Der wöchentliche Presserückblick der Schweizer Botschaft in der VR China
The Weekly Press Review of the Swiss Embassy in the People's Republic of China
La revue de presse hebdomadaire de l'Ambassade de Suisse en RP de Chine
  24-30.5.2014, No. 526  
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Foreign Policy

Vietnamese woman self-immolates in anti-China protest (SCMP)
Le Thi Tuyet Mai, 67, doused herself with petrol and set it alight in front of the landmark Reunification Palace in Ho Chi Minh City early on Friday, the website of the Thanh Nien newspaper quoted an official in the city as saying. “The fire was extinguished by security guards there after three minutes, but the woman died,” the official, Le Truong Hai Hieu, said. The report said authorities found a can of petrol at the scene and a note in which Mai expressed indignation over the Chinese oil rig and called for its removal. Hieu said Mai set herself on fire over personal problems “and her anger over China's illegal placement of the oil rig in violation of Vietnam's sovereignty”. A video clip of the incident circulated on YouTube. The woman's son also was quoted as saying “she seemed to be sad, frequently following news on TV” about the Vietnam-China dispute. China deployed the giant deep-sea drilling rig in early May, sparking tense confrontations at sea between dozens of Chinese and Vietnamese vessels. The two countries hotly dispute sovereignty of the area, and the confrontation sparked anti-China riots in Vietnam last week. China – which has evacuated thousands of its nationals from Vietnam over the riots – says four Chinese citizens died in the violence. Vietnam says three Chinese were killed. China claims nearly all of the South China Sea, and its Southeast Asian neighbours have expressed growing alarm over what are seen as Beijing's increasingly aggressive actions to underline its claims over waters believed to harbour vast oil and gas deposits. Vietnamese Prime Minister Nguyen Tan Dung said on Wednesday that the deployment of the rig by China had “seriously threatened peace”. ^ top ^

Putin says Russia-China ties enter new stage (Xinhua)
Russian President Vladimir Putin said Saturday that his meeting with Chinese President Xi Jinping earlier this week in Shanghai marked that Russia-China relations have entered a new stage, and that the two countries will roll out all-around cooperation. Putin made the comment in reply to a question on China-Russia ties raised by Zhou Shuchun, vice president of the Xinhua News Agency, during his meeting with representatives of world leading news agencies at the 18th St. Petersburg International Economic Forum. Putin also said that the consensus reached and agreements signed in Shanghai demonstrated a big step forward for the relations between Russia and China. The gas deal inked on Wednesday in Shanghai was historic and significant to both countries, Putin said. For Russia, it is an important opportunity to enter the largest market in the Asia-Pacific, while more natural gas use in China will help the country improve its energy mix and ecological environment in its large cities, Putin said. Putin expressed the hope that Russia and China will continue to strengthen cooperation in nuclear energy, aviation, outer space exploration, medical care and public health, finance, and agriculture. The two countries have started local currency settlement in bilateral trade and will strengthen cooperation in this respect, Putin added. Putin was in Shanghai this week for a state visit and for a summit of the Conference on Interaction and Confidence Building Measures in Asia. China and Russia on Wednesday signed a long-awaited gas deal in Shanghai, ending a decade of natural gas supply talks between the two neighbors. In reply to questions raised by leaders of other news agencies, Putin said Russia and China will jointly celebrate the 70th anniversary of the victory over fascism next year. He urged people not to forget the historical disaster of World War II. On Sunday's presidential election in Ukraine, Putin said Russia will respect the choice of the Ukrainian people and will cooperate with the new authorities. But he held that presidential election in Ukraine should be preceded by a referendum to revise its constitution. Putin said that sanctions imposed on Russia over the Ukraine issue are counterproductive and will lead the Russian, European and global economy to turbulence that is in no one's interests. The ongoing St. Petersburg International Economic Forum shows the willingness of many foreign companies to invest in Russia, said Putin. Citizens in many European countries do not support sanctions against Russia, and policies should be based on people's will, he added. Russia hopes to have fair dialogues on an equal footing with Western countries so as to solve problems in a peaceful way and to have cooperation, he said. Asked about the disputed islands known as the Southern Kurils in Russia and the Northern Territories in Japan, Putin said Moscow is ready for talks with Tokyo over territorial disputes. But he said Moscow was confused by Japanese moves as the country had joined Western countries in imposing sanctions against Russia and halted negotiations over these islands with it. ^ top ^

China fighters in 'dangerous' brush with Japanese plaes (SCMP)
China and Japan traded accusations yesterday after Tokyo said Chinese fighter planes had come within 30 metres of its surveillance aircraft. Japanese Defence Minister Itsunori Onodera termed the events "dangerous", while China warned Japan not to intrude on its naval exercises with Russia. Japan said Chinese SU-27 fighters came as close as 50 metres to a Japanese OP-3C surveillance plane near disputed islets on Saturday and within 30 metres of YS-11EB electronic intelligence aircraft. "Closing in while flying normally over the high seas is impossible," Onodera said. "This is a close encounter that is outright over the top." A ministry official said it was the closest Chinese warplanes had come to aircraft of Japan's Self-Defence Forces. Hours later, in Beijing, the Ministry of National Defence said it was the Japanese planes that had carried out "dangerous actions" despite "no fly" notices being issued before the exercises. "Japanese military planes intruded on the exercise's airspace without permission and carried out dangerous actions, in a serious violation of international laws and standards, which could have easily caused a misunderstanding and even led to a mid-air accident," the ministry said. It called on Tokyo to stop its surveillance of and interference with the Sino-Russia drill. "Such actions will increase tensions in the region and could cause a more drastic incident," said Da Zhigang, an expert in Japanese affairs at the Heilongjiang Academy of Social Sciences. "Both sides should be cautious and restrained." Tensions have been running high between China and its neighbours over Beijing's land and sea claims. Beijing lays claim to Japanese-administered islets in the East China Sea known as the Senkakus in Japan and the Diaoyus by the Chinese. It is also pressing its claims to almost all the South China Sea, brushing aside claims by several Southeast Asian states. China's proclamation last November of an air defence zone covering disputed islands have raised concerns that a minor incident in disputed areas could quickly escalate. Back in April 2001, an American spy plane and a Chinese fighter jet collided near Hainan province. The American crew were detained after crash-landing, while the PLA pilot was never found. China's defence ministry said yesterday the mid-air encounter happened on Saturday morning, as the Sino-Russia navies concluded their three-day drill. That afternoon, eight ships from both sides fired main guns, high-speed guns and rocket depth charges, Xinhua reported. The two navies also conducted a search and rescue exercise. Commanders of the two navies are slated to hold discussions on how the drills went today, while the PLA's Zhengzhou missile destroyer and Russia's Varyag missile cruiser are holding an open day for Shanghai residents to check them out. ^ top ^

China-Russia naval drill concludes (Xinhua)
The Chinese and Russian directors of a joint naval drill on Monday announced the successful conclusion of the seven-day initiative. Alexander Fedotenkov, Russia director of the Joint Sea-2014 exercise and deputy commander of the Russian Navy, said the two sides completed the mission with high competence and gained rich joint command experiences, describing the action as a "pleasant collaboration." A total of 14 warships, two submarines, nine airplanes and six helicopters from both sides took part in the drill, which focused on escorts, search and rescue, identification, anti-submarine work and the freeing of hijacked ships, among other aspects. "The drill was another success in the two countries' joint military actions, showcasing to the world the new level of China-Russia strategic mutual trust and collaboration," said Tian Zhong, Chinese director and deputy commander of the Chinese Navy. According to Tian, there will be further opportunities for the navies of the two countries to cooperate in future. "Joint naval drills are a direct and solid platform for China and Russia to deepen concrete cooperation and communication. They are of profound significance in their efforts to boost capabilities to cope with security threats, safeguard national sovereignty and maritime interests as well as regional security and stability," said Duan Zhaoxian, executive director of the drill. According to Duan, the drill involved testing of weapons that are harder to operate than those tested in previous exercises, and a more exacting confrontation exercise greatly boosted the navies' combat capacities. The two sides have formed a regular system for the organization and implementation of such war games, paving the way for future joint drills. ^ top ^

Explain your cyberspace spying, Washington told (China Daily)
The United States must account for its surveillance activities against other countries and stop "antagonizing" cyberspace, a Chinese government agency said in a report. The US Global Surveillance Record report by the Internet Media Research Center condemned the spying on Chinese leaders and companies. It said China had become a main target for US spying efforts and Chinese leaders, scientific institutions and companies were the key victims. Documents leaked by former US National Security Agency contractor Edward Snowden showed the US targeted Chinese leaders and telecoms equipment company Huawei Technologies. China's Ministry of Commerce, Ministry of Foreign Affairs, Chinese banks and other telecoms companies were also spied on. The report said the US had flouted international law, impinged on human rights and brought "great threats" to cyberspace. It came after the two countries exchanged accusations over cyberattacks in the past week. Last week, the US Department of Justice charged five Chinese military personnel with spying on US companies, an allegation denied and condemned by the Chinese government. China said last week that imported technology products and services used in key sectors would have to undergo a security review process, a policy widely believed to affect leading US companies including Cisco Systems, Microsoft Corp and IBM. Ni Guangnan, an academic at the China Academy of Engineering and a top computer scientist, welcomed the measures. Ni said that countries, institutions and people that had been monitored by the NSA did not realize they were targeted until Snowden made the revelations, "which means these online attacks are always made quietly". The report said the US intelligence agency even spied on the Chinese public by pretending to be players in computer games such as World of Warcraft and Second Life, adding that the majority of players of these online games are Chinese. QQ, the chat software of Internet giant Tencent, one of China's largest technology companies, and Fetion, China Mobile's instant messaging service, were also being monitored by the NSA, documents disclosed by Snowden showed. US wiretapping had been criticized and condemned across the world by countries including Germany, Brazil and Malaysia, the report said, adding that the Chinese government had taken measures to restrict it being monitored. ^ top ^

Japanese jets' intrusion "dangerous, provocative": Chinese general (Xinhua)
Japanese military jets' intrusion into the East China Sea Air Defense Identification Zone on Saturday was dangerous and provocative, a Chinese general said on Tuesday. "Japan unilaterally stirred up the military jets' encounter over the East China Sea," Sun Jianguo, deputy chief of General Staff of the Chinese People's Liberation Army, said of the jets' subsequent confrontation by Chinese counterparts. Two Japanese airplanes, OP3C and YS11EB, intruded into the East China Sea Air Defense Identification Zone on Saturday morning to scout and interfere with China-Russia naval drills, according to the Chinese Defense Ministry. "Japan's move, like its decision to purchase the Diaoyu Islands in 2012 so as to change the status quo, is very dangerous and provocative," Sun said on the sidelines of an international security seminar. He urged Japan to stop any interference in China's legitimate military operations so as to avoid misunderstanding, frictions and conflicts. He said China expects Japan to follow the mainstream of global peace and development, while safeguarding Asian peace and development. "On issues concerning China's sovereignty and territorial integrity, we don't stir up trouble, nor are we afraid of getting into trouble," Sun said. "We will firmly safeguard our legitimate rights." ^ top ^

Tensions between China and Vietnam escalate in row over boat sinking (SCMP)
Tensions between China and Vietnam continued to escalate yesterday as both nations traded accusations over the sinking of a Vietnamese vessel near a controversial oil rig in a disputed area of the South China Sea. Vietnam's foreign ministry lodged a protest with the Chinese embassy in Hanoi, claiming a Chinese vessel rammed and sank a Vietnamese boat on Monday. But the Foreign Ministry in Beijing said the Vietnamese boat went into a restricted area near the oil rig in the Paracel Islands and rammed a Chinese vessel. The Vietnamese boat then sank. The latest spat came after deadly anti-China protests swept across Vietnam, triggered by China's establishment of the oil rig earlier this month. The heated exchanges indicated that the tensions would continue, though military conflict was unlikely, observers said. "With nationalist sentiment running high, especially in Vietnam, it is expected that Hanoi will continue with actions that dismay Beijing," said Xu Liping, an expert on Southeast Asia with the Chinese Academy of Social Sciences. Hanoi said the Vietnamese fishing boat with 10 people on board was rammed on Monday by one of 40 Chinese fishing boats that surrounded it. The crew members were rescued by nearby Vietnamese vessels. The incident occurred 17 nautical miles south of the oil rig. But Beijing hit back, saying the fishing vessel breached the security zone around the oil rig. Foreign Ministry spokesman Qin Gang said: "The direct reason for the incident is that Vietnam has from time to time ignored China's representations, warnings and advice, continuing to disturb the normal operations of Chinese vessels and making dangerous moves on the sea." The rig's operator, China Oilfield Services, said exploration at the rig would continue. Tensions between China and its neighbours, particularly the Philippines, have increased in the South China Sea. But ties between Beijing and Hanoi had been comparatively stable since October, when the two countries agreed to set up a working group to explore the disputed waters. Li Mingjiang, an associate professor at S. Rajaratnam School of International Studies in Singapore, said the latest incident could help Hanoi gain international support as Beijing had refused to move the oil rig away. "China will inevitably need to respond," he said. "And this will help Vietnam gain credit for its public relations in the international arena." Kang Lin, a researcher at the National Institute for South China Sea Studies, said the incident could see the Southeast Asian nations becoming more united against China. He noted that Hanoi said it was closely following an arbitration case brought by the Philippines in a separate maritime dispute with Beijing. "China should have prepared for this trend," he said. But Wu Shicun, the national institute president, said the latest spat would probably be settled through talks. "China does not want the tensions to escalate and it uses only civilian ships around the oil rig," he said. ^ top ^

Major Russian utility may supply China by building coal-fired power plant (China Daily)
Russia's Inter RAO might build the world's largest coal-fired power plant to sell electricity to China in a sign of strengthening bilateral economic and political ties. Chairman Boris Kovalchuk told reporters the Russian power monopoly would examine the cost and timetable required to build the 8-gigawatt plant, which would use coal from the Erkovetskaya deposit in the Amur region in Russia's Far East. The announcement follows a historic $400 billion agreement to sell Russian natural gas to China for the next 30 years. Russia, a leading producer of oil and gas, wants to diversify its energy exports away from its core European market. Inter RAO already supplies China with electricity. A subsidiary, East Energy Co, last year increased electricity exports to China by 33 percent to 3.5 billion kilowatt hours. Kovalchuk said that Inter RAO is looking for a loan from China to build the plant. Analysts have estimated it would cost about $12 billion to build. "If our Chinese partners could make enough of the cheap money they have available, this would of course improve the economics of the project," Kovalchuk said. He said that State-owned China Huaneng Group Corp, with which Inter RAO signed a cooperation deal last week, might participate in the project. China regularly faces power shortages during peak consumption periods as a result of surging coal prices and coal supply bottlenecks as well as transmission constraints. "We want them to take part in it," Kovalchuk said, adding that the Chinese badly need electricity from Russia and want to build plants abroad to help reduce air pollution. ^ top ^

PLA army general calls US 'leading cyber thief' (Xinhua)
A Chinese general on Tuesday called the US the world's leading cyber thief, saying the US cyber spying force should be charged by other countries. "In terms of both military and political intelligence and trade secrets, the US is the world's No.1 cyber thief and its spying force should be indicted," Sun Jianguo, deputy chief of General Staff of the Chinese People's Liberation Army, said on the sidelines of an international security seminar. The US Justice Department last week announced an indictment against five Chinese military officers on allegations of commercial cyber theft. "It is ridiculous for the US side to say that cyber espionage on political and military intelligence is common practice while the theft of commercial secrets is illegal," Sun said. Sun said the US move is like "a thief crying 'stop thief,'" which seriously violates the norms guiding international relations and undermines China-US relations. A report by China's Internet Media Research Center published on Monday said the US has taken advantage of its political, economic, military and technological hegemony to spy without restraint on other countries, including its allies. ^ top ^

Chinese premier meets WEF founder, executive chairman on closer ties (Xinhua)
Chinese Premier Li Keqiang met with World Economic Forum (WEF) Founder and Executive Chairman Klaus Schwab in Beijing on Wednesday, agreeing on closer cooperation between China and the institution. Li said the global economic recovery faced much uncertainty and instability in the current complicated global economic situation. Developed and emerging economies need to help each other, jointly respond to challenges and consolidate the momentum of economic recovery, he said. Li said the Chinese economy has been running smoothly despite the complicated external situation, and the country has made positive progress in structural adjustment. Facing the downward pressure, China sticks to a policy of seeking progress while maintaining stability, and continues to promote stable growth and improve quality of life. China will continue with a proactive fiscal policy, a prudent monetary policy and enhance policy coordination, said the premier.He expressed his hope that those policies would offer a sound environment for development, motivate the people and meet the goals of China's economic and social development of this year. China hopes to keep in close cooperation with the WEF, Li said, expressing his hope the WEF would play a positive role in boosting understanding between China and the international community. It was the second meeting between Li and Schwab in a month following Li's participation in the 2014 WEF conference on Africa in Abuja, capital of Nigeria, earlier in May. Schwab, for his part, said Li's speech at the Abuja conference was very inspiring, and received positive responses from various parties and boosted Africa's confidence in countering challenges. China's reform and development is conducive to global economic recovery and growth, he said. Schwab expressed his appreciation for China's support for the WEF, vowing to play a positive role in promoting global economic governance and economic development through such platforms as Summer Davos Forum. ^ top ^

Better relations sought with Japan (China Daily)
Vice-President Li Yuanchao hosted a group of prominent Japanese industrial figures on Wednesday and asked them to help improve strained relations between China and Japan. Li met the business delegation led by Hiromasa Yonekura, chairman of the Japan Business Federation, in Beijing just days after the countries traded bitter exchanges. Last week, two Japanese military aircraft intruded into the airspace of China's East China Sea Air Defense Identification Zone during joint naval drills by China and Russia. As close neighbors, the two nations should pursue "peace, friendship and cooperation", Li told Yonekura, a frequent visitor to China. The two largest economies in Asia have seen their relationship strained over territorial and historical issues since September 2012, when the Japanese government unilaterally announced its decision to "nationalize" China's Diaoyu Islands in the East China Sea. "An improvement in the China-Japan relationship requires a correct understanding and an appropriate treatment of historical issues, and the Diaoyu Islands," Li said. Repairing the relationship also requires the Japanese to "observe China's development in a correct manner", Li added. Yonekura said his federation will consistently devote efforts to normalize relations between the two countries. Liu Jiangyong, deputy dean of the Institute of Modern International Relations at Tsinghua University, said the islands issue has been widely perceived as a "bottleneck". "Things will get worse" if Japanese Prime Minister Shinzo Abe visits the Yasukuni Shrine in Tokyo — which honors 14 Class-A war criminals of World War II among other war dead — again later this year, Liu added. Yonekura was part of a delegation in November of more than 100 leading Japanese entrepreneurs who visited China in search of business opportunities. During that trip, they met with Vice-Premier Wang Yang. Ma Junwei, deputy director of the Institute of Japanese Studies at the China Institutes of Contemporary International Relations, said: "In contrast to the existing tensions over political and defense agendas, there are robust demands from both countries for more economic cooperation." Tokyo Governor Yoichi Masuzoe visited Beijing in April and Masahiko Koumura, vice-president of Japan's ruling Liberal Democratic Party, led a delegation to China for a three-day visit in early May. "Bilateral ties have suffered and the visiting delegations were trying to find out which field or dimension bears the best chance of a major breakthrough," Ma said. Tadatomo Yoshida, president of Japan's Social Democratic Party, will lead his party delegation's visit to China in June. The group will include former Japanese prime minister Tomoiichi Murayama. Banri Kaieda, president of the Democratic Party of Japan, plans to visit China in July, Japan's leading newspaper Sankei Shimbun reported on Wednesday. ^ top ^

US shield in SK disrupts stability: Chinese FM (Global Times)
China on Wednesday opposed deployment of a US missile defense system in South Korea, calling it "inconducive" to regional stability and strategic balance. "China's stance on the missile defense system has been consistent and clear," foreign ministry spokesman Qin Gang told a daily news briefing when asked to comment on reports that Washington had invited Seoul to join its missile defense system amid. "We believe that the deployment of a missile defense system in this region works against regional stability and strategic balance," Qin said. "We hope the US side will take into consideration reasonable concerns of countries in the region," he added. According to reports, South Korea expressed interest in buying Lockheed Martin's Terminal High Altitude Area Defense (THAAD) missile defense system, which was designed to intercept ballistic missiles in midair. China firmly safeguards the peace and stability of the Korean Peninsula, and is firmly committed to the denuclearization of the peninsula and peaceful settlement of relevant issues via dialogue and consultation, Qin said. China will never ever allow chaos or war near its doorway, said Qin, urging all parties to take concerted efforts, take into consideration the whole situation on the peninsula and stop doing anything that might escalate tensions. Defense ministers of South Korea, the US and Japan are expected to discuss a military intelligence-sharing accord and the US missile defense system during a three-way meeting in Singapore this week, the Yonhap News Agency reported Wednesday. ^ top ^

Senior diplomats to defend China's assertive role in Asia at region's top security forum (SCMP)
China plans to send a team of top diplomats to Asia's premier security forum, the Shangri-La Dialogue, in an attempt to fend off increasing criticism of its assertive role in the region, Chinese scholars and the event's organiser said. This would be the first time Beijing has sent foreign ministry officials to the security-focused event, which opens tomorrow. A foreign policy adviser to the Chinese government said the move was in response to China's deteriorating relationships with the United States and its regional neighbours. Former deputy foreign minister Fu Ying will lead the diplomats, said William Choong, a Shangri-La Dialogue senior fellow for Asia-Pacific security. "There is a broader participation from China this year," Choong said. The size and seniority of the diplomatic corps has not been made public. The foreign ministry did not respond to a request for comment. Fu, known for her sharp tongue and robust defence skills, has left the foreign ministry and now chairs the Foreign Affairs Committee of China's National People's Congress. She attended the Shangri-La Dialogue last year. On the defence side, Deputy Chief of General Staff Wang Guanzhong would lead a delegation of 11 from the People's Liberation Army, Choong said. Several participants of last year's forum said China had changed its approach from being observers to more active engagement by asking robust questions and defending its own position. Fu and other professional diplomats this year could help the Chinese delegation put forward "more professional" arguments in defending China's position, said Shi Yinhong, a professor of international relations at Renmin University. "China faces a more intense and complex environment," Shi said, referring to increasing tensions with the US, Japan, Vietnam and the Philippines. "China hopes to send a stronger and more eloquent delegation. The diplomats will be more professional in defending China's foreign policy." One likely source of heated debate will be Japanese Prime Minister Shinzo Abe's keynote speech at the forum. US Secretary of Defence Chuck Hagel will also deliver remarks, according to the US defence department. China has squared off with its neighbours over disputed waters. Its relationship with Washington also hit a rough patch after President Barack Obama's recent visit to Asia and a decision by US prosecutors to charge five Chinese military officers over cyberespionage. ^ top ^

China, Russia to hold strategic security consultation (Xinhua)
Russian Security Council Secretary Nikolai Patrushev will visit China from June 4 to 6, a Foreign Ministry spokesman said Thursday. Patrushev will attend the 10th round of China-Russia strategic security consultation and the first meeting of a cooperative mechanism on security and law enforcement between the two countries, spokesman Qin Gang said at a daily news briefing. Patrushev's visit is at the invitation of security chief Meng Jianzhu and State Councilor Yang Jiechi. Meng Jianzhu is the head of the Commission for Political and Legal Affairs of the Communist Party of China Central Committee and a member of the Political Bureau of the CPC Central Committee. ^ top ^

Berlin mayor seeks more investment from China (Xinhua)
Berlin Mayor Klaus Wowereit and the German business delegation with which he is visiting China have encouraged more Chinese investment in Berlin. Berlin is a benchmark city for urban mobility and energy supply, as well as information and communication technologies, construction and architecture, and thus a good choice for Asian tourists and investors, he said in Beijing on Thursday. The delegation, scheduled to tour China between Tuesday and Saturday, is made up of 17 enterprises involved in traffic, logistics, energy and the environment. Wowereit expressed hope that the visit can boost understanding between Berlin's enterprises and their Chinese partners. Dr. Eric Schweitzer, president of the Association of German Chambers of Commerce and Industry, and of the Chamber of Commerce and Industry Berlin, said the cutting-edge technology of Berlin enterprises will help boost China's urbanization process. Meanwhile, the visit marks the 20th anniversary of the twinning agreement between Berlin and Beijing. Over the past two decades, Berlin has enjoyed a vibrant and extremely productive partnership with the Chinese capital and the visit should help intensify existing cooperation and create fresh impetus for new joint projects, Wowereit said. In 2013, Berlin's main imports from China included metal, rubber and plastic products, motor vehicles and mining products, while Berlin's main exports to China included machinery, electrical equipment, computers and pharmaceuticals, according to the Chamber of Commerce and Industry Berlin. ^ top ^

Li: Stronger India ties to benefit both nations (China Daily)
Beijing and New Delhi should see each other's development as providing opportunities and work closely to facilitate the construction of a regional economic corridor, Premier Li Keqiang said on Thursday. "China and India, both civilizations with long histories and the world's largest developing countries and emerging markets, are natural cooperative partners," Li said in a telephone call with his Indian counterpart, Narendra Modi, who was sworn in to office on Monday. The telephone conversation was Modi's first with a foreign government leader since taking over as prime minister. Li said China and India need to improve trust, discover more areas with shared interests and jointly promote the establishment of an economic corridor that connects the two countries, as well as Myanmar and Bangladesh. China raised the proposal of building a Bangladesh-China-India-Myanmar Economic Corridor during Li's visit to India last May. The four countries established an inter-government system to help boost economic cooperation in December. Chen Lijun, an expert on Southeast Asia studies at Yunnan Academy of Social Sciences, said India has sped up its pace of boosting the BCIM economic corridor since Li's visit. "India has a strong demand for bolstering cooperation with China. China is an emerging market and a locomotive of the economic growth of developing countries. India wants to take a ride on it," Chen said. Li said bilateral relations have developed substantially over the years due to joint efforts from both sides. "China and India have explored a way of getting along with each other through expanding cooperation and properly managing differences," Li said. This year marks the 60th anniversary of the announcement of the Five Principles of Peaceful Coexistence, which was initially endorsed by China, India and Myanmar (then Burma) in 1954. Li said cooperation and common development between Beijing and New Delhi will benefit both countries and contribute to global efforts to tackle the development problem. Describing the relations with China as "a priority of Indian diplomacy", Modi said India is willing to learn from China's development. "The new government will pay high attention to China-Indian ties from a strategic perspective," Modi said, adding that he welcomed greater economic engagement between the two countries. Boosting the domestic economy is "Modi's top priority", and the Indian public has placed high hope on Modi's economic talents, said Lou Chunhao, an expert on South Asia studies at the China Institute of Contemporary International Relations. "We are willing to work with China to advance cooperation in all areas and work to solve current problems through dialogue," Modi told Li. ^ top ^

China unveils monument (Global Times)
China unveiled a stone monument on Thursday in honor of Korean soldiers who fought for the Korean Peninsula's liberation from Japan's 1910-45 colonial rule, the Yonhap News Agency reported. Since South Korean President Park Geun-hye visited Xi'an, Northwest China's Shaanxi Province in June and suggested the monument, Seoul and Beijing have been working on the proposal over the past 11 months. The unveiling came months after China built a memorial to Ahn Jung-geun, a prominent Korean independence hero who assassinated the peninsula's first Japanese governor-general, Hirobumi Ito, in October 1909. ^ top ^


Domestic Policy

Corruption probe into He Jintao, elder son of ex-Politburo man He Guoqiang (SCMP)
The party's top leaders have approved the launch of a corruption investigation into the elder son of He Guoqiang, a former member of the supreme Politburo Standing Committee, four sources familiar with the matter told the South China Morning Post. The son, He Jintao, is now under house arrest. Wang Qishan, who is in charge of the Central Commission for Discipline Inspection, the Communist Party's anti-corruption investigation department, has briefed He Guoqiang on some of the initial findings, the sources said. He Guoqiang was Wang's immediate predecessor as head of the anti-graft commission and was the eighth most senior official in the party before his retirement in 2012. It is not clear if a younger son, He Jinlei, is also under investigation. The inquiry into He Jintao did not mean his father was implicated, the sources added. The case contrasts with the corruption investigation into the former security tsar Zhou Yongkang, who was also a member of the Politburo Standing Committee. Zhou's elder son, Zhou Bin, was detained as investigators focused on Zhou Yongkang himself. He Guoqiang, 70, once headed the powerful Central Organisation Department that controls more than 70 million Communist Party appointments and assignments across China. He also served as the party chief in Chongqing. Sources said Wang had advised He to persuade his son to cooperate with the investigation. It remains unclear if the son will eventually face criminal charges - the sources said it would depend on the final findings of the investigation and his level of cooperation. President Xi Jinping is believed to have made the final decision to launch the investigation, two sources said. The president urged Wang to "get to the bottom of it" when he was briefed on the corruption investigation into Song Lin, former chairman of the state-run conglomerate China Resources. He Jintao is said to have played a part in the case. The investigation into Song came after he was accused in June by two mainland reporters of misconduct and corruption over coal mine acquisition deals in Shanxi province, but it was only last month that Beijing announced a formal investigation into his affairs. After Song's detention, the Guangming Daily, which is controlled by the party's central propaganda department, raised questions over the case and implied the former executive was protected by a senior leader. "Who was responsible for withholding the top leadership's order to investigate Song for nearly a year? Who resisted against the probe?" the newspaper said in an editorial. Xi's decision to push the investigation into He's son showed his determination to weed out corruption that is undermining the foundations of communist rule, the sources said. The case would also send out a powerful message that family members or close associates of senior leaders would no longer be spared from investigation, even if the former top politicians themselves were not under scrutiny. "Top leaders believe the runaway corruption among relatives or secretaries of senior leaders will sabotage the party's rule if things continue," said one of the sources. The leaders had reached a consensus in the He case in light of the investigations into Zhou and his family, the source said. It has been revealed that many secretaries and relatives of Zhou were involved in allegedly illegal acts. One of the sources said the president would face some "tough battles" ahead as he pressed his campaign against corruption, but Xi also understood he had to continue for the party to clean up its image and consolidate its rule. The president has repeatedly stressed the importance of "zero tolerance to corruption" since taking office and he sees graft as the major threat to the party's legitimacy. He Guoqiang's last public appearance was at an alumni event at the Beijing University of Chemical Technology in September. He also published a book in January, a compilation of his speeches and essays on building the party written during his tenure as head of the anti-corruption commission. An article published by the Hong Kong-based magazine Phoenix Weekly the same month praised He as honest and upright, saying his sons' weddings took place at a simple guest house. The article quoted his unnamed secretary as saying that He urged his family to "be honest" and behave themselves. It also said his secretary felt safe working with him because he was an uncorrupt official. Zhou ranked beneath He in the party hierarchy before his retirement in 2012. The outcome of his case has yet to be made public and is awaiting a final decision from the top leadership. ^ top ^

Anti-terror plans go national (Global Times)
A one-year anti-terrorism campaign in Northwest China's Xinjiang Uyghur Autonomous Region, which vows "ultra-tough measures and unconventional means," will expand nationwide as terrorist threats become a new norm. Analysts said the campaign, which is expected to shake off some unnecessary constraints, will deal with the root cause of terrorism in Xinjiang. The operation in Xinjiang, which was launched Friday and will last until June 2015, came after Thursday's deadly attack at a market in Urumqi, which killed 43, including four assailants, and injured 94. Soon after its launch, it has seen the apprehension of the first batch of terror suspects. According to the Xinhua News Agency, police in Xinjiang's Hotan, Kashi and Aksu have busted 23 terrorist and religious extremist groups, caught over 200 suspects and seized more than 200 explosive devices. Most of them were apprehended in raids early Sunday morning, after local police probed key suspects. "The raids came as a deterrence for terrorists, and were also a concerted action to pressure some other involved in terror activities to turn themselves in," said Xu Jianying, a research fellow with the Research Center for Chinese Borderland History and Geography at the Chinese Academy of Social Sciences, referring to a statement issued by Xinjiang's legal, procuratorate and public security authorities Saturday. The statement said those involved in terror-related activities will be given mitigated punishments if they turn themselves in within 30 days, according to Xinhua. It also encourages the public to send tip-offs. Xu said the tips and surrenders will lead to a follow-up of intelligence for the authorities. "We can expect that the heavy-handed raids will last one or two months, which covers the sensitive period around July 5," he said. July 5 marks the fifth anniversary of deadly riots in Urumqi, in which 197 people were killed and 1,700 injured. The campaign has seen strengthened security in the regional capital over the weekend. A Global Times reporter Sunday saw a SWAT team stationed in front of the International Grand Bazaar, a famous market and tourist attraction in Tianshan district. Cars going into the bazaar need to open up their trunks for security checks and passengers need to open their bags. More police were deployed around schools. A new regulation says no parking is allowed within 100 meters of schools and cars picking up children can only stay temporarily. Security is also tightened in front of supermarkets, malls and entertainment centers such as karaoke parlors. Xinjiang said "ultra-tough measures and unconventional means" will be used in the anti-terror campaign. While focusing on terrorists and religious extremist groups, gun and explosive manufacturing dens and terrorist training camps, the regional government also said it will put some key people, who are related to terrorism and religious extremism, under control, and rectify some key villages and towns. Yang Shu, director of the Institute for Central Asian Studies at Lanzhou University in Gansu Province, told the Global Times that the move is aimed at rooting out religious extremism, the deep-rooted cause of Xinjiang's terror threats. "Those key people may indicate those who have already participated in the spreading of religious extremism or those who are likely to be approached, such as unemployed youngsters." Li Wei, an anti-terrorism expert at the China Institutes of Contemporary International Relations, shares similar sentiments, adding that some villages, where underground preaching activities are prevalent,will also be targeted. "However, despite the stressing of ultra-toughness and unconventional means, the campaign will still be carried out in the framework of law," Li said, regarding it is a strengthening of existing measures. Xu told the Global Times that though the regional government stressed heavy-handed anti-terror measures in the past, it still fell short of strong punishments. "Sometimes, local authorities only dealt with the attacks in a case by case manner. They stopped short of rooting out the whole terror chain," Xu said, citing the repeated attacks in one single town last year. Xu also noted that sometimes local authorities strike terrorists in a secretive manner, simply because those suspects were from minority groups. "These practices made their hands tied in the fight against terrorism. Hopefully, the ongoing campaign could make a difference," he said. Meanwhile, the website of Hong Kong-based Ta Kung Pao reported that the central authority will hold a key work conference on Xinjiang in June, the second such meeting attended by China's leaders. The first work conference on Xinjiang was held in 2010 in the wake of the July 5 riot in 2009. The meeting will be the first held under President Xi Jinping, who visited Xinjiang late April. Experts believe the meeting will focus on maintaining stability and building a lasting peace in the region, and the fight against terrorism will be the priority among priorities in the wake of the surge of attacks. The Ministry of Public Security Sunday announced that police across the country will also start a year-long operation. Police nationwide will pool their information for early identification of terrorist groups and their members. ^ top ^

White paper: Progress made in protecting people's rights (Xinhua/China Daily)
China has effectively safeguarded its citizens' rights of life and health, personal liberty, personal dignity and other rights, according to a government report published on Monday. The re-education-through-labor system was abolished in 2013 after more than 50 years of operation in China, says the report, titled "Progress in China's Human Rights in 2013", issued by the Information Office of the State Council. China has effectively protected the rights of women and children through special campaigns against human trafficking, according to the report. In 2013, the country cracked 5,126 cases of abducted and trafficked women and 2,765 cases of abducted and trafficked children, and united 631 abducted children with their biological parents through the DNA database network of public security organs. Special emphasis has been given to the protection of the rights of people with mental disorders, said the report, adding that the Law on Mental Health took effect on May 1, 2013, and applies the principles of free will and restriction on involuntary hospitalization for patients with mental disorders. The State has seriously punished crimes that undermined people's sense of security and infringed their rights, it says. People's courts at all levels concluded 250,000 cases of homicide, robbery, kidnapping, explosions, rape, trafficking of children and women, and gang-related organized crime, convicting 325,000 people. Measures for preventing and rectifying unjust, false and erroneous charges have been further strengthened, according to the report. In 2013 people's courts at all levels acquitted 825 defendants in accordance with the law, and had retrials of unjust, false and erroneous charges discovered during appeals and quashed the original judgments in these cases. Protection of the rights of criminal suspects, defendants and detainees has been enhanced, said the report. The people's procuratorates further improved synchronized audio and video-recording systems, effectively protecting the legitimate rights of suspects, it added. ^ top ^

Fifth energy official sacked within six days for bribe-taking (Global Times)
Huang Baodong, a former senior official of a State-owned hydropower engineering and construction company, was expelled from the Communist Party of China (CPC) and his office for taking bribes, China's discipline watchdog announced on its website on Monday. Huang, 44, had resigned on March 6 for "personal reasons" from his post as the vice president of the Power Construction Corporation of China (PCCC), according to an earlier notice issued by the company. Huang is the fifth official from the monopolized power sector that authorities have announced was relieved from duty and is the target of investigation over the past six days. "According to the investigation, by taking advantage of his position, Huang took large sums in bribes, a serious offense against the law," said the statement issued by the Central Commission for Discipline Inspection of the CPC. Details of his offense and the evidence have been transferred to judicial organs, the administration noted. The Party has already set its sights on the state-owned energy sector, including the State Grid Corp of China, PetroChina, and its parent firm, China National Petroleum Corp. Earlier this month, the Party's anti-graft watchdog said it was conducting inspections at Power Construction Corp and state-controlled power equipment maker China XD Group. In March, the chairman and the president of China Three Gorges Corporation, the company that operates the $59-billion project, also known as the world's biggest hydropower station, stepped down. However, they have not been accused of any wrongdoing. The PCCC, with 200,000 employees, is responsible for the construction of 65 percent of domestic large- and medium-sized hydropower stations. It planned and developed 80 percent of these domestic projects, including the Three Gorges Dam on the Yangtze River and the South-North Water Diversion project, according to its official website. By the end of 2013, the PCCC was involved in a total of 1,021 contracting projects in 92 countries and regions. Energy is a vital national resource, as well as a major source of funds for the country. The industry easily breeds corruption and forms a chain of interest for corruption, Li Chengyan, director of the Research Center for Government Integrity Building of Peking University, told the beijing-based Legal Mirror. On May 21, prosecutors revealed that they put Hao Weiping, head of the National Energy Administration (NEA)'s nuclear power department, and Wei Pengyuan, vice director of the administration's coal department, under investigation on charges of bribe-taking. On May 23, Xu Yongsheng, the NEA's deputy director, and Wang Jun, head of the organization's renewable energy department, were both put under investigation. According to the Legal Mirror, a total of 18 officials or managers from the power administration or industry have been sacked since March this year. ^ top ^

Tencent's messaging app WeChat target of latest crackdown by officials (SCMP)
The authorities will begin a month-long crackdown on Tencent Holdings' popular WeChat messaging application, state media reported, the latest in a series of curbs on online expression. WeChat, whose Chinese name means micro-message, has quickly become a news source for mobile phone users on the mainland, where most traditional news outlets are heavily censored. "Some people are using this platform to disseminate negative, harmful or illegal information to the public, seriously damaging the internet system and hurting the public interest," according to a report on state-owned China News Service, alleging the messaging service was "causing dissatisfaction among internet users". The crackdown would focus on accounts sending information with the ability to "communicate [widely] and mobilise society", the report said. Accounts accused of spreading rumours and ideas about violence, terrorism, cheating and sex would be targeted, said the report. Tencent could not be immediately reached for comment. The report went on to say that authorities would also seek to weed out domestic and foreign forces seeking to infiltrate and sabotage the nation. Authorities closed dozens of popular internet accounts sending out social or political content in March. Unlike popular microblogging services such as Sina Weibo, where posts can reach millions of people in minutes, WeChat allows users to communicate in small, private circles of friends, and send text and voice messages for free - which is a major part of its success. The Communist Party renewed a campaign to regulate online discourse last year, threatening legal action against people who post rumours online which are reposted more than 500 times or viewed by more than 5,000 people. ^ top ^

Campaign launched to wipe terrorism off Internet (China Daily)
China will launch a campaign to keep terrorism-related video and audio information off the Internet, on grounds that publicity encourages terrorists to commit more violent acts, the State Internet Information Office said. The office announced the move in a video conference attended by heads of provincial Internet information offices. Almost every terrorist involved in recent violence, including the March 1 knife-wielding assailants who killed 29 civilians in Kunming, Yunnan province, and the May 22 bomb attack that killed 43 in Urumqi, capital of the Xinjiang Uygur autonomous region, once listened to or watched videos and audio files related to terrorism, an official with the State office said at the conference. The official did not want to be named. Mei Jianming, director of the Anti-Terrorism Research Center at the People's Public Security University of China, said the Internet has become the main channel for terrorists and religious extremists to recruit, plan, promote and organize terror attacks. "It is a must now. I hope it can sever the communication channels of terrorists and extremists," he said. The situation has been worse this year, as the East Turkistan Islamic Movement and other separatist forces released many more terror videos and audio files through overseas websites, and many of them have spread to China via various means, the official said. The group, which advocates violence to force the separation of Xinjiang from China, has been identified as a terrorist group by China, the United States, the European Union and the United Nations. The official said the State Internet Information Office will step up efforts to crack down on acts of spreading terror videos and audio information that includes attack methods and Internet sales of products to aid in staging attacks. After the attack in Urumqi on April 30, which killed three and injured 79, the East Turkistan Islamic Movement released a video on how to make a briefcase bomb of the type that was used in the attack. It also claimed responsibility for the deadly incident. Since March 31, the police in Xinjiang have detained more than 230 suspects accused of uploading, downloading and spreading audio and video promoting terrorism and extremism. On May 20, courts in the region convicted 39 people. The longest sentence was 15 years. Mei of the anti-terrorism center said it is a challenge to stop the spread of material in digital form because many Internet servers are outside of China and use different technologies. International cooperation, especially with the US and Central Asian countries, is key, he said. ^ top ^

Chinese army regulates sat nav use (China Daily)
The Chinese army on Thursday issued regulations covering how satellite navigation systems are applied in combat. The new rule issued by the Chinese People's Liberation Army (PLA) General Staff Headquarters will take effect on June 1, the PLA said in a statement. The regulation stipulates procedures for sourcing satellite navigation systems as well as their safety management and how they should be used, it said. The General Staff Headquarters said the regulation has provided policy support for management of the systems and will play a vital role in boosting their application to military missions. China's homegrown BeiDou Navigation Satellite System (BDS) began providing positioning, navigation, timing and short message services to civilian users in China and surrounding areas in the Asia-Pacific region in December 2012. China launched the first BDS satellite in 2000. Prior to the official launch of the system a year ago, a preliminary version was used in traffic control, weather forecasting and disaster relief from 2003. ^ top ^



Rules of engagement loosened and helicopters patrol skies (Global Times)
Beijing has stepped up its anti-terrorism operations as heavily armed police increased patrols around the city's hot spots, reinforced by helicopters in the air. The latest instructions from the Ministry of Public Security allows armed police officers from SWAT units in the capital to shoot without identification or warning as long as they are fighting against terrorists. The amount of ammunition police carry has also been doubled, Beijing Evening News reported Monday. Police rarely went armed in Chinese cities until recently. Since Saturday, five police helicopters have been patrolling routes covering train stations, shopping centers and scenic spots at least twice a day, according to the Xinhua News Agency. This is part of a year-long nationwide anti-terrorism campaign following a series of terrorist attacks across the country. The latest attack hit Urumqi last week, killing 43. The area around Beijing's central business district (CBD), including Guomao subway station and the CCTV headquarters, is one of the most heavily guarded spots in the city. "We pay special attention to areas with the biggest crowds," Xia Hongwei, the head of the police team in charge of the area told the Beijing media. Two armed police officers from SWAT units were guarding an exit at Guomao station, while at least seven police cars were seen parking near different exits of the station during the Monday evening rush hour. "Armed patrol vehicles patrol the area everyday around 10 am and 3 pm," a newspaper vendor near the Guomao station told the Global Times on Monday. The area has seen much more frequent police patrols since the rail station attack in Southwest China's Kunming in March, he said. These recent measures demonstrate China's greater efforts in combating terrorism following the terror attacks, said Li Wei, director of the Center of Counter-Terrorism at China Institutes of Contemporary International Relations. Security has been strengthened because the capital city is a tempting target for terrorists, Wang Hongwei, an associate professor of public security at the Renmin University of China, told the Global Times. Three related attackers, believed to be religious extremists from Xinjiang, drove a car into a crowd in Beijing's Tiananmen Square last October, killing two tourists as well as themselves.A poll conducted in nine major cities by the Global Times found that about 65 percent of respondents showed their support for police patrolling while carrying guns. The poll also shows 86.5 percent of the more than 1,300 respondents were confident about the government's ability to protect them from terrorism. Commuters working in the CBD said the increased police force does not affect their daily life. But at the nine subway stations that now requires full-body research, the increased waiting times and growing crowds have drawn concerns that terrorists may see these as attractive targets. ^ top ^



Police identify Urumqi attack suspects (Xinhua)
Police have identified five suspects who took part in a terrorist attack on Thursday that killed 39 innocent people and injured another 94, local authorities said Friday night. Four of the suspects died in the bomb attack and their DNA have been identified. Another one was caught by police on Thursday night in Bayingolin Mongolia Autonomous Prefecture. The suspects, Nurahmat Ablipiz, Memet Memtimin, Raghimjan Memet, Memtimin Mahmat and Ablet Abdukadir, had long been influenced by the religious extremism. They took part in illegal religious activities, watched and listened to terrorist violence video and audio materials, according to the police. They formed a five-member terrorist gang at the end of 2013. In order to carry out terrorist activities, they bought materials for producing explosives as well as vehicles. They made explosive devices and chose the target for their attack. At 7:50 a.m. on Thursday, four members of the gang including Memet Memtimin, carried out the attack. It is the worst attack in five years in the far western region after riots on July 5, 2009 in the regional capital claimed 197 lives and injured more than 1,700. Two vehicles, without license plates, broke through roadside fences and plowed into people at an open-air market in Gongyuanbei Street near Renmin Park at 7:50 a.m. and explosive devices were detonated, said a statement by the Xinjiang Uygur Autonomous Region's publicity department. ^ top ^

Politburo pushes for ethnic unity in restive Xinjiang in wake of terror attacks (SCMP)
National solidarity would be achieved in Xinjiang by promoting bilingual education, "patriotic religious practices" and interaction between ethnic groups, the Politburo said after a meeting yesterday. It called for "religious harmony and elimination of extremism", according to a statement released by Xinhua. Employment would also be a priority, with the goal of ensuring that at least one person in each family has a job. And education levels of all schools across Xinjiang would be enhanced. There should be more construction projects and greater development of natural resources for the benefit of locals. The emphasis on education marks a shift of focus from November's Politburo meeting, which emphasised security, and sets the tone for a conference on Xinjiang next month, the first under President Xi Jinping's rule. The statement after the meeting in Beijing, chaired by Xi, said the goal was to achieve "long-term peace" and "ethnic unity" by cracking down on terrorists and religious extremists. Xinjiang had good momentum for development and overall society was stable, indicating the central government's policy was "completely accurate". But the war on separatists was long term, complicated and urgent. The statement said: "[We must] take the severe crackdown on terrorism as the focus of the current war and curb the spread of terrorist attacks and the filtration of extreme religious powers. "[We must] be confident about our victory and be prepared for the long-term battle and soundly carry out work to maintain Xinjiang's long-term stability." The crackdown on extremists would be maintained to prevent terrorist attacks spreading. Jiang Zhaoyong, a Beijing-based expert on ethnic issues, said the government was addressing a long-standing problem by focusing on education. "Learning Chinese is not only a tool and skill to survive in China, it also opens the door to embrace Chinese culture, which has long been a weak link as many young Uygurs do not know the language. As a result they shut themselves off from Chinese culture and embrace extreme religion." Xinjiang detained more than 200 suspects allegedly involved in terrorist activities this month. They were mostly people born in the 1980s and 1990s. At the last Xinjiang work conference four years ago - held months after violence between Han Chinese and Uygurs in Urumqi left 200 dead - a strategy for long-term development and stability was deployed. Beijing faces a daunting task in fighting violence in Xinjiang and other parts of the country carried out by what the authorities describe as Xinjiang separatists and religious extremists. Last week, two SUVs were driven into a market in Urumqi and explosives were flung out of the vehicles, killing 39 civilians and injuring more than 90. The market attack came less than a month after an explosion at a train station in Urumqi killed three people and wounded 79, just after Xi concluded a visit to Xinjiang. A month earlier, eight Uygurs with knives killed 29 at a Kunming train station. State media said on Friday that the Xinjiang authorities had launched a "one-year campaign against terrorist violence". ^ top ^

'Ambiguous' official being investigated (Global Times)
A local official in Ili prefecture, Northwest China's Xinjiang Uyghur Autonomous Region, has been placed under investigation for harboring an "ambiguous" attitude toward terrorist attacks, revealed an official from the region's disciplinary inspection department. Batur Duwamet, the official under investigation, was a deputy director of the general office of Ili government. During an online interview with news portal Tuesday, Ma Guowei, a deputy head of the regional commission for discipline inspection of the Communist Party of China, said the probe into Duwamet was a result of a tip-off by local people. Ma said Duwamet made public remarks that are inconsistent with the regional government's ethnic policies and held an ambiguous stance over terrorist attacks, but didn't give specific details. "One of the major reasons for frequent terrorist attacks in southern Xinjiang is the irresponsible work style shown by a minority of officials in the face of cardinal issues of right and wrong. Some of them even show an ambiguous attitude," a local official in Xinjiang surnamed Yan told the Global Times. According to him, some officials' dereliction of duty had led to serious consequences in the fight against terrorism. "Once we found the hideout of terrorists was where local officials had inspected several times," he said.  ^ top ^

Amid security crackdown, Xinjiang weighs cash incentive to revive tourism (SCMP)
Officials in Xinjiang are considering offering each tourist 500 yuan (HK$630) as part of an effort to revive the region's flagging tourism industry, state media have reported. Regional authorities are seeking to project an image of stability following a series of violent attacks. On Tuesday, dozens of people were sentenced in a large rally held in a stadium in a city near the Kazakhstan border. Tourist intake has fallen by 40 per cent since last year, China Radio International reported. "Many tourists went skiing and skating in Xinjiang during the winter, but since the deadly knife attack in Kunming in March, many have postponed their tour to Xinjiang," the region's tourism chief, Inam Nesirdin, was quoted as saying. No details were given on how the cash would be paid to tourists. In a display reminiscent of the mainland's revolutionary-era rallies, 55 people were sentenced for crimes including terrorism, separatism and murder before a crowd of 7,000 at a sports stadium in Yining, state media reported. Photographs showed packed stadium stands and trucks parked on the field loaded with prisoners in orange vests, guarded by armed police. The sentencing comes after courts in the region jailed 39 people last week on charges including leading and organising terrorism groups. Thirty-nine people were killed when attackers drove two off-road vehicles into crowds and threw explosives at an open air market in the regional capital of Urumqi last week. A bomb and knife attack at the end of last month at the main railway station in Urumqi killed one bystander and wounded 79 people. Two attackers also died. The attack in Kunming in March, which the authorities have blamed on separatists from Xinjiang, killed 29 people. Regional tourist chief Nesirdin said tourists in Xinjiang should be allowed to easily visit the region's neighbouring countries. Unlike Yunnan province and Guangxi, where domestic tourists can apply for visas to Vietnam, Xinjiang has kept its borders closed. The vast autonomous region had been attracting a large number of visitors before the spate of violent attacks on the mainland. Over the Lunar New Year holiday, more than a million tourists flocked to the region, Xinhua reported in February. More than 1.5 million jobs were in tourism-related industries in the region at the end of last year, according to Xinhua.  ^ top ^

Xi pushes local jobs, legal religion as key for Xinjiang (SCMP)
A push for more local jobs and legal channels for pursuing religious beliefs were among the measures announced at a national Xinjiang affairs meeting that ended yesterday. At the two-day Central Work Conference on Xinjiang, President Xi Jinping said the long-term issue for the restive region remained ethnic unity. The conference, like the first one held four years ago, came amid a renewed wave of violence in Xinjiang and other parts of the country blamed by Beijing on separatists from the restive region, which is home to the Uygur ethnic minority. The Politburo meeting on Monday had outlined the major policy direction for the medium to long term on Xinjiang affairs. It pledged promoting bilingual education and interaction between ethnic groups. The two-day work conference reaffirmed counter-terrorism as an immediate priority. "[We must] push forward the domestic and international front lines in fighting terrorism and strengthen anti-terror cooperation with other countries," Xi told senior officials at the meeting. But in a state television report yesterday, much more coverage was given to detailed measures on ethnic unity, religion, education and economic development. Xi said the basic principle for easing religious tensions was to protect legal religious activities and deter extreme ones. The president noted that people's need for normal religious practices should be protected and that their customs should be respected. "Legal channels for religious people to accurately grasp religious knowledge should be broadened," he added. Professor Yang Shu, from the Institute for Central Asia Studies at Lanzhou University, said the central government was spearheading efforts to remove radical religious thoughts. "Over the past year, some authorities have also cracked down on non-radical religious activities and this has resulted in resentment," Yang said. "The stress on building up legal channels for religious pursuits is an attempt to counter balance the impact caused by radical religious beliefs." Xi said the government would encourage ethnic minorities in the region to work and receive education in the more urbanised parts of the country. He pledged more central government funding to boost school enrolment and promote bilingual education. Premier Li Keqiang said employment was the top livelihood issue for Xinjiang. He called on businesses and investors there to hire more locals. Jiang Zhaoyong, a Beijing-based expert on ethnic issues, said the measures might help the Uygur and other minority ethnic groups improve their livelihoods. "Many national state enterprises had hired a certain proportion of local people during the planned economy era. … But this practice was broken when market reforms accelerated in the past two decades," he said. But Jiang doubted the government's ability to develop the economy in southern Xinjiang. "Geographically, the southern part of Xinjiang lacks natural resources," he said. "I don't know what kinds of industries could be developed in Kashgar and other remote counties in the south."  ^ top ^



Macau entrepreneur and politician Ma Man-kei passes away (SCMP)
Ma Man-kei, renowned Macau entrepreneur and a vice-chairman of the country's top political advisory body has died in Beijing aged 94. The “renowned entrepreneur in Macao” and “senior political adviser of the mainland” died of illness in Beijing at 6pm on Monday, Xinhua reported. Ma, who was also regarded by the state media as “distinguished social activist, patriot and close friend of the Communist Party of China”, was appointed to vice chairman of the eighth, ninth, tenth and 11th National Committee of the Chinese People's Political Consultative Conference since 1993. The tycoon-patriot had been treated for his heart problems in the General Hospital of the People's Liberation Army in Beijing over the recent years since 2002. During the 10th anniversary of Macau handover in December 2009, Jia Qinglin, then-chairman of the National Committee of the Chinese People's Political Consultative Conference, paid him a visit at the hospital. Ma was seen shaking hands and chatting with Jia. Ma, often compared with late Hong Kong tycoon-patriot Henry Fok Ying-tung, was known for exporting necessities into mainland when the country was under the Japanese invasion in the Second World War. His wartime deeds earned him respects from the Communist Party's leaders including Deng Xiaoping, who met him in several occasions during 70s and 80s. Ma was born in October 1919 in Nanhai, Guangdong province and grew up in Guangzhou, where he learned the food trade and ran his father's food trading business at a young age after his father died. He started a business in Hong Kong in late 1930s and moved to Macau and founded several businesses and charity organisations in the 40s. Ma was said to have good relationships with earlier generations of Chinese leaders. Spending a lot of time with local political and economic elites, he also played a part in major developments in the enclave as well as in China-Portugal relations. Ma witnessed the handover of Macau to China which ended the Portuguese era. He praised Macau's continuous development under the leadership of Edmund Ho Hau-wah, the first chief executive of the Macau Special Administrative Region. Ma played a significant role in the preparation of Macau's handover before 1999. He was vice-chairman of the Committee for Drafting of the Basic Law for the Macao Special Administrative Region. He was a close friend to another patriotic businessman Ho Yin, the father of the first Macau's former Chief Executive Edmund Ho Hau-wah. He was honoured with the Grand Medal of Lotus Flower in 2002. ^ top ^

Macau protests force chief executive Fernando Chui to scrap controversial perks bill (SCMP)
Macau's chief executive bowed to public pressure yesterday and scrapped a contentious bill that would have granted lavish retirement packages to top officials. Dr Fernando Chui Sai-on made the dramatic U-turn two days after thousands of protesters converged on the legislature calling for his resignation if he refused to withdraw the controversial proposals. He had previously pledged to shelve the bill after an unprecedented demonstration on Sunday, thought to be the biggest march in the former Portuguese colony since the 1999 handover. A humbled Chui admitted his administration could have done more to explain and solicit opinions on the bill. "We need to listen to people's opinions in order to narrow the differences and form a consensus," he said after an Executive Council meeting. Political scientists believe he is trying to smooth the way for his bid to secure a second five-year term. The bill would have given former chief executives a stipend every month equivalent to 70 per cent of their monthly salary for as long as they are unemployed. Chui's monthly salary is estimated at 270,000 patacas a month. It would have also granted a serving chief executive immunity from criminal charges. Retiring ministers would have received a one-off payment of up to 30 per cent of their monthly wage for each month of service. Protesters saw it as tailor-made for Chui's cabinet, which will see its current term end on December 19. Rally organisers said 20,000 took part in Sunday's rally, with police putting the figure at nearer 7,000. The next day, Chui tried to compromise by asking the Legislative Assembly president to drop the item from discussion on Tuesday, when lawmakers were due to vote on the bill. But protesters still massed outside the legislature demanding that the bill be totally withdrawn. After yesterday's decision, they vowed to keep up the pressure to push for democracy. Sulu Sou Ka-hou, of rally organiser Macau Conscience, described Chui's latest concession as a "small victory" for the city's civil rights movement. "But at the end of the day, the problem today stems from the undemocratic political system we have," Sou said. "The legislature has apparently failed to monitor the government." He said they would organise forums - not necessarily protests - to help residents understand that democracy was the ultimate key to solving the problems. As a first step, he said, a rally would be held outside the legislature on June 8 to demand universal suffrage in elections for the chief executive. Meanwhile, Chui said the secretary for administration and justice would draft a new paper on retirement benefits for public consultation. But Eilo Yu Wing-yat, a political scientist at the University of Macau, said the rallies could prompt Beijing to prepare a substitute for Chui in time for this year's election. "From Hong Kong's experience, Beijing has realised that small incidents can have a big impact [on the election]," he said. "Chui might want to settle the dispute before Beijing actually comes up with a plan B." ^ top ^



Cross-Straits proposals should stick to one-China principle: spokesman (Xinhua)
New proposals by Taiwan to resolve cross-Strait differences should conform to the one-China principle, said a mainland spokesman on Wednesday. "Though the two sides of the Taiwan Strait are yet to be reunified, they both belong to one China, and the cross-Straits relationship is not a state-to-state one," Ma Xiaoguang of the State Council Taiwan Affairs Office said at a press conference. Adhering to the 1992 consensus and opposing "Taiwan independence" is the political basis for peaceful development of cross-Straits ties, he said. "We hope the people of Taiwan will explore ways to solve cross-Strait political differences and put forward proposals for safeguarding and boosting peaceful development of cross-Strait ties on the basis of these principles," Ma said. Ma made the remarks when he was asked to comment on the "greater one China" concept put forward by the island's former Democratic Progressive Party chairman Shih Ming-teh along with several other Taiwan politicians and scholars. They raised the concept on Tuesday, calling for both sides across the Strait form a "limited international legal entity" to handle cross-Straits affairs as a transitional solution to their disputes.  ^ top ^



Silk Road economic cooperation to bring benefits (Xinhua)
Around 2,000 years ago, caravans of camels carrying goods followed specific routes across Eurasia, overcoming deserts and mountains and linking the continent's east and west sides with silk, jewelry and spice. Now the journey's eastern destination, the world's second largest economy, is devoting itself to rejuvenating the ancient route named the Silk Road and bringing economic impetus to countries along the path. Businessmen, scholars and government officials thronged to Northwest China's Xi'an city, the route's easternmost end, for an ongoing forum on investment and trade held this weekend, seeking business opportunities and cooperation. Masimov Kazimham, deputy dean of the UN International Information Academy in Kazakhstan and international economic consultant of the Xi'an government, hoped for agreements on several investment projects. One of his projects was an agricultural cooperation program in the area around Almaty, commercial center of Kazakhstan, where 10,000 hectares of farmland is in need of funds from Chinese enterprises. Meanwhile, merchants from other central Asia countries including Turkmenistan and Uzbekistan have occupied quite a few booths in the exhibition center, their products on display ranging from flour to tapestries embroidered with the pattern of the Ferghana horse. The Silk Road International Exposition, or the 18th Investment and Trade Forum for Cooperation between East and West China, which started on Friday and ends on Monday, has attracted officials, corporate executives and economists from countries along the route to discuss how to build the Silk Road economic belt and promote common development. The concept of the economic belt was first proposed by Chinese President Xi Jinping on a visit to Kazakhstan in September, who called for joint efforts from relevant countries to build the belt and boost cooperation. He proposed that China and central Asian countries work to improve traffic connectivity, trade and monetary cooperation, and people-to-people exchanges.  ^ top ^

Slowdown expected in retail sales growth (Global Times)
China's retail sales, a key indicator for consumer spending, will only rise by around 12.4 percent in the second quarter from a year ago due to downward pressure on the economy and increasing risks in the property market, a government think tank said in a report on Monday. The forecast of 12.4 percent growth is higher than the first quarter's actual growth of 12 percent in retail sales but still falls below the annual growth target of 14.5 percent. The slowdown in upgrading of the country's consumption structure and downward pressure on the economy has weakened consumers' confidence, the State Information Center said in a report published by China Securities Journal on Monday. Increasing risks in the property market may also have an adverse effect on demand, the report said. Although China's working-age population has started to decline, rural laborers continue to move to cities and economic development is still mainly driven by investment, the report said. But the report also recognized that despite the slowing growth of consumption, its contribution to the country's economic growth continues to increase. China should create new growth points for consumption and push ahead with income distribution reforms to improve consumer confidence, the report said. On Monday, China Resources Enterprise Ltd - controlled by China Resources, one of the largest State-owned conglomerates - reported a 10.3 percent decline in profit at its retail unit in the first quarter. The company, which operates a number of hypermarkets in Asia, attributed the profit decline to the slowdown of the domestic economy. "Retail sales in the second quarter will definitely grow faster than in the first quarter. But since factors favorable for boosting consumption are not evident, sales are likely to grow by between 12.2 and 12.3 percent year-on-year in the second quarter," Zhao Ping, deputy director of the Consumption Economics Department at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday. "As the 4G coverage continues to expand, information-related consumption - including mobile Internet services and smartphone sales - and consumption in the services sector will become new highlights in the coming period," Zhao said. Retail sales grew 11.9 percent year-on-year in April, down from the 12.2 percent expansion in March and lower than the 12 percent growth in the first quarter, official data showed earlier this Month. The April data also showed consumer spending accounted for 64.9 percent of GDP in the first quarter, up 1.1 percentage points from the same period of last year. "Because of outdated statistical techniques, data for online consumption, which has grown robustly in recent years, has not been completely included into the final official economic statistics," Cai Jin, a vice chairman of the China Federation of Logistics & Purchasing, told the Global Times on Monday. "With moderate growth of prices and faster expansion of online shopping, there is no need to worry about consumption in the near future," Cai said. Monday's report came after Premier Li Keqiang was quoted by State media as saying on Sunday during his visit to Inner Mongolia last week that downward pressure on the economy is still large and the country will use policy tools and preemptive fine-tuning in a timely and proper manner to help ease financial strains for the real economy. The comment was interpreted by some economic observers as a sign of impending monetary easing, such as cutting the reserve requirement ratio (RRR) and interest rate. "Policy easing does not necessarily mean lowering the RRR and interest rate. The government is likely to use credit policy such as bond issuance to ease the financial strains," Cai said. The Ministry of Finance announced Wednesday that the country will allow 10 local governments to raise money by selling municipal bonds directly, marking a breakthrough in China's fiscal reform.  ^ top ^

Beijing urged to comply with Foreign Account Tax Compliance Act (SCMP)
Hong Kong financial institutions with mainland affiliates are hoping Beijing signs an agreement with Washington soon on a new US tax disclosure law, because of concerns mainland financial institutions will otherwise find it difficult, if not impossible, to comply with the new law. At least one major international bank with Hong Kong connections has admitted, off the record, that some of its mainland affiliates may not be ready to comply with the Foreign Account Tax Compliance Act (Fatca) by a July 1 deadline. “We have observed that in China, financial institutions are waiting for more information on an IGA (intergovernmental agreement) before registering [to comply with Fatca],” said Florence Carr, Asia-Pacific Fatca lead at accounting firm EY. HSBC spokesman Gareth Hewett said it had decided that the whole group should be “Fatca-compliant”. “Achieving compliance with Fatca by July 1 is a requirement,” he said. “Achieving this is in line with our ambition to be the world's leading international bank.” Standard Chartered Bank and UBS of Switzerland did not reply to inquiries about their preparations. Karl Paulson Egbert, a partner at US law firm Dechert, said there were concerns that mainland affiliates of Hong Kong financial institutions might not be able to register as foreign financial institutions (FFIs) by July 1. “Hong Kong banks can be perfectly compliant with Fatca, but still have an issue because their mainland affiliates are not compliant,” he said. Under Fatca, financial firms around the world will be required to report to the US Internal Revenue Service (IRS) on the accounts of clients who are US citizens or US permanent residents in order to prevent tax avoidance. Those who fail to do so face a 30 per cent withholding tax on their US income. After previously stating there would be no delays in implementing Fatca, the IRS announced earlier this month May that there would be a temporary delay in enforcing parts of Fatca, with the second half of this year and all of next year to be considered a transition period. “Many Chinese institutions do not feel comfortable registering with IRS without further guidance from the central government,” Egbert said. He said that if Beijing signed an IGA, it would make things easier for Hong Kong and regional banks. “Many Asian financial institutions have affiliates in mainland China, and all financial institution affiliates need to have Fatca status,” Egbert said. “These Asian financial institutions have a common problem of not knowing whether their mainland Chinese affiliates can comply with Fatca.” Carr said IGAs aimed to resolve conflicts which might exist between local regulations and Fatca regulations. “This is why having an IGA in China will help greatly Hong Kong banks with operations in China to be compliant with Fatca,” she said. “The earlier China gets an IGA, the better.” Egbert said he had heard that Beijing was expected to sign an IGA by the middle of the year, but progress was hard to predict. He said that if Beijing did not sign an IGA, Hong Kong financial institutions could avoid being penalised under Fatca by providing some basic information about their affiliates on the mainland, which would then be granted “limited FFI” status. ”This limited FFI relief won't work for everyone, but it's an attempt to fix the problem of Fatca compliance in mainland China,” he said. “The best fix will be an IGA.” The US government had been hoping that 50 jurisdictions would sign IGAs by July 1, but Egbert said only 32 had so far signed up formally. Hong Kong has not yet signed an IGA, but is expected to do so by the end of this year. It is still deemed Fatca compliant, until the end of this year, because it was included on a list of jurisdictions created by the IRS this month in another transitional measure.  ^ top ^

Xi stresses market-gov't coordination (Xinhua)
Chinese President Xi Jinping has called for better coordination between government work and market forces in promoting sustainable economic and social development. Calling the relationship between government and the market the core issue in economic reform, Xi said that the roles of the two are not contradictory and should not be pitted against each other. "China will well use both 'visible' and 'invisible' hands," he said at a collective study of the Political Bureau of the Communist Party of China Central Committee on Monday. Although economic reform has made progress in recent decades, market vitality is still shackled by many institutional flaws. To straighten out the relationship between the two, the president said China will continue its efforts to let market forces play a "decisive" role in allocating resources while making sure the government functions better. The decisive role of the market cannot replace or negate the role of the government, and vice versa, according to Xi. He said China will stick to market-oriented reform and refrain from intervening in microeconomic activities. It will forge a unified and open market, in which economic entities can compete fairly under a set of transparent rules. In addition to loosening grips on the market, Xi said the Chinese government also needs scientific macroeconomic controls and effective governance. To that end, it will improve macroeconomic control measures, optimize public services and enhance social justice, according to the president.  ^ top ^

RRR cut unlikely: economists (Xinhua)
A fully-fledged cut of the reserve requirement ratio (RRR) for banks is unlikely, as the central bank prefers targeted monetary tools, economists have said, as speculation mounts about such a dramatic move to heat China's lukewarm economy. Faced with an economic slowdown, the People's Bank of China (PBOC) has been treading cautiously in its monetary policy shift. Instead of an RRR or interest rate cut, the central bank has resorted to measures such as "targeted" RRR cuts for rural banks and re-lending. However, speculation was fuelled by Premier Li Keqiang saying last Friday during an inspection tour that China's economy still faces "relatively big" downward pressure and timely policy finetuning is needed. While some analysts see a rising possibility of a RRR or rate cut, Peng Wensheng, chief economist of the China International Capital Corporation (CICC), said such a possibility is small. There is a tendency for the central bank to resort to capital injection instead of RRR or rate cuts in easing the monetary policy, he said. "Another explanation is the economic situation is not that bad, and the central bank prefers low-profile and targeted monetary easing. A RRR cut is not only high-profile, but also has too strong an influence," Peng added. However, he expects the central bank to apply such an "indicative" move as a RRR cut only if the economic downward pressure continues to build. In its research note, the CICC attributed the low possibility of a RRR cut to the fact that interest rates for interbank lending have been at a stable level that is remarkably lower than the same period last year. The investment bank expects China's M2, a broad measure of money supply that covers cash in circulation and all deposits, to increase in May through more open market operations and finetuning.  ^ top ^

Growing service sector held back by regulation, protectionism (SCMP)
Considering the prominence of services in the global economy, it is salutary to be reminded of the extent to which costly regulation and protectionism weigh upon the sector. A database rolled out earlier this month by the Organisation for Economic Cooperation and Development (OECD) does just that. Six years in the making, the Services Trade Restrictiveness Index (STRI) documents 16,000 measures applied in 40 countries to 18 service sectors. Air transport, legal services, accounting, broadcasting, courier services, architecture, telecoms and maritime transport top the list in average levels of restrictiveness in the 34 OECD member countries and the BRICS (Brazil, Russia, India, China and South Africa) plus Indonesia. Overall, transport and professional services – the lifeblood of so much economic activity – are the most regulated and protected. Wide variance occurs around the average levels of restrictiveness. Individual economies also display very different rankings of restrictiveness among sectors. There are certain patterns, however, with Germany and Britain registering above-average openness within the country sample in all 18 sectors. Brazil, China, Indonesia and South Africa score highest at the other end, with below average openness in every sector. The STRI assigns weights to five policy variables to derive overall values of restrictiveness in the range of zero (no restrictions) to one (highly restrictive). The five policy elements are: restrictions on foreign ownership; restrictions on the movement of service providers; barriers to competition; regulatory transparency and administrative requirements; and other discriminatory measures. The database reveals that restrictions to access and the nurturing of monopolistic privilege, along with opaque regulation and administration, are far more commonplace than can possibly be justified on the grounds of public interest or social preferences. Why does this message matter so much? It goes to the heart of any story about progress and prosperity. Services account for 75 per cent of gross domestic product and 80 per cent of all jobs in OECD countries. The numbers for major emerging economies are 70 per cent and 40 per cent, respectively. About two-thirds of foreign direct investment is in service industries. Numbers as big as these mean that for economies to grow and jobs abound, much of the action has to be in services. The message ought to resonate even more in emerging economies. Productivity growth is an essential accompaniment of progress as export-led growth models reliant on capital and labour addition start to flag, and innovation in service sectors can make a very substantial contribution to that growth. More generally, success in moving incomes towards industrial country levels implies the rising dominance of services as a source of income and growth. Services play a particular role in all economies. They are not just a product like any other. They also drive production within and across sectors. Given that many of the services we are talking about are essential to virtually every sector, improved efficiency has massive multiplier effects. Think, for example, about how many value chains – whether national or international – could not survive without telecommunications, transport, finance, insurance and professional services. Clumsy regulation and protectionist policies take a correspondingly heavy toll right across the economy. Government policies are supposed to provide services, too, not impediments to progress. Something else worth remembering is that low-quality policy in this field does not affect only foreign economic interests. Restricted access and cost-augmenting interventions hit domestic enterprise too, infecting economic activity in its entirety. The OECD's STRI project does not just provide information. It is accompanied by analysis, too, showing how large the costs of restrictions are, and therefore how big the benefits of their removal could be. In a simulation, OECD economists calculate the effects on imports and exports of modest policy changes in a country with a more or less average level of restrictiveness. Imports of insurance and banking services, for example, would increase by roughly 2.5 per cent and 4 per cent, respectively. The corresponding numbers for exports are even larger, at 6.5 per cent and 7.5 per cent. It is interesting to think about why the gains from reduced restrictiveness would be greater on the export side. One reason is that barriers in the domestic economy affect local service providers as well as foreign ones, so the impact of their removal is greater than in the case of imports. Another is that reduced competitiveness resulting from bad regulations lessens incentives for local firms to innovate and sell in foreign markets. Services have been growing faster than goods in the global economy since the 1980s. They also showed more resilience and an earlier recovery following the Great Recession. In light of the sheer importance of services to well-being and future growth, can governments really afford to neglect poorly designed and administered regulation and remain snug in the thrall of cosseted special interests?.  ^ top ^

Shenzhen to hold first-ever auction of carbon permits (SCMP)
Shenzhen will auction 200,000 carbon permits to help the city's big emitters meet their targets under an emissions trading scheme. But speculators who had bought permits in the market in the hope of selling them to emitters at a profit, said the minimum auction price was too low and could scupper their resale plans. China, the world's biggest emitter of climate-changing greenhouse gases, has launched six regional carbon markets as a low-cost approach to slowing the rapid growth in emissions. The Shenzhen auction, the first such sale in the city, will come on June 6, with permits sold at a minimum price of 35.43 yuan (HK$44.47), according to a statement by the China Emissions Exchange, which runs the market. “The auctioned permits can only be used for compliance, they cannot be traded in the market,” it said. The fresh supply, taken from a reserve set aside by the city government last year, will help companies meet their carbon reduction targets under the scheme. But speculators complained the minimum price was unfair as it was half the average price of permits since the market launched in June last year. “This is toxic for individual investors. There is no fairness, justice or transparency,” said a trader, who declined to be named. The Shenzhen government was not immediately available for comment. The note from the China Emissions Exchange said the 200,000 permits would not be enough to cover the total shortfall at companies. Individual emitters will not be allowed to buy more than 15 per cent of their shortfall in the auction, meaning they would still need to buy more in the secondary market, which traded at 74.99 yuan on Tuesday. Shenzhen, the smallest of China's six pilot markets, issued around 33 million carbon permits for last year. Some 10 per cent were set aside in government reserves, with the rest handed out to emitters for free. Around three million of the permits have since been cancelled as the government adjusted allocation levels based on reported production data after the year ended. The June auction will be limited to the nearly 200 companies that had their allocation levels adjusted. The 635 companies covered by the scheme have until June 30 to hand over permits to the government to cover for their last year emissions. Most of China's six carbon markets remain illiquid as many companies with a permit surplus are reluctant to sell as they are concerned they may need them later.  ^ top ^

Govt measures to restructure economy taking effect (Global Times)
GDP growth in 12 out of 31 Chinese provincial-level regions fell behind the national increase of 7.4 percent in the first quarter, with Northeast China's Heilongjiang Province gaining the least, at 4.1 percent. In the first quarter, only GDP increase of 9.6 percent in East China's Anhui Province outperformed its 2014 annual target by 0.1 percentage point, while economic growth in seven regions missed the full-year goal by more than 3 percentage points. The data was released as China is in the process of shifting its economy to rely more on domestic consumption instead of exports. Local governments have also been asked to focus less on speeding up GDP growth. The central authority said in a statement released in December that GDP growth should not be the sole criterion to evaluate local officials' performance. Other factors, such as cutting overcapacity and protecting the environment should be considered as well. Tang Jianwei, a senior macroeconomic analyst at the Bank of Communications, told the Global Times Wednesday that this statement has partly contributed to the lowered local government GDP growth. "Blindly pursuing high GDP growth is not sustainable," Tang said. "The priority for local officials should now be building a favorable economic environment for businesses and households." Tian Yun, a research fellow with the China Society of Macroeconomics under the National Development and Reform Commission, told the Global Times that "it is a good thing for GDP growth to slow, as long as the country's distorted economic structure gets corrected." "As China becomes more developed, the employment rate and the increase in household income are more important than GDP growth," Tian said. China's local authorities often use money borrowed from the shadow banking system through government-backed special vehicles, to heavily invest in infrastructure construction so as to boost GDP. But as GDP soars, local government debt also skyrockets. This prompted the Ministry of Finance to give approval for 10 provincial-level regions and cities, including Beijing, Shanghai and Shenzhen, to directly sell government bonds on their own credit, in an attempt to construct a more transparent borrowing system. Tang said the ministry's move will further curtail local government GDP growth, as they can no longer hide loans from their balance sheets when issuing bonds. "It will put tight restrictions on local governments, which will be cautious and selective when funding projects," he said. "The era of extremely high GDP surges has gone." More than half of the 19 regions with first-quarter GDP growth higher than the national level are in central and western China. That is because less-developed regions are going through high-speed urbanization and attract more central government benefits, Li Bo, a Shanghai-based chief investment consultant at GF Securities, told the Global Times. "China's central and western regions will see fast growth, albeit slower [than previously], in the next few years, since they still have a long way to go to catch up with provinces in the east," Li said.  ^ top ^

Senior Chinese official urges SOE reforms, innovation (Xinhua)
Chinese State Councilor Wang Yong has urged the country's centrally administered state-owned enterprises (SOEs) to step up reforms and innovation to take a leading role in stabilizing the economy. During a recent research tour of several centrally administered SOEs, including Datang Telecom and China National Building Materials Group, Wang asked them to take the initiative to roll out effective measures to stabilize growth. Centrally administered SOEs, as the backbone of the economy, should prioritize efficiency, and improve management to avert possible risks and big fluctuations, Wang said. The enterprises should deepen reforms to clear the institutional barriers that hamper growth, and step up innovation to enhance their core competitiveness, he added. China has 113 centrally administered SOEs. In the first four months of the year, their profits amounted to 576 billion yuan (93 billion U.S. dollars).  ^ top ^


DPRK and South Korea

China foreign minister visits Seoul with eye on North's nuclear threat (SCMP)
China's foreign minister today visited South Korea, where he is expected to finalise preparations for a meeting between President Xi Jinping and the South's leader to stave off threats of a new North Korean missile test. The South Korean government wishes to hold the meeting, possibly next month, between Xi and Park Gyeun-hye to send a signal to Pyongyang that a fourth nuclear weapons test this year would not be tolerated, the Yonhap News Agency reported yesterday. Foreign minister Wang Yi, invited by counterpart Yun Byung-se, will be in the country for two days – his first South Korean trip since taking up the post in March last year. They will finalise the agenda for the meeting between Xi and Park, Yonhap said. Wang and Yun are scheduled to meet this afternoon at the foreign ministry in Seoul. Wang will meet Park and join activities at the Chinese embassy before returning to Beijing tomorrow afternoon. China is North Korea's only major ally and biggest trading partner, and as such exercises some influence on the wayward North. The Chinese government has previously backed UN Security Council sanctions against the North after it test-fired missiles, and it has also been part of stalled six-nation talks with Pyongyang – inculding the US, South Korea and Russia – on possible nuclear disarmament. Beijing has urged “stability” in the Korean peninsula. But tensions flared up recently when the North fired shells near a patrolling South Korean warship, prompting an exchange of gunfire last Friday. Officials and analysts said the shelling might have been a warning shot in the poorly marked boundary. The South's government has long been hoping that Beijing will step in and force a halt to provocations from North Korea. In return, Yonhap said China would seek to strengthen geopolitical ties with Seoul, such as by cooperating on matters related to Japan – which has been locked in maritime disputes with China over islands in the East China Sea. Beijing also navigates the geopolitical relationship with the US – the South's defence treaty partner – in mind, a South Korean government source told Yonhap. Pyongyang fired four scud missiles into the sea in late February, and another two short-range missiles on March 3 amid South Korea-US military drills. Twenty days later, it test-fired 30 short-range missiles into the sea, and may be preparing for another volley according to analysts and satellite photos.  ^ top ^

North Korea, Japan expected to discuss abductions of decades ago (SCMP)
North Korea and Japan are expected to discuss the fate of Japanese nationals kidnapped decades ago by Pyongyang as their envoys met for three days of talks in Stockholm that began yesterday. The meeting in the Swedish capital takes place after the two countries held their first official talks in 16 months in China in March, speaking on a range of issues including the abductions and North Korea's nuclear weapons programme. One of the most remarkable features of the new talks is the Scandinavian venue, as bilateral talks have so far tended to take place in Asia, and China in particular. Observers said the decision not to meet in China could reflect the tension between Tokyo and Beijing, especially over territorial issues in the East China Sea, but Japanese media suggested Pyongyang might also want to try a new venue. "North Korea apparently wants to have in-depth talks in a place away from China at a time when its relations with China are strained," an unnamed Japanese official had told the Mainichi Daily News. Sweden has had diplomatic relations with North Korea since 1973, and it also represents the interests of US citizens in the country in the absence of diplomatic ties between Washington and Pyongyang. The Japanese side was expected to tell the North Koreans that it was willing to lift some economic sanctions imposed on the hermit state if it was convinced that Pyongyang is making a serious effort to investigate what happened to abductees still unaccounted for, Kyodo News said, citing unnamed sources. "I don't think it represents any reconciliation between the two sides, but there is a meeting of interests, and both would get something off it if there was a deal done," said Hazel Smith, an expert on Korean politics at the University of Central Lancashire. "For Japan, it would mean a political success for the government, and for North Korea it could mean, they hope, the possibility of increased trade." While relations with South Korea remain testy, Pyongyang's approach to its dealings with Japan appears to have softened in recent months, especially on the emotive issue of abductions. In March, North Korea allowed the daughter of a Japanese woman who was kidnapped in the 1970s and later died to travel to Mongolia to meet her grandparents, who had flown in from Japan. "It's a sign that the North Koreans are prepared to do pretty much anything in order to get a deal with the Japanese, because they feel it's achievable," said Smith, indicating that it could mark the first step towards a wider thawing of tensions. North Korea outraged Japan when it admitted more than a decade ago that it had kidnapped 13 Japanese in the 1970s and 1980s to train its spies in Japanese language and customs. Five of the abductees were allowed to return to Japan but Pyongyang has insisted, without producing solid evidence, that the eight others are dead. "Needless to say, the abduction issue is one of the nation's biggest concerns," Japanese Foreign Minister Fumio Kishida said last week when announcing the Stockholm meeting. " During the March meeting, the Japanese side protested against the communist state's launch of ballistic missiles and its threat to conduct more nuclear tests. Japan may reiterate this in Stockholm, but it is unlikely to make any progress, since North Korea prefers to deal with the United States on this issue, according to analysts. Pyongyang for its part renewed its demand that Tokyo compensate Koreans for their suffering during Japan's 1910-1945 colonial rule over the Korean peninsula.  ^ top ^

New bridge to link China, DPRK (Xinhua)
Construction on a new bridge over a river separating China and the Democratic People's Republic of Korea (DPRK) has started, authorities of northeast China's Jilin Province said on Tuesday. With a total investment of 137 million yuan (21.93 million U.S. dollars), the 804.7-meter new Tumen River bridge is expected to open in 2015 or 2016 as a new route for bilateral trade, authorities said. The old Tumen River bridge has not been repaired for many years and is facing safety risks. However, the old bridge will not be dismantled and will be kept as a scenic spot. Tumen City is linked to the DPRK by both highway and railway. ^ top ^

US military lists DPRK, Iran as major threats of missile strike (Xinhua)
The US military identified the Democratic People's Republic of Korea (DPRK) and Iran as the leading threats of a missile attack to the United States in future, a high-ranking US military officer said Wednesday. Speaking at the annual global missile defense conference held at the Atlantic Council's Center on International Security, James Winnefeld, vice chairman of the US Joint Chiefs of Staff, said the assessment was based on the fact that both the DPRK and Iran boast nuclear and ballistic missile programs. The United States has to take such threat seriously,"even though neither nation yet has a mature capability," the senior officer said. He added the DPRK is closer than any other adversary to being able to reach such a threshold, as Pyongyang could test a missile capable of reaching the US homeland at any time. However, Winnefeld warned that if either the DPRK or Iran launches a missile attack at the United States in future, it will be met with an "overwhelming response." He said that the US priority of missile defense is deploying ground-based interceptors that aim to take out incoming missiles as part of its expanding missile defense system. Moreover, the United States places an emphasis on building regional missile defense, by closely cooperating with a number of key partners in different regions, he noted. Winnefeld also urged Russia and China to persuade the DPRK and Iran to drop their ballistic missile programs. At the same, the general noted that the United States is making progress in investing in promising technology programs" to ensure the missile defense program will be fully capable of defeating complex threats we expect to see in the future."  ^ top ^

Japan says will ease sanctions for North Korea kidnap probe (Global Times)
Tokyo said Thursday it would ease sanctions against North Korea if the secretive state delivers on a pledge to reinvestigate the cases of Japanese nationals kidnapped to train spies. The announcement, a major breakthrough in a very strained relationship, came after three days of talks between the two sides in Sweden, and marks the most positive engagement between Pyongyang and the outside world in many months. "As a result of the Japan-North Korea talks, the North Korean side promised to the Japanese side that it will make a comprehensive and thorough investigation" into confirmed and suspected abductions, Japanese Prime Minister Shinzo Abe told reporters. "In keeping with the promise, it will set up a special commission for the investigation." In return, Tokyo has agreed to ease some of the stinging sanctions it has levelled at the unpredictable regime over years of mistrust, and dangled the prospect of some much-needed aided. "Japan has decided to lift special restrictions on travel by people, reporting requirements on remittances... as well as the ban on North Korea-registered vessels entering Japanese ports for humanitarian purposes," said Chief Cabinet Secretary Yoshihide Suga. The unilateral sanctions are in addition to UN strictures placed on Pyongyang, which are unaffected. "Japan will study the possibility of extending humanitarian assistance to North Korea at an appropriate time from a humanitarian standpoint," a written statement distributed to reporters said. North Korea outraged Japan when it admitted more than a decade ago that it had kidnapped 13 Japanese in the 1970s and 1980s to tutor its spies in Japanese language and customs. Five of the abductees were allowed to return to Japan but Pyongyang has insisted that the eight others are dead. The subject is a highly-charged one in Japan, where there are suspicions that dozens or perhaps even hundreds of other people were taken. Suga added that Japan would keep pressing for a "comprehensive resolution" to the issues of the abductees and the threats from North Korea's nuclear and missile development program before it would normalize ties.  ^ top ^



Government of Mongolia is ready to support the issue on natural gas pipeline through Mongolian territory, says Premier N.Altankhuyag (Info Mongolia)
Prime Minister of Mongolia N.Altankhuyag, who attended the International Economic Forum 2014 in Saint Petersburg, held a meeting with President of the Russian Federation V.V.Putin on May 24, 2014. At the beginning of meeting, state of head V.V.Putin expressed his gratitude to Premier N.Altankhuyag for accepting the invitation to participate in the International Forum and parties exchanged views on further bilateral partnership and economical issues, besides discussed about many other topics such as railway and joint ventures established by two governments. Prime Minister N.Altankhuyag underlined that Mongolia and Russia are friendly nations with long traditional ties, our country's relationship with the Russian Federation is considered as the priority foreign policy and we always prefer to deepen this traditional relations. Also, Premier N.Altankhuyag mentioned that he met with authorities of Mongolia-Russia joint ventures including Ulaanbaatar Railway and other organizations to exchange views and re-affirmed the invitation of the President of Mongolia to participate in the celebration of the 75th anniversary of the victory in the Battle of Khalkha River to commemorate in Dornod Aimag of Mongolia in August 2014. During the meeting Prime Minister N.Altankhuyag expressed his readiness to discuss issues regarding a joint railway efficient utilization, transportation increases, and reciprocal visa free travel and if necessary, the Government of Mongolia is ready to support the issue on construction of natural gas pipeline between Russia and China through Mongolian territory.  ^ top ^

Mongolian People's Party delegates conducted an official visit to North Korea (Info Mongolia)
Upon the invitation of North Korea's Chairman of the Presidium of the Supreme People's Assembly Mr. Kim Yong-nam and its ruling Workers' Party of Korea (WPK), delegates from Mongolian People's Party (MPP) headed by the Secretary General of the Party, Mr. Jamiyan MUNKHBAT have conducted an official visit to Pyongyang, the Democratic People's Republic of Korea on May 18-24, 2014. The MPP, formerly known as MPRP, and the WPK have been collaborating in terms of long lasting party-to-party ties and in order to bring the cooperation in a new stage, the MPP Secretary General J.Munkhbat and the WPK's Foreign Relations Department Secretary Mr. Kang Sok-ju have signed a Memorandum of Understanding on Cooperation. During the visit, Chairman of the Presidium of the Supreme People's Assembly Kim Yong-nam welcomed the guests and held a meeting with MPP Secretary General J.Munkhbat, where parties exchanged views on further collaboration issues and two countries' development tendencies. Also, Secretary General J.Munkhbat met with representatives of KWP Youth Organization and Korea Democratic Women's Union to seek opportunities of cooperation and exchange information. Moreover, upon the invitation of Korea Democratic Women's Union, delegates led Chairwoman of Social Democracy - Mongolian Women's Association, Ts.Tsogzolmaa will be conducting an official visit to the DPRK in June 2014. Before, the Korea Democratic Women's Union delegation had visited Mongolia. In recent years, the DPRK is implementing a policy of rapid development in particular focusing in the sector of animal husbandry and thereby the country is studying Mongolia's experience in this field. During the visit, the issue of long-term renting the Unsan port by Mongolian side was discussed and parties exchanged opinions to seek opportunities. Before heading to North Korea, MPP Secretary General J.Munkhbat received in his office the Ambassador Extraordinary and Plenipotentiary of the DPRK to Mongolia Mr. Hong Gyu at the Independence Palace on May 02, 2014. At the reception, parties discussed issues on deepening the cooperation between Mongolian People's Party and Workers' Party of Korea.  ^ top ^

Foreign Minister of Mongolia pays an official visit to the Kingdom of Sweden (Info Mongolia)
On May 26, 2014, Mongolian delegates led by Minister of Foreign Affairs Mr. Luvsanvandan BOLD paid an official visit to the Kingdom of Sweden in the scope of the 50th anniversary of establishment of diplomatic relations. The Kingdom of Sweden is considered one of the important partners of Mongolia in Scandinavian region in Northern Europe, thus this visit is being implemented following the visit of the President of Mongolia Ts.Elbegdorj conducted in 2012 and the first visit at Foreign Minister-level and in the frameworks of celebrating the diplomatic relations, parties have been organizing several events involving many sectors. During the stay in Stockholm, Minister L.Bold held an official meeting with Foreign Minister of Sweden Mr. Carl Bildt, where sides exchanged views on bilateral relations, cooperation and other issues concerning international spheres. In the scope of Mongolia's chairing the 5th "Online Freedom" Conference in 2015, Minister Carl Bildt pledged to support Mongolia on organizational issues. On the same day, Foreign Minister L.Bold met with Speaker of the Sweden Parliament (Riksdag) Mr. Per Westerberg and Minister for Public Administration and Housing Mr. Stefan Attefall to discuss inter-parliamentary ties and exchanged views on state structure of Sweden and partnership opportunities between the two administrative organs. Moreover, Mongolian delegation got acquainted with the Folke Bernadotte Academy, a Swedish Government Agency dedicated to enhancing the quality and effectiveness of international conflict and crisis management, with a particular focus on peace operations. As of today, over 4,500 Mongolian citizens are residing in the Kingdom of Sweden and nearby regions, and one of the vital issues to carry out is to promote Mongolian language and culture to children growing there. In this regard, Mongolian Ambassador Extraordinary and Plenipotentiary to the Kingdom of Sweden Mr. Zorig ALTAI has introduced works being implemented to visiting Foreign Minister L.Bold. As part of cultural promotion events, an accompanying the Head of Mongolian Buddhist Center and Gandantegchinlen Monastery, Khamba Lama D.Choijamts met Mongolians and gave his teachings to disciples gathered. Moreover, an art exhibition by Mongolian artists was displayed at cultural center in Stockholm. The delegation was also comprised by Vice Director of Mongolian National Chamber of Commerce and Industry, Ms. M.Oyunchimeg and during the visit, Mongolia-Sweden Business meeting was organized, where representatives of Sandvik, ABB, Atlas Copco and other prestigious companies have attended. Mongolia and the Kingdom of Sweden have established the diplomatic relations on June 30, 1964. Following the official visit to Sweden, Foreign Minister L.Bold is continuing his visit to the Kingdom of Denmark scheduled on May 27-28, 2014. ^ 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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