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
  10-16.5.2014, No. 524  
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Table of contents


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Bilateral Issues

Reveling in good fortune of middle class (China Daily)
Asia's new rich are growing at a staggering rate, spurred on by the economic rise of China and its knock-on effect throughout the region creating a new, rich middle class. Asians with at least $1 million in disposable income are expected to see their combined wealth climb to $15.9 trillion by 2015 from $12 trillion in 2012, according to the Asia-Pacific Wealth Report 2013 by Royal Bank of Canada and French multinational Capgemini. Reuters recently quoted Brookings Institution scholar Homi Kharas as saying the "old world" middle class will, in time, shrink from 50 percent of the world's total to around 22 percent. Kharas went on to say rapid growth in China, India, Indonesia, Vietnam, Thailand and Malaysia will cause Asia's share of the new middle class to more than double from its current 30 percent. By 2030, Asia will host 64 percent of the global middle class and account for over 40 percent of global middle-class consumption. Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy in Singapore, says in a blog post, "The size of (Asia's middle class) currently stands at 500 million and will mushroom to 1.75 billion by 2020 - more than a threefold increase in just seven years." "The world has never seen anything like this before; it's probably one of the biggest seismic shifts in history," Mahbubani added. Boston Consulting Group says that while the "old money" of North America and Europe are still the wealthiest regions, accounting for $43.3 trillion and $35.8 trillion of private wealth, the Asia-Pacific region (excluding Japan) is fast catching up at $28 trillion in 2012 - up nearly 14 percent on the previous year. Data for 2013 is not due out until later this year. Consultancy firm PricewaterhouseCoopers predicts that Singapore could dislodge Switzerland as early as 2015 as the world's wealth capital center. Others like WealthInsight, an industry research group, is not as bullish, saying Singapore is expected to outstrip Switzerland by 2020 as the world's leading wealth management center. Analysts say the reason for such projections is obvious - more wealth is being created in Asia and it is being created faster than anywhere else in the world. But not everyone is convinced. Patrick Odier, chairman of the Swiss Bankers Association, says he does not see Singapore as a threat to Switzerland's private banking. Singapore is a crowded market, with banks chasing a community of largely Asian clients who are less interested in complete secrecy - as has been the case in Europe - but more in achieving yield. "It seems pretty obvious that in time Singapore will overtake Switzerland," says Keith Pogson, head of assurance practice for banking and capital markets with EY. "When that will happen I don't think any one can predict with any degree of certainty. But it will happen," he tells China Daily Asia Weekly. Pogson says there are different dynamics at play when discussing Singapore becoming the world's leading wealth management center. "In recent years we have seen increased transparency and regulation globally around financial services," he says. "(This has created) a realignment within the banking sector and a debate about private banking. "Private banking has always been about secrecy. High-net-worth customers were assured complete discretion and above all their privacy was protected by the bank." In the past, private banks have also been associated with other, less savory aspects of banking such as tax avoidance and money laundering, he adds. "Now they have to fully disclose who is doing what and where, added to which you now have cross-border disclosure. So there is no secrecy anymore." Pogson says the spectrum has now changed. Traditionally there have been three wealth centers - Switzerland, Hong Kong and Singapore. Switzerland is no longer secret and has been forced to open up while the Asian centers accumulate the wealth that is being generated. "When you look at what is happening in terms of wealth accumulation and wealth growth in Asia, it is only a matter of time before Singapore takes the lead," Pogson says. UBS, Switzerland's biggest bank, has already recognized Asia as its priority growth area. According to a report by Bloomberg, the bank intends to hire 88 advisers this year just to service its rich Asian clients. Bloomberg says assets at UBS wealth management business in the region jumped 38 percent in the past two years. Credit Suisse, which is facing an investigation into how it helped tax evasion in the US, is looking to increase private banking services to its wealthiest clients in emerging markets, and in particular Asia. Switzerland's second-biggest bank is approaching Asia differently from second- or third-generation wealth in the US or Europe, according to Francesco de Ferrari, managing director and head of the bank's private banking division. "In Asia, a lot more of the wealth is generated by first-generation entrepreneurs who are optimistic about the returns their businesses will yield," de Ferrari says. "The last thing you want from a bank is for them to ask you to put funds to buy something with them. You actually want them to give you money." When the entrepreneur becomes successful, de Ferrari says, the bank will aim to raise equity or debt for the business and build a personal treasure chest on the side. "The next stage is to help structure that wealth to pass on to heirs and preserve the business," he adds. A report by the Financial Times says: "In Singapore alone, the accumulation of wealth - and the speed with which it has happened - has been staggering." ^ top ^


Foreign Policy

Vietnam allows people to protest outside Chinese Embassy (Global Times)
Southeast Asian leaders met Sunday for a historic summit in Myanmar with the South China Sea issue being dragged into the ASEAN meeting. Hosted for the first time by Myanmar in its capital Nay Pyi Taw, the summit is set to be dominated by discussion of the South China Sea, which is crisscrossed by key shipping lanes and thought to contain vast energy reserves. In his opening address, Myanmar President Thein Sein said "regional and global issues of great concern to ASEAN will be extensively discussed among ourselves," without directly mentioning the escalating maritime crisis. ASEAN foreign ministers expressed "serious concerns over the ongoing developments" in a joint statement released Saturday. Philippine President Benigno Aquino also vowed to bring up the maritime territorial disputes with China during the ASEAN meeting. "We wish to emphasize, uphold and follow the rule of law in resolving these territorial issues so that the rights of all countries involved will be recognized and respected," Aquino said in a speech at Manila airport on Saturday. Even though not all ASEAN members are involved in territorial disputes with China, Aquino said the issue concerned the security of the region as a whole. "The fact that the summit is dominated by discussion of the South China Sea is unprecedented. Although the ASEAN members did not openly name the country they claim to have concerns with, it is obvious from their rhetorics that they have taken the US's stance. Obama's Asia tour has really give some countries confidence over the South China Sea issues," Zhuang Guotu, a professor from Xiamen University, told the Global Times. In response to the ASEAN foreign ministers' statement, Hua Chunying, Chinese foreign ministry spokeswoman, said on Saturday that the South China Sea issue is not a problem between China and ASEAN. "The Chinese side is always opposed to one or two countries' attempts to use the South China Sea issue to harm the overall friendship and cooperation between China and the ASEAN," said Hua. Hua said China stands ready to work together with the ASEAN to continue implementing the Declaration on the Conduct of Parties in the South China Sea (DOC) comprehensively and effectively to safeguard peace and stability in the region. Tensions flared this week after Beijing relocated a deep-water oil rig into territory also claimed by Hanoi. The area around the drilling well has since seen several collisions between Chinese and Vietnamese ships, with each blaming the other for the rise in tensions. On Sunday, some 1,000 people staged one of the Vietnam's largest rallies against Beijing in front of the Chinese Embassy in Hanoi, capital of Vietnam. "Hanoi is well aware that permitting this kind of activity is a clear message to Beijing," said Professor Jonathan London at City University of Hong Kong. ^ top ^

Company's drilling activities are within Chinese waters: official (Xinhua)
The drilling activities of China Oilfield Services Limited (COSL) are located only 17 nautical miles (some 31 kilometers) from China's Zhongjian Island, completely within the country's territorial waters, an official has said. Yi Xianliang, Deputy Director-General of the Department of Boundary and Ocean Affairs of the Foreign Ministry of China, told reporters on Friday that the Chinese side was "deeply surprised and shocked" by Vietnam's intensive attempts since May 2 to disrupt the Chinese company's normal drilling activities in the waters off China's Xisha Islands. The Xisha Islands are an inherent part of China's territory and there is not any dispute about it, said the official. The operations undertaken by COSL are only 17 nautical miles from Zhongjian Island, while they are as far as 130-150 nautical miles (241-278 kilometers) from Vietnam's coastline, he said. Yi said Chinese enterprises started operations in the area ten years ago and in the time period from May to June 2013, a Chinese company carried out three-dimensional seismic operations there as well. The ongoing operations are a normal follow-up to those past operations, he added. Yi said the Chinese company's operations are completely within the mandate of China's sovereignty, sovereign rights and jurisdiction, and that Vietnam's harassment of the company's normal activities has seriously violated China's sovereignty, sovereign rights and jurisdiction, and gravely affected the production and safety of China's drilling rig. It has caused unnecessary trouble for the China-Vietnam relationship, he added. Faced with the harassment, the Chinese side had to strengthen security on the spot to stop the Vietnamese side's behavior and ensure the operations as well as navigation security. "We demand the Vietnamese side sincerely respect China's legitimate rights, return to a rational track, immediately stop all forms of harassment and withdraw all its vessels and personnel from the area," said the Chinese official. ^ top ^

Philippines to charge 9 Chinese fishermen (Global Times)
Philippine prosecutors said Monday they would charge nine Chinese fishermen arrested in South China Sea waters with environmental crimes. The other two were found to be minors and would be repatriated without charge, the prosecutors said. "We have already expressed China's position and demands to the Philippines many times," said Chinese foreign ministry spokeswoman Hua Chunying on Monday. "We hope the two sides can properly handle this issue as quickly as possible." Prosecutor Allan Ross Rodriguez told AFP the fishermen were charged with violating laws against poaching and catching protected species after they were allegedly caught with a huge haul of sea turtles. The prosecutor rejected the appeals of two Chinese diplomats who met him earlier in the day about the case. Rodriguez said the Philippine government has assigned lawyers to represent the crewmen. The Chinese diplomats declined to hire defense lawyers, citing reasons that the incident occurred in Chinese waters. The court is expected to summon the fishermen to enter a plea within 10 days, Rodriguez added, with bail set at 70,000 pesos ($1,570) per defendant. Filipino police seized the Chinese-flagged vessel and detained its 11 crew last week off disputed Half Moon Shoal. The police said they found a huge haul of hundreds of sea turtles - a protected species - on board the 15-ton vessel, many of them already dead. If found guilty of collecting "rare, threatened or endangered" species, the most serious allegation, the fishermen could face up to 20 years in prison and large fines. Poaching in Philippine waters is punishable by fines of up to $200,000. However, family members of the detained fishermen told the Global Times that they found the charge of "poaching" unsustainable. The Philippines has started to detain Chinese fishermen with force since 2000. Many fishermen were forced to sign a statement of confession, admitting they have "conducted illicit fishing activities in Philippine waters" to indirectly prove Philippines' sovereignty over the disputed waters, sources told the Global Times. Ding Zhile, head of the Tanmen Fishermen's Association in Qiongmen, Hainan Province, where the detained fishermen came from, told the Global Times that the family members are infuriated with the Philippine government and are looking forward to the return of their loved ones. China has demanded that the Philippines free the fishermen immediately, saying it has "undisputable sovereignty" over the shoal and urging Manila to "stop taking further provocative action" that would harm relations. "China will not accept the trial, which is unilateral from the Philippines. It is not from an international court and therefore will not be recognized internationally. The only purpose it serves is to cause tensions between the two countries to escalate. It is very much a provocation," a scholar from Osaka University in Japan, who spoke on condition of anonymity, told the Global Times. ^ top ^

Trip reflects militaries' will to seek closer ties (China Daily)
Fang Fenghui, chief of the general staff of the People's Liberation Army, will start his first trip to the United States on Tuesday, as a guest of Martin Dempsey, chairman of the US joint chiefs of staff. The visit is a chance for Dempsey to repay the hospitality he received in China in April 2013, as reciprocation is one of the main focuses of Fang's trip, according to the itinerary disclosed by the Pentagon. The visit comes amid heightened maritime tensions in the Asia-Pacific region, but observers said the carefully choreographed schedule will highlight both countries' willingness for closer cooperation following US President Barack Obama's recent Asian tour. In San Diego, his first stop, Fang will be hosted by the US 3rd Fleet, tour the aircraft carrier USS Ronald Reagan and combat ship USS Coronado. He will also visit the US Marine Corps recruit depot there, the Pentagon said on Friday. Fang and Dempsey will meet on Thursday at the Pentagon where the Chinese general's arrival will be greeted with full military honors, the Pentagon's press secretary John Kirby said. When Dempsey visited China last year, he met President Xi Jinping and Fang, toured an army aviation regiment, talked to senior officers at the National Defense University and delivered a speech at the Army Aviation Academy. Fang will also visit the US Army Forces Command in Fort Bragg, North Carolina, before ending his tour in New York, Kirby added. It will be the first time the headquarters has received a Chinese officer. "General Dempsey looks forward to the opportunity to meet again with Fang and to continue their conversation on improving our military-to-military relationship with China," Kirby said. Zhao Weibin, a researcher at the Center for China-US Defense Relations at the PLA Academy of Military Science, said the visit comes at a good time, as it will signal confidence in the two militaries' relationship and weaken those who attempt to play up "Chinese threats". The visit comes a month after US Secretary of Defense Chuck Hagel's first visit to China and weeks after Obama's trip to the region. "Fang will seek more understanding from Washington by making clear China's sincerity on cooperation and its determination to safeguard its core interests," Zhao said. Bonnie Glaser, a senior adviser for Asia at the Center for Strategic and International Studies, said signing agreements on notification of major military activity at sea and maritime safety are the highest priorities for the two militaries. Zhu Chenghu, dean of the Defense Affairs Institute at the National Defense University, said both countries should hold more regular military exchanges. ^ top ^

Sino-Russian naval drill set for May 20-26 (Xinhua)
China and Russia will hold a joint naval drill in the northern part of the East China Sea between May 20 and 26, a spokesman for the Chinese navy announced on Tuesday. Liang Yang told a press conference that the "Joint Sea-2014" drill will focus on defense and attack, escorts, search and rescue and the freeing of hijacked ships, among other actions. Liang revealed that the two sides will dispatch a total of 14 vessels, two submarines, nine fixed-wing aircraft as well as helicopters and special forces for the exercise. According to the spokesman, the event is a key measure for China and Russia to strengthen mutual political trust and for the two armies to deepen cooperation. The drill aims to boost their capabilities to jointly cope with maritime security threats and will not target any third party, he added. ^ top ^

War of words erupts as John Kerry calls Beijing 'provocative' in South China Sea disputes (SCMP)
China and the United States exchanged heated words yesterday over the recent tensions between Beijing and its neighbours about disputed territory in the South China Sea. "[John Kerry] said China's introduction of an oil rig and numerous government vessels in waters disputed with Vietnam was provocative," US State Department spokeswoman Jen Psaki said, referring to a telephone call between the US secretary of state and Foreign Minister Wang Yi. Wang called on the US to be objective and urged it to "stick to its promises, and act and speak cautiously", according to a statement on the Foreign Ministry's website. Ministry spokesman Hua Chunying said China had not taken any provocative moves in the South China Sea. "The US' mistaken comments have encouraged dangerous and provocative actions," she said in a daily press briefing. "We expect the US to reflect on its acts. If it expects the Pacific Ocean to be peaceful, it should think what role it can play in maintaining regional peace and stability." The exchange between the two top diplomats came as tensions between China and Vietnam escalated after Beijing positioned an oil rig on May 1 in the Paracel Islands - called the Xisha Islands by China and the Hoang Sa Islands in Vietnam, which also claims them. At the same time, the Philippines decided to prosecute nine of 11 Chinese fishermen apprehended in the disputed Spratly Islands for poaching sea turtles. Manila said it released two fishermen because they were minors. "We were told that the two minors would be released soon," said Dai Yudao, an official of an association that represents the fishermen in Qionghai, Hainan province. "But we are not familiar with the Philippine legal system and don't know what will happen to the other fishermen." Beijing and Hanoi have been engaged in a stand-off over the past week, with both accusing each other of ramming ships. In signs that the tensions may linger for some time, several thousand Vietnamese workers protested at an industrial park in Binh Duong province in southern Vietnam yesterday over Beijing's deployment of the oil rig. The plant is Taiwanese-owned and makes footwear. The workers waved banners and shouted anti-China slogans, Vietnam's Thanh Nien Daily reported on its website. Employees of other production plants also joined the protest. About 1,000 workers from Mega Step Electronics, which is under the Hong Kong-based Fittec International Group, also took part, Thanh Nien said. In a meeting with Singapore's foreign minister, K. Shanmugam, yesterday, Kerry said the US was concerned about the Chinese challenge to the Paracel Islands. "We want to see a code of conduct created; we want to see this resolved peacefully through the Law of the Sea, through arbitration, through any other means, but not direct confrontation and aggressive action," he said. Wang Fan, a professor at the China Foreign Affairs University, said the conversation between the Chinese and American top diplomats indicated that both nations were taking steps to avoid the territorial disputes becoming another flashpoint between Beijing and Washington. "On one hand, the US can showcase the importance of its presence in the Asia Pacific, and draw Southeast Asian nations closer to Washington with the disputes between Beijing and its neighbours," he said. "But on the other hand, it does not want the dispute to get out of control." ^ top ^

China 'building airstrip on disputed reef', says Philippines (SCMP)
The Philippines accused China on Wednesday of reclaiming land on a reef in disputed islands in the South China Sea, apparently to build an airstrip, only a day after Washington described Beijing's actions in the region as “provocative”. If confirmed, the airstrip would be the first built by China on any of the eight reefs and islands it occupies in the Spratly Islands and would mark a significant escalation in tensions involving several nations in the area. China claims almost the entire South China Sea, an area rich in energy deposits and an important passageway traversed each year by US$5 trillion worth of ship-borne goods. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims on the area. Philippine Foreign Ministry spokesman Charles Jose told reporters that China had been moving earth and materials to Johnson South Reef, known by the Chinese as Chigua, in recent weeks. He said China was reclaiming land in violation of the Declaration on the Conduct of Parties in the South China Sea, an informal code of conduct for the region. “They're about to build an airstrip,” Jose said.He said evidence of the Chinese activity on the reef had been shown in aerial photographs taken by the Philippine Navy. The Philippines and Taiwan already have airstrips in the area. The ministry had already lodged a protest with the Chinese and raised the issue behind closed doors at last weekend's summit of the Association of South East Asian Nations (Asean) in Myanmar, Jose said. Tensions in the South China Sea were already high after China moved a large oil rig into an area also claimed by Vietnam. Beijing and Hanoi each accused the other of ramming its ships near the disputed Paracel Islands, On Tuesday, Kerry said during a phone call with Chinese Foreign Minister Wang Yi that China's introduction of the oil rig and numerous government vessels into the area disputed with Vietnam was “provocative”, a State Department spokeswoman confirmed. China in turn said there had indeed been provocative action taken in the area but that it was not the guilty party, with the foreign ministry blaming the United States for encouraging such behaviour. The ministry said Wang had urged Kerry to “act and speak cautiously”. Beijing says the South China Sea issue should be resolved by direct talks between those involved and has bristled at what it sees as unwarranted US interference. It has also looked askance at the US “pivot” back to Asia, especially Washington's efforts to boost existing military links with Tokyo and Manila. The remote and otherwise unremarkable Johnson South Reef has been a catalyst for conflict in the past. In March 1988, China and Vietnam fought a brief naval skirmish on and around the reef with up to 90 Vietnamese reported killed. ^ top ^

China, U.S. have more common interests than disputes: premier (Xinhua)
There are far more common interests than disputes between China and the United States, Premier Li Keqiang said on Tuesday as he met with visiting U.S. Treasury Secretary Jacob Lew in Beijing. Li said China and the United States, as the largest developing and developed countries in the world respectively, are highly complementary in terms of economy and share far more common interests than disputes. China's market potential will provide the United States with great opportunities and the Chinese side stands ready to work together with the U.S. side to expand cooperation in trade and investment, energy and environmental conservation, and climate change among other areas, and push ahead with the negotiations on a bilateral investment deal, said the premier. Li said he hopes the United States will take substantial measures to relax its restrictions on high-tech exports to China and provide a fair environment for Chinese companies investing in the United States. A sound China-U.S. relationship is of great significance for the whole world as well as for the two nations, conducive to the global economic recovery and world peace and stability. The two sides should uphold the right direction of bilateral ties in line with the consensus reached by the two heads of states, maintain the momentum of high-level interactions, and ensure the success of the next rounds of the China-U.S. Strategic and Economic Dialogue and the China-U. S. High-Level Consultation on People-to-People Exchange, said the premier. Li proposed the two sides enhance communication and coordination on major regional, international and global issues and sincerely respect each other's core interests to make sure the bilateral relationship will advance in a healthy and stable way. Reviewing the deepening and strengthening bilateral relationship over the past years, Lew said China's reform is encouraging and that the country's development is beneficial for economic growth of the United States and the world at large. Lew said the U.S. side expects greater development of China and that the United States is willing to work together to ensure success of the forthcoming round of the China-U.S. Strategic and Economic Dialogue. Lew, special representative of U.S. President Barack Obama, also pledged to step up communication and cooperation with China on climate change and other global issues. During the meeting, the two sides also exchanged views on other regional and international issues of common concern. ^ top ^

Manila to bear consequences for deliberate provocation (China Daily)
In a reckless move that further undermined the peace of South China Sea, Manila went ahead with a premeditated plot to provoke Beijing in a vain wish to infringe upon China's sovereignty. Last week, Philippine police detained 11 Chinese fishermen and their boat near China's Half Moon Shoal in the South China Sea on the grounds that they poached sea turtles. But no matter the allegation was true or not, Manila was wrong in the first place because China has indisputable sovereign rights over the Nansha Islands and the adjacent waters, including the Half Moon Shoal, where the incident occurred. Thus any actions taken by the Philippines against the Chinese fishermen are illegal and invalid and would be regarded as direct infringements of China's sovereignty. The timing of the incident is tricky, as it happened not long after U.S. President Barack Obama's recent visit to Manila, during which the two sides reasserted their military alliance. The provocation also came days before the annual summit of the Association of Southeast Asian Nations (ASEAN), during which the emboldened Philippines, together with Vietnam, launched a failed bid to pit the regional bloc against Beijing over territory claims. The Manila-Hanoi cohort evokes reminiscence of a Philippine naval delegation's beer drinking and volleyball playing with Vietnamese sailors in the South China Sea in April, widely read by the media as the two countries' budding nascent partnership amid their growing row with Beijing over contested waters. But that kind of ill-disposed joint venture is built on shaky grounds and is doomed to fail. While reiterating calls for peaceful settlement of the dispute and joint development of resources, China has also made it clear that it is confident and capable of countering challenges to its territorial and sovereign integrity. All parties should also be reminded that ignorance of China's resolve to defend its sovereign land will induce consequences too severe for certain countries to bear. Meanwhile, the wish to maintain regional peace and stability is shared by China and the majority of ASEAN members. The United States, which is strengthening military alliance with Manila and has a huge stake in the region's stability, should comply with its promise to leave the countries concerned to settle their differences through bilateral talks. Instead of spoiling its increasingly-paranoid junior ally and muddying the waters, Washington should keep Manila within bounds and try not to stir up tensions by backing it in territorial dispute. After all, it won't serve Washington's interests if the dispute in the South China Sea spins out of control. ^ top ^

2 Chinese killed, over 100 hospitalized in Vietnam's riot (Xinhua)
At least two Chinese nationals have been killed and over 100 Chinese hospitalized after rioters attacked Chinese companies in Vietnam, sources told Xinhua on Thursday. An unidentified Chinese national was found dead in a Taiwanese-invested factory of Foming Bicycle Parts in southern Vietnam's Binh Duong Province, some 1,120 south of Vietnam's capital Hanoi. Local police has dealt with the case and diplomats from the Chinese embassy will be arriving there. Another Chinese national was killed in Ha Tinh Province, some 300 km south of Hanoi, where a bloody mob attack on Chinese nationals and companies occurred. "As we counted, the hospital has received 75 Chinese nationals, while the hospital says 101 are admitted," said a high-ranking official with China 19th Metallurgical Corporation (MCC19) which was the worst hit among the Chinese companies there on Wednesday. "There are dozens of Chinese sent to another provincial hospital." The official requesting anonymity for fear of retaliation is also hospitalized. "I found the Chinese dead before reaching hospital, but his identity is still unknown," he said, adding the MCC19 office and dormitory buildings were burned down on Wednesday. "Now, the security forces are guarding the hospital, so it is fairly safe now," he told Xinhua, "The owner of the house we rent, and some local Vietnamese people and organizations have come to the hospital to console the wounded Chinese with some fruits, etc. " Moreover, around 10 Chinese remained unaccounted for on Thursday after violent rioters attacked Chinese companies in Vietnam's central Ha Tinh Province, sources said. "The protests were held throughout Wednesday. The rioters attacked four Chinese companies constructing an iron and steel complex invested by China's Taiwan," a Chinese manager in Ha Tinh told Xinhua. "So far, around 10 staff lost contact with us and at least 55 workers were wounded," an official with MCC19 said. Nguyen Minh Hoan, vice chairman of the People's Committee of Ky Anh District in Ha Tinh Province, where the bloody attacks occurred, told Xinhua over phone that he had just attended a meeting on the violence. But he refused to give figure of casualties, saying the Ha Tinh Province was expected to make an official announcement on Thursday afternoon. The anti-China riot in Vietnam came in the wake of rising tensions between the two countries over territorial disputes in the South China Sea. From May 3 to 7, Vietnam dispatched 36 vessels to China's territorial waters, ramming Chinese vessels for 171 times to disrupt the normal drilling operation by a Chinese oil company. China on May 9 urged Vietnam to respect China's sovereignty and jurisdiction over the Xisha Islands in the South China Sea and stop provocative actions. However, Vietnamese Foreign Ministry on May 7 said that Vietnam "cannot accept China's illegal drilling rig HD-981" and "it is an infringement of Vietnam's sovereignty". With distorted information published by Vietnam's state-run media, the largest ever anti-China demonstrations in the last ten years have been held throughout Vietnam since May 9, and the bloody attacks on Chinese nationals and companies have spread from southern Vietnam on Tuesday to central and northern Vietnam on Thursday. Vietnamese Prime Minister Nguyen Tan Dung on Thursday ordered the Ministry of Public Security to ensure security and absolute safety for lives and assets as well as normal operation of all companies, especially foreign invested firms. According to the directive on Vietnamese government's website, the prime minister urges unanimous, active and firm measures to be implemented to prevent illegal activities and strictly handle those who had provoked riots. The directive asked local people not to follow illegal actions, in order to ensure security and solidarity and contribute to economic development. ^ top ^

Xi, Putin could sign 30-year gas deal in Shanghai (SCMP)
China and Russia hope to sign a massive deal for natural gas supply when their leaders meet in a regional summit in Shanghai next week, a senior diplomat has said. Under the deal, Russia will supply 38 billion cubic metres of natural gas annually to China for 30 years. Deputy Foreign Minister Cheng Guoping told reporters yesterday that President Xi Jinping would discuss the deal and other points of co-operation with his Russian counterpart, Vladimir Putin, who will visit Shanghai on Tuesday. The deal is between Russia's Gazprom and China National Petroleum Corporation (CNPC), but the two sides have yet to agree on pricing despite more than a decade of negotiations. Xi will meet Putin on the sidelines of the Conference on Interaction and Confidence Building Measures in Asia, to be attended by 46 nations and agencies. "The companies of the two nations are exchanging views on the pricing issue," Cheng said. "We will strive to get the companies to sign the natural gas co-operation deal and [have it] witnessed by both state leaders while Putin is in China." Cheng said Xi and Putin reached a consensus over natural gas co-operation when Xi attended the Sochi Winter Olympics in February. Companies of both nations have reached agreement on many aspects of the deal. Russian Deputy Energy Minister Anatoly Yanovsky said on Monday that the deal was "98 per cent ready". Supply would begin no later than the end of 2018. Russian business daily Vedomosti reported last month that the companies were negotiating a price in the range of US$360 to US$400 per 1,000 cubic metres. Gazprom chief executive officer Alexey Miller said last year that the supply could be boosted to 60 billion cubic metres a year over the period of the contract. The gas would be supplied via two pipelines entering northeast and northwest China. Russia has been trying to diversify its energy export base beyond the European market, where Gazprom generates about 80 per cent of its revenue. China relied on imports for nearly a third of its natural gas needs, Xinhua said. It imported 53 billion cubic metres of natural gas last year, according to the China National Petroleum Corporation. Putin's visit will be his first to China since Xi was named president in March last year. Observers expect both leaders to take a united stand on major international issues, and Putin may seek China's support on Russia's dealings with Ukraine. Cheng said the two nations would issue a joint declaration on strategic co-operation after the talks, but added that China respected the integrity of Ukraine. "The problems that are facing Ukraine should be resolved by the people of Ukraine," Cheng said. "The problems should be resolved under the framework of respecting different groups of Ukrainians and their legitimate interests." ^ top ^

Xi to address Asian security summit (Xinhua)
Chinese President Xi Jinping will expound on China's views on the Asian security situation and put forward proposals for beefing up regional security dialogue and cooperation during a summit in Shanghai next week, said a senior diplomat here on Thursday. The Conference on Interaction and Confidence Building Measures in Asia (CICA) will be held in Shanghai on Tuesday and Wednesday. Chinese Vice Foreign Minister Cheng Guoping said the two-day event will draw 11 heads of states, two heads of governments and 10 chiefs of international organizations. The dignitaries will include Russian President Vladimir Putin, Iranian President Hassan Rouhani, Kazakhstan President Nursultan Nazarbayev and United Nations Secretary-General Ban Ki-moon. They are expected to discuss topics including the Asian security situation, measures to promote Asian dialogues, trust and coordination, according to Cheng. China will take over as CICA host from 2014 to 2016. During the summit, President Xi will announce China's measures to promote Asia security and CICA development in his key-note speech, Cheng told a press briefing. The conference will result in a Shanghai Declaration elaborating on CICA members' agreement on the global and regional situation, their consensus in solving hot issues as well as plans for CICA development, he said. Xi and his wife, Peng Liyuan, will host a welcome banquet for foreign guests on Tuesday. The summit itself will be held on Wednesday at the Shanghai Expo Center. Putin, Nazarbayev, Kyrgyz President Almazbek Atambaev and Iranian President Hassan Rouhani will pay state visits to China on the sidelines of the summit, Cheng said. The CICA was established in 1992 as a forum for dialogue and consultations and promotion of confidence-building measures. It now has 24 member countries and 13 observers. ^ top ^


Domestic Policy

China should get Nobel Peace Prize for poverty relief success: Norway's richest man (SCMP)
China deserved a Nobel Peace Prize for successfully lifting nearly one fifth of the world population out of poverty, Norway's richest man told a local newspaper, amid the recent controversy triggered by the Norwegian government's decision to snub the Dalai Lama when he visited the country to commemorate his winning of the prize 25 years ago. Stein Erik Hagen, chairman of Norwegian conglomerate Orkla ASA, on Wednesday told VG, the country's second largest print newspaper, that China is “bringing hundreds of millions of people out of poverty”, an achievement “that qualifies for the Nobel Peace Prize”. “China is constantly evolving and is about to become the world's economic superpower,” he was quoted by the paper as saying of the country that halted negotiations on the China-Norway Free Trade Agreement (FTA) after the Norwegian Nobel Committee awarded its Peace Prize to jailed Chinese dissident Liu Xiaobo in 2010. On the same day, the 1989 Nobel Peace Prize winner, the Dalai Lama, received no greeting from the Norwegian government when he arrived in the country on a three-day visit to mark the 25th anniversary of his Nobel recognition, the paper reported. (…) According to the company on Thursday, Orkla ASA is “exploring the possibility” of listing its wholly-owned subsidiary Gränges AB, an aluminium products manufacturer located in both Sweden and China. Chinese people have received Nobel recognition twice: the Dalai Lama in 1989 and jailed dissident Liu Xiaobo in 2010. The latter award triggered a diplomatic freeze between the two countries that lead to painful economic consequences. Norway was excluded from China's 72-hour transit visa scheme, which allows visitors from all European Union member states, Iceland and Switzerland to stay in Beijing for three days without a visa. In addition, Norway's share of China's salmon market, once as high as 92 per cent, plummeted to 29 per cent last year, with mountains of Norwegian salmon left rotting at port, Agence France-Presse reported in January. (…) Two weeks ahead of the Dalai Lama's recent visit, Foreign Minister Boerge Brende said his government would not meet the prize winner due to “the absolutely extraordinary situation between China and Norway” that lacks “any real political contact” for several years. Meawhile, China's foreign ministry, which in December condemned his visit, said during a daily news briefing that China “resolutely opposes any foreign country providing a platform or convenience for the Dalai Lama's splittist words and acts and opposes him meeting any foreign leader”. (…) In 2012, the committee presented the award to the European Union, which it said “for over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe”. No single country has been named as winner of the peace prize so far. This year, Yuan Longping, the “father of hybrid rice” who played a key role in the threefold increase of China's rice output from 4,500 kilograms per hectare in the 1970s to 13,500 kilograms per hectare in 2011, is nominated. The committee will choose from among a record number of nominations including 231 individuals and 47 organisations and the winner of the prize will be announced on October 10. ^ top ^

China should adapt to new norm of growth: Xi (Xinhua)
Chinese President Xi Jinping said Saturday that the country should adapt to new norm for its economic growth and be cool-minded amid slowdown in the world's second-largest economy. Xi made the remark during his inspection tour to central China's Henan Province from Friday to Saturday. "China is still in a significant period of strategic opportunity. We must boost our confidence, adapt to the new normal condition based on the characteristics of China's economic growth in the current phase and stay cool-minded," Xi said. The country's economy has gradually slowed since the international financial crisis in 2008. Its economy expanded by 7.7 percent in both 2012 and 2013, the slowest pace since 1999. However, China should also attach great significance to preventing diversified risks for its economy and take timely countermeasures to reduce potential negative effects, Xi said. "The basic conditions for sustaining the country's growth have not changed, so we should stick to the fundamental principle of seeking progresses while maintaining stability in economic work," he said. The government must continue to coordinate the relations of stabilizing growth, promoting reforms, adjusting structure, improving people's livelihood and preventing risks so as to ensure sound economic growth and social stability, according to Xi. Xi's words are in line with recent message from some other senior officials concerning the direction of China's economic policies. Premier Li Keqiang said at a forum in Hainan Province last month that China will not resort to strong short-term stimulus policies just because of temporary economic fluctuations, but rather pay more attention to sound development in the medium and long run. China will seek growth impetus from deepening reforms, adjusting economic structure and improving people's livelihood, the premier said. On Saturday, China's central bank governor Zhou Xiaochuan reaffirmed the stance at a conference in Beijing, saying that macroeconomic policies should be stable and no massive stimulus should be taken at present. Zhou urged for more accurate judgment about the present economic situation, arguing that short-term economic figures may not be sufficient to help come to conclusions. China's economic growth slowed to a six-quarter low of 7.4 percent in the first quarter of the year, down from a growth of 7.7 percent in the final quarter of 2013. In spite of the slowdown, the pace was within a reasonable range, as the government has set the annual growth target for this year at about 7.5 percent. During the two-day inspection, Xi visited rural areas, companies and the inland port in Zhengzhou, one of the terminals for a railway connecting the city with Europe to facilitate cargo transportation. He stressed the significance of agriculture after inspecting a pilot area for high-standard grain production in the city of Kaifeng, saying that grain safety and the work of agriculture, farmers and rural areas are important foundation for all other government work. Xi lauded the independent innovation at the China Railway Engineering Equipment Group Co., Ltd. after visiting an assembly plant of the company. "Equipment manufacturing is the backbone of a country's manufacturing industry, but weakness still exists in many aspects of China's equipment manufacturing," Xi said. China needs to boost investment, enhance research and development efforts to accelerate the development of the sector and gain a say in terms of advanced technology in the world, he said. Through innovation and technological development, the country should push for the transformation from "Made in China" to "Created in China," from "China speed" to "China quality" and from "Chinese products" to "Chinese brands," according to Xi. ^ top ^

Chinese 'princelings' push for release of jailed Nobel laureate Liu Xiaobo (SCMP)
A group of “princelings”, children of China's political elite, has quietly urged the Communist Party leadership to release jailed Nobel laureate Liu Xiaobo on parole to improve the country's international image, two sources said. Liu's release is not high on the agenda of the party, which is trying to push through painful economic, judicial and military reforms amid the most extensive crackdown on corruption in over six decades, the sources with ties to the leadership said, requesting anonymity. But the back channel push for Liu's parole shows that a debate is taking place among leaders about damage to China's reputation caused by his jailing. It also suggests the ruling elite are not monolithic when it comes to views on dissent. Liu, 58, a veteran dissident involved in the 1989 Tiananmen Square pro-democracy protests crushed by the army, was jailed for 11 years in 2009 on subversion charges for organising a petition urging an end to one-party rule. He won the Nobel Peace Prize the following year. “For many princelings, the pros of freeing Liu Xiaobo outweigh the cons,” one of the sources said. “Liu Xiaobo will definitely be freed early. The question is when.” He is eligible for parole after serving half his term. The sources declined to say how big the group of princelings was, but said most were second- or third-generation born in the 1960s or 1970s and some were close to President Xi Jinping. “The biggest worry is hostile forces using Liu Xiaobo once he is freed,” the second source told Reuters. Asked how the message was relayed to the leadership, the source said: “We have our channels... the topic has come up many times during our gatherings.” (…) Liu's wife, Liu Xia, has been put under effective house arrest since shortly after her husband won the Nobel prize, ostensibly to prevent her from talking to the media, and could not be reached. Liu Xia was admitted to hospital in February after police refused to let her seek medical help abroad. (…) President Xi, despite being the son of a reform-minded former vice premier, has shown no sign of wanting to loosen the political system. He said in Belgium last month that China had experimented with multi-party democracy and that it did not work. China's human rights record has been a thorn in its side since the army crackdown on student-led demonstrations for democracy centred on Beijing's Tiananmen Square on June 4, 1989, which attracts endless opprobrium abroad. (…). ^ top ^

Communist Party anti-graft agency detains one of its senior inspectors, Wei Jian (SCMP)
The Communist Party's anti-graft watchdog placed one of its own senior officials under investigation yesterday amid a continuing anti-corruption campaign spearheaded by the nation's top leaders. Wei Jian, the director of the No 4 office under the Central Commission for Discipline Inspection (CCDI), was being probed for "suspected serious violation of discipline and laws" - a description that usually applies to corruption and bribery - according to brief dispatch by Xinhua. Wei was taken away from his office on Sunday, the news portal reported, citing an unnamed source. Wei is the first CCDI official to be implicated in the anti-corruption drive since the watchdog set up its internal affairs branch to police its own agents in a restructuring in March. Wang Qishan, the head of the CCDI, vowed when he announced the restructuring of the commission that there would be "zero tolerance" for ethical violations and abuse by its own inspectors. Since November, Wei had mainly been responsible for affairs related to financial institutions, such as the People's Bank of China. Before that, he was tasked with anti-graft investigations in 11 provinces in the northwest and southwest such as Sichuan, the onetime power base of former security tsar Zhou Yongkang, reported. Observers said the downfall of Wei signified that the probe against Zhou would continue, but it was also an attempt by the anti-graft agency to clean house. "There are many problems within the agency," said Zhang Ming, a political scientist at Renmin University of China. "The investigation against Wei is intended to improve the agency's reputation and authority." Many senior officials from Sichuan, such as provincial party chief Li Chuncheng, who is close to Zhou, have been placed under investigation for corruption since President Xi Jinping launched his anti-graft crusade last year. Gu Su, a professor of political science at Nanjing University, said the CCDI may also target financial institutions in its upcoming investigation because that was the portfolio Wei had recently been responsible for. Wang was also responsible for the nation's financial affairs as a vice-premier before he was named head of the agency. "Wang knows very well the operations and problems facing the financial sector," Gu said. A series of problems facing the sector, such as the rising debt levels of local governments, could be at the heart of corruption, Gu said. ^ top ^

Hangzhou arrests 53 lawbreakers in garbage incinerator protest (Global Times)
Police detained 53 people Monday in Hangzhou, Zhejiang Province, on charges relating to violent incidents during a protest against a planned trash incinerator on Saturday. The suspects were arrested on charges of disturbing public order, provoking trouble and obstructing public functions. The accused allegedly attacked police officers, damaged vehicles and blocked traffic during the mainly peaceful protest, which was marred by clashes with local police as officers attempted to clear a highway blocked by hundreds of demonstrators. Seven other suspects have been put into administrative custody on Monday for rumor-spreading about deaths of civilians during the protest, according to Hangzhou police. Thousands of people allegedly gathered on Saturday in Hangzhou's Yuhang district in protest against the planned incineration plant out of fear of pollution. A local resident surnamed Ma told the Global Times that the notice calling for "suspects" to surrender themselves has kept rolling on local television. Another anonymous resident told the Global Times that some residents are unhappy with how local authorities have dealt with the incident. Shi Jianhua, deputy head of the city's Yuhang district, pledged to halt construction of the plant, which is still in the planning phase, until it "gains public support and legal approval" on Sunday. Construction of potential polluters such as chemical or garbage processing plants has become a flash point in recent years, with multiple demonstrations often held in protest. In most cases, local governments halt the projects or relocate them to other areas. However, local authorities have shown increasing determination to hold responsible those people who turned violent and broke the law during the protests. Tong Zhiwei, a professor with the East China University of Political Science and Law, wrote on his Sina Weibo on Monday that it is unfair that Hangzhou authorities arrested so many protesters but no official was held responsible for misconduct in this incident. ^ top ^

Xiang Nanfu, journalist for Boxun website in the US, arrested (SCMP)
Police in Beijing have detained a man for allegedly selling and posting "fabricated information" to an overseas news website. Analysts said the detention of Xiang Nanfu was part of attempts by the authorities to stifle dissent ahead of the 25th anniversary of the crackdown on the pro-democracy protests in Tiananmen Square in 1989. Xiang, 62, who lives in Beijing, posted untrue stories on the US-based Chinese-language news website Boxun since 2009 that had "seriously harmed the image of the state", a statement on the Beijing police website said. He was being held under criminal detention. State television's news channel and its main evening bulletin reported Xiang had confessed. Footage was shown of him in a green prison vest apologising for his actions. Boxun, which often reports political rumours alongside its own articles, issued a statement describing Xiang as one of its journalists. His detention comes after veteran journalist Gao Yu and other prominent civil rights activists were held by police in recent weeks. Gao was accused of leaking state secrets by giving documents to a foreign website. She was also shown on television making a confession. Civil rights lawyer Pu Zhiqiang is in criminal detention in Beijing after he attended a low-key event at a home in the capital to commemorate the Tiananmen Square crackdown. At least four other people have also been placed in detention after they attended the event. Xiang was detained for allegedly "picking quarrels and provoking trouble", the same charge made against Pu. "Picking quarrels and provoking trouble is a catch-all charge used by the authorities to detain anyone they don't like, especially outspoken intellectuals," said Cheng Yizhong, the former chief editor of the outspoken Southern Metropolis Daily. Hong Kong-based political commentator Johnny Lau Yui-siu said Xiang's case showed Beijing's crackdown against dissent was expanding. "There have been several crackdowns on the mainland over the past year since President Xi Jinping took control over the party," he said. Xiang was accused of providing false stories to Boxun, including claims authorities had harvested organs and buried people alive, according to police. However, Boxun said the report was only about a protest over the issue held outside the United Nations office in Beijing. Boxun founder Watson Meng said Xiang backed up many of his reports with photos and video and called him "trustworthy". Meng denied Xiang was paid "large amounts of US dollars" for his reports. ^ top ^

Top environmental agency defines pollution haze (China Daily)
The Ministry of Environmental Protection has drafted definitions for the conditions that qualify a day as having haze pollution. The primary indicator of haze pollution is PM2.5, particles with a diameter of less than 2.5 microns, which can penetrate the lungs. A haze pollution day occurs when the average concentration of PM2.5 is above 75 micrograms per cubic meter and visibility is less than 5 km for more than six consecutive hours due to an increasing concentration of fine particulate matter in the air. According to the new criteria, Guangzhou had haze pollution for 14 to 15 days in 2013, while Beijing had 138 days with haze pollution and Shenzhen had none. However, a technical standard published by the China Meteorological Administration in 2010 said haze pollution takes place when visibility is less than 10 km due to reasons other than precipitation, sandstorm or dust, which would mean Guangzhou had 51 haze pollution days last year alone. A Guangzhou Daily report also quoted an unnamed insider as saying the ministry's new criteria on haze pollution days seemed "too slack". In November, the ministry published an instruction that urged local governments to establish emergency management systems against haze pollution. According to an earlier report by, 38 cities across China prepared such emergency plans, with measures including shutting down polluting factories, temporary traffic restrictions and suspending classes at primary and middle schools. However, local governments in different regions use different criteria to define haze pollution days, which is the reason the ministry published the unified standard. ^ top ^

China to build new hi-tech power network to help fight pollution (SCMP)
China will build the world's largest high-power electricity transmission network as part of the country's efforts to battle smog and pollution.The State Grid Corporation of China - the world's largest state-owned utilities company - said on its website that the central government would soon approve plans for the construction of 12 power lines connecting the energy-rich interior with heavily industrialised coastal areas. The initial investment is estimated to be at least 210 billion yuan (HK$264 billion). The 12 projects include eight ultra-high-voltage (UHV) lines, which offer distinct advantages over conventional power lines by transmitting electricity over significantly longer distances with far greater efficiency. Energy losses from UHV power lines are five to six times lower than the conventional ones, studies show. Despite some concerns about the project - especially the vulnerability of such a broad network to system-wide failures - the emerging technology is being hailed as an ultimately far cleaner, more efficient way to deliver electricity across the country. State Grid claims UHV power lines can reduce the density of PM2.5 smog particles, which are considered most dangerous to human health, by 4-5 per cent in central and eastern regions and cut coal consumption by 200 million tonnes a year. Once completed, the grid will allow China to relocate many power plants from populated areas near Beijing, Shanghai and Guangzhou to remote inland areas, as UHV lines can transmit power over distances two to three times greater than conventional power lines. In theory, this will greatly help China fight smog and pollution, both rapidly growing sources of public discontent. More than 75 per cent of China's coal reserves are in the northwestern region, while 80 per cent of hydropower is concentrated in the southwest. Yet 70 per cent of electricity is consumed by the populous eastern provinces. While UHV technology is not new, China is putting it to use most aggressively. Similar grids - but on much smaller scales - are being tried in Russia and Japan. The central government decided to approve the hugely expensive projects after they were endorsed in the National Action Plan for Air Pollution Prevention and Control released last year amid a series of smog crises, according to the State Grid report. The UHV lines will stretch from Inner Mongolia, Shanxi, Shaanxi and Yunnan to Beijing, Tianjin, Hebei and the Yangtze and Pearl River deltas. When completed, the UHV grid will allow many coal-fired power plants, regarded as a major contributor to China's air pollution, to be retired. The State Grid report cited the company's president, Liu Zhenya, as saying that UHV technology was the "ultimate cure" for smog. Not everyone is convinced the benefits outweigh potential risks. One concern is that the new power network will be more vulnerable to blackouts as local problems could quickly develop into a system-wide crisis. However, Professor Chen Shuiming, a researcher at Tsinghua University's department of electrical engineering who was involved in drawing up proposals for the new UHV lines, was confident Chinese engineers had solved "nearly all difficult issues" of the technology. But whether the new lines should be built was a political decision, he said. "State Grid will enjoy the biggest benefits. They are using the public's fear of smog to push through these projects. It is a smart [political card], but I have my reservations as to what extent it can effectively reduce air pollution," Chen said. ^ top ^

SPP sees 24% rise in cases of graft, situation 'remains grave' (Global Times)
Prosecutors in China have investigated 10,840 people suspected of involvement in bribery, corruption and embezzlement in the first quarter of this year, the Supreme People's Procuratorate (SPP) said Wednesday at a press conference. Some 6,759 people were investigated for embezzling more than 100,000 yuan ($16,100) or taking bribes of more than 50,000 yuan, accounting for 82.2 percent of all cases. Some 661 people involved in corruption cases were officials at county-level or above, accounting for 6.1 percent of all cases, according to the SPP. Xu Jinhui, director of the SPP's anti-corruption bureau, said the number of corruption cases in the first quarter of this year has risen 24 percent compared with last year and the number of suspects involved in these cases has risen by 19.8 percent. Xu further said the number of cases involving county-level officials or above has seen a rise of 46.9 percent in the first quarter this year. The number of cases in which the bribery amount reached 50,000 yuan or the embezzlement amount reached 100,000 yuan has seen a rise of 26.9 percent. The Communist Party of China (CPC) launched a nationwide campaign, which is still ongoing, to crack down on corruption at the end of 2012. On Wednesday, chief of CPC Central Commission for Discipline Inspection, Wang Qishan, urged Party committees at all levels to shoulder the responsibility to discipline their subordinate groups. "The anti-corruption situation remains grave," said Wang. ^ top ^

Police detain Qu Zhenhong, niece representing rights lawyer Pu Zhiqiang, attorney says (SCMP)
The lawyer and niece of detained rights lawyer Pu Zhiqiang has been placed under criminal detention herself, a veteran lawyer said yesterday. The detention of Qu Zhenhong and two other associates close to Pu has stoked fears that police are collecting further evidence to prosecute the prominent lawyer well known for his defence of sensitive cases. The lawyer, Zhang Sizhi, said he did not know the reason for the detention. It is also unclear when Qu was taken into custody, although several activists have posted messages on Twitter suggesting she was detained on Tuesday for "illegally obtaining personal information". Police this week detained a Chinese employee of Japan's Nihon Keizai financial newspaper, and a Beijing-based NGO worker and former journalist, both of whom are close to Pu. Pu, 49, who took part in the Tiananmen pro-democracy protests in 1989, was detained last week for "picking quarrels and provoking trouble" after attending a May 3 event marking the 25th anniversary of the crackdown. Four others - scholars Xu Youyu and Hao Jian, the activist writer Liu Di and house church leader Hu Shigen - were detained on the same charge after attending the event, which took place at a private residence in Beijing. Pu's detention surprised many, as the 86-year-old Zhang has dealt with authorities for years and was confident in his handling of sensitive rights cases. He has been openly critical of ex-security chief Zhou Yongkang, who is believed to be the subject of a graft investigation. But Teng Biao, a visiting law scholar at the Chinese University of Hong Kong, said: "Nobody can be sure of where the boundaries are unless you steer clear of human rights and sensitive issues … it's all up to the authorities." Teng said he believed the authorities' threshold for tolerating dissent had fallen markedly since last year, when scores of activists were arrested, including some from the New Citizen movement. ^ top ^

President Xi eyes more foreign exchanges (Xinhua)
Chinese President Xi Jinping on Thursday called on organizations to increase the role of people-to-people exchanges so they can contribute more to China's friendship with other countries. Xi made the remarks while addressing a conference marking the 60th anniversary of the Chinese People's Association for Friendship with Foreign Countries (CPAFFC), a non-governmental organization. Xi said the association played an irreplaceable role in promoting China's friendship with other countries. Its development showcased the power of people-to-people engagement in promoting world peace and development, and its important role in China's overall diplomacy. Xi said friendship between peoples is a strength to promote world peace and development, as well as a precondition to realize win-win cooperation. Peoples in all countries should strengthen friendly exchanges and join hands in the face of a complicated international situation and severe global challenges. He called on the association to innovate and explore ways to allow for more people-to-people exchanges, and help build more sister cities and promote exchanges between localities. Xi stressed that China loves peace and will not pursue hegemony. China will insist on a peaceful way of development. The CPAFFC has established friendly cooperation with more than 500 non-governmental organizations in 157 countries, and helped the establishment of 2,106 sister cities and provinces between China and 133 nations. ^ top ^

Size of Chinese family getting smaller (Xinhua)
The average number of family members in a home declined to 3.02 in 2012 from 5.3 in the 1950s as a result of low birth rates, late marriage and population migration, said the report published by the National Health and Family Planning Commission. The figures were 3.96 and 3.10 for 1990 and 2010, respectively. China's family planning policy was first introduced in the late 1970s to rein in the surging population by limiting most urban couples to one child and most rural couples to two children, if the first born was a girl. China has seen a rise in the number of smaller sized family homes. The amount of single-person households doubled from 2000 to 2010 while the figure for two-person families increased by 68 percent in the same period, the report said. The two types accounted for 25 percent of total households in the country in 2000 while the proportion reached nearly 40 percent, or a total of 160 million families, in 2010. The number of single-person households in cities increased 1.5 times from 2000 to 2010 while the figure in the countryside grew 40 percent in the same period, said the report. The report attributed the surge of single-person households to the increase in the population of unmarried people above the age of 30, 43.2 percent of whom live alone. A growing number of well-educated people now decide to marry at a later age because of their careers, the report said, adding that changing attitudes toward marriage also prompted many to stay single. ^ top ^



Beijing launches armed patrol force in wake of civilian attacks (SCMP)
More than 1,300 armed police and 150 patrol vehicles took to Beijing's streets today as the government stepped up security measures following a series of violent attacks on civilians at public facilities. As the 25th anniversary of the Tiananmen Square crackdown approaches, Beijing authorities have vowed that the units will be their “most important” force on the streets as they make it their “exclusive responsibility” to fight “terrorism and serious crimes of violence”, according to the Beijing Times newspaper, quoting the Beijing Municipal Public Security Bureau (PSB). With maximum striking force and minimum response time, the new armed patrol units are built with what the newspaper called a double-three standard: each unit will cover a street section less than three kilometres long, and the site of any incident can be reached within three minutes, the newspaper reported. The armed patrol force comes in the wake of a series of attacks on public places in China which have resulted in multiple deaths and injuries. An attack on Kunming train station two months ago saw a group of nine suspects hack at commuters with knives for nearly half an hour, leaving 29 dead and more than 140 injured. Earlier this month, a knife attack on Guangzhou train station left several people injured. The slow response of local police contributed to the large number of fatalities and prompted doubts over the government's ability to deal with such sudden, violent incidents. Ordinary patrol officers were often occupied by many assignments to deal with non-violence issues, such as thieving, family quarrels or prostitution, according to the Beijing Times. They were often not adequately trained or armed to contain organised, large scale violent attacks, either, the newspaper reported. The new units will each include nine fully armed officers with four assistants and they would rotate to maintain around-the-clock cover. Maximum visibility will be used by the units to deter violent crimes, the municipal police said. The armed vehicles will park in public areas or road intersections with dense population, looking for anyone acting suspiciously. However, the units will cover less than 500km of streets in total, only a fraction of Beijing's over 21,000km long road network. The units will therefore be placed at “critical areas”, although the authorities would not give details on where they were or what qualified as a critical area. Beijing's new armed patrol force is part of a national effort to maintain the stability in urban areas. In Shenzhen, city government staged a two-hour long anti-terror drill amid a heavy downpour on Sunday, mobilizing a large number of armed forces including tactical units and armed helicopters. Following the attack in Guangzhou train station last week, top level officials with the Ministry of Public Security visited train stations in Changsha, Beijing and Shanghai to inspect the implementation of security measures. Liu Siyue, an accountant in Beijing's Chaoyang district, said he was disturbed by the increase in security forces on streets. “More than once I have been asked for my ID card by a policeman when walking in downtown areas. I feel very uncomfortable about this,” he said. But Li Yuanyuan, a public servant in Dongcheng district, said she felt safer with the presence of the new patrolling force. “It is the price we pay for safety. It is unavoidable,” she said. “A few more attacks can make us as terrified as the Americans.” ^ top ^

Beijing firm to pay biggest air pollution fine under new rule (Global Times)
Beijing imposed a 300,000 yuan ($48,030) pollution penalty on a local company Monday, the largest fine since new pollution regulations started in March, environmental authorities said. Babcock & Wilcox Beijing Company is facing administrative punishment due to the release of volatile organic compounds to the air. Later investigation showed that the electronic heater manufacturer in Shijingshan district often paints its heaters in open space covering 500,000 square meters and some 100 tons of anti-rust paint is used every year. Beijing's environmental protection bureau said the company has been monitored and was punished twice by district and municipal environment authorities in the past two years. The bureau delivered the administrative punishment decision on May 6 and the company must correct its behavior and pay the fine before June 1. Beijing aims for a 25 percent reduction of PM2.5 by 2017, which many blame for causing the city's heavy smog. About 1 trillion yuan will be invested in the next five years in clean air efforts. ^ top ^



Shanghai airports safer (Global Times)
Starting Thursday, airports in Shanghai begin to upgrade their security measures with better explosive detection and more physical security inspection. Shanghai Pudong International Airport and Shanghai Hongqiao International Airport are reminding travelers to arrive earlier than usual as the new security measures will take extra time. The airports also said that they plan to open extra lanes for security inspection. ^ top ^



Shenzhen residents slam authorities after city paralysed by floods (SCMP)
Shenzhen residents have criticised the city's drainage system after floods paralysed the city. Authorities said up to 430mm of rain fell on Sunday, the heaviest downpour in six years, and caused about 80 million yuan (HK$100 million) in damage. The flooding had eased by midnight on Sunday but thousands of passengers were stranded yesterday at Shenzhen North station until 3pm after dozens of high-speed trains were cancelled when a landslide damaged tracks at Guangming New Zone. An early-morning train from Guangzhou to Hong Kong was also cancelled, according to the MTR Corp. Twelve trains between the cities were cancelled due to Sunday's floods. In Shenzhen, the flooding spurred criticism of the drainage system among residents, especially as the city had spent more than 300 billion yuan on infrastructure upgrades for the Universiade 2010 sporting event. "The situation of the sewers reflects the real quality of the city's infrastructure," said Ray Cai, whose car got stranded. "The Shenzhen government should feel ashamed to call it one of China's most developed cities. A world-class metropolis by 2020? Please forget this dream." According to the Shenzhen Water Affairs Bureau, the city was to spend 32.8 billion yuan between 2011 and next year on water resources, drainage and flood control. "But the officials' accounts in this field are chaotic," said Yang Qin, a Shenzhen lawmaker. "I have little idea how the department uses the budget. "We suffered three torrential downpours of this kind within a year - one on August 30 and another on April 30. Sunday was the third. So far no officials have been punished for the losses."Xiong Yang, of the NGO Green River, said the floods were largely the result of aggressive urbanisation. Vast road networks and destroyed green belts meant some cities struggled to cope with heavy rain, Xiong said. ^ top ^



232 held for spread of terrorism in Xinjiang (Global Times)
Police in Xinjiang Uyghur Autonomous Region have arrested over 200 people in connection with the dissemination of violent or terrorist videos. This comes weeks after the regional government announced a ban on spreading these videos online, or by using a portable storage device. Since the end of March, Xinjiang authorities found 2,229 webpage links, cracked 226 cases and arrested 232 people who have circulated videos promoting terrorism through the Internet and on portable devices. Among those arrested, 71 are in criminal detention, 107 are under administrative detention, while 34 people connected to 17 cases have been prosecuted, the Legal Daily reported. The campaign was jointly announced by Xinjiang's High People's Court, People's Procuratorate, Public Security Bureau, Department of Culture and the Administration for Industry and Commerce on March 31. The use of webpages, microblogs and Internet chatrooms has become more prevalent in spreading extremist ideology that leads to terrorist actions. In the announcement, the Xinjiang government banned the use of all the aforementioned channels, as well as cellphones, computers, portable storage devices, and mobile instant-message applications like WeChat to download, save, or spread terror-related videos. Almost every extremist has seen such videos before they resorted to terrorism, according to the report by the Legal Daily. Some of the videos feature lectures on religious extremism and separatist views, while others circulate rumors or information on methods of making guns and explosives, the official paper reported. In 2013, the East Turkestan Islamic Movement produced 107 videos for terrorist purposes, which exceeded the total amount of all videos from the past years combined, the Legal Daily reported. "Social networking applications like Weibo and WeChat allow quick and widespread transmission of rumors and misleading messages such as accusing the government of oppression," Pan Zhiping, an expert on terrorism issues at the Xinjiang Academy of Social Sciences, told the Global Times. However, these videos are still not the dominant method of spreading the knowledge of weapon-making and explosives, as extremists still rely on face-to-face gatherings when organizing attacks, Turgunjan Tursun, an associate research fellow at the Xinjiang Academy of Social Sciences, told the Global Times. The Internet is used to spread ideology rather than to gather people to launch terrorist attacks, he said. But the influence of visual images and videos are much more stimulating and far-reaching than words, in particular to teenagers of ethnic minorities, who are easily misled, Turgunjan said. ^ top ^

China sends arms trainers to Xinjiang (Xinhua)
A team of arms trainers has been sent to China's northwestern Xinjiang Uygur Autonomous Region to help local police better handle terrorist situations, the ministry of public security said on Tuesday. The team, consisting of 30 trainers from across the country, is part of a three-month program launched in April to train grassroots policemen in using arms, the ministry said. It said training will focus on the legitimate use of weapons, tactical collaboration, emergency response as well as safety protection, and will highlight proper handling of cold arms. In recent years, China has witnessed a string of violent attacks on police, government organs and civilians. Most of the attacks have taken place in Xinjiang. But since last year, attacks have spread beyond the region. According to a report published last week which reviewed China's national security status, ten terrorist attacks were reported in the country in 2013. These included one in Tian'anmen Square in Beijing last October, during which separatists drove a vehicle into a crowd of tourists, killing five and injuring 40. Security experts have also noted an increasing use of cold weapons in attacks. On March 1, knife-wielding assailants killed 29 civilians and injured another 143 at a railway station in the southwestern city of Kunming. The ministry of public security said it hoped the arms trainers will help improve local police's capabilities in "dealing with terrorist offences, resolutely suppressing terrorists' rampant momentum, and safeguarding people's security," it said. ^ top ^

Islamist group 'claims responsibility for Urumqi railway station bombing' (SCMP)
An Islamist militant group called the Turkestan Islamic Party claimed responsibility for the attack at a train station in Urumqi late last month that killed one and injured 79 people, the SITE Monitoring service said. The authorities had said the attack in Xinjiang, home to the Muslim Uygur ethnic group, was carried out by two religious extremists who were also killed in the blast. Xinjiang has been beset by violence for years and a recent series of attacks, some of which Beijing has called terrorism, have unnerved the country. SITE, which tracks Islamist militant statements, said the Turkestan Islamic Party had released a 10-minute video in the Uygur language showing the construction of a briefcase bomb it said was used in the station attack. "A fighter is shown placing the explosive material and shrapnel of bolts inside a box, then inserting the detonation device in a briefcase with the explosive and leaving the trigger exposed in an outside pocket," SITE said. Beijing says it faces a real threat from militant Islamists in Xinjiang who want an independent state called East Turkestan. The authorities say many have links with foreign groups, although rights groups and some foreign experts say there is little evidence to support this. The Turkestan Islamic Party, which Beijing equates with the East Turkestan Islamic Movement, keeps a low profile. Unlike the Taliban, it rarely posts videos promoting its activities or ideology. Foreign Ministry spokeswoman Hua Chunying said she had not seen the video, but she believed it might further bolster China's position on separatist groups. "Some violent extremist terrorist groups have now emerged. They are colluding with foreign groups and are attempting violent activities in Xinjiang and other areas in China intended to destroy China's national policy and social stability," Hua told a regular press briefing. "We hope that everyone can recognise the goal of these violent groups and support the Chinese government's will to crack down on all violent terrorist activities," she said. ^ top ^

Islamic leaders join fight against extremism (China Daily)
China's top Islamic leaders urged the nation's Muslims to resist religious extremism and fight terrorism after a number of violent attacks in the Xinjiang Uygur autonomous region in March and April. Around 80 religious leaders and scholars discussed Islamic doctrine by quoting the Quran and the teachings of the Prophet Muhammad on Wednesday and Thursday in Urumqi, the region's capital. On Thursday, Islamic leaders in China passed a proposal calling on all Muslims in the country to regulate their behavior, resist religious extremism and improve their moral outlook. Abulitif Abdureyim, director of the Xinjiang Islamic Association, said governments at all levels in the region are battling religious extremism. "The attackers who carried out the terrorist activities cannot go to heaven because they have violated the sayings in the Quran," he said. Wang Yujie, a professor of religious studies at Renmin University of China, said separatist forces are the main source of terrorism in Xinjiang. In recent years, China has seen a number of violent attacks on police, government organs and civilians. Most of the attacks have taken place in Xinjiang. A national security blue paper said on May 6 that religious extremism was the major reason for 10 violent terrorist attacks last year. On March 31, the regional government banned the spread of religious extremism and violence. In less than 40 days, police arrested and detained more than 200 suspects who produced, uploaded or forwarded videos or audios featuring religious extremism and violence, including instructions on how to make bombs. On April 30, a blast at a railway station in Urumqi killed three people and injured 79. A video released by a group called the "Turkestan Islamic Party" claimed responsibility for the attack. The Foreign Ministry said on Wednesday that the claim has yet to be verified. On March 1, knife-wielding terrorists killed 29 people and injured 143 at a railway station in Kunming, capital of Yunnan province. The East Turkestan Islamic Movement, listed by the United Nations as a terrorist group, expressed support for the attack days later in an online video. ETIM also claimed responsibility for an attack at Tian'anmen Square in October 2013 that killed five people and injured 40. Kahar Smayi, the leader of a mosque in Kuqa county in Xinjiang, said he was worried that the spreading of religious extremism at the grassroots level might cause more terrorist attacks. "We are taking training courses and lectures on the Islamic doctrine to improve the believers' quality," he said. During an inspection tour of Xinjiang in April, President Xi Jinping urged police officers to devise "effective ways" to deal with terrorists, the third time in a month he has spoken about the issue of fighting terrorism. A team of weapons trainers was sent this week by the Ministry of Public Security to Xinjiang to help train local police for terrorist situations. ^ top ^



Hong Kong is Europe's best connector to Chinese mainland: C Y Leung (Xinhua)
Chief Executive of the Hong Kong Special Administrative Region (SAR) of China, Leung Chun-ying, also known as C Y Leung, on Thursday said Hong Kong is Europe's best connector to the mainland of China. He made the remarks while addressing business leaders at two events during his brief visit in Belgium, according to a statement issued by the Hong Kong SAR Government's press release site. Leung highlighted Hong Kong's strengths as a global financial center in the Asian time zone, connecting Chinese and international financial markets. Addressing a breakfast meeting with business leaders attending the European Business Summit, he said, "The internationalisation of the Renminbi is a dominant trend in global finance and Hong Kong is the most effective partner to give European firms a competitive edge." Speaking at a luncheon with representatives of the Belgium Hong Kong Society and other business leaders in Belgium, Leung invited the participants to make the best use of Hong Kong's advantages to seize the huge opportunities in the mainland of China and across Asia. Leung arrived in Brussels Wednesday afternoon for a two-day visit during which he also met with European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy. According to the statement, Leung and the EU leaders exchanged views on issues of mutual interest, including further strengthening of the ties between Hong Kong and the European Union (EU) and how EU companies can capitalize on the role of Hong Kong as China's global trade and financial center. ^ top ^



Macau casinos to be handed card scam deadline (SCMP)
Macau casinos will be handed a deadline by which to get rid of illegal China UnionPay mobile swipe card devices or face a crackdown on the city's multimillion-dollar illegal cash-transfer business, gaming insiders say. The news comes a week after it emerged that tighter curbs on China's only payment card being used to circumvent national currency controls were on the way. People with knowledge of the planned squeeze have told the South China Morning Post that a deadline of July 1 will be set by Macau's Monetary Authority. It is understood that discussions are also under way that could see the crackdown apply to shops on or around casino floors with officially registered fixed swipe card devices. It is known that these shops sell goods which can quickly be returned for cash in what is a form of currency transaction. Informed analysts believe the business could have involved as much as 40 billion yuan (HK$50.3 billion) last year. The crackdown will be backed by Beijing, which controls state-owned China UnionPay. The past week's developments - which rattled normally high-performing casino stocks - come amid speculation over possible moves by Beijing to restrict visas for Macau as the anti-corruption campaign of President Xi Jinping continues. Macau attracted about 29 million tourists last year. Mainland visitors can legally take 20,000 yuan into Macau and withdraw as much as 10,000 yuan a day at cash machines with each card they possess. Last night, in response to questions about the deadline from the Post, the Monetary Authority of Macau said that UnionPay had been restricting the use of its cards in the gaming industry "since its inception". While not confirming the July 1 deadline, the statement added: "During the course of on-going supervision of card acquiring services by banks, the monetary authority may, in accordance with any changes in and development of the market, streamline or strengthen relevant risk management and on-going customers' due diligence, with the objective of promoting healthy development of the sector." China UnionPay referred the Post to the Monetary Authority statement. News of a deadline comes as reports in Macau quoted SJM Holdings chief executive Ambrose So Shu-fai as saying that tighter controls by China UnionPay and the Macau authorities could have an impact on casino revenues. Mobile UnionPay payment devices from the mainland have illegally entered Macau at a rapid rate and are being used for unauthorised dealings that appear as domestic transactions, circumventing currency controls. The mobile swipe devices are also used to evade tax on the mainland, which is why they require authorisation for use there. Macau police have carried out a handful of raids in and around casinos in recent months and seized devices and cash. But the problem had reached dimensions that the central government could no longer ignore, said a gaming analyst. Last week, the Macau General Chamber of Pawnbrokers said the illicit trade had caused their business to slump by 40 per cent. None of the major casinos contacted for comment on the latest developments had responded by press time. ^ top ^

Wynn Macau rejects US trade unionist's accusation it works with crime-linked junkets (SCMP)
One of the world's biggest casino operators issued an angry rebuke last night after a United States trade union boss accused it of allowing organised crime-linked junket operators to do business at its Macau property. Jeff Fiedler, the man behind a short-lived 2012 US-based whistle-blowing-style website which had aimed to lift the lid on gangland involvement in casinos and lax gaming regulation, has accused Wynn Macau of allowing known associates of 14K triad boss "Broken Tooth" Wan Kuok-koi to promote VIP gaming in its Macau property. Fiedler, who is director of special projects and initiatives for the International Union of Operating Engineers (IUOE), which represents engineers in casinos in Nevada - also accused the Macau Gaming Inspection and Coordination Bureau (DICJ) of failing to determine properly what is or is not a "suitable'' junket operator. In a letter delivered to the DICJ's director, Manuel Joaquim das Neves yesterday, Fiedler questions "how both the DICJ's and Wynn Macau's compliance departments cleared as 'suitable' a junket operator who has been in business partnerships with members of the 14K triad convicted of triad crimes in Macau." But last night Wynn Macau lashed out at what they described as "reckless'' accusations. "Mr Fiedler's latest actions are those of a bitter, unsuccessful union boss who lost representation of employees in Mr [Steve] Wynn's prior company, Mirage Resorts," said a statement. "The Operating Engineers have been unable to persuade our Las Vegas employees to support their union. These allegations are merely the latest in a series of reckless actions by Mr Fiedler, all of which lack any credibility and are unworthy of further response. "While Mr Fiedler was able to bully MGM Resorts into surrendering, he will be unable to bully Wynn Resorts. If Mr Fiedler has the courage to accuse us directly of misconduct, we will respond in court at once." The controversy comes at the end of an eventful week for Macau, which has seen shares in the normally well-performing casino companies take a hit amid fears of a crackdown on illegal cash transfers via China's huge and only payment card, UnionPay. Triad boss Wan was released from prison in December 2012 after serving more than 14 years for organised crime offences in Macau before its handover to China in 1999. The Macau Gaming Inspection and Coordination Bureau had not responded to questions by press time last night. ^ top ^



Hundreds attend China's first bitcoin summit, defying Beijing's warning (SCMP)
Several hundred people defied the central government's bitcoin crackdown by attending China's first summit on the digital currency in Beijing this weekend. Venture capitalist Li Xiaolai, who organised the conference, dismissed the suggestion that Beijing would ultimately outlaw the use of digital currencies in the mainland. "Thailand has already banned bitcoin, so has Russia. But who cares if China bans it as long as everyone knows the whole world can't ban it," Li said. He denied that bitcoin users felt threatened by the central government, and said bitcoin posed no threat to Beijing. However, the chance of the government implementing further measures aimed at disrupting the growth of bitcoin on the mainland forced the heads of the five largest bitcoin businesses in China to skip the event. The prominent figures within the bitcoin world wanted to reduce the summit's profile. Since December, the People's Bank of China has launched a series of crackdowns against the digital currency, discouraging banks and payment companies from dealing with money involved in bitcoin trading. Li, who in the past has said he owned a six-figure number of bitcoins - which would make him a multi-millionaire - declined to reveal his bitcoin holding yesterday. He said he was pleased with the turnout. "I'm glad to have an opportunity to introduce … the environment of bitcoin in China. It is a very stunning innovation," Li told attendees. Among them was Zheng Qinen, 23, who quit his job in January despite receiving a "good" salary. He felt he could make money faster by working in the bitcoin industry. "I'm a bitcoin believer, I believe in this technology, and I quit my job because I can't help jumping into this new world. I know I can make a fortune," Zheng said. He described the government's crackdown as "reasonable and logical". "If I was the Chinese government, I would do a similar thing. If there is no restriction - if Beijing doesn't say it is a risky thing, or give warning - then lots of people will lose their money." Zheng did not rule out the possibility of the mainland eventually banning bitcoin. "It might not happen this year but it could happen someday. It's a challenge to the traditional structure of government," he said. Engineer Hui Yenyan, 26, said she had lost 10,000 yuan after buying at the height of the bitcoin boom, only to sell as the price has tumbled. "I'm not happy I lost my money but I hope to get it back," Hui said. "I still think bitcoin will replace money." ^ top ^

Talent shortage hampers FTZ (Global Times)
A survey has found that the China (Shanghai) Pilot Free Trade Zone (FTZ) is suffering from a shortage of high-level talent in the field of finance, local media reported Monday. Towers Watson, a consulting company, surveyed FTZ enterprises about their labor needs on behalf of the Shanghai Committee of the Communist Party of China, according to a report in the Youth Daily. About 8,000 enterprises have registered in the FTZ, about 10 percent of which are foreign enterprises. About 1,000 of the enterprises specialize in investment and finance. Most of the others are in international trade, which has created huge demand for qualified employees in finance and international trade, said Yin Chen, secretary-general of the China (Shanghai) Free Trade Zone Comprehensive Research Centre at Fudan University. The survey also found that enterprises in the FTZ lacked qualified employees in management and information technology. The shortage of qualified employees reflects the shortcomings of Chinese universities, whose graduates lack the practical skills to meet the enterprises' high requirements, Yin told the Global Times. Another reason why enterprises in the FTZ cannot find qualified employees is that most of them lack name recognition in China and do not offer satisfactory salaries, Yin said. Location is also a problem because the FTZ is far away from downtown Shanghai. The survey found that 70 percent of the enterprises prefer returnees from foreign countries who have job experience in finance, marketing, international trade or logistics. These people understand the new rules governing international investment and trade, which will help the FTZ catch up with global trends in these fields, Yin said. To educate more qualified employees, the report advised local universities to cooperate with enterprises to train students in specific industries. Enterprises can provide students with internships, which will help improve their skills. However, there is still a long way to go before enterprises will benefit from this process, so they may hesitate before investing in an internship program, said Yu Liying, a professor with the School of Management at Shanghai University. Yin told the Global Times that the government and related industry associations ought to serve as a bridge between universities and enterprises. ^ top ^

Slowdown in mainland loans as Xi Jinping stresses 'new normal' growth (SCMP)
The amount of new loans extended on the mainland last month was lower than expected, indicating the authorities refrained from adding liquidity to spur growth despite a rapidly cooling property market that has flagged further weakness in the economy. The lingering tightness in liquidity also reflects the regulators' efforts to rein in shadow-banking businesses to prevent systemic risks after several property trusts reportedly defaulted on their products. An approaching peak of property trust repayments is likely to test market stability, analysts say, with more than 120 billion yuan (HK$151 billion) worth of products expected to mature this month. Remarks by President Xi Jinping during a visit to Henan province on Saturday that people should adapt to the "new normal" of economic development have been widely interpreted by observers as suggesting that Beijing remains comfortable with the pace of slowdown in economic growth. Echoing Xi's message, People's Bank of China governor Zhou Xiaochuan told a closed-door forum at the weekend the authorities would not easily resort to massive stimulus in response to short-term fluctuations in economic data, but policy fine-tuning would continue. Aggregate social financing fell by 12 per cent year on year to 1.55 trillion yuan last month, PBOC said on its website yesterday. Trust loans rose 41.7 billion yuan year on year, only a fifth of the increase in April last year. New yuan loans extended by banks reached 774.7 billion yuan last month, below the 880 billion yuan expected by analysts and also lower than the 1.05 trillion yuan issued in March. M2, a gauge of money supply, rose 13.2 per cent at the end of April, accelerating from 12.1 per cent growth in March but slower than the 16.1 per cent growth in April last year. "In the face of calls for stimulus, China's government appears comfortable with a continued slowdown in credit growth," said Mark Williams, chief Asia economist with London-based Capital Economics. Some analysts have warned that the mainland's gross domestic product growth risks slowing further, after easing to 7.4 per cent in the first quarter from 7.7 per cent in the fourth quarter of last year, if the government does not pump in liquidity in a timely manner to help companies, including property developers. The real estate market has been cooling fast in the past few months, thanks to curbs on home sales and bank lending implemented by regulators in response to property bubbles. Land sales and home transactions fell in some cities while some developers are near bankruptcy. China Vanke, the mainland's largest developer by sales, reported a 5 per cent drop in net profit - its first in more than a decade - in the first quarter. Barclays Capital said the government was likely to tolerate further correction and "bad news" in the property market, but that it could announce more supportive measures including broad-based easing if house-price declines reach about 10 per cent. ^ top ^

Facebook would consider opening Beijing office for local advertisers (Global Times)
Facebook said it may consider opening a sales office in China to provide more support to local advertisers who use the website to reach customers overseas. While Vaughan Smith, Facebook's vice president of corporate development, told Reuters it was exploring ways to provide even more support locally, he did not comment on how soon it plans to be in China. Facebook currently has a Hong Kong sales office with a staff of 30 to 40 people who deal with advertisers locally and in the Chinese mainland, where its services are inaccessible. The sales office would, for the first time, put Facebook employees inside the Chinese mainland. Several Chinese companies, such as Tsingtao Beer, VANCL, an Internet fashion brand, and Povos, an electric appliance company based in Shanghai, have already started marketing their products to global customers through Facebook. "The investment in brand promotion on social networking platforms has already exceeded those on search engines. For Chinese companies to enter global market, social networking websites have become increasingly important," the 21st Century Business Herald quoted Shan Liang, an executive director of Soci-Link, a company that helps promote Chinese brands on Facebook, as saying. Bloomberg on Monday reported that Facebook could open an office in China within a year, citing a person familiar with the matter. The world's largest social networking company is in talks to lease space in the Fortune Financial Center in Beijing's central business district, Bloomberg said. The news came after Sina Corp's Weibo, a Chinese social networking service that works like Twitter, went public in the US last month. ^ top ^

Report alerts Chinese firms to international anti-corruption rules (Global Times)
China released the first report on international rules and common practice on combating corruption to the country's corporate sector Tuesday. The report, Go Global: International Business Anti-Corruption Rules Research, is the first to be jointly presented by the Bank of China, the International Chamber of Commerce (ICC), the China Chamber of International Commerce and Renmin University of China. The report marks the beginning of international cooperation among non-governmental sectors in fighting corruption as more Chinese companies go global. Corruption has become the biggest stumbling block for local corporations to expand their business abroad, according to the report. "Corruption slows the growth of China's companies, and this could have been avoided if companies understood the international business environment and regulations," Chen Yulu, president of Remin University of China, said Tuesday. Twelve Chinese enterprises were blacklisted by the World Bank in recent years over allegations of corruption, Zhang Yanling, former deputy governor of the Bank of China, who led the drafting of the report, said Tuesday. The report also quoted research from the Ministry of Commerce to remind local firms to be aware that local corruption could impact the international reputation of Chinese firms. Among 74 companies investigated and punished for corruption in America, 24 cases took place in China. These included well-known multinational corporations like Siemens and IBM. Anti-corruption is high on both the national and international agendas, stated the report. The central government pledged greater efforts in eliminating corruption during the 18th National Congress of the Communist Party of China. It has also become one of the major issues at G20 summits since 2009. The report is a local translation of the ICC Anti-corruption Clause and ICC Rules of Combating Corruption, which details common rules and regulations of business dealings in the global business community, such as how to establish procedures to deal with gifts offered by business partners. Zhang expects the advice will reach the corporate sector through education and media promotion. "We hope the report will serve as a reference for local enterprises to keep away from corruption, and to encourage further discussion on the issue," she added. ^ top ^

Apec trade ministers urged to restart talks on tech tariff cuts (SCMP)
More than 80 industry groups from around the world have called on the Asia-Pacific Economic Cooperation trade ministers gathering in China this weekend to help restart stalled talks on expanding tariff cuts on information and communications technology products. China, which is hosting key Apec meetings, seminars and workshops this year, will be presiding over the two-day meeting of ministers responsible for trade, starting on Saturday in Qingdao, Shandong province. In a joint statement released on Tuesday in the United States, the industry associations urged the trade ministers "to take active steps to restart the tariff-elimination negotiations" for an expanded Information Technology Agreement. Specifically, the groups called on the "Apec economies participating in the negotiations to exercise strong leadership, embrace the long-term benefits of ITA expansion, and limit product sensitivities so an ambitious outcome can be achieved as soon as possible". They pointed out that Apec "has deep ties with ITA. The Apec ministers meeting in Singapore in 1995 played a critical role in helping to launch the ITA". The groups included the American Chamber of Commerce, the Consumer Electronics Association, DigitalEurope, the Semiconductor Industry Association, the Japan Electrical Manufacturers' Association, the Taipei Computer Association and the Hong Kong Information Technology Federation. Broadening the scope of the ITA, a global pact set up under the World Trade Organisation, is forecast to increase global trade in information and communications technology products to more than US$5 trillion this year from US$1.2 trillion when the deal took effect in 1996, the Information Technology and Innovation Foundation, a US-based think tank, said. The trade groups said the expanded ITA "would do even more to help drive innovation, accelerate productivity, create jobs, lower consumer prices and bridge communities across the globe in ways unimagined 18 years ago, when the agreement was established". Negotiations to expand the scope of the ITA were suspended on November 21 last year after China, the world's biggest exporter and importer of high- technology goods, declined to pare down the list of products - called "sensitivities" - it wanted excluded from an expanded deal. Last year's talks tabled about 250 products in addition to the 190 duty-free items originally covered by the ITA. China offered a deal-breaking "sensitivities" list of about 140 products, of which 57 items were for exclusion and the rest for longer tariff phase-out periods. "The Chinese have had six months to reflect on how ITA expansion would be good for China in terms of growth and innovation," John Neuffer, the senior vice-president for global policy at the Information Technology Industry Council, a US-based advocacy group, told the South China Morning Post yesterday. "[China] has an excellent opportunity to help deliver a key Apec deliverable by showing greater ambition on ITA expansion and playing a constructive role in driving the negotiations to a conclusion." In a statement released in October, Apec economic leaders supported an ITA expansion that was "commercially significant, credible, pragmatic, balanced and reflective of the dynamic technological developments in the information tech- nology sector over the last 16 years". The Information Technology and Innovation Foundation has estimated that increased global demand for information and communications technology products induced by wider ITA tariff cuts would boost China's exports of these goods by US$12 billion annually. Formal ITA negotiations are held at the WTO's headquarters in Geneva, Switzerland. There are 79 ITA signatories, accounting for about 97 per cent of global trade in information and communications technology products. ^ top ^

Shanxi body passes coal measures (Global Times)
The Shanxi Coal Industry Bureau has passed a set of measures to boost the sluggish local coal market, the 21st Century Business Herald reported Thursday. A staff member of Datong Coal Mine Group, a major State-owned coal company in North China's Shanxi Province, was quoted by the report as saying that the 17 measures are now waiting for the approval of higher authorities. According to the report, the measures include the suspension of a deposit system for mine environmental restoration and control, the halting of levying fees for the coal sustainable development fund, and halving of the service charge for coal trading. In July 2013, the Shanxi provincial government rolled out a set of 20 policies to help local coal companies ease or get rid of losses. The current spot price for coal with heating value of 5,500 kilocalories per kilogram is 532 yuan per ton, falling from 600 yuan per ton in July 2013, said the report. In the first quarter, Shanxi saw coal sales of 94.7 billion yuan, down 21.3 percent year-on-year, the Shanxi Daily reported on May 4. Besides Shanxi, other regions where coal is also the pillar industry have also issued policies to save local coal firms from losses and overcapacity. Given the oversupply, the net profit of major coal companies slumped 41.2 percent year-on-year to 32.32 billion yuan in the first quarter of this year, read data from the China National Coal Association. There have also been reports that a ban on coal imports may be launched soon. ^ top ^

Banks' bad loan ratio inches up (Global Times)
Chinese banks' non-performing loan ratio edged up to 1.04 percent at the end of March, a shade higher than the 1 percent at the end of last December, the country's bank regulator said on Thursday. The weighted average capital adequacy ratio of Chinese banks fell slightly to 12.13 percent as of the end of the first quarter, from 12.19 percent at the end of December, the China Banking Regulatory Commission said in a statement on its website. In general, a higher capital adequacy ratio is seen as good for the financial system as lenders have more cash to cover the cost of unforeseen risks, benefiting depositors. The downside for investors is that a high ratio could crimp profitability. ^ top ^


DPRK and South Korea

North Korea renews threat to conduct nuclear test (Global Times)
North Korea renewed a threat on Saturday to conduct a nuclear test amid heightened concern that the state with a stockpile of missiles may set off an atomic device for the fourth time on the path to building a nuclear arsenal. North Korea's official Rodong Sinmun newspaper said the country was justified in using all available means at its disposal to counter aggressive challenges by the United States and South Korea aimed at stifling its sovereignty. North Korea clarifies "its resolute stand that it would take counter-measures including nuclear test to protect the sovereignty and dignity," the newspaper said in a commentary carried by the official KCNA news agency. The threat comes days after statements by South Korea's defense minister that preparations for a new test appear to be near completion although analysis by an American think tank last week suggested a test may not be imminent. A US official said the United States is "closely monitoring" the situation on the Korean Peninsula and urged North Korea to refrain from actions that could threaten regional peace. "The United States remains steadfast in its commitment to the defense of its allies and continues to coordinate closely with both the Republic of Korea and Japan," National Security Council spokesman Patrick Ventrell said in an e-mailed statement. North Korea had stepped up the threat in March to show off its military strength to counter what it said was hostility led by the United States after the UN Security Council condemned Pyongyang's launch of mid-range missiles into the sea. ^ top ^

Two Koreas trade barbs (Global Times)
The two Koreas engaged in an escalating war of words Monday over crashed spy drones. South Korea's defense ministry said last week an investigation into three drones that crashed in South Korea had provided proof that they were all flown from the North, which Pyongyang denied. Arguing North Korea barely deserved to be regarded as a proper country, ministry spokesman Kim Min-seok said it existed purely to serve the pleasure of leader Kim Jong-un. He went on to suggest it would be best if North Korea simply "vanished as soon as possible." In a statement earlier Monday carried by the North's official KCNA news agency, a military spokesman called the South's findings a provocative "charade for confrontation." ^ top ^

DPRK warns S. Korea of "dear price" for slandering (Global Times)
The Democratic People's Republic of Korea (DPRK) warned Tuesday that the South Korean government would pay a dear price for flagrant slandering. Seoul's Defense Ministry spokesman Kim Min Seok told a press briefing Monday that "the North is an abnormal state and should vanish as soon as possible" while denouncing Pyongyang's denial of sending drones to the South. In response to the remarks, the powerful National Defense Commission (NDC) of the DPRK on Tuesday slammed the South Korean official's verbal attacks as "intolerable." "What the Park group uttered this time is an undisguised revelation of its wild ambition to achieve unification by absorption and a declaration of all-out confrontation with the DPRK's social system," the official KCNA news agency quoted the NDC as saying. South Korea's Defense Ministry said that three drones that crashed across the border in late March and early April were all sent from the DPRK, citing an analysis of geographical data retrieved from the spy aircraft. The NDC said on Sunday that Pyongyang has no involvement in the drone case, proposing once again that the two Koreas conduct a joint probe into the case, a demand soon spurned by South Korea. ^ top ^

Another drone found on mountain in S. Korea (Xinhua)
Another drone was found on a mountain near Seoul, South Korea's capital, after the defense ministry concluded three drones discovered in March and April were flown by the Democratic People's Republic of Korea (DPRK), local media reported Wednesday. A flying object, believed to be an unmanned aerial vehicle (UAV), was found on Mount Cheonggye, southeast of Seoul, military officials was quoted by local media as saying. An unidentified hiker reported it to the police, who transferred it to the military. A military investigation team was dispatched to the scene to recover and examine where it came from. The UAV was similar in color with the three drones, which the South Korean military claimed came from the DPRK, but it was different in shape with the three drones. The South Korean military said last Thursday that the three drones were programmed to take off from and return to the DPRK based on investigation into built-in memory chips, calling the pre-arranged coordinates as "smoking gun" to prove the drones came from the DPRK. The drones were equipped with digital cameras, capturing images of military installations near the Demilitarized zone and the Blue House in Seoul where President Park Geun-hye's residence and office are located. ^ top ^

Kim Jong-un in US game (Global Times)
A video game featuring North Korean leader Kim Jong-un battling US troops has been created by a US video game company, reported on Wednesday. In the game Glorious Leader, Kim rushes through the streets of Pyongyang and gallivants through forests on a unicorn. Dennis Rodman assists. "Battle through seven unique levels as you defeat waves of imperialists, combat over-the-top bosses, and ride unicorns!" Moneyhourse Games said on its website. ^ top ^



The first part of 500 million USD loan by China Government agreed in 2011 will be spent for “Highway along the Tuul River” and “Yarmag Bridge” (Info Mongolia)
In June 2011, the Governments of Mongolia and the People's Republic of China signed a strategic partnership agreement in Beijing, in the meantime, the Government of China agreed to provide a 500 million USD loan to Mongolia. Later, the Government of Mongolia issued a list of tasks to be financed by this fund at its Cabinet meeting held on March 30, 2013. According to Cabinet decision from May 10, 2014, 193 million USD from total 500 million USD loan will be spent to finance the construction of “Highway along the Tuul River” and “Yarmag Bridge” as part of the “Street” projects. Minister of Economic Development N.Batbayar is obliged to establish and manage the project agreements with China side. Also, each loan agreement for a project to establish with China will be submitted to the Government and if project finance would lack, Minister N.Batbayar is entrusted to negotiate with China part for additional fund. ^ top ^

Ambassador of the State of Israel to Mongolia is visiting Ulaanbaatar (Info Mongolia)
Minister for Foreign Affairs of Mongolia Mr. Luvsanvandan BOLD received in his office a non-resident Ambassador of the State of Israel to Mongolia Mr. Matan Vilnai in Ulaanbaatar on May 13, 2014. During the meeting, Minister L.Bold expressed his satisfaction with strengthening Mongolia-Israel friendly relations and cooperation, and offered to host a regular consultative meeting between the Foreign Ministries of the two countries in the second half of this year. Minister L.Bold extended congratulations on the Israeli Declaration of Independence that marks annually on May 14 since 1948. The sides also exchanged views on issues pertaining to bilateral cooperation in the political, economic, health and agricultural spheres. Mongolia and the State of Israel have established the diplomatic relations on October 02, 1991. ^ top ^

UNICEF and National Authority for Children of Mongolia to broaden its collaboration (Info Mongolia)
On May 12, 2014, Director of the National Authority for Children of Mongolia Ms. I.Narantuya received in her office the UNICEF Mongolia's Representative, Mr. Mohamed Malick Fall, where representatives from both sides have attended. During the meeting, parties discussed issues of further collaboration to carry out, for instances, sides negotiated to submit its voices to Mongolian National Council for Children, to co-organize the International Day for Protection of Children observing in Mongolia as the Mothers' and Children's Day on June First with the Office of the President of Mongolia, to report public the studies on children welfare and circumstances, and joint writing of the Fifth Periodic Report on Convention on the Rights of the Child of Mongolia as well as UNICEF medium-term program evaluation process. ^ top ^

Mongolia's nuclear free status was discussed in New York (Info Mongolia)
The Preparatory Committee for the 2015 Review Conference of the Parties to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) held its third session at the United Nations Office in New York from April 28 to May 09, 2014. Following the Conference, Mongolian participating delegates met with five nuclear powers in New York, United States, reports the Ministry of Foreign Affairs of Mongolia on May 14, 2014. The parties deliberated a draft resolution on Mongolia's status to be issued at UN General Assembly session. Mongolia proposed including a provision recognizing fully the Mongolia's status by the international community in the draft, seeking thereby a support from the nuclear powers. In considering that the Mongolia's proposal and its consequences shall be deliberated, the parties agreed to go on discussing during the UN GA session. ^ top ^


Mrs. Lauranne Peman
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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