly important role in UNESCO, Hong said. "China is willing to deepen cooperation with UNESCO and contribute to world peace and poverty eradication as well as promoting talks and sustainable development," Hong said. Hao, China's vice minister for education and representative to UNESCO's executive board, was on Tuesday elected president of the organization's 37th general conference with a two-year mandate.He was officially endorsed for the appointment at the opening of the 37th session of the General Conference, to replace Katalin Bogyay, Hungary's ambassador to UNESCO, who had presided the 36th session since October 25, 2011. The General Conference of UNESCO consists of representatives of its 195 member states. They meet every two years to determine policies and main lines of work, set the programs and budget, elect members of the executive board, and appoint the director-general every four years. Born in 1959 in East China's Shandong Province, Hao was vice president of Peking University (2001-2005) and president of Beijing Foreign Studies University (2005-2009), before assuming the position as the vice minister of education. ^ top ^

Chinese president meets Brazilian VP (Global Times)
2013.11.07
Chinese President Xi Jinping and Vice President of Brazil Michel Temer agreed to further promote bilateral relations during a meeting on Thursday afternoon. The meeting was held after the third session of the China-Brazil High-level Coordination and Cooperation Committee, which was co-chaired by Chinese Vice Premier Wang Yang and Temer in Guangzhou of south China's Guangdong Province. Next year marks the 40th anniversary of the establishment of diplomatic relations between the People's Republic of China and Brazil. Xi said he had met with Brazilian President Dilma Rousseff twice this year, during which they exchanged their visions on the development of bilateral relations and reached consensus on many important matters. He said China will work with Brazil to maintain the close communication between state leaders, increase cooperation, and strengthen communication and coordination in global affairs. This will contribute to China-Latin America relations, unity and cooperation among emerging market economies, and the common interests of developing countries. Xi added China supports Brazil as host of next year's BRICS summit. He also wished success for the 2014 Brazil World Cup. Temer said Brazil is happy with the smooth development of Brazil-China strategic partnership. He noted Brazil is willing to strengthen high-level contacts with China and advance bilateral cooperation in various fields through the mechanism of the China-Brazil High-level Coordination and Cooperation Committee. He added that Brazil will also strengthen communication and cooperation with China within the framework of BRICS, promote global governance and jointly push forward the development of the relationship between Latin American countries and China. ^ top ^

Chinese State Councilor meets Cuban, Argentine FMs, vows to further China-Latin American cooperation (Xinhua)
2013.11.07
Chinese State Councilor Yang Jiechi on Thursday met with the Cuban and Argentine foreign ministers, pledging to enhance ties with the two countries and promote cooperation between China and Latin America. During his meeting with Cuban Foreign Minister Bruno Rodriguez Parrilla, Yang said China-Cuba relations have entered a new stage of development. He highlighted the close contact at all levels and substantial cooperation between the two countries, pledging to strengthen friendly cooperation and push forward bilateral ties and China-Latin American cooperation. Rodriguez said the Cuban side would like to work with China to deepen exchange and cooperation. He also pledged to contribute to the development of cooperation between Latin America and China. During another meeting with Argentine Foreign Minister Hector Timerman, Yang hailed the frequent high-level contact and enhanced political mutual understanding, as well as cooperation in various fields. He said China attaches importance to relations with Argentina and will work together with the country to implement the consensus reached between the leaders of the two countries so as to further the strategic partnership. Timerman said China is an important partner to Argentina and the two states have had sound and fruitful bilateral and multilateral cooperation. Argentina will work with China to increase exchange and cooperation so as to further bilateral ties, he said. ^ top ^

Chinese Premier voices hope to advance BIT negotiation (Xinhua)
2013.11.08
Chinese Premier Li Keqiang said on Thursday that he hopes China and the United States will advance negotiations on a bilateral investment treaty (BIT). Li made the remarks during a meeting with former U.S. Treasury Secretary Henry Paulson in Beijing, saying that China and the U.S. need to promote pragmatic cooperation in all fields. The two sides need to convert complementary advantages into cooperation and properly handle differences to safeguard overall development of bilateral relations, Li said. He pointed out that China will step up its reform and opening up and the pace of development will also be accelerated. Li also voiced hope for the two sides to advance BIT negotiations and provide institutional guarantees for the two sides' investment and cooperation. He urged the U.S. side to provide a fair competition environment for Chinese investment in the U.S. and relax its restrictions on high-tech products to China, adding that the two countries need to enhance coordination on macroeconomic policy, adopt responsible domestic economic policy and participate in regional economic integration under the principles of openness and transparency. Paulson said the Chinese government has made considerable achievements in various aspects, such as the transformation of government functions, technology innovation, energy conservation and environmental protection. He said the U.S. side is willing to strengthen cooperation with China for the overall development of bilateral relations. ^ top ^

Xi promises deep reforms (Global Times)
2013.11.04
China will firmly continue to push ahead with the drive of reform and opening-up, though the modernization process will still take a long time, Chinese President Xi Jinping and Premier Li Keqiang said over the weekend during a conference held by the 21st Century Council. While meeting with a group of foreign members of the global think tank on Saturday, Xi said that a blueprint for comprehensive reform will be put forward during the Third Plenary Session of the 18th Communist Party of China (CPC) Central Committee, to be held between November 9 and 12 in Beijing. Expressing confidence that the Chinese economy will keep growing in a "sustained and healthy way," Xi said that China will not fall into the middle-income trap, a term to describe countries whose economy stagnates when the per capita income reaches the middle level. At the opening ceremony of the conference on Friday, Li said the government's top priority remains economic development and improving people's livelihoods. Li noted that economic development cannot be sustained if the economy doesn't transform as development has encountered a series of deep-rooted conflicts and structural problems to date, vowing to comprehensively deepen the reform. "China still has a long way to go in achieving modernization, which will benefit the Chinese and the world's people," Li said. Members of the 21st Century Council expressed their high expectations on the reforms to be put forward during the Party's forthcoming plenum. "From the dialogue, we believe that the political reform that may be announced in about a week will be ambitious and useful for China's prosperity," former Mexican president Ernesto Zedill told reporters at a media briefing held Sunday, noting that "it would be a comprehensive package of reforms," which means it would be economic, social and political. China's future development is about transformation and upgrading on expanding domestic demand, promoting the new pattern of industrialization, informatization, urbanization, agricultural modernization and pursuing green growth, Premier Li said Friday. Scholars agreed that it is urgent for the country to carry out deeper reforms to clear the blocks that are holding the country from moving further ahead. "The inequality in society and the severe problem of resources and the environment are outstanding problems that call for reform," said Chang Xiuze, a researcher with the National Center for Economic Research at Tsinghua University. Chang said that the reform also needs to remove obstacles in the political system, such as corruption. The financial crisis since 2008 has brought an end to the old economic growth pattern. A set of reform measures are now on the table to steer the country to more efficient growth. However, the process of reform will face some difficulties, as many reform plans will affect the interests of those who have been better off under the old development pattern, Tian Yun, a scholar with the China Macro Economics Institute, told the Global Times. Tian said even some local government officials might not be eager to make a change. The authorities have been cutting the administrative approval power of governments at various levels and instead given the market more space to make its own decisions. "The leaders are confident about the China's economy as they have clearly identified the problems the reform is faced with," Tian said, noting that there's still some concern as the authorities said reform will be "comprehensive" but how much will be carried out remains to be seen. ^ top ^

New warning on overcapacity (China Daily)
2013.11.05
China's central ministries on Monday sent a stern message about the implementation of a key State Council document aimed at tackling excess industrial capacity. The ministries underscored the increasing urgency of containing the risks of the longstanding issue. In a video conference, officials from the National Development and Reform Commission and the Ministry of Industry and Information Technology, the two bodies with primary responsibility for the problem, urged local governments to implement a directive from the State Council, which is the country's cabinet. "Local governments will be held accountable on this issue. Those who still violate discipline will be heavily punished. Officials should not bet on infringement without exposure," Hu Zucai, deputy director of the NDRC, said during the meeting. On Oct 15, the State Council issued "guiding opinions" on solving the capacity issue. The document ordered a halt to the construction of new capacity in sectors burdened by excess production facilities. The council also said that projects on which construction hadn't yet started should be canceled. Projects that were under construction at that point are to be halted unless they receive central government approval. The document singled out five sectors — steel, flat glass, cement, electrolytic aluminum and shipbuilding — as having severe excess capacity, and it listed specific measures for each industry. According to official data, the cement industry had the lowest capacity utilization rate, which was 71.9 percent at the end of 2012. The rate for steel was 72 percent, while that for the glass industry was 73.1 percent. A capacity utilization rate of 70 to 75 percent is regarded as a sign of "medium-level" excess capacity in manufacturing. China's excess capacity issue has become so severe that President Xi Jinping has made special comments on the issue four times this year. "Increasingly, excess capacity has become a salient problem in the economy and the root cause of many issues," Xi was quoted as saying at one point. "If solved properly, China's economic structural upgrading will make big progress. If not, new problems could arise and even trigger an economic crisis." "Excess capacity is not new to China. But the current level, given its scope, number and influence, is unprecedented," Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology, said during the meeting. "Some local governments favored fast growth too much and relied on investment too much. "They have tried all means, including offering cheap land, electricity and tax breaks, to attract investment. That strategy has exacerbated continued construction and capacity expansion," said Zhu. The NDRC said barriers to entry and environmental standards will be two key indicators for phasing out old capacity or adding new capacity. On the same day, Shang Fulin, chairman of the China Banking Regulatory Commission, said during a meeting with bank executives in the eastern province of Fujian that banks should try to head off a rise in bad loans from industries with excess capacity. He said banks should also step up efforts to write off some of the nonperforming loans on their books. Shang said that any form of new credit is prohibited for new projects in industries with overcapacity, and banks shouldn't extend loans or provide funds by issuing wealth management products to back projects that don't have the relevant government approvals. ^ top ^

Symbols of Chinese government bombed for second time (SCMP)
2013.11.07
The second attack in less than two weeks targeting a prominent government symbol occurred in Shanxi province yesterday - just days ahead of a key party meeting in Beijing. The series of explosions that left at least one person dead and at least eight injured near the provincial Communist Party headquarters in the capital Taiyuan was caused by "homemade bombs", Xinhua quoted local police as saying. The initial police investigation found that "the blast was a deliberate act" as "metal ball bearings and explosive devices made using electric circuit-boards" were found at the site, the news agency said. The incident occurred even though mainland public security officials were on high alert following last week's suicide attack in Tiananmen Square, which has been officially called a terrorist strike by a Uygur separatist group. It also came days before top party leaders convene this Saturday for a four-day plenary session that is expected to produce major economic and social policies for the next decade. No one claimed responsibility for the Taiyuan explosion, as remains the case with the Tiananmen blast. Resource-rich Shanxi has a noticeable wealth gap between the coal mining executives and the poorer mine workers. On Friday, around 200 laid-off workers protested on the street where the blasts occurred. The first explosion occurred at around 7.40am when a bomb that had apparently been placed in the flowerbeds almost directly in front of the main entrance of the party's Shanxi headquarters went off, a Shanxi provincial government spokesman said. Within seconds, a minivan exploded several hundred metres away, according to eyewitnesses. Some mainland media, including the Beijing Youth Daily, reported that seven explosions occurred. "I thought it was fireworks when the first bomb went off," a witness at the scene recalled. "I realised that it might be some kind of attack, and then I just kept running." Many bystanders found metal ball bearings and long nails - apparently packed in the bombs as shrapnel - scattered near the blasts. The injured victims were sent to two hospitals near the blast site. One of the injured was in serious condition and several cars were damaged. Taiyuan police searched for suspects by asking hotels to report information about guests who checked in on Tuesday night and to monitor every guest in the coming days, three Taiyuan hotels said. ^ top ^

Taiyuan ticket ID check (Global Times)
2013.11.08
People travelling from Taiyuan, North China's Shanxi Province to Beijing are required to show their ID cards for real-name identification when buying bus tickets starting Thursday, a day after a series of explosions occurred outside a provincial Party office in Taiyuan. Passengers can only board the bus after their ID cards and tickets are checked, while getting on the buses en route is no longer allowed, said a notice issued to Taiyuan Long-distance Bus Station by the local police station Wednesday, a staff member told the Global Times. The bus station would also strengthen security checks on those whose looks or luggage arouse suspicion. The notice did not say that how long the real-name identification would last. Buses bound for other cities are not subject to the requirements. A series of explosions caused by homemade bombs outside a provincial office of the Communist Party of China (CPC) in Taiyuan on Wednesday morning killed one person and wounded eight others. An investigation is underway but there is no indication that the blasts involved terrorism so far. The case drew nationwide attention in the wake of a terrorist attack at Tiananmen Square last week, days ahead of the key Third Plenary Session of the 18th CPC Central Committee to be held between November 9 and 12 in Beijing. "Since the 2008 Olympics, our bus station would occasionally conduct real-name identification for passengers who travel to Beijing under the orders of local police, such as during important conventions or long national holidays," a shift manager at the bus station who declined to reveal her identity told the Global Times, denying that the serious blasts are the reason for the new checks. She said that the station would also keep an eye on the security checks of passengers who travel to cities near Beijing. Temporary traffic control, which tightens up the conditions for vehicles from outside of Beijing to enter the capital, is in place from Thursday to November 13. The new policy also said non-Beijing vehicles cannot stay in the city for more than three days. Taiyuan police bureau could not be reached for comment. ^ top ^

Attacks show dangerous trend of private grievances turning into public violence in China (SCMP)
2013.11.08
Deadly explosions outside the Shanxi Communist Party Committee offices in the provincial capital of Taiyuan on Wednesday show a trend of aggrieved persons seeking revenge not on specific people and targets but against society in general and at symbolic venues, academics say. Just a week before the Taiyuan bombings, which left one person dead and eight injured, an SUV rammed through barricades in front of Tiananmen Square's gate tower and burst into flames. The incident killed five people, including two tourists and the vehicle's three occupants - a man, his mother and his wife, all from Xinjiang. Forty others were injured. Authorities said the crash was a terrorist attack orchestrated by the East Turkestan Islamic Movement (ETIM). No one has claimed responsible for either incident. In July, a disabled man, Ji Zhongxing, set off a homemade explosive at Beijing airport in protest against alleged police brutality that he said had left him confined to a wheelchair. Ji, who said he had "lost all hope in society", lost his left hand in the blast but injured no-one else. On October 15, he was sentenced to six years in jail. The recent high-profile incidents differ from previous cases in which people who felt they had been unfairly treated sought revenge explicitly against those they thought had done them wrong. For example, Shenyang street vendor Xia Junfeng stabbed two security officials to death in 2009, he claimed, in self defence as they attacked him. Xia's execution in September, two years after his appeal against his death sentence was overturned, was widely condemned. In 2008, 28-year-old Beijing man Yang Jia stormed into a Shanghai police station and stabbed to death six officers and injured four others. Yang claimed he had been beaten at the station for riding an unlicensed bicycle. He was found guilty of murder and executed in November 2008. "Previously, such attacks were normal criminal cases with explicit targets, but recent cases involve implicit targets - the public - at symbolic places," said Mao Shoulong, a professor of public administration at Renming University. "Such attackers aim to attract wide attention and create an atmosphere of fear." Hu Xingdou, an economics professor at the Beijing Institute of Technology, said it was a sign of growing despair. "Social problems have been accumulating over the past decades," Hu said. Some people who have been treated unfairly want to exact revenge on society, or at least attract attention across the country or even overseas through such radical actions when they feel they have no redress through legal channels." With the latest incidents coming at such a politically sensitive time, Mao felt the media needed to exercise restraint when reporting them. "Others might try to imitate them," he said. For instance, an elderly petitioner from Hunan province set off fireworks at Beijing airport in September, apparently following Ji's example. But Hu played down Mao's concerns. "Media reports have little to do with this," he said. "If a man really wants to take revenge on society, he can think of many ways to do so himself." ^ top ^

Key Party meeting to forge China's future, but don't expect major political reforms (SCMP)
2013.11.08
As the Communist Party's Central Committee leaders gather in Beijing on Saturday for a closely-watched session, an expectant public - hungry for change - eagerly awaits proposals that might shake up the way the People's Republic governs itself. The four-day gathering, called the third plenary meeting, is supposed to focus on economic plans. But there have been signs that party politics may be on the table. In late October Yu Zhengsheng, the party's fourth-ranked leader, hailed the reform measures to be discussed as being "unprecedented". A subsequent Politburo meeting vowed to accelerate developments in five areas, including democratic politics, in a comprehensive and deepening way. "The meeting will mainly focus on economic reforms. But the tone of comprehensive reform hints that the leadership is leaving some leeway for possible political reforms," says Cheng Li, director of research at the John Thornton China Centre at the Brookings Institution in Washington. But don't hold your breath awaiting momentous change: what Chinese leaders consider to be "political reform" is often very different from how it is defined in the West. Political reform on the mainland is not about universal suffrage or balancing power among the administrative, legislative and judiciary branches, but about making the government more responsive, efficient - and powerful. There is a yawning gap between what defines the word "reform" and what it means in practice. Ask a state think-tank scholar, an independent intellectual and an international researcher and you'll hear different answers. International researchers insist there are standards that constitute positive political change. "Chinese political reforms are closely connected with economic reforms," says Cheng. "The current measures on anti-corruption are to some extent linked to political reforms. However, international researchers normally use free elections, rule of law and free expression of media as key barometers for democratic systems. China's political reforms are still a bit distant from using this standard." Whatever is meant, there is agreement that China's government needs to change for the country to continue its economic success. "Without political reforms, what we achieved in the past three decades would be lost," said Zhu Lijia, a professor with the Chinese Academy of Governance. Political change has long been a sensitive topic in China. Before the 18th Party Congress last November, the media highlighted the hopes of Chinese citizens who were hopeful that the new leadership would kick-start the stagnant government. Last December, party head Xi Jinping, chose Shenzhen for his first out-of-town excursion, a move interpreted by China observers as a signal of his commitment to the reformist path of the late Deng Xiaoping. Xi called for "greater political courage and wisdom to deepen reforms", in a politburo meeting after the Shenzhen trip. The statement fanned the public's expectation that something big was afoot. But the hopes withered. Months after, Xi began a Mao-like campaign, tightening control of the internet and media expression - which is why liberal academics warn about prospects for a regime that eschews political change. "China faces two possible futures: one is to keep reforming to improve and perfect the market economy and limit the administrative powers, and this will lead to a market economy based on a rule of law," wrote Wu Jinglian, a renowned economist, in an article published on iceo.com.cn in September. "The other is to keep strengthening the government's role and the country will march towards a dead end of crony capitalism. "In the coming 10 years, China should actively and prudentially push forward political reforms, while accomplishing its market economy reforms. This should become the theme of China's future reforms and it affects the rise or fall of the Chinese nation and the fundamental interests of every citizen," Wu writes. Suddenly, the topic of political change is re-emerging after months of silence. A recent news analysis published by Xinhua said that a political change would be an important accomplishment at the upcoming meeting, and that revamping government functions would be a breakthrough that could lead to broader political reforms. But what those changes and shifts may look like depends on which expert is talking. "In my view, the government's anti-corruption efforts, transformation of the government functions and the restructuring of the government organisations fall into the category of political reforms," says Zhu. Li Chengyan, a professor from Peking University's School of Government, says: "It's unrealistic to expect the new leadership to deliver major political reforms after just one year at the helm. Possible political reforms might include those in the judicial areas to fight corruption." Democracy within the party will be improved gradually, he predicts. Some independent researchers believe that state media tries to salve the public's eagerness for political changes, even though there's no sign of them happening. "They intentionally confuse administrative reforms with political reforms," says Zhang Lifan, an independent political affairs commentator in Beijing. "Real political reforms should include independent … media … direct and general elections and full protection of citizens' rights as stated in the constitution, including media freedom and free expression." Both Li and Zhu rule out any possibility of the Communist Party abandoning its one-party ruling system. "The party will increase democracy within the party and use inner-party democracy to push forward the social democracy. Media freedom is not on the agenda yet," says Li. When it comes to revising the system, Chinese leaders take a pragmatic approach. "Their focus is to solve the immediate problems, with economic issues topping the agenda,'' Cheng of Brookings says. "However, the market opening will eventually force changes in political systems. They might come back [to reforms] sometime in the future." Zhang agrees. "All the reform measures we have seen for now are aiming to improve the government's efficiency and strengthen the party's ruling. So it will be in the future," he says. This is, after all, China. "You can't expect China would become a democratic system like Taiwan or South Korea," says Geoff Raby, an independent China observer and former Australian Ambassador to China. "The possible scenario is to become a system like Singapore." ^ top ^

Beijing's Party chief vows to strengthen security after Tian'anmen terror attack (Xinhua)
2013.11.03
Beijing's Party chief Guo Jinlong has called for enhanced capacity to prevent the Chinese capital from terrorist attacks after a car crash in Tian'anmen Square killed five people and injured another 40. During a two-day inspection tour lasted from November 1 to 2, Guo urged police and security forces to "look for vulnerable links" and "learn a lesson" from the Tian'anmen terrorist attack, the Beijing Daily reported Sunday. Guo, a member of the Political Bureau of the Communist Party of China Central Committee, stressed the importance of quick response to emergencies and asked police and security forces to raise their awareness in countering terrorism and violence. Police are asked to strengthen security in key areas, enhance their capacity to collect intelligence and take precautions against terrorist attacks, the newspaper reported. Authorities in downtown districts are required to strengthen urban management, crack down on violations of laws and regulations, and improve management of rented housing, small and medium-sized inns and floating population. A jeep crashed into a guardrail of Jinshui Bridge across the moat of the Forbidden City at noon October 28. Police said the three people in the jeep died after they set gasoline inside the vehicle on fire. The dead also include a Filipino tourist and a tourist from south China's Guangdong Province. Chinese police have identified the deadly crash as a terrorist attack and detained five suspects. ^ top ^

Beijing to cut new car registration quota by 37.5 pct (Xinhua)
2013.11.07
The Beijing municipal government will slash its new car registration quota by 37.5 percent starting from 2014 and give more stake to new energy vehicles as part of its efforts to curb air pollution. According to an interpretation of a five-year vehicle emission reduction plan (2013-2017), the number of newly registered cars will be cut from current 240,000 each year to 150,000 by 2017. A five-year clean air action plan (2013-2017), released on Sept. 12, ruled that the total number of vehicles in the city would be restricted to around 6 million by the end of 2017. The city had 5.4 million vehicles at the end of October, according to figures from the Beijing Traffic Management Bureau. Among the 600,000 vehicles allowed to hit the road within the next four years, 170,000 will be new energy vehicles which include battery electric, plug-in hybrid and fuel cell ones. In 2014, a quota of 20,000 new car registration will be given to new energy vehicles, and 30,000 in 2015. In 2016 and 2017, that figure will be doubled from that for 2015 to 60,000 respectively. ^ top ^

Shanghai air pollution hovers near index's limit (SCMP)
2013.11.08
Thick smog enveloped Shanghai yesterday, with the air staying "heavily polluted" all day, according to the official index - a first since autumn began. Photos shared by residents on social media showed a murky sky - an image usually associated with the city's long-time competitor, Beijing, or "Grey-jing" as some have taken to calling it. The air quality index exceeded 200 at 4am and stood at 255 as of 8pm, according to the Shanghai Environmental Monitoring Centre. Any index reading of 300 or above is classified as severely polluted. The average concentration of PM2.5, tiny particulates that pose the biggest threat to health, stood at about 200 micrograms per cubic metre over a 24-hour period - a reading that is eight times what the World Health Organisation deems safe. People remarked online they were shocked Shanghai was "catching up" with Beijing, which has suffered from heavy air pollution for years. "First it was our much pricier number plates, now Shanghai is again beating Beijing," one resident wrote on Sina's Weibo, referring to the financial hub's pricey vehicle registrations. Shanghai's education authorities sent out an alert to schools in the morning, suggesting pupils avoid outdoor activities. The US consulate rated the air quality as "unhealthy" on a Twitter account it maintains. At 5pm, it said the concentration of PM2.5 was 139. In Beijing, the US mission rated the air quality there as "unhealthy for sensitive groups", with the concentration of PM2.5 hitting 51 in the late afternoon. Last month, the capital announced it would enforce emergency measures, such as shutting factories and limiting traffic, when PM2.5 levels exceeded 300. In an attempt at a long-term solution, central government authorities have allocated five billion yuan (HK$6.31 billion) for Beijing and surrounding regions to tackle air pollution. The mainland is also in the process of forming a national carbon-trading market to help bring down carbon emissions. Studies have shown that northern mainlanders lose at least five years of their lives due to poor air quality. ^ top ^

Member of Party's executive body in Xinjiang replaced (Global Times)
2013.11.04
Beijing has acted to remove the military commander of the Xinjiang Uyghur Autonomous Region from the region's Standing Committee of the Party Committee, the Xinjiang Daily reported on Sunday. Peng Yong, who was named commander of the Xinjiang Military Command in July 2011, was dismissed from his post as a member of the Standing Committee of the Communist Party of China Xinjiang Committee. Peng will be replaced by Liu Lei, who was appointed the commissar of the Xinjiang Military Command in July this year. The Xinjiang Daily did not specify the reason for Peng's removal. A jeep crashed into a crowd of people and caught fire in front of the Tiananmen rostrum in downtown Beijing on October 28, killing five people and injuring another 40. Police have identified the deadly crash as a terrorist attack and detained five suspects. ^ top ^

In Xinjiang capital Urumqi, poverty greater threat than radical Islam (SCMP)
2013.11.05
In the dirty backstreets of the Uygur old quarter of Xinjiang's capital Urumqi in China's far west, Abuduwahapu frowns when asked what he thinks is the root cause of the region's festering problem with violence and unrest. “The Han Chinese don't have faith, and the Uygurs do. So they don't really understand each other,” he said, referring to the Muslim religion the Turkic-speaking Uygur people follow, in contrast to the official atheism of the ruling Communist Party. But for the teenage bread delivery boy, it's not Islam that's driving people to commit acts of violence, such as last week's deadly car crash in Beijing's Tiananmen Square - blamed by the government on Uygur Islamist extremists who want independence. “Some people there support independence and some do not. Mostly, those who support it are unsatisfied because they are poor,” said Abuduwahapu, who came to Urumqi two years ago from the heavily Uygur old Silk Road city of Kashgar in Xinjiang's southwest, near the Pakistani and Afghan border. “The Han are afraid of Uygurs. They are afraid if we had guns, we would kill them,” he said, standing next to piles of smouldering garbage on plots of land where buildings have been demolished. China's claims that it is fighting an Islamist insurgency in energy-rich Xinjiang - a vast area of deserts, mountains and forests geographically located in central Asia - are not new. A decade ago, China used the 9/11 attacks in the United States to justify getting tough with what it said were al-Qaeda-backed extremists who wanted to bring similar carnage to Xinjiang. For many Chinese, the rather benign view of Xinjiang which existed in China pre-September 11, 2001 - as an exotic frontier with colourful minorities who love dancing and singing - has been replaced with suspicion. China says al-Qaeda and others work with the East Turkestan Islamic Movement, in Beijing's eyes the foremost terror group in Xinjiang, and spraypaints warnings on walls against Hizb ut-Tahrir, a supranational group that says its goal is to establish a pan-national Muslim state. The incident on Tiananmen Square has only added to China's unease. “The Han seem to be afraid of us. I don't know why. They won't tell us,” said a 22-year-old Uygur man who runs a shoe and clothing shop a stone's throw from an armed police training ground in Urumqi. Since 2001 - a process that started arguably even before - China has conducted a sweeping security crackdown in Xinjiang, further repressing Uygur culture, religious tradition and language, rights groups say, despite strong government denials of offering the Uygurs anything but wide-ranging freedoms. Some Uygurs believe their only alternative may be to draw closer to Islam, and by doing so, further the distance between themselves and the Communist Party and the Han Chinese. While many Uygur women in Urumqi dress in much the same casual fashions as their Han counterparts, others have begun to wear full veils, something more common in Pakistan or Afghanistan than Xinjiang. “It's only since the state has been repressing religious practices in Xinjiang so hard, that ironically it has caused Uygur Muslims to re-traditionalise, to re-Islamise at a very rapid rate now,” said Joanne Smith Finley, a lecturer in Chinese studies at Britain's Newcastle University who studies Xinjiang. “There is no tradition in Xinjiang of any kind of radical Islamism,” she added. The government has recognised the economic roots of some of the problems, and has poured money into development in the form of schools, hospitals and roads. To be sure, incomes have risen, especially in the countryside where many Uygurs live. Annual rural incomes averaged a little under 6,400 yuan (HK$8,080) a year last year, up some 15 per cent on the previous year, though this is still 1,500 yuan less than the national average and more than 11,000 yuan less than Shanghai's rural residents, the country's richest. Discrimination against Uygurs in the job market - including employment advertisements saying “no Uygurs accepted” - is another issue, despite government attempts to end this. Ilham Tohti, an ethnic Uygur economist based in China and a longtime critic of Chinese policy toward Xinjiang, said he feared the Tiananmen incident would only lead to more repression and discrimination, further fanning the flames. “Whatever happens, this will have a long-term and far-reaching impact on Uygurs, and will cause great harm. It will only worsen the obstacles Uygurs face in Han-dominated society,” he said. ^ top ^

Delta free-trade zone with Hong Kong and Macau could be years away (SCMP)
2013.11.06
A proposal by Guangdong authorities to create a free-trade zone covering Hong Kong, Macau and part of the Pearl River Delta may take years to happen, sources familiar with the matter say. The idea, first floated by Guangdong party boss Hu Chunhua in September, generated a buzz in Hong Kong and over the border. Some see it as an answer to the Shanghai free-trade zone set up in September. The proposed Guangdong free-trade zone would cover Hong Kong, Macau, Qianhai in Shenzhen, Hengqin in Zhuhai and Nansha in Guangzhou. It would be much bigger than the 28.78 square kilometre Shanghai free-trade zone. Sources said the proposal would offer benefits such as free convertibility of yuan, company registration reform, import and export relaxations, as well as freer internet connections. Some media reports have speculated that the proposal would receive Beijing's blessing as early as the end of this month - right after a key Communist Party plenary meeting that will start on Saturday. But sources familiar with the development told the South China Morning Post that the idea was still in an initial stage and creation of the zone would not happen any time soon. "No one has a clear picture but our understanding is that it might take two or three years to get the project approved," said a government source. A different source said the proposal would not be discussed at the plenary meeting, while another said Guangdong should focus first on creating a Qianhai Special Economic Zone. "They have been planning this for many, many years and there have been many more rumours. But it won't be happening for at least a year. Don't forget Qianhai," the source said. Ding Li, an economist at the Guangdong Academy of Social Science, suspected that the project had not been submitted to the central government. "Earlier media reports saying the project would be approved soon are simply efforts to drum up the noise," Ding said. "The Guangdong FTZ idea offers one hat but worn by many stakeholders. It is going to be a very difficult sell and very hard to pull it off. There is not the slightest sign of anything happening yet for the China's newest free-trade zone in Shanghai. Now Guangdong wants to join the pit. How can you convince the central government [to approve it]?" Ding said the onus was on the Guangdong government to show it could integrate with Hong Kong and Macau, as the two special administrative regions already have free trade. "Guangdong must come up with a different approach and serve a different function than the one in Shanghai, in order for the idea to get [Beijing's] support," he said. Professor Chen Guanghan, director of the Centre for Studies of Hong Kong, Macau and the Pearl River Delta at Sun Yat-sen University, agreed. Chen said Guangdong should first work how to reconcile the free-trade-zone idea with the Close Economic Partnership Arrangement (Cepa) that gives Hong Kong businesses and professionals preferential access to mainland markets. Otherwise, he said, the idea would never pass the Ministry of Commerce, let alone the State Council. "Beijing is inclined to have Guangdong focus on sorting out problems with Cepa first, as it already offers many flexible and beneficial policies," Chen said. "Otherwise, many would wonder whether Guangdong is simply proposing an old wine packaged in a new bottle." Experts say that while the Guangdong government is eager to play catch-up with Shanghai, it has not made full use of the existing Cepa framework. "The problems of Hong Kong businesses entering the mainland market remain outstanding. So we must ask, is it China's institutional problem or is it Cepa's problem? No one has carried out any in-depth studies in the area," Chen added. "To my knowledge, the project has yet to gain approval from the Ministry of Commerce," Chen said. He predicted that the free- trade zone would be approved in "about a year's time". Yuan Weishi, a Guangzhou-based historian, believes strong will exists at the top for the move. "[President Xi Jinping's] central government is very keen to push for more reform. They are ready to sweep away any obstacle," he said. ^ top ^

Taiwan, Singapore sign free trade agreement (SCMP)
2013.11.07
Taiwan signed a free trade deal with Singapore yesterday, its first with a Southeast Asian country, as the diplomatically isolated island steps up efforts to join regional economic blocs.The "economic partnership agreement" was signed in Singapore just months after Taiwan struck a similar deal with New Zealand, its first with a country that has diplomatic ties with the mainland. "The agreement will further boost trade liberalisation and internationalisation for Taiwan and create beneficial conditions for our entry to the TPP and the RCEP," Foreign Minister David Lin said in Taipei. Taiwan has been pursuing bilateral trade deals to prepare for joining proposed multinational free trade blocs such as the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership. Under the deal, signed after three years of negotiations between the sides, Singapore will immediately remove custom duties on all products imported from Taiwan, according to Taiwanese authorities. Taipei will immediately eliminate customs duties on 83 per cent of goods imported from Singapore, while duties on other products will be removed over a period ranging from five to 15 years. Forty agricultural products such as rice and pineapples are excluded. Singapore, like most countries, officially recognises Beijing rather than Taipei and already has a free trade deal with the mainland. Singapore is Taiwan's fifth-largest trade partner and fourth-largest export market, with bilateral trade totalling US$28.2 billion in 2012. In 2011 Taiwan forged an investment protection agreement with Japan as Beijing relaxed its previous strong opposition to economic deals between the island and third parties. The change in the mainland's policy followed the signing of the sweeping Economic Co-operation Framework Agreement between Beijing and Taipei in 2010. Beijing still considers Taiwan as part of its territory awaiting reunification even though the two entities have been governed separately since 1949. Many Taiwanese fear that increasing dependence on the mainland market gives Beijing leverage that could ultimately be used to undermine Taiwan's de facto independence. About 40 per cent of Taiwan's total trade is with the mainland. ^ top ^

Xi: China confident of sustainable economic growth (Xinhua)
2013.11.02
President Xi Jinping on Saturday said China is confident of a sustainable and healthy economic growth and it will further the reform and opening up drive. Xi made the remarks as he met with a group of foreign members of the 21st Century Council in Beijing, where the global think-tank is holding a conference from Friday to Sunday focusing on the world's second largest economy. China is working to transform the mode of development and readjust its economic structure, Xi said, highlighting the country's push for new-type industrialization, urbanization, the application of information technology and agricultural modernization. He noted that China's economy is growing steadily, with its gross domestic output (GDP) expanding by 7.6 percent in the first six months and by 7.8 percent in the third quarter. "There are sufficient factors supporting China's economic development," said the president. "We are confident that the Chinese economy will keep growing in a sustained and healthy way." Xi said that China will firmly continue pushing ahead with the drive of reform and opening up. "The more China is developed, the more the country will open up," he said, adding that it is impossible for China to "shut the door already opened up." Xi told the members of the think tank that a blueprint of comprehensive reform will be put forward at the forthcoming Third Plenary Session of the 18th Communist Party of China (CPC) Central Committee. Xi is also general secretary of the CPC Central Committee. Xi said the Chinese dream of national rejuvenation and the Chinese people's pursuit for a good life are interrelated with all other nations' pursuit for peace and development. China will stick to the path of peaceful development and will never seek hegemony, Xi said. "With the further development of China, we will shoulder more international obligations and play a more proactive role in international affairs as well as the reform of the international system," said the Chinese president. The 21st Century Council's foreign members include the Council Chairman and former Mexican President Ernesto Zedillo, Chairman of Berggruen Institute on Governance Nicolas Berggruen, former British Prime Minister Gordon Brown, former Australian Prime Minister Paul Keating and Singaporean scholar Kishore Mahbubani. During the discussion, they expressed the belief that the Chinese economy will keep growing, which is conducive to the world. The 21st Century Council is a non-governmental forum composed of former heads of state, top global intellectuals and entrepreneurs. Founded in 2011, it is becoming a platform for dialogue and action that is dedicated to addressing key challenges of global governance. ^ top ^

Summit held to boost closer cross-Strait economic cooperation (Xinhua)
2013.11.04
Chinese people on both sides of the Taiwan Strait should take the current opportunity and work for closer economic cooperation, senior Chinese leader Yu Zhengsheng said at a business summit on Monday. Yu, a member of the Standing Committee of the Political Bureau of the the Communist Party of China (CPC) Central Committee, made the remarks at the opening ceremony of the 2013 Zijinshan Summit for Entrepreneurs across the Taiwan Strait in Nanjing, capital of east China's Jiangsu province. "Both sides should speed up their steps to promote economic cooperation in order to deal with external challenges and create a new cooperative situation," said Yu. Yu said that both sides are now dedicated to economic cooperation, which lays a solid foundation for peaceful development and is conducive to the welfare of the people across the Taiwan Strait. Yu reiterated that the increased participation of entrepreneurs across the Strait will promote cross-Strait economic cooperation. "The mainland and Taiwan should boost core competitiveness in both traditional and emerging industries and expand space for industry development with a new division of labor to boost talent, funds and techniques," said Yu. He appealed to both sides to accelerate establishment of a cross-Strait industry cooperation mechanism and urged implementation of agreements in order to improve business negotiations and conditions for entrepreneurs. The business summit was first held in 2008, and this year marks the first "upgraded" annual meeting after the mainland and Taiwan each set up councils of the Zijinshan Summit. Zeng Peiyan, president of the mainland-based Council of the Zijinshan Summit, said at the ceremony that the new leadership of the mainland has made a spate of new moves, including expanding domestic demand, structural adjustment, and deepening reform. Zeng said that the reform and opening up of the mainland will lead to new opportunities for cross-Strait enterprises and create a more impartial and transparent investment environment for both sides. Zeng also said that the summit will improve convenience and opportunities for trade. He expressed his hopes that entrepreneurs across the Strait will take the opportunity to achieve mutual benefits. Vincent Siew, president of the Taiwan-based Council of the Zijinshan Summit, said he expected the cross-Strait service trade pact to be brought into effect at an early date as well as accelerated fulfillment of agreements on goods trade and dispute settlement, and reinforcement of the cross-Strait currency clearing mechanism. A total of 600 entrepreneurs and financial professionals across the Strait attended the summit and will hold talks on the theme "new cross-Strait cooperative situation: challenges and countermeasures" on Nov. 4 and 5. Before the opening ceremony, Yu met with Siew and Taiwanese delegates. ^ top ^

Will China's third plenum be an economic turning point? (SCMP)
2013.11.07
Facing pressure to overhaul a worn-out growth model, China's leaders are promising dramatic changes at a weekend meeting that reform advocates hope will make history by unleashing a new wave of economic transformation. The Communist Party has yet to announce an agenda for the gathering that starts on Saturday but one leader has promised “profound” changes. China's press and a cabinet think tank point to possible areas for reform ranging from giving farmers more control over land to forcing state industry to compete with entrepreneurs. The scale of possible change is daunting. So is potential resistance from factions including state companies that see threats to their privileges. Because of that, analysts say the four-day meeting is just the start of a long thorny process. They say leaders are likely to agree on changes in a few areas such as finance but leave the rest, and all the details, for later. “You don't propose a whole package of reforms and tell people to do everything at once,” said Tao Ran, director of the Brookings-Tsinghua Centre for Public Policy in Beijing. “You have to study the system and interest groups very well and create packages to compensate those who lose to reduce their resistance.” Three decades after Deng Xiaoping's reforms launched China's boom, even party leaders agree a growth engine based on exports and heavy industry is running out of steam. They want to shift to cleaner, self-sustaining growth driven by domestic consumption and technology. The leadership under President Xi Jinping that took power last year has issued a flurry of piecemeal changes including easing controls on bank lending and announcing a free-trade zone in Shanghai. But Beijing has yet to tackle fundamental reforms the World Bank and other advisers say are critical to keeping growth strong. That would require politically difficult upheaval of a system that spent the past decade building up state-owned corporate giants in energy, finance and other industries. Their monopolies, access to low-cost credit and other privileges would have to be cut to improve conditions for private industry that creates China's new wealth and jobs. “They have to make room for entrepreneurs,” said Sun Dawu, chairman of a conglomerate with interests in agribusiness, education and food processing in Baoding, 150 kilometres southwest of Beijing. Sun's career highlights the hurdles facing China's private business pioneers. Once lauded by the state press for his success, he received a suspended jail sentence in 2003 on charges of improperly raising money from investors after he was unable to get bank loans. “The obstacles are systemic – the ideology of public ownership,” Sun said. “They think state-owned companies are the foundation of the country's economy.” Pressure for change has mounted as China's expansion slowed following a decade when growth peaked above 14 per cent in 2009. That has raised the risk of politically dangerous job losses or discontent among entrepreneurs and professionals. They are the biggest winners from reform and a key base of support for the ruling party. Slow growth in consumer spending has forced Beijing to set aside its reform goals and shore up the economy by building more railways and other public works. Analysts say more than half of the latest quarter's growth of 7.8 per cent was due to government spending, rather than trade or consumption. This weekend's meeting is the 205-member Central Committee's third plenum – or annual full meeting – of the party's 18th congress. That tedious title hides symbolic significance: meetings at this point in the party's five-year political cycle are seen as a launching pad for changes in economic direction after Deng used a third plenum in 1978 to unveil market-style reforms. “The reforms this time will be broad, with major strength, and will be unprecedented,” said Yu Zhengsheng, the No 4 member of the party's ruling Standing Committee, according to the official Xinhua news agency. This weekend's meeting will be an opportunity for Xi and Premier Li Keqiang, the country's top economy official, to make clear their overall economic vision. The scattered changes already announced point toward more liberalisation. In July, regulators removed controls on interest rates charged by banks on commercial loans as part of injecting more market forces into lending that now is used mostly to subsidise state companies. The change might eventually channel more money to productive private companies. In September, the government launched a new free trade zone in Shanghai, an echo of the Special Economic Zones that were used in the 1980s to test market-oriented reforms that later were rolled out nationwide. Few details have been released, but authorities promise a bigger role there for private business in previously closed industries. A proposed roadmap for reform issued by a cabinet think tank, the Development Research Centre, calls for changes including allowing private companies into state-dominated industries such as railways, oil and electric power. The think tank represents only the most pro-free market stream of official thinking. State-owned banks, oil companies and steelmakers are criticised by reform advocates as a drain on the economy, consuming billions of dollars a year in subsidies. But they also serve political goals, paying to develop poor areas and providing a flow of jobs and revenue for party leaders to buy loyalty. In China's last major bout of reform in the 1990s, then-Premier Zhu Rongji forced state industry through a painful shakeup. Companies were forced to compete or close. They shed millions of workers. That set the stage for the past decade of explosive growth but also created the rich, entrenched state companies that could be the biggest obstacles to change. “The corporatisation of China's state-owned sector created the powerful individual vested interests that oppose reform now,” said Lombard Street researcher Diana Choyleva in a report. In the 1990s reforms, “China's politicians had much less to lose individually,” said Choyleva. “This time around both their personal wealth and their own political power are on the line.” ^ top ^

Ministry provides update on mining plans and current statistics (UB post)
2013.11.01
The Ministry of Mining (MM) reported that it expects Mongolia to extract around 131.4 million tons of coal each year on average until 2032 and export 94.9 million tons of coal each year. The amendment was made at Transparent Mining press conference on October 30. The MM said that out of the amount of income expected to be drawn into the state budge from coal exports, only 53 percent has been collected. In total, the state budget has collected revenue of 178.2 billion MNT this year. The MM plans to increase coal exports to 30 million tons before the end of the year. The statistics show that Mongolia has exported only around 12 million tons of coal to China this year, which means that just over a million tons of coal were exported per month. The statistics date clearly indicate that Mongolia cannot reach its target by exporting 18 million tons of coal in the remaining two months of 2013, but Minister of Mining D.Gankhuyag claimed that it was possible. Though Mongolia's coal exports currently stand at 12 million tons, total extracted coal is around 20 million tons which means around eight million tons are ready for export. The MM officials also plan to repay the state owned coal miner, Erdenes Tavan Tolgoi's 170 million USD debt to Aluminum Corporation of China Limited (CHALCO) from the coal export revenue derived from the eastern tsankhi (block) of the giant Tavan Tolgoi mine. The coal extracted from the western tsankhi of TavanTolgoi isexported to CHALCO at the rate of 40 USD per ton, to repay Erdenes Tavan Tolgoi's debt. At the current rate, the company cannot repay the debt by the end of this year, as planned. Minister D.Gankhuyag also reported that Mongolia will export one billion tons of coal to China in the upcoming 20 years. He added that the ministry is not certain of the rates at which Mongolia will export coal but said that the trade transactions will be conducted on a monthly or quarterly basis. As part of the memorandum of understanding signed between Mongolia and China, Mongolia is to export 50 billion USD worth of coking coal and 20 billion USD worth of brown coal in upcoming 20 years. D.Gankhuyag reported that the oil sector had a revenue of 116 billion MNT this year. ^ top ^

Mongolia's new investment law 'will boost property sector' (news.mn)
2013.11.05
New legislation that begins on Friday 1 November makes it easier for foreigners to invest in Mongolia and will increase confidence in the property market. Overseas property buyers will now find it easier to invest in Mongolia, thanks to new legislation that comes into effect today (Friday 1 November). The new law means that individuals no longer need government approval to invest in strategic industries. The Strategic Entities Foreign Investment Law, which restricted investments in strategic sectors, by requiring government or parliamentary approval for transactions, is being repealed. ^ top ^

Ludivine Candiotti
Embassy of Switzerland