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
  21-27.6.2014, No. 530  
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Foreign Policy

Senior Chinese military official warns against Japanese militarism (Xinhua)
A senior Chinese military official said on Sunday that all peace-loving people should keep alert about Japan's further inclination toward a wrong and dangerous path and the revival of its militarism. Sun Jianguo, deputy chief of the General Staff of the People's Liberation Army, made the comment at a luncheon during the Third World Peace Forum (WPF) at Tsinghua University in Beijing. "All the countries should learn from history and aspire for peace and development, rather than clinging to outdated ideas or going against the tide of history," Sun said. Instead of repenting and correcting the country's past invasion, Japan's right-wing leaders blatantly visited the Yasukuni Shrine honoring 14 Class-A war criminals in World War II, Sun said. He listed Japan's attempts to deny history, including revising school textbooks and reviewing Kono statement over wartime sex slavery, revising its pacifist constitution and exercising the rights to collective self-defense. "Japan is intensifying military buildup to break the post-war order," he said, adding that it stirred up island disputes with neighbors to deliberately escalate regional tension. Japan's moves have sparked opposition from home and neighboring Republic of Korea (ROK). Abe's administration, by revising constitution, hopes to break away from the post-war order in the end, said Haruo Nishihara, former president of Waseda University in Japan. Though Japan's ruling Liberal Democratic Party (LDP) attempted to revise the constitution since 1955, but breaking away from the post-war order is not yet acceptable to the majority party members. When it comes to constitution revision, there are differing opinions within the LDP, not the least, half of the Japanese nationals vote against the revision, so for a long time, the LDP has avoided substantial procedures, according to Nishihara. Japan's actions have led to tension in its relations with China, making bilateral leaders' meeting impossible. "This makes it very difficult for the average Japanese to vote in favor of the security strategy," Nishihara said. ROK-Japan ties reached the lowest in history and have seemed to retrograded to the level before the normalization of diplomatic relations in 1965, ROK's former Foreign Minister Yu Myung-hwan said. He attributed wartime sex slaves and Japan's unawareness of history to be a major cause for soured bilateral relationship. Academics voiced anxiety about Japan's political security development. "The year 2015 marks the 70th anniversary of the end of World War II but Japan is on its way to becoming a nation that can fight wars," said Li Wei, a Chinese researcher on Japanese studies. Once Japan exercises the rights to collective self-defense, Japan will be able to send troops overseas and fight wars, which sends an alarming signal to neighboring countries, said Wang Taiping, former Chinese Consul General to Osaka of Japan. For China and Japan, it means the East China Sea tension may escalate, Wang added. China and the United States have no reason for military confrontation. However, He Yafei, deputy head of the Overseas Chinese Affairs Office of the State Council, expressed concern about the possibility that the two powers might be dragged into conflict by a third party, as Japan is trying to change the status quo and challenge post-war order. With the theme In Pursuit of Common Security: Peace, Mutual Trust and Responsibility, the forum discussed security issues in the Asian-Pacific region, the Middle East and Central Asia, as well as nuclear nonproliferation. With about 500 participants, the forum concluded on Sunday. ^ top ^

China, Russia to hold extensive exchanges during bilateral expo (Global Times)
Chinese and Russian delegates are expected to engage in extensive exchanges at the first China-Russia Exposition later this month, according to sources with the event's organization committee, the Xinhua News Agency reported on Sunday. Scheduled to open in Harbin on June 30, the event is jointly held by China's Ministry of Commerce, Heilongjiang provincial government and the Russian ministries of economic development and industry and trade. The event's predecessor was the China Harbin International Economic and Trade Fair initiated in 1990. It was upgraded to an exposition earlier this year to focus on bilateral cooperation. During the five-day event, a number of seminars on trade, application of satellite navigation systems, agriculture, forestry, tourism and financial cooperation will be organized, sources with the organization committee said. According to Sun Yao, deputy governor of Northeast China's Heilongjiang Province, the expo would be used to promote cooperation between China's Heilongjiang Province and Inner Mongolia Autonomous Region and Russia's Far East and Lake Baikal area. The expo is also expected to help expand cooperation from goods trade to intensive integration of industry chains. In the run-up to the event, the trade infrastructure has been enhanced. A border warehouse area covering 3,000 square meters was put into operation in Ha'nan New District of Harbin this month, the first of its kind specializing in e-commerce with Russia. Sources with the Harbin Business Bureau said the warehouse would help develop the city into an important e-commerce and financial center in the Far Eastern region. Five e-commerce companies, including Shenzhen Sailvan Network Technology Co, have goods stored in the warehouse which can accommodate more than 100,000 items. Once Russian consumers place orders on the Internet, store owners can immediately make shipping arrangements from the warehouse, avoiding domestic transportation, security checks, packaging and customs clearance, and thus reducing the time of delivery by five days, said a commerce official. At the expo, customs officials of both countries will explore cooperation initiatives to boost bilateral trade, according to the Heilongjiang Daily. Russia is a major trade partner of China. In the first four months of 2014, trade volume grew by 3.4 percent year-on-year to $29.06 billion, official statistics showed. ^ top ^

Li's charisma wins over British press (China Daily)
Britain's media fuss about details in Premier Li Ke-qiang's visit to their country was muted by Li's unexpected charm. London's tabloid Daily Mail, which made sport over the allegation that Li had to ask for an invitation to meet the Queen during his visit to Britain, called him "Premier Twinkle" on the day following his meeting with David Cameron. The report said that Li "radiated a self-delight not previously seen in Peking" and "Premier Li - Premier Twinkle - was almost running the show by the end". Li lost no time in connecting with the locals, including his hosts, the Camerons, and local media, during his three-day visit. At a leisurely tea during which the premier and his wife sat with their British counterparts in the Camerons' garden, the leaders chatted with each other mostly on their own, relegating their interpreter to note-taking. In the following news conference, Li hailed the British media for "bringing us the good weather" - a courtesy that impressed British journalist Quentin Letts at the scene. "Lord Justice Leveson was never that civil to us," Letts wrote in a Daily Mail article. The Independent said Li has "a ready smile, gesticulates a lot and rather dominated the press conference. He mentioned several times his pleasure at meeting `friends in the British press'. He is, well, scrutable." During the visit, which came after 18 months of frozen relations between the two countries, Li's warmth and wit didn't seem to fit the stereotype of Chinese leaders created by sometimes ethnocentric commentators in the old British empire. But as Li said in his article published by The Times: It is time for Britons to change their misperceptions of China. ^ top ^

Xi stresses China-Malaysia ties (Xinhua)
Chinese President Xi Jinping met with Malaysian Speaker of the House of Representatives Pandikar Amin Mulia on Tuesday, saying that China attaches great importance to its friendly relationship with Malaysia. "The Chinese government regards the development of China-Malaysia ties as an important part of China's neighborhood diplomacy," Xi said during the meeting with Pandikar at the Great Hall of the People. Xi proposed the two sides take the 40th anniversary of diplomatic relations as an opportunity to do a "top-down design" of the bilateral ties and blueprint reciprocal cooperation in various areas to boost the countries' partnership. The president said China pays great attention to good-neighborly relations. He reiterated the country's neighborhood diplomacy concept featuring amity, sincerity, mutual benefit and inclusiveness, advocacy for common, comprehensive, cooperative, and sustainable security in Asia, as well as its proposal to forge a closer China-ASEAN community of shared destiny and initiative for the Silk Road economic belt and the 21st century Maritime Silk Road. The Chinese leader said the fact that he tabled these proposals shows the Chinese side's willingness to pursue common development with neighboring countries. According to Xi, China will back Malaysia as it takes the rotating chair of the Association of Southeast Asian Nations (ASEAN) next year and stands ready to work with all countries concerned to boost the China-ASEAN relationship. Xi also said China hopes Malaysia will continue to coordinate with relevant countries to search for the missing flight MH370. Malaysia Airlines Flight MH370, carrying 239 people,including 154 Chinese, disappeared on March 8 after leaving Kuala Lumpur en route to Beijing. Despite a multinational search and rescue effort -- the largest and most expensive marine search ever undertaken -- no confirmed flight debris or crash site has been found. During the meeting, Pandikar conveyed the greetings of Malaysian Supreme Head of State Abdul Halim Mu'adzam Shah and Prime Minister Najib Razak to Xi, pledging that the House of Representatives will endorse the consensus reached between the Malaysian and Chinese governments and contribute to the friendship between the two nations. Pandikar and his delegation are visiting China from June 22 to 28 at the invitation of top Chinese legislator Zhang Dejiang. On Tuesday afternoon, Zhang and Pandikar held talks and they vowed to promote the two countries' parliamentary cooperation. Zhang, chairman of the Standing Committee of the National People's Congress (NPC), said the NPC is ready to strengthen communication and cooperation with the Malaysian parliament to increase sharing of experiences on national governance, democracy and rule by law. Pandikar agreed with Zhang by saying the Malaysian parliament will enhance exchanges and cooperation with the NPC. ^ top ^

China likely to take firm line in Asean talks on code of conduct for South China Sea (SCMP)
China will act assertively at a regional meeting to discuss a code of conduct for the South China Sea amid rising tensions with its Southeast Asian neighbours over disputed waters, observers say. While Beijing would seek to establish such guidelines on maritime conduct during the two-day meeting that started in Bali, Indonesia, yesterday, it will also signal to the Association of Southeast Asian Nations (Asean) that territorial interests would be its top priority. The meeting will be the 11th time China and Asean have negotiated on a binding set of rules to inform engagements in the contested area. China has been more willing to negotiate for such a code since September, when Beijing and Asean diplomats held their first consultation in Suzhou. But the recent spat between Beijing and Hanoi and Manila will complicate the negotiations. Zhang Mingliang, an expert in Southeast Asian affairs at Jinan University in Guangzhou, said China was expected to send a message to its neighbours. "China is determined to defend its territorial integrity, and this has become the first priority," he said. But "China will resolve the dispute through peaceful negotiations". The talks in Bali come after China and Vietnam locked horns recently over the establishment of a Chinese oil rig around the disputed Paracel Islands, which triggered deadly anti-China riots in Vietnam. In the Philippines, Manila accused Beijing of reclamation activity at the Johnson South Reef in the Spratly Islands. Zhang Jie, an expert on regional security with the Chinese Academy of Social Sciences, said China's tough posture would linger because Beijing believed its neighbours had not respected its stance over the disputed waters. Beijing has previously said nations involved in spats should set aside their differences to seek joint development. That directive will remain unchanged, Zhang said, but Beijing would become increasingly active in the waters. "By showing strength, it is hoped that the claimant states of the South China Sea will be pushed to pay serious attention to Beijing's position," she said. "There is a perception inside China that maintaining a low profile, which has been the directive for Chinese diplomacy for years, will necessarily be beneficial to China." Oh Ei Sun, a senior fellow at the S. Rajartnam School of International Studies in Singapore, said Vietnam and the Philippines might draw support from other Asean states to try to restrict movement of Chinese vessels in the disputed waters, which Beijing may brush aside. "China on one hand will be proactive in pursuing the code of conduct, but on the other hand will also be uncompromising," he said. "The code is only one part of China's dealing in the South China Sea." Kang Lin, a researcher at China's National Institute for South China Sea Studies, said Beijing would also push for cooperation on navigation security. "It may not be an appropriate timing to discuss exploration of resources in the waters, but the nations can discuss less sensitive issues, paving the way for more future cooperation," he said. ^ top ^

US Congress pokes Beijing with 'Liu Xiaobo Plaza' Washington embassy address proposal (SCMP)
China may soon have an unhappy address for its embassy in Washington. The House Appropriations Committee has included in its next year State Department budget a proposal to rename the stretch of road in front of the embassy “Liu Xiaobo Plaza”. Liu, a writer, was jailed over his involvement in Tiananmen Square. Later, in 2009, he was slapped with an 11-year sentence for subversion after spearheading a bold petition for democracy reforms. China's government voiced outrage when he won the Nobel Peace Prize two years ago. China has censored any mention of the Nobel after Liu won, and put his wife under house arrest. The amendment, proposed by Republican congressman Frank Wolf, says the new name should apply for US postal code purposes. The embassy's street address would be Number 1. In a statement, Wolf says the change would highlight Liu's “unjust imprisonment”. In the 1980s, the street in front of the Soviet Embassy in Washington was named after dissident Andrei Sakharov. After US lawmakers proposed the street renaming several weeks ago, a Chinese foreign ministry spokesman warned it would be a "provocative action" and called Liu "a man who has violated Chinese laws". It was Phil Mendelson, head of the US capital's council, who introduced a resolution to rechristen the street after the Nobel laureate in hopes of freeing him. Mendelson's resolution had called for a vote by the US Congress, where the proposal enjoys support across party lines. Renaming the street after Liu "would raise the price on China for imprisoning dissidents and democracy advocates like Liu Xiaobo", David Keyes, executive director of the group Advancing Human Rights, said. "It's symbolic and it may seem small, but if we can remind every Chinese diplomat around the world about the cost of their tyranny and if we can give hope to dissidents throughout China's prisons, I think it can play a significant role in pressuring China to release political prisoners and open up," he said. ^ top ^

New vertical map shows full extent of China's territory (Global Times)
China unveiled its first official vertical national map to better serve the public alongside all previous versions of national maps, and China has never changed its stance on the South China Sea, the foreign ministry said on Wednesday. "It's unnecessary to make further interpretations out of this. China has always held a consistent and clear stance on the South China Sea," said foreign ministry spokeswoman Hua Chunying. The nation's first vertical map, published on Monday, is seen as a reaffirming gesture to emphasize China's sovereignty over the disputed waters in the South China Sea. The new map gives equal weight to both land and sea, with the islands and waters of the South China Sea presented on the same scale in one map with the nine-dash demarcation line clearly marked. Previous national maps were horizontal in orientation and focused on the country's land area, while the South China Sea was separately featured in a small box in the bottom corner. "Horizontal maps can easily create misconceptions that China covers a wider range from west to east, while in fact the north-south distance is longer. It is because the measuring scale for the South China Sea box was only half of that of the main map," Shan Zhiqiang, executive editor of China National Geography, previously wrote on his Sina Weibo account. The National Administration of Surveying, Mapping and Geoinformation said the new map presents detailed geographic features in the South China Sea. "It helps correct misconceptions that territories carry different weights, and fosters a better marine consciousness among the public, which is significant to secure territorial sovereignty," said Lei Yixun, editor-in-chief of Hunan Map Press, the map's publisher. ^ top ^

Vietnam riot payouts reach $220,000 (Global Times)
Chinese mainland enterprises that suffered losses in the anti-China riots in Vietnam in May had as of Wednesday received about $220,000 in compensation, the Xinhua News Agency reported. Xinhua said some 39 mainland companies in southern Vietnam had suffered losses in the riots, among which nine had suffered direct impacts, such as having their factories burned down. Two suffered considerable indirect losses and the rest suffered losses on a relatively smaller scale. In total, these 39 companies have lost a total of 100 million yuan ($16.6 million). Three enterprises have received partial compensation from insurance companies, totaling an amount of $220,000. As for companies in northern Vietnam, Xinhua quoted the Chinese Embassy in Vietnam as saying that only a small number of them had suffered losses and that they have yet to receive any compensation. "About one third of the losses will be compensated by insurance companies in cash. The rest will be compensated through tax cuts," a representative of a Chinese enterprise in Vietnam, who requested anonymity, told the Global Times. His company lost about 7 million yuan in the riots. "Although a majority of the compensation will not come in the form of cash, the Vietnamese government is offering plans such as a reduction on rent or import tariffs," said Miao Renlai, chairman of the China Business Association Ho Chi Minh City Branch. Anti-China demonstrations broke out in Vietnam in May after China started an oil rig operation in the waters of the Xisha Islands, an area also claimed by Vietnam. ^ top ^

PLA warships to join US-led Pacific drills for first time (Global Times)
Chinese warships are set to join the US-led Rim of the Pacific (RIMPAC) naval exercises on Thursday for the first time, a move expected to enhance understanding and help avoid unintended clashes amid growing tensions around China. However, analysts are reluctant to be too optimistic about what the joint exercise means for China-US relations, with some believing this joint drill could still be a symbolic effort in the two countries' ups and downs. Four Chinese navy ships, including missile destroyer Haikou, missile frigate Yueyang, supply ship Qiandaohu and hospital ship Peace Ark with more than 1,100 crew arrived in Pearl Harbor in Hawaii for the world's largest naval drills, according to the Xinhua News Agency. This year's RIMPAC exercise, the 24th in a series that began in 1971, is scheduled to run from Thursday until August 1. A total of 23 nations, 49 surface ships, six submarines, more than 200 aircraft and 25,000 personnel will participate. The People's Liberation Army (PLA) navy will join a fleet with the US, France, Mexico and Brunei and take part in seven programs, including artillery practice, anti-pirate sea security operations, search and rescue exercises and military medical exchanges. Zhang Junshe, a researcher at the PLA Naval Military Studies Research Institute, said this is a good chance for the outside world to better understand the Chinese navy. "China has sent its newest and best warships to engage in face-to-face exchanges," Zhang told the Global Times on Wednesday. "It will enhance the transparency of the Chinese navy, and help reduce 'China threat' accusations." What is even more important is that the exchanges will reduce the chances for the two countries to misunderstand each other or make the wrong decisions in tense situations, Zhang said. Chinese soldiers will also attend seminars and play basketball and soccer with their counterparts from other countries, according to Zhang. Another highlight is that the two hospital ships have participated in the joint drills for the first time in 24 years. Crews of China's Peace Ark and the host's USNS Mercy will visit each other's ship and share information, according to Zhang. The US side has touted China's first participation in RIMPAC as "a big step" in reducing tensions. "We just have to get past these issues that are historical in nature that are causing regional problems," The head of US Pacific Command, Admiral Samuel Locklear, told AFP. "And if we keep working at it we'll get through them." With its "pivot" to Asia policy, the US has become more active in China's territorial disputes with neighboring countries in South China Sea and East China Sea. China has insisted that it will deal with regional disputes directly with the involved countries and does not want to see interference by a third party. Xu Liping, a researcher of Southeast Asian studies with the Chinese Academy of Social Sciences, said Japan and the Philippines, which have territorial disputes with China and have also participated in RIMPAC joint drills, should not just rely on the US in security issues. They should also cooperate with China, Xu told the Global Times. Military exchanges between China and the US have been on-and-off for decades. China suspended military contacts after incidents such as the 1999 NATO bombing of China's embassy in Belgrade, in 2001 when a US spy plane and Chinese fighter jet collided over the South China Sea and in other years when the US sold weapons to Taiwan. ^ top ^

Sino-Russian alliance not on the cards, says German envoy Michael Clauss (SCMP)
China and Russia are unlikely to form an alliance against the West despite presenting a united front on several conflicts, the German ambassador to China, Michael Clauss, says. Clauss told the South China Morning Post that while there was common ground, it would be an exaggeration to claim they were forming a bloc, as they still "have diverging views on many other issues", including the Ukraine crisis. At a security summit in Shanghai last month, President Xi Jinping and Russia's Vladimir Putin vowed to oppose interference in the domestic affairs of other countries and opposed unilateral sanctions - a move widely seen as targeting the United States. Beijing views Washington's security support to Japan and the Philippines, which are involved in bitter territorial disputes with China in the South and East China Seas, as trespassing on its national interest. Bolstering their ties, Russia and China recently held joint naval exercises around the sensitive East China Sea. But Clauss pointed out that China had not always sided with Russia. While it refrained from criticising Moscow's handling of the crisis in Ukraine, it had abstained - rather than vetoing - the UN Security Council resolution to denounce Russia over the annexation of Crimea. "China has not supported Russia's actions in Ukraine. That has become very clear in the UN Security Council," he said. "China did not seem to be happy about Russia unilaterally breaking international law, casting aside the principle of territorial sovereignty and non-interference by occupying a part of a sovereign country." As for the South China Sea dispute, Clauss said China was being more assertive. If it became "over-assertive", Clauss said smaller countries would be tempted to form alliances against China. "China should not allow any doubt to arise regarding its peaceful rise," he said. Clauss also discounted the significance of a huge Sino-Russian natural gas deal - a move seen by observers as bringing ties, and resources, closer as Moscow faces mounting pressure from international sanctions over its annexation of Crimea. The US$400 billion deal will see Russia supplying 38 billion cubic metres of natural gas a year to China. Negotiations had been stalled for more than a decade because of pricing differences, but it was finalised last month when Putin visited Shanghai. "My impression is that many people in Russia had hoped the Chinese would be more forthcoming in the negotiations," Clauss said. "In the end, Russia had to make many concessions in order to reach an agreement on the price. "I would not see China's signature as a concession to Russia. China was in a very strong negotiating position." ^ top ^

Chinese workers still stuck in Iraq as troops turn back evacuation buses (SCMP)
China has demanded cooperation from the Iraqi government to "accurately assess" the security situation after troops reportedly turned back 1,300 Chinese employees of a state-owned enterprise who were trying to leave the war-torn country. The Chinese foreign ministry said Beijing was increasing its communication with the Iraqi government and military to ensure the safety of its citizens. "We demand Iraq cooperate with China to accurately assess the security situation and provide security for the evacuation of Chinese workers of companies located in areas where conditions are serious," ministry spokeswoman Hua Chunying said yesterday. The workers, employed by China Machinery Engineering Corporation (CMEC), were due to evacuate on Tuesday as Iraq's security situation deteriorated. Iraq is fighting an offensive by the jihadist group Islamic State of Iraq and the Levant (ISIL), also known as Isis, that has overrun large swathes of five provinces. CMEC, which has invested US$1.2 billion in a power plant project in Samarra, had arranged for the workers to travel to Baghdad, but government troops stopped their buses near the Iraqi capital and forced them to return to the Samarra camp, mainland news site Caixin reported. Some 50 workers managed to escape on a small plane to Baghdad, before transferring to a flight due to land in Shanghai today. But the fate of other workers was "worrying" because several previous evacuation attempts had also failed, said Guo Jing, the wife of an engineer at the camp. "Their water and food supplies will only last two more weeks, and supplies can't get in, so we are all worried," Guo said. "Their supervisors have already stopped updating them about the evacuation, probably fearing that it would be a severe mental blow if it failed again." Guo said security had deteriorated over the past two weeks, with guards fleeing the camp. "They are anxiously waiting for updates," Guo said. "If the buses still remain blocked and they have to try other routes, then they would need to pass through areas controlled by militants." A spokesman for the Chinese embassy in Iraq said all employees of the company were safe. The worsening situation in the country poses a huge risk to Chinese investment. Lin Boqiang, director of the China Centre for Energy Economic Research at Xiamen University, said China was facing a dilemma as it imports about 60 per cent of the country's crude oil. "It is very difficult for China to pull out from Iraq because it has already invested a lot there. The cost for pulling out is too high," he said. ^ top ^

SCO members to stage anti-terror drill in China (Xinhua)
The member countries of the Shanghai Cooperation Organization (SCO) will stage an anti-terrorism military drill in China from August 24 to 29, a Chinese Defense Ministry spokesman said on Thursday.
Code-named "Peace Mission 2014",the joint drill will take place at the Zhurihe training base in Inner Mongolia, Yang Yujun told a monthly press briefing. Founded in Shanghai in 2001, the SCO groups China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. It has Afghanistan, India, Iran, Mongolia and Pakistan as observers and Belarus, Turkey and Sri Lanka as dialogue partners. The exercise will be the fifth multinational drill under the SCO framework and will aim at deterring the "three evil forces" of terrorism, separatism and extremism, safeguarding regional peace and stability and improving the militaries' coordinated ability to fight terrorism, Yang said. The exercise will not target any third party, he added. On Russia's "Aviation Dart 2014" international aviators' race, Yang said a squad of the Chinese Air Force will take part in the race in late July in a bid to upgrade cooperation between China and Russia and increase experience sharing with aviators from other countries. ^ top ^


Domestic Policy

Protest over removal of crosses from Zhejiang churches is now unlikely (SCMP)
A plan by Christians in Zhejiang province to hold a protest today over a government campaign to remove crosses from their churches is likely to be called off, a church leader said last night. Police had called several pastors and warned them against joining a silent protest outside Pingyang county's government offices in Wenzhou, the pastor said. "I received a call from a senior officer from Pingyang county police station to ask whether I was the main organiser of tomorrow's silent protest, which they said would put everyone in trouble because it's illegal," the pastor said last night. The police calls had led other church leaders to also withdraw from the protest, the pastor said. Leaders from 135 churches in Pingyang county, which are all members of the officially sanctioned Three-Self Patriotic Movement of the Protestant Churches and the China Christian Council, had originally agreed to join the protest. Wenzhou has one of the highest concentrations of Christians on the mainland. About 360 crosses and one church have been torn down in Zhejiang since January in the "Three Rectifications and One Demolition" campaign, said China Aid, a US-based religious rights group. Opponents say the campaign amounts to religious persecution, while local government officials argue the initiative only targets "all illegal buildings, not just churches". "The cross is sacred and inviolable for all Christians. It's definitely a humiliation for us to take down crosses from our churches," another pastor in Pingyang said. "We are very angry, but the local authorities threatened us not to send anyone to petition Beijing or talk to overseas media. "We decided on a silent protest because we have no other way to go." The provincial government's demolition campaign received international coverage and criticism from religious rights organisations after the Sanjiang Church in Wenzhou was torn down in April. "We have repeatedly sent representatives to try to negotiate with the authorities, asking them which rules our churches have violated and we will try our best to correct it, but all of our requests have fallen on deaf ears," a third pastor from the county said. Church leaders have vowed to continue their campaign to protect the crosses. A source close to the county government said officials had been told that a provincial leader would visit Pingyang on an inspection tour on June 28 to assess progress in removing crosses that breach regulations. "That's why the county government and police are so anxious to watch us closely," another church leader in the county said. "We have pledged to protect our cross. We will take it down from the top of our church when the Communist Party takes down its party flag." ^ top ^

UNESCO adds Grand Canal, Silk Road route to World Heritage List (Global Times)
China gained two more UNESCO World Heritage sites Sunday, bringing the nation's total to 47. The decision was announced by the UNESCO World Heritage Committee in Qatar. The Silk Road, which served as a corridor for trade and cultural exchanges between Asia and Europe dating back 2,000 years ago, was inscribed on the World Heritage List along with the Grand Canal, which runs 1,794 kilometers from Beijing to Hangzhou, East China's Zhejiang Province. China's application for the Silk Road was jointly submitted with Kazakhstan and Kyrgyzstan, the first transnational application for China. "We hope the experience gained in the application process will lay the foundation for future transnational projects," said Tong Mingkang, deputy director of the State Administration of Cultural Heritage. Du Yue, secretary general of the Chinese delegation at the 38th session of the World Heritage Committee, said the approval of the application would strengthen cultural exchanges between the three countries. A total of 33 heritage sites are included along the historic trade route, 22 of which are located in the provinces of Henan, Shaanxi, Gansu and the Xinjiang Uyghur Autonomous Region. Kazakhstan and Kyrgyzstan have eight and three sites respectively. Chinese President Xi Jinping mooted the idea of a Silk Road Economic Belt during his visit to Central Asia in 2013, which was then supported by many neighboring countries. "Different from the Silk Road, China's Grand Canal is a living heritage, which makes its preservation more challenging. Many projects have increased awareness of preservation and improved protective measures during the application process. They should be further enhanced with more investments and higher standards," Chen Tongbin, director of China Architecture Design and Research Group, was quoted by the Xinhua News Agency as saying. The Grand Canal, the longest artificial waterway in the world, dates back more than 2,400 years, still plays a dynamic role in transportation, irrigation and flood control. Other canal systems are listed as World Heritage sites, including the Canal du Midi in France and the Amsterdam Canal District of the Netherlands. "Those canals, built after the industrial revolution, date back some 300 years. The Grand Canal has significant historical and technological value," said An Jiayao, a research fellow with the Institute of Archaeology at Chinese Academy of Social Sciences. ^ top ^

Xi Jinping's important remarks published (Xinhua)
The Communist Party of China (CPC) Central Committee on Monday ordered all CPC members to study a recent book of President Xi Jinping's remarks. The book, organized by the Publicity Department of the CPC Central Committee, became available in the Xinhua Book Store chain on Monday. The Publicity Department and the Organization Department of the CPC Central Committee ordered Party organizations at all levels to organize study sessions on the book. According to a statement jointly issued by the two departments, all institutions of higher learning across the country should use the book as the textbook for teachers and students. The statement said, the book expounds the significance, connotations, underlying principles, and practical requirements of Xi's remarks, and digests Xi's major strategic thinking and theoretic perspectives. ^ top ^

Death sentence overturned in 'landmark' Chinese domestic violence case (SCMP)
China's supreme court has overturned the death sentence of a woman convicted of killing her husband after she endured months of domestic abuse, a member of her family said. The US-based rights group the Dui Hua Foundation hailed the court's decision as "a landmark ruling with far-reaching implications for survivors of domestic violence". The Supreme People's Court reversed its approval of the death sentence given to 43-year-old Li Yan from Sichuan, her brother Li Dehuai said. He said he had first learned of the ruling in a letter sent by his sister from prison. "A court official told me the verdict was returned sometime in May," Li Dehuai said. Li added he did not know why the court had made the surprise decision or when the court in Sichuan would schedule a retrial. Li Yan's conviction became a landmark case in a decade-long campaign for comprehensive legislation on domestic violence. Her husband, Tan Yong, had beaten Li, extinguished cigarettes on her face and locked her out on their balcony in winter, according to the defence lawyer's earlier statements. In November 2010, a drunken Tan threatened to shoot Li with an air rifle, then he beat and kicked her. She hit him over the head with the gun barrel, accidentally killing him. Li then dismembered the body. She was arrested after a friend she confided in about the killing informed the police. John Kamm, the founder and director of the Dui Hua Foundation, said: "In China, if a woman is repeatedly abused and kills the man reacting to the abuse, she will be sentenced to death," he said. "This ruling reverses the trend. I don't think the [Sichuan] High Court will sentence Li Yan to death again. She will not be executed." ^ top ^

Report underlines China's cyber security challenges (Xinhua)
Cyber security is the most important issue that China has to address in developing its new media, according to a report released Wednesday by the Chinese Academy of Social Sciences. After the whistleblowing of former U.S. National Security Agency (NSA) contractor Edward Snowden, the think tank believes that cyber security is relevant to a country's political and cultural safety, more than just information security. The United States is the world's sole power to adopt an offensive strategy in the cyber world, while China and Russia can only resort to a defensive strategy, meaning the defense of their cyber space will become a strategic priority, according to the report. The think tank advised Chinese authorities to raise their capacities in self-defense and formulate an effective defensive strategy. ^ top ^

Food safety law amendment promises to get tough on offenders and more generous to victims (SCMP)
Lawmakers in Beijing are considering amending the law on food safety that promises tougher rules on food production, sales and supervision. This will be the first time the Food Safety Law has been amended since it was hurriedly enacted in 2009 amid one of the country's most notorious food safety scandals, when melamine-tainted milk killed at least six children and sickened 300,000 others. "The amendment increases penalties for offenders, and compensation for their victims," said Liu Junhai, a Renmin University law professor who helped draft the amend ment. Zhang Yong, head of the food and drug administration, said food safety had been improving but "the situation remains severe". The existing regulatory system is not effective, penalties are too lax and do not serve as a deterrent, Xinhua reported. "The amendment will impose the harshest civil, administrative and criminal penalties on offenders and toughest punishment on supervisors who neglect their duties," Xinhua quoted Zhang as saying. Zhang presented the proposed amendment to lawmakers at the bi-monthly session of the Standing Committee of the National People's Congress, which ends on Friday. The proposed amendment increases the number of articles by 50 per cent and proposes food manufacturers or operators who add chemicals other than approved food additives have their licences revoked and face fines of up to 30 times of the product value, up from 10 times. Instead of being compensated for 10 times the price of an offending product, the amendment proposes that consumers be compensated three times the financial losses incurred as a result of food-related problems. Employees engaged in testing services who present false reports that result in major food safety incidents, or engaged in related crimes, will face lifetime bans from such work. "This is great improvement and very necessary," said Fan Zhihong, associate professor at the China Agricultural University's College of Food Science and Nutritional Engineering. "It will deter anyone from providing false test results given the high price offenders will pay." Fan said the law had already achieved good results by imposing harsh penalties. Heads of local governments and other officials directly in charge will also be held accountable under the amendment. Those who fail to investigate, delay reporting or cover up food safety incidents will be sacked. Those caught abusing their power, neglecting their duties for personal gain or found responsible for food safety cover-ups will face criminal charges. According to the Ministry of Public Security, police prosecuted more than 52,000 food safety cases in the past three years. Media also revealed such shoddy practices as feeding pigs the asthma drug clenbuterol to produce lean meat, recycling cokking oil and passing off fox meat as mutton or beef, among others. ^ top ^

China passes revised law for army facilities protection (Xinhua)
China's top legislature on Friday passed a revised law to improve the protection of military facilities, adding provisions to stress the security of waters under military control. Aquaculture is banned in waters under military control, and non-military facilities are not allowed to be set up in such areas, according to the revised law. Any fishing or other activities must not affect war preparedness, training and duty performing of military ships, the law stipulates. The law also bans building facilities or obstacles that could interfere with military radio equipment, and bans conducting activities disturbing the electromagnetic environment of military radio equipment. ^ top ^



Beijing deals with 200 duty crimes in 17 months (China Daily)
Beijing prosecutors have tackled more than 200 cases of duty crimes in 17 months through May, the capital's top procuratorate said on June 24. Prosecutors dealt with 201 cases, involving 236 people, from January 2013 through May this year, the authority said. It also showed that most of them involved corruption and embezzling public funds. Among the suspects, 152 have been prosecuted, it said, adding that some suspects were high-level officials, such as those at the bureau level. For example, Chen Zhoukun, former deputy director of No 15 Bureau under China Electronics Technology Group Corp, was prosecuted for embezzling over 25 million yuan ($4 million) of public funds in 2013, the authority said. To better and effectively cope with the cases, the municipal prosecuting authorities established a database last year that has recorded 240 judicial documents, including indictments and judgments, since 2008, the statement said. The database also covers inquiry videos and analysis reports of key cases from 2008 to 2012, the statement said. In addition, prosecutors across the city opened report hotlines and websites for the public to provide clues, it said, adding that since 2013, prosecutors have received almost 5,000 tips involving duty crimes, up 8 percent in 2012. ^ top ^



Police shoot dead 13 attackers who rammed a public security building in Xinjiang (SCMP)
Police shot dead 13 people who attacked a police station in Xinjiang yesterday, local authorities said. Attackers drove at least one car into the main police station in Yecheng and set off explosives. Three policemen were injured. Police in Kashgar, which administers the larger prefecture that contains Yecheng county, did not answer calls. A spokesman for the Xinjiang government also could not be reached for comment. Yecheng, also called Kargilik, is no stranger to violence. In March 2012, nine axe-wielding men attacked and killed 13 shoppers and police in the town's market. Police shot dead seven of the attackers and arrested the two survivors. Yecheng is at the crossroads of highways leading to Tibet, Qinghai and Kashgar. The county also shares borders with, and road crossings, to Pakistan and Afghanistan. Last month, attackers drove two SUVs into a street market in Xinjiang's capital, Urumqi, and threw explosives, killing 39 people and injuring scores more. On April 30, a bomb and knife attack at Urumqi South railway station killed three people, including two perpetrators, and injured 79. Xinjiang's nine million Turkic-speaking Muslim Uygurs, by far the largest of about a dozen minorities in the autonomous region, have complained of discrimination and ostracisation from their culture and identity in a Han-dominated country. Violence linked to Xinjiang's ethnic unrest has spread to other cities. On March 1, a group of men armed with knives killed 25 people and injured more than 140 at the main railway station in Kunming, Yunnan. Last October, a car crashed in Tiananmen Square in Beijing and burst into flames, killing two bystanders and the car's three occupants. Thirty-eight people were injured. Officials usually attribute the attacks to Islamic separatists who want to establish an independent state called East Turkestan. President Xi Jinping has responded to the upsurge of violence with a massive security crackdown in the region. Tightened patrols, intensive weapons drills and other new security measures have been put in place. Dilxadi Rexiti, a spokesman for the World Uygur Congress, an organisation of exiled Uygurs, said the crackdown would exacerbate the situation. "Once again, I urge China to stop the repression and change its aggressive policies," Rexiti said. ^ top ^

Cuffed knifeman apologises for 'holy war' assault in China's Xinjiang (SCMP)
State television yesterday showed a suspect confessing and apologising for an attack on a mahjong parlour in Xinjiang, saying he had been influenced to carry out holy war by other gang members. China Central Television identified the man as Murzahti and said the interview took place in a local detention centre. A later Xinhua report gave his age as 19. Murzahti spoke in Uygur, the Turkic language of the ethnic minority. Extremists among Xinjiang's nine million Uygurs have been blamed for a spate of attacks on civilians, including a market bombing last month that killed 43 people in Urumqi, the region's capital. CCTV said Murzahti was one of three attackers who entered the mahjong parlour in Hotan city on Sunday last week and began slashing at players with axes. The people in the parlour fought back with chairs, state media reported. The three assailants ran outside but were prevented from fleeing the scene by other people armed with sticks until security forces arrived. The other two attackers were seriously injured and died, authorities said earlier. Four civilians were wounded. Police said the gang had been influenced by overseas religious extremist videos, CCTV reported. Murzahti said the gang's leader, who was among the dead, had told him that if he died carrying out jihad, or holy war, he would enter heaven directly. Murzahti, shown with a bandage on his head, said he was sorry for his behaviour. He added that if he was released from detention he would not commit a similar act of violence and would take care of his parents. CCTV often airs footage of suspects apologising for crimes such as theft or fraud and has also shown video footage of high-profile individuals being interrogated. Critics say airing a confession before an accused is brought to court - and sometimes before charges are officially lodged - is inconsistent with rule of law. The incident was one in a series of attacks pointing to growing unrest in Xinjiang. On Saturday, police in Kashgar shot dead 13 assailants who rammed a truck into a police station and set off explosives, state media said. Three officers were wounded. ^ top ^

Xinjiang sets up trade zone in border county (Xinhua)
Northwest China's Xinjiang Uygur autonomous region broke ground for the construction of a border trade zone Friday to boost trade between local residents and their foreign neighbors. Taxkorgan Tajik autonomous county, which hosts the project on the Pamirs Plateau in southern Xinjiang, borders Pakistan, Afghanistan and Tajikistan. The trade zone, built with an investment of 100 million yuan ($16 million), covers an area of 99 mu (6.6 hectares). It comprises functional areas for commerce, trade, tourism, dining and accommodations respectively. Joint inspection units and other law-enforcement departments will be stationed in the zone. When it is completed, the project will provide 300 jobs for local people and create nearly 20 million yuan taxes annually for the local government, said Yu Jun, deputy head of the county. The trade zone will help increase incomes of farmers and herdsmen, boost tourism, and promote the Silk Road economic belt and economic cooperation between China and neighboring countries, added Yu. ^ top ^

Jailed Uygur academic Ilham Tohti's case handed to Xinjiang prosecutors, lawyer says (SCMP)
Authorities in Xinjiang said yesterday they had broken up 32 terrorist groups and arrested more than 380 suspects in the first month of a security campaign in the region. A total of 315 people had gone on trial and 13 had been executed, Xinhua reported after a press conference held by the region's government. The executions were announced by state media last week. Police had also seized 264 bombs, more than three tonnes of raw materials for explosives, 357 weapons and 101 computer hard drives holding extremist content, along with books, DVDs and terrorist training materials, Xinhua reported. Authorities said they had received more than 400 tips from the public that helped the police break up 11 terrorist groups. The crackdown comes amid several violent attacks in Xinjiang and elsewhere in recent months that authorities have blamed on extremists seeking independence for the region. These include an attack on an open-air market in the regional capital, Urumqi, last month that killed 39 innocent people. Four assailants also died. Exiled Uygur groups and human rights activists say government curbs on the ethnic group's language, religion and culture have inflamed tensions in Xinjiang, allegations authorities strongly deny. An outspoken Uygur economist and advocate for the rights of the ethnic minority group, Ilham Tohti, was detained in January in Beijing after a raid on his home. He was later charged with spreading separatist ideas. Fears that Tohti was secretly put on trial and given a harsh sentence were quashed by his lawyer yesterday. Li Fangping told the South China Morning Post he had finally received word that Tohti's case had been transferred to the prosecutor's office in Urumqi. Li voiced fears last week that 44-year-old Tohti had been secretly tried and punished by a court of the Xinjiang Production and Construction Corps, a quasi-military administrative body under the People's Liberation Army. Li and a fellow lawyer, Wang Yu, travelled to Urumqi on Sunday to check on the case and were relieved to learn no trial had taken place. "[Wang and I] met staff at the case management centre," Li said. "Now we are waiting for arrangements to check the files." Tohti's wife, Guzaili Nuer, told the Post she was waiting for more information from Li before deciding whether to visit Urumqi. But she was unsure whether authorities would allow her to see her husband. "I worry about him in jail as he hasn't been able to see anybody in five months," she said from their home in Beijing. Her husband "had been in good health before he was arrested. I don't know how he is now," she said. ^ top ^

Eliminating online terror is a war China must win (Xinhua)
If terrorism is threatening the world like a cancer, online videos and audio promoting terrorism are like cordial that speeds up the growth of the cancer. And China is determined to eliminate such content before it is too late. Violence and terrorism have been on the rise in China, with the Xinjiang Uygur Autonomous Region suffering the most, especially from the East Turkestan Islamic Movement (ETIM). Listed by the United Nations Security Council as a terrorist organization in 2002, the ETIM is not an isolated group, but part of an international terrorist system. As is shown in a TV program released by China's State Internet Information Office on Tuesday, terrorists and their supporters are increasingly using the Internet and new communication technologies for the purposes of recruitment and incitement to commit terrorist acts, as well as for the financing, planning and preparation of their activities. Investigations have showed that most of the suspects seized in recent bloody terrorist attacks in China were led on by terrorist video and audio products to carry out these atrocities. Many of them had learned how to make explosives through online tutorials. They exchanged experiences of making explosives and propagating Jihad through chat tools, text messages and illegal preaching sites. Some suspects admitted that they became more passionate about Jihad after watching these videos online. As another example of the harm of online terror, the Tsarnaev brothers suspected of perpetrating the Boston Marathon bombings in the United States were recruited via the Internet and found online material that helped radicalize them. All these cases showed that the Internet is not the cause, but a very powerful means of spreading terrorism and extremism. That is why the Chinese authorities are so determined to rid the Internet of audio and video materials that promote terrorism and violence. The campaign launched last week not only aims to prevent terrorist materials produced overseas from being disseminated in China, but will also contribute to global efforts in monitoring terrorism.p Among those who advocate absolute freedom of the Internet, there are concerns that the Chinese government's campaign to rid cyberspace of terrorist content could harm people's personal rights. But they are wrong. While it is important to protect freedom of speech online, the international community must make sure that terrorists are not free to end the lives of innocents. Now that terrorists are using the Internet to spread their message, there is a risk that one day they will target the Internet itself, as it is a technology on which the world now depends. China has taken serious steps to police the Internet. The country needs support and cooperation rather than doubt or criticism. Otherwise, the kind of terrorists who shouted "Let there be holy war" as they attacked Beijing's Tiananmen Square in October -- as shown in the TV documentary -- will shout the same slogan elsewhere in the world. In an era when information is freely available for anybody anywhere who wants to get involved in terrorism, China's actions concern the survival of everyone. ^ top ^

Detained Uygur economist Ilham Tohti denied food for 10 days in custody, lawyer says (SCMP)
Detained Uygur economist Ilham Tohti staged a hunger strike in jail and was later denied food for 10 days, his lawyer said after visiting him yesterday at a detention centre in Xinjiang. Until now, little has been known about the status of Tohti, an economics professor, since he was taken away from his home in Beijing by police in mid-January and taken to Xinjiang, where he was later accused of separatism. Tohti has been a moderate but vocal advocate for equal rights for the Turkic-speaking Uygur ethnic minority in the western region, which has been shaken by escalating unrest. Tohti began a hunger strike on January 16 when the detention house refused to provide halal food. The hunger strike lasted 10 days until staff agreed to provide him Uygur naan bread. "They gave him a small piece of naan, an egg and milk as a meal. The detention house refused to specially prepare halal food just for him," said Li. Then, on March 1, staff suddenly stopped providing food. Only a half-filled glass of water was left for him. That was the day suspected Uygur assailants attacked Kunming railway station, killing 29 people and injuring 143. According to Li, Tohti survived by sipping a little of his meagre water ration every day. "He has lost 16kg," Li told the Post. "He also suffers severe prostatitis, but does not qualify for medical parole." He had also been put in shackles for about 20 days. Calls to the detention centre in Urumqi, the capital of Xinjiang, went unanswered. Yesterday's meeting lasted about five hours, but did not make Li any more confident about the case is being handled. Tohti's wife, Guzaili Nuer, also said she feared for her husband's health. But Li said, at this stage, Nuer won't be able to visit Tohti. Li and a fellow lawyer went to Urumqi this week, and were told the case had been transferred to prosecutors. Tohti says he is innocent and advocates ethnic tolerance. ^ top ^

Forced to go five-star: How China sends dissidents on all-expenses paid trips to keep them quiet (SCMP)
As top Communist leaders gathered in Beijing, veteran Chinese political activist He Depu was obliged to leave town - for an all-expenses-paid holiday to the tropical island of Hainan, complete with police escorts. It is an unusual method of muzzling dissent, but He is one of dozens of campaigners who rights groups say have been forced on vacation - sometimes featuring luxurious hotels beside sun-drenched beaches, trips to tourist sites and lavish dinners - courtesy of the authorities. It happens so often that dissidents have coined a phrase for it: “being travelled”. He, 57, had not been charged with any crime, but officers took him 2,300 kilometres to Hainan for 10 days to ensure he was not in the capital for this year's annual meeting of China's legislature, he said. Two policemen accompanied him, his wife and another dissident for dips in the ocean and visits to a large Buddha statue, he said. “We had a pretty good time, because a decent amount of money was spent on the trip, the local government paid for everything.” Altogether eight activists said they had been forced on holiday in recent years. “Every time there is an important national event I'm taken on vacation,” said Xu Xiangyu, who has long campaigned against officials she accuses of demolishing her house without any compensation. In 2011 police and court staff announced they and her family were going on a trip to Hainan - a place of internal exile for criminals, disgraced officials and renegade poets as early as the Tang dynasty of 618-907. She rifled through holiday snaps showing her posing at a seaside park, and with her chaperones around a table heaped with empty plates. “The hotel was luxurious, and we ate excellent food, they paid for everything,” she said of her guides. “We would spend up to 1,000 yuan (HK$1,260) on a single meal.” China's ruling Communist party keeps a tight grip on power, frequently detaining those who speak out against government abuses. Over the last decade domestic security spending has soared, regularly exceeding Beijing's declared military outlays. It has built a vast “stability maintenance” apparatus and President Xi Jinping has sought to further stifle dissent since his 2012 ascension to the top of the ruling party. State-enforced travel spiked this year ahead of the 25th anniversary of the Tiananmen Square crackdown - where the army killed hundreds of protesters - on June 4. According to US-based advocacy group Human Rights in China, 15 people were taken on forced vacations beforehand. “I've just returned from Beijing after being travelled,” Yan Zhengxue, a painter and government critic, said. Police “went with me everyday, and paid for everything” on a trip to Ningxia in the northwest, including the towering dunes of the Tengger desert. “If you refuse to go travelling, there will be consequences,” he said. “You have to go. Even though you are at tourist sites, you have been forced to go, so you're not in the mood to enjoy it.” Government personnel relish the trips, some regular forced travellers suggest. “We ate the best food, and drank the best alcohol. The security officials enjoyed it too. Not just any security official can go on this kind of trip, they need to be above a certain rank,” said environmental campaigner Wu Lihong, adding he was taken to the ancient city of Xi'an for two weeks in March. “Quite a few” officials from Beijing's secretive ministry of state security accompanied him, he said. They stayed at Xi'an's “best hotel”, he said, and saw the Unesco-listed Terracotta Warriors, as well as the “Wild Goose Pagoda”, a Tang dynasty tower that hosts night-time laser shows. “They are usually stuck inside using their computers and reading the papers, but by accompanying me they have a chance to travel and eat well,” he added. When Chinese citizens travel to Beijing seeking redress from higher authorities for local government abuses they risk detention in makeshift “black jails”, where they are sometimes beaten before being sent home. More persistent ones, though, are targeted for holidays. “If you're really grassroots you'll be held in a black jail. Forced travel is for fairly well-known activists,” said Maya Wang, of US-based campaign group Human Rights Watch. “It's a form of illegal detention,” she added. “This kind of forced travel depriving people of their freedom is unlawful.” China's foreign ministry often says that detained activists are treated according to the law. The public security ministry did not respond to a request for comment. Wang Rongwen, a longtime petitioner from Sichuan in the southwest, had her third trip ahead of the Tiananmen anniversary, with six officials taking her to the majestic peaks and gurgling waterfalls of the Tiantai mountains. During the Communist party's 2012 Congress she was brought to a hotel that boasts a chandeliered restaurant, marble-floored lobby and king-sized beds. But she did not enjoy the experiences, she said. “Being travelled is no better than being in a moving jail.” ^ top ^



Authorities rebuff HK 'referendum' (Global Times)
China's central authorities on Friday rebuffed an unofficial "referendum" into how the Hong Kong chief executive will be elected, saying such a "referendum" lacks constitutional grounds and is illegal and invalid. The referendum, organized by the Occupy Central movement, kicked off earlier on Friday and asked voters to choose from three shortlists, all of which suggest that any electoral plan of the chief executive should start with public nominations instead of Beijing's plan for the nominating committee. The Hong Kong and Macao Affairs Office of the State Council said in a statement that the election methods proposed are not in line with the universal suffrage method determined by the Basic Law of the Hong Kong Special Administrative Region (SAR) and the National People's Congress Standing Committee. The SAR government on Friday also said the so-called "civil referendum" has no legal effect, after repeatedly pointing out that according to Article 45 of the Basic Law, the power to nominate chief executive candidates is vested in the nominating committee only. "What must be pointed out is that a 'referendum' is a constitutional arrangement. Hong Kong is not a state and has no right to create a 'referendum.' Occupy Central movement's proposal has attempted to make Hong Kong's political system equivalent to that of a state and exposed its nature of favoring the 'independence of Hong Kong,' which is both illegal and unconstitutional," said Yuen Kwok-keung, the Secretary for Justice of the Hong Kong SAR. Wearing white T-shirts and chanting the slogan "June 22, voting together," over 200 Hong Kong residents and representatives from pro-democracy groups, including Tai Yiu-ting, the organizer of Occupy Central, and retired Cardinal Zen Ze-kiun participated in the voting launching ceremony on Friday. The voting period is to be extended to June 29, with online voting starting on Friday and poll booths open on Sunday. Tai told the Global Times that Occupy Central will not demonstrate in Central, Hong Kong's financial district, on July 1. "We'll consider [a demonstration] after the government puts forward its plan, probably at the end of this year," Tai said. Some residents who came to the launching ceremony had little knowledge about the voting proposals or the universal suffrage in 2017. Chim Miu-cheung, 65, believed the "referendum" was a chance for Hong Kong people to "pursue democracy," but she admitted she did not know the differences among the three shortlists. In 2007, the Standing Committee of National People's Congress announced that Hong Kong could embrace universal suffrage as early as 2017 in electing the next chief executive from a number of candidates determined by a "broadly representative nominating committee." "It is likely some small change will be added into the Basic Law's Appendix, such as expanding the current four sub-sectors the representatives come from to five. However, the change will always be subjected to the framework of the Basic Law," said Tian Feilong, a legal expert at Beihang University. Some 326,947 people voted as of 9 pm on Friday, according to the website of Hong Kong University's public opinion program. The voting was also widely criticized by many organizations in Hong Kong. Lobby group Silent Majority released a video saying the protests in Central would leave the whole city in gridlock and over 1.3 million people would be trapped in Hong Kong island in one hour. The Hong Kong-based Sing Tao Daily reported Friday that over 53.6 percent of local people opposed the Occupy Central campaign, according to a poll conducted by the Hong Kong government this week. ^ top ^

Cyberattacks against Occupy Central poll traced to mainland firms' computers in Hong Kong (SCMP)
Up to 40 per cent of cyberattacks on the website used to run Occupy Central's unofficial plebiscite on electoral reform came from computers registered to mainland firms in Hong Kong, said an IT expert who advised the poll's organisers. But it was possible the firms were unaware their computers were involved, as they may have been controlled by hackers, said Young Wo-sang, convenor of the Internet Society of Hong Kong's security and privacy working group. Dr Chan Kin-man, a key organiser of the civil disobedience movement - which has vowed to blockade Central if the government fails to offer a satisfactory reform proposal - said the findings had fuelled Hongkongers' worries that Beijing was the ultimate hacker of the system. The 10-day so-called referendum, allowing Hongkongers to pick their preferred reform proposal from a shortlist of three, faced over 10 billion distributed denial-of-service attacks shortly after it launched for pre-registration on June 13, knocking the system offline for periods. Young said many attacks appeared to have come from computers in Hong Kong registered to mainland firms. "After tracing the IP addresses, we have found that 30 to 40 per cent of them were registered by mainland enterprises," he said. Young has been advising the University of Hong Kong's public opinion programme - commissioned by Occupy to handle the poll - on security. He said the poll team had passed its information to police and urged them to locate the real culprit. Last night police said they were still investigating. More than 720,000 votes have been cast, including 48,000 at 15 polling stations on Sunday. In Beijing, a mainland official joined the debate, saying the voting system was unprofessional based on his first-hand attempts to cast a vote. Zhang Hong, a researcher with the Cyber Security Research Institute under the Ministry of Industry and Information Technology, said he voted twice on Sunday despite not being a Hong Kong permanent resident. He said he logged on to the online voting system using a false Hong Kong address and two Hong Kong cellphone numbers with the help of a friend in the city, and two Hong Kong ID numbers generated online. "The credibility of the voting system is doubtful due to the technical loopholes," he said. Zhang said he had tried to vote online eight times and succeeded twice. "The system makes it impossible to verify whether all the votes are from qualified voters." He tested the system "out of curiosity", and concluded the poll result was contaminated. "[The voting] is merely self-serving. It is interesting for those who have no technical background but left us professionals speechless," he said. Zhang also questioned people who said the cyberattacks were from mainland companies. "It is not difficult to remove one's footprint from the internet. The attacker could easily hide their identity and then launch the attack," he said. "It is far-fetched to accuse the mainland authorities." In response, Chan said Occupy had tried to prevent any dishonest voting. "I am particularly concerned that even mainland officials have failed to realise that using others' identities is in fact an offence under the city's laws," Chan said. He urged people to vote at polling stations if they feared their identities were being used dishonestly online. ^ top ^

Occupy Central rifts widen (Global Times)
The pro-democracy camp in the Hong Kong Special Administrative Region (SAR) is divided over whether a civil disobedience campaign will take place on July 1 to shut down the city's financial district to make an appeal for electoral reform, amid criticisms and warnings that it may jeopardize the SAR's economy. While an annual July 1 march in the city has been held since 2003, it is expected that the number of participants this year may be pushed up by an unofficial "referendum" initiated by the Occupy Central movement, which has been condemned as invalid and lacking in a constitutional basis by the authorities. The organizers claimed that so far, more than 700,000 votes were cast, but doubts have been cast on its credibility due to flaws in the online polling system. Tai Yiu-ting, an associate law professor at the University of Hong Kong and the co-organizer of the Occupy Central movement, told the Global Times Tuesday that after the poll concludes on June 29, a proposal for the selection of Hong Kong's chief executive will be submitted to the SAR government. He also admitted that there could be some loopholes as the vote is run by a non-government organization. "Repeat votes will be deducted after the whole referendum ends and the number will be smaller," he said. The poll lets voters choose an electoral method from among three plans, all of which contained public nominations, while the central authorities said the SAR's chief executive should be elected through universal suffrage among candidates that are approved by a nominating committee. In contrast to Occupy Central's initial plan to shut down the financial district in the summer if their appeal is not dealt with, Tai said the movement will wait until the release of a government proposal on electoral reform, which is due at the end of 2014, to decide whether to go through with the plan. However, Chow Yong-kang, the convener of another pro-democracy group, the Hong Kong Federation of Students (HKFS), told the Global Times that he couldn't rule out the possibility of blocking the financial district on July 1. Chow said thousands of college students are expected to take to the streets on that day, and may start to occupy the central area depending on the government's attitude toward the referendum. Tai said he and Chan Kin-man, another organizer of the Occupy Central movement, have been attempting to persuade other groups, including the HKFS, to not launch the occupation on July 1. But Chow said Tai and his organization will be blamed if they don't follow the students, should they launch the campaign on July 1. Differences between the pro-democracy groups also include their positions on electoral reform. "In fact, we don't really need public nomination and if the government would offer an electoral plan that allows Hongkongers to choose candidates with different political backgrounds, we won't occupy central," Tai said. However, Chow insisted that public nomination is "a must." Differences have occurred within the pro-democracy groups and some mild ones will be pushed or even "hijacked" possibly pushing the situation out of control, a political science professor in Hong Kong, who requested anonymity, told the Global Times on Tuesday. "The Occupy Central campaign will only make the current Hong Kong political groups more divided and make the political situation more chaotic, and that will not only fail to push democracy, but will certainly influence Hong Kong's long-term development in various aspects," the professor said. Yam Chi-kwong, former head of the Hong Kong Monetary Authority and a renowned economist, said in a preface to his latest book, which was released Monday, that the central government has been trying to reduce the Chinese mainland's excessive dependency on the SAR in its global financial activities by establishing a trial free trade zone in Shanghai and offshore yuan centers overseas. "Perhaps Hong Kong's political development is encroaching on national leaders' confidence in Hong Kong," Yam warned, indicating a potentially weakened competitive edge for the city. Mok Kin-wing, deputy executive director of the Hong Kong Department Stores and Commercial Staff General Union, told the Global Times that participants in Occupy Central are trying to use illegal means to pursue a political purpose that would pose great threats to tourism in Hong Kong. Tourists won't go to Central due to a fear of violence; department store employees wouldn't be able to work under a paralyzed traffic system in Central; and the revenue of the restaurants and shopping malls in the financial street would witness a distinct drop, he said. According to an estimate by Francis Lui, deputy director of the business school at the Hong Kong University of Science and Technology, the Occupy Central protest would incur a total economic loss of $206 million per day. "It is highly possible that the Occupy Central campaign could get out of control considering the recent violent protests," Mok said. Tien Puk-sun, a member of the Hong Kong Legislative Council and founder of the G2000 clothing retail chain, agreed with Mok by saying that young people and college students are easily incited. But Tien also said the referendum, though it may contain some fake or repeated votes, should receive attention from the SAR government. "Now the government should talk with young people and explain to them the Occupy Central protest is illegal and communicate to them that democracy and the rule of law could be achieved in Hong Kong," he said. Hongkongers want universal suffrage and the central government has assured them of that, he added, saying that a lack of communication with young people resulted in mistrust. In the meantime, the unofficial referendum could very easily send out the wrong message, he said. ^ top ^

Hong Kong police stage mock protest in 'major' training exercise for Occupy Central (SCMP)
"Protesters" blocked a road on the grounds of the Police College in Aberdeen yesterday in what force insiders described as a "major exercise" to prepare for possible trouble during the Occupy Central mass sit-in. All parking at the college was suspended for the day to facilitate the seven-hour exercise, which began at about 10am. During a simulated march, there were chants of "make way" and "stop the northeastern New Territories new-towns plan" from the 30 or so protesters, all of whom were officers. One group barged into police and another blocked the road. Officers then formed a cordon around the sit-in, while other police arrived with barricades. Protesters lying on the ground were carried to a bus nearby. Police have clashed twice recently outside the Legislative Council complex with protesters fighting plans for new towns. A police spokesman said yesterday's exercise was part of the force's regular drills to prepare officers to "handle public processions more professionally". Some 4,000 officers will be deployed to maintain order during the annual July 1 march, part of their preparations for the Occupy Central protest, which will go ahead if the government fails to come up with an acceptable plan for the 2017 chief executive election. The Police College will be turned into a temporary detention centre during the July 1 operation, police sources said. ^ top ^

China opposes interference in Hong Kong affairs (Xinhua)
China on Thursday voiced opposition to the US State Department's remarks on Hong Kong, and reiterated that Hong Kong's political system is its internal affair."Hong Kong's political system is a domestic affairs in which other countries have no right to interfere," said Foreign Ministry spokeswoman Hua Chunying at a regular press briefing. Hua made the remarks while commenting a statement by spokeswoman of the US State Department Marie Harf, who said, "we do believe that the legitimacy of the chief executive will be greatly enhanced if the promise of universal suffrage is fulfilled and if the election provides the people of Hong Kong a genuine choice of candidates representative of the voters' will." "The Chinese government firmly opposes interference from any foreign country in any form," Hua said. ^ top ^



Taiwan's first lady postpones rare Japan visit over diplomatic row (SCMP)
Taiwan's first lady has postponed a rare visit to Japan after a diplomatic row over the wording of posters promoting the island's exhibition in Tokyo of treasured artefacts. Chow Mei-ching, wife of President Ma Ying-jeou, was to leave on Sunday for Monday's opening of the exhibition, at which hundreds of artefacts and artworks from the Taipei National Palace Museum would have gone on display in Japan for the first time. The Taipei museum has said the Tokyo National Museum guaranteed in a contract that the lender's full name would be used and that the word “national” would not be omitted in promotional posters and tickets. But less than a week before the opening, the Taipei museum said the Tokyo museum had failed to use the word “national” on many of its posters and tickets. The name issue has long been a sensitive topic for Taiwan, which is recognised by only 22 countries after a decades-old diplomatic tug-of-war with China from which it split in 1949. On Friday Ma's spokeswoman Ma Wei-kuo warned in a strongly-worded statement that “national dignity definitely comes before cultural exchanges”. The spokeswoman confirmed on Sunday that the first lady's trip was postponed but would not provide details. The Taipei museum said on Sunday its Tokyo counterpart had shown “sincerity” by taking down the problematic posters and other measures. But the question of whether the exhibition would open as scheduled “would be dictated by the outcome of the improvement”. Japan, like most countries, has diplomatic ties with Beijing rather than Taipei. But it maintains close trade and other ties with Taiwan, which was its colony from 1895 to 1945. The National Palace Museum last year announced the loan of 231 artefacts to Japan, its first to an Asian country, following exhibitions in the United States, France, Germany and Austria. The Taipei museum boasts more than 600,000 artefacts spanning 7,000 years of Chinese history from the prehistoric Neolithic period to the end of the Qing Dynasty. The museum's contents - one of the world's finest collections of Chinese treasures - mostly came from Beijing's Forbidden City. They were brought to the island by Nationalist leader Chiang Kai-shek, when he fled to Taiwan after losing the Chinese civil war to the communists in 1949. For years the National Palace Museum was unwilling to lend the artefacts to Japan for fear that China would try to reclaim them, until the Japanese government passed a law in 2011 to prevent such seizures. China regards Taiwan as part of its territory awaiting reunification, by force if necessary, although tensions have eased markedly since Taiwan's Beijing-friendly Ma took office in 2008. ^ top ^

Landmark Taiwan trip bolsters Straits links (China Daily)
The mainland's chief Taiwan affairs official began a four-day trip to the island on Wednesday by greeting people in the Minnan dialect, a major local language. Zhang Zhijun, the first such official to visit the island since 1949, also said: "It took me only three hours to fly from Beijing to Taipei. However, it has taken 65 years for cross-Straits ties to take this step." He was welcomed by crowds of local people chanting "people across the Straits are one family" and "the more we visit each other, the closer we are". He said people from both sides have benefited from peaceful development in recent years. Zhang said cross-Straits ties should be boosted continuously even though many challenges remain. "In the past, it was unimaginable for chief officials on cross-Straits issues to meet with each other. I'm glad to become the first mainland director of Taiwan affairs to visit the island," he said. "My heart is sincere." He made the remarks in the afternoon during a meeting with Wang Yu-chi, director of Taiwan's "Mainland Affairs Council". It is the second meeting between the two this year, following one held on the mainland in February. Zhu Weidong, deputy director of the Institute of Taiwan Studies at the Chinese Academy of Social Sciences, said the historic visit symbolizes the establishment and normalization of a communication mechanism between the chief officials. The mainland's cross-Straits policies will better reflect the opinions of Taiwan people after Zhang gets close to Taiwan society and hears what it has to say, Zhu said. Zhang is scheduled to visit New Taipei City, Taichung and Kaohsiung, meet the mayors of the three cities and chat to experts, college students, farmers, fishermen, members of minority groups, religious figures, and businessmen and spouses from the mainland. Chen Xiancai, a professor at Xiamen University's Taiwan Institute, said Zhang's visit is a key step for the mainland and Taiwan authorities to set up a system for holding direct talks on the basis of the "1992 Consensus" and the "one-China" principle. It is also practical for Zhang to visit grassroots society in Taiwan, listen to people on low incomes and have direct talks with small and medium-sized enterprises, Chen added. "Zhang is sincere in reaching out to the grassroots and getting to know the real thoughts of Taiwan people," he said. Despite plans for a service trade pact triggering protests in Taiwan, the mainland has not abandoned efforts and continues to boost ties, reflecting its confidence in addressing the problems, Chen said. The pact, aimed at giving investors wider access to each other's markets, triggered lengthy protests in Taiwan, but was not mentioned during the talks. On March 18, hundreds of students stormed into the legislative chamber in Taipei to protest the pact. The protests ended in early April after the pact was sent to the legislature for further review. Zhang said the two sides should boost political trust, maintain the "peaceful situation" of cross-Straits ties and enhance cooperation, adding that the grassroots and young people should communicate more to build mutual understanding. Cross-Straits ties will inevitably encounter various problems and challenges, but these difficulties will be overcome if both sides make continuous efforts, he said. Wang described Zhang's visit to Taiwan as director of the State Council Taiwan Affairs Office as having "great meaning". By setting aside disputes and creating "win-win results", the two sides have seen remarkable achievements in improving cross-Straits ties in the past six years, he said. ^ top ^

KMT Vice President Hau Lung-bin begins first trip to Beijing as Taipei mayor (SCMP)
Taipei Mayor Hau Lung-bin, tipped to run for president of Taiwan in two years, is due to meet senior leaders in Beijing today. It is Hau's first official visit to Beijing, and analysts said it would help boost his profile if he does stand for the presidency. Hau, who is also vice-chairman of the island's governing Kuomintang, will meet Yu Zhengsheng, a member of the elite Politburo Standing Committee, and Chen Deming, head of the mainland's Association of Relations Across the Taiwan Strait, according to the United Daily News. Hau arrived yesterday for a four-day visit to the mainland. He previously met Yu in 2010 in Shanghai when the mainland official was Communist Party chief of the city. "Yu is an old friend of mine. I hope our meeting will help Taiwan foster closer ties with the mainland," Hau said. He is also due to meet Zhang Zhijun, Beijing's top Taiwan affairs official, who is currently touring Taiwan, before he leaves for home on Sunday. "The tour shows his mainland connections where he enjoys a clear edge over his [presidential] rival Eric Chu," said Wu Jau-shieh, a cross-strait relations expert from National Chengchi University in Taiwan. After sweeping protests in Taiwan earlier this year over a cross-strait trade pact, the KMT would nominate a candidate who had the knowledge to foster ties with Beijing without angering the public, Wu said. Another analyst based in Taipei, who asked not to be named, said the mainland was keen to forge more ties with the KMT beyond President Ma Ying-jeou. "The Chinese Communist Party increasingly sees Ma as a lame duck and is looking for a new ally or client in Taiwan: many KMT figures seem to by vying for this position," he said. Li Fei, the deputy director of Xiamen University's Taiwan Research Institute, said he thought it unlikely that Hau would seek the presidency. The mayor was more likely to the seek nomination as vice- president or chief of the Executive Yuan, using his connections with mainland officials as a political bargaining chip within the party, said Li. "I think Hau is just a supporting actor, given that both Wu Den-yih and Eric Chu [KMT challengers for the presidency] have proven to be more popular among the public," Li said. ^ top ^



Stock markets tumble as IPOs attract funds (Global Times)
Stock markets in the Chinese mainland ended the lower last week, despite some gains on Friday, as a string of companies went public throughout the week. The benchmark Shanghai Composite Index edged up 2.94 points or 0.15 percent to 2,026.67 points on Friday, the lowest in a month. The index ended the week with a loss of 2.8 percent from the previous Friday, June 13. The Shenzhen Component Index rose by 0.21 percent or 15.37 points to 7,195.69 points on Friday, with a weekly loss of 3 percent. The combined turnover on the two bourses on Friday was 127.03 billion yuan ($20.4 billion), down from Thursday's 176.5 billion yuan. Friday's slight gain, driven by the plastic products manufacturing and crude oil industries, came after Chinese Premier Li Keqiang said in London during a three-day visit that the country's economy will not experience hard landing. Although Li expressed his confidence on China's economy, the stock markets plummeted as listings by four mainland companies created huge capital demand. The four companies, with business in fields ranging from auto parts to environmental technology, raised a total of 1.8 billion yuan, according to the statements the firms filed to the Shanghai and Shenzhen bourses. The China Securities Regulatory Commission plans to allow 100 companies to go public during the rest of 2014, bringing the full-year tally up to 150, Reuters reported on Friday. That will further drive the stock market down, experts said. Lock-up shares of 20 companies worth 17.2 billion yuan will become tradable this week, according to the Shanghai and Shenzhen exchanges. Bucking the overall trend, three stocks, including the real estate investor Zhejiang Guangsha Co Ltd and Shaanxi Qinling Cement Co, jumped by the daily limit of 10 percent on Friday. ChiNext, China's NASDAQ-style board for high-tech and fast-growing start-ups listed in Shenzhen, grew by 1.01 percent or 13.33 points to 1,333.98 points on Friday. The index fell by 4.4 percent last week. ^ top ^

Tax benefits expected as China pilots ESOP (Xinhua)
China has released long-awaited guidance on employee stock ownership plans (ESOP), but analysts expect more policy infrastructure, such as tax benefits, to be in place before the mechanism proves effective. China Securities Regulatory Commission (CSRC) on Friday allowed ESOP to be piloted in listed companies on a voluntary basis, as long as total stocks owned by employees account for no more than 10 percent of the company's share capital. For each individual employee taking part in plans, such proportion shall be kept at no more than one percent. The document also stipulates how long the stock shall be owned by an employee, as well as requirements on information disclosure and other regulations. The ESOP, in which companies provide employees with stock ownership to allow them to enjoy share entitlement under certain conditions, is a widely-used method to increase efficiency and internal growth of a company in mature securities market. Previously, China introduced plans that encouraged only senior executives to own stakes in listed companies. The CSRC began to solicit public opinions on the draft ESOP regulation in August 2012. But it was only last month the State Council made it clear in a document "to improve stock incentives of listed companies and allow them to carry out ESOP in various forms by regulation." The nod from the State Council was also in line with the task to diversify the ownership of State-owned enterprises and develop a mixed-ownership economy, one of the reform priorities set in a key plenum of the Communist Party of China in November 2013. In fact, de facto employee-owning-stocks phenomena are not uncommon in China's A-share market. CSRC data showed that by the end of 2012, 74 percent of listed companies had employees holding stocks of their own firm. ^ top ^

Why economic stimulus no longer works for China (SCMP)
There is a dispute between those who see mainland economic policy as merely being "fine-tuned" and those who see active stimulus. The debate is misguided: the level of stimulus may be relevant to the current state of the economy, but it will not affect where the economy is headed. Regardless of whether it is scattered or intense, monetary stimulus no longer works for the mainland economy and cannot boost growth. Consider using a hose to fill an empty swimming pool with water. At first, the hose has a dramatic effect. When the pool is filled, though, the hose merely causes the water to overflow. This is the situation in many countries where stimulus has been applied for most of the past decade. Chinese conditions, unfortunately, resemble less a pool and more a small lake. The Federal Reserve says the stock of broad money (M2) in the US was US$11.2 trillion at the end of the first quarter. Using Beijing's statistics, China's M2 stood at US$18.7 trillion, a staggering two-thirds larger. The ratio of M2 to national wealth is a measure of how much money is circulating within an economy. Gross domestic product should not be used here because it resets each year while M2 accumulates over time. The stock of wealth in the US is at least twice as large as in China. This means China's M2 to national wealth ratio is three times higher than in the US, even though American monetary conditions are quite loose in themselves. The ill-advised post-Lehman credit boom is one reason for China's predicament. So are years of negative real interest rates - the ultimate sign of irresponsible monetary policy. The extent of excess liquidity can be seen in commodities fraud. Stocks of metal are being illegally used as collateral, because firms have become accustomed to an endless amount of credit. The debate of fine-tuning versus active stimulus is a debate over how fast the water is coming out of the hose. It does not matter how full the hose is, though, because the water is flowing into a lake. One counter-argument is that stimulus must be important because it worked in May, when there were signs of modest economic improvement. But mainland economic data is not nearly accurate enough to render the very slight upticks in industrial production, retail sales and other indicators at all meaningful. First, there is a simple question of accuracy. It takes smaller, richer countries months to compile the same numbers China publishes in two weeks. Second, there is also the Communist Party's implicit requirement that no sharp downturns be acknowledged, for instance when policymakers in Beijing panicked in early 2009. A few months of negative results in early 2014 called for stabilisation to be reported. This is where stimulus is actually informative. Its extent indicates how policymakers view the economy - strong enough to leave alone or in need of official medicine, even if the medicine no longer really works. The good news: those who see only minor stimulus can claim, with some justification, that it is because the economy is performing adequately. After all, employment is the top priority and the jobs situation is acceptable. While the property market is suffering, from a national standpoint it needs to suffer. Higher property prices and sales would only heighten macroeconomic risks. Similarly, slower growth in fixed investment is long overdue. Rebalancing towards consumption cannot occur without a check on investment and such rebalancing is necessary for living standards to continue rising. The principal worry about the economy seems to involve GDP growth, but the obsession with GDP is misplaced. The Party will only permit a gradual decline in officially announced GDP growth. And if jobs are available and the economy is truly orienting towards consumers, the pace of true GDP growth is almost irrelevant. So stimulus will not work but, happily, is probably not needed. Instead, what is worrisome is that implementation of fundamental reforms has not begun. Implementation of a few pro-market changes should occur later this year. But powerful steps to promote clearer land rights, labour mobility through the hukou reforms, financial competition and corporate innovation have not moved forward. China did not proceed with additional market-oriented reforms in 2005 in large part because there did not seem to be a need - the economy was strong. Then it did not reform in 2009 because the economy was fragile. Now economic performance is middling, there is a government which has loudly promised change, and yet little action has taken place. What is the justification this time? If the economy needs to be as vigorous as a decade ago for another round of market reforms, they will never occur. The era of extraordinarily rapid increases in employment, production and exports is over. For every month that passes without powerful action, the mainland eases further into the middle-income trap, where once fast-rising economies slowly drift towards stagnation. This gradual failure, not the extent of stimulus, is what matters. ^ top ^

Joining trade pact to boost China growth (SCMP)
China would add about 2 percentage points to annual economic growth by joining a Pacific trade pact in the view of the central bank's chief research economist.The country should join negotiations on the Trans-Pacific Partnership (TPP) as soon as possible to reap the benefits, Ma Jun of the People's Bank of China said in an internal presentation in mid-June. South Korea and Vietnam would also add more than 2 percentage points to their growth rates as part of the TPP, the presentation said. While joining the talks may help China counter an economic slowdown without resorting to large-scale stimulus, the 12 nations currently negotiating the TPP are expected to conclude an initial agreement before new members are admitted. The US and Japan said in April that there was "still much work to be done" on outstanding issues. The pact would link an area with about US$28 trillion in annual economic output, or 39 per cent of the world total, and would be the biggest trade deal in US history. In addition to the US and Japan, nations seeking the deal are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Ma, who came to the PBOC earlier this year from Deutsche Bank, sees the benefits from joining the TPP talks to China's GDP expansion accruing over several years to eventually reach 2 percentage points, the presentation showed. It did not give forecasts for China's actual pace of growth. The PBOC did not immediately respond to a request for comment. Ma did not respond to an e-mail seeking comment. Commerce Minister Gao Hucheng said in March the nation is paying close attention to the TPP talks and hopes others can be open and inclusive on the accord. Ma's projection is based on the assumption of having 16 countries in the TPP, including the additions of China, South Korea, Thailand and Indonesia, according to the presentation. China is projected to grow 7.3 per cent this year. That would be the slowest pace since 1990. The TPP goes beyond usual deals that focus on tariffs and traditional goods such as agriculture. It would establish rules for digital commerce and include environmental standards and protection for companies that compete against government-backed businesses. If China joins the TPP, Ma sees industries including textiles, apparel and electronic equipment benefiting while those including petrochemicals, mining and vehicles would be hurt the most, the presentation said. The trade pact is unlikely to be reached this year and the opportunity to sign it is more likely in the first half of 2015, Australian Trade Minister Andrew Robb has said. ^ top ^

More bankers think economy cooling in Q2 (Global Times)
More Chinese bankers now believe the economy is cooling in the second quarter than earlier in the year and demand for loans has weakened, according to a central bank survey published on Wednesday. The survey also showed that in the second quarter, the number of bankers who believed monetary policy was appropriate increased from the first three months of the year. Business confidence in China cooled in the second quarter compared with the first quarter, according to the People's Bank of China (PBC). PBC, China's central bank, has taken targeted measures to support the economy, including cutting reserve requirements for selected banks. The government has unveiled a host of steps - dubbed a "mini-stimulus program" by some economists - to boost activity in certain sectors. A Reuters poll in April forecast that China's annual economic growth pace could slow to 7.3 percent in the second quarter from an 18-month low of 7.4 percent in January-March, with full-year growth of 7.3 percent in 2014, the weakest in 24 years. Recent data reinforced market expectations that the world's second-largest economy is powering through its recent soft patch, even if the recovery may be patchy. About 47 percent of bankers polled thought the economic climate is "relatively cool" in the second quarter, up 16.3 percentage points from the first quarter, the central bank said. It also showed more bankers believed that the current monetary policy stance is appropriate - up 5.8 percentage points to 72 percent, compared with the previous three months. The central bank polls bankers, households and business people separately every quarter for their views on the economy, inflation, home prices and other subjects. The confidence index of entrepreneurs in the second quarter fell to 64.9 percent, 2.1 percentage points lower than the first quarter, the survey showed. The PBC said that, based on the survey, slightly fewer Chinese residents believe property prices are at unacceptable levels, as home prices are showing signs of cooling. The survey also showed inflation expectations among Chinese residents held steady in the second quarter. ^ top ^

940-km highway around Beijing to lift economy (Global Times)
Beijing has announced that plans have been finalized for the Seventh Ring Road, a 940-kilometer highway to connect the capital with neighboring Hebei Province, as part of the master plan for the Beijing-Tianjin-Hebei metropolitan area. While economists have said that this will aid integration of the region, environmentalists question the effect it will have on pollution. The expressway, which will encircle Beijing and run through Langfang, Zhuozhou, Zhangjiakou and Chengde, is designed to help alleviate the capital's traffic pressure. It will also facilitate industrial relocation between Beijing and Hebei, as well as connect Beijing with the rest of China, Gao Jinhao, director of Hebei's Transport Department said Wednesday during an interview with the Ministry of Transport's website. Previous reports indicated the road will be open at the end of 2015. Gao also pledged to speed up construction of a railway linking downtown Beijing with the suburb of Yanjiao and a high-speed railway between Beijing and Shenyang, Liaoning Province. New airports will also be built in Beijing and Hebei's Shijiazhuang. Economists describe the highway as a step to realize the Beijing-Tianjin-Hebei mega-plan. "Beijing started talking about the possibility [of integration] about five years ago," Gilbert Van Kerckhove, a Beijing-based economic planning consultant, told the Global Times. "So it's a natural and logical step." Van Kerckhove believes the three interlinked regions will complement each other in terms of their industrial division. While Hebei will take over heavy industries, Tianjin will focus on electronics and telecommunication, and Beijing will continue to develop finance, banking, service and high-tech industries. The Beijing-Tianjin-Hebei integration will give an extra edge to the region in catching up with the thriving Pearl River Delta Region, noted Van Kerckhove. However, different regions are not in mutually exclusive competition because each region has its own advantages. Other experts displayed worries about the feasibility of the integration, even with the help of a highway. "Corporations in Beijing may not be willing to move to Hebei and Tianjin, as they may lose the economic advantage they enjoy in Beijing," Zhang Hanya, a research fellow at the National Development and Reform Commission, told the Global Times. The project also draws speculation over its effectiveness in alleviating pollution and transportation issues. "Building the Ring Road will not solve congestion and air pollution, but will only worsen the existing problem," said He Dongquan, board member of China Sustainable Transportation Center. He said Beijing's overpopulation problem will continue to plague the city as people from other provinces will still flood to Beijing, and the highway may create even bigger congestion because of likely urban sprawl. "The Fourth and Fifth Ring Roads were supposed to ease congestion, but they have in fact attracted more traffic," noted He, suggesting that the government should change its focus from road-building to construction of more sustainable railways.  ^ top ^

Beijing-Tianjin-Hebei megalopolis intended as showcase for economic reform (SCMP)
Unlike other regional economic plans that focus mainly on development, the integration of the metropolises of Beijing and Tianjin with Hebei province will be more about implementing reform, analysts say. A development plan for cooperation between the two cities and Hebei (known collectively by their traditional characters Jing-Jin-Ji) was recently submitted for approval by the State Council, following the personal intervention of President Xi Jinping. Along with Premier Li Keqiang and other leaders, Xi is attempting to restructure the world's second-largest economy following three decades of breakneck growth. The Jing-Jin-Ji integration programme "calls for measures to promote structural reforms on all fronts", said Jianguang Shen, chief China economist with Mizuho Securities, in a research report on the project. "We believe the plan is paramount to promoting China's economic restructuring and consumption-driven sustainable growth." The 216,000 square kilometre region surrounding the capital is home to more than 100 million people and has a combined gross domestic product of more than 6 trillion yuan (HK$7.6 trillion), making it the country's third main economic engine after the Pearl River Delta and Yangtze River Delta. Urbanisation of the Jing-Jin-Ji region has been a goal since the 1980s, but conflicting interests have stalled progress. Just why Xi is pushing the plan now is the subject of much analysis and conjecture. The first reason put forward by analysts is that the new leadership had to find a solution to the "urban diseases" afflicting Beijing and Tianjin - hellish traffic jams and chronic air pollution arising from their rapid population growth. The metropolises, two of the country's four most important cities directly under central government control, realised they could not tackle these problems without the cooperation of Hebei. Another reason is that the central government is trying to restructure the economy away from its decades-old growth model that is heavily dependent on capital investment and export-oriented manufacturing. That model is increasingly unstable, and the economy is in desperate need of new momentum. Finally, it is also possible that it is a tactic to end the inefficiency of neighbouring localities as they compete for similar businesses. "The new leadership must tackle these long-standing problems, and the best way to solve them is through regional integration," said Yang Long, a professor of political economy at Nankai University in Tianjin. At a symposium on the project in February, Xi told national and regional officials to focus on coordination and integration among the three regions, while balancing the needs of development, the environment, population and resources. Economic planners hope the plan can provide momentum for more widespread development of areas surrounding the Bohai Bay, and possibly for the whole northeast. They also hope the project will prove to be a successful experiment in sustainable, balanced and environmentally-friendly economic growth. Shen said the Beijing-Tianjin-Hebei metropolitan area would become the urbanisation reform model for the rest of the country. The leadership's ambitious plans to modernise cities will require greater spending on public housing and infrastructure, including mass-transit systems in urban areas, railways and highways connecting cities, and sewage and water facilities to connect newly developed areas. "As such, we expect metropolitan areas will be created by allowing the free flow of labour and resources in the Beijing-Tianjin-Hebei area through unifying the hukou, or household registration, within the region," Shen said. "Residents in the greater capital area could benefit from the same education and healthcare system. Another factor is migrating the headquarters of selected government departments, state-owned firms and government agencies to Tianjin and Hebei." Other analysts pointed out that the Jing-Jin-Ji regional economy is relatively loose and unevenly developed compared with its southern rivals. While market forces have played a big role in the integration of the two coastal regions, which enjoy more evenly distributed wealth, the greater disparities within the Jing-Jin-Ji are will bring greater resistance to reform and economic integration. "The problem in this region has been a strong government and weak markets. The share of the state in Jing-Jin-Ji is too big and administrative intervention has been strong," said Zhang Gui, deputy director of the Centre for Beijing-Tianjin-Hebei Development Research of the Hebei University of Technology. "We should streamline administrative approvals between the three places, such as making it easier for a company based in Hebei to obtain a business licence in Tianjin." Louis Kuijs, chief China economist with Royal Bank of Scotland, said a key objective was to relocate some activities presently based in Beijing to the neighbouring region, to relieve congestion in the capital and, hopefully, achieve efficiency gains. "It will be interesting to see how such an initiative of regional cooperation will be managed by the central government in the face of strong regional competition," Kuijs said. Hongyi Lai, a professor of political economy at the University of Nottingham's School of Contemporary Chinese Studies, warned that integration should also provide a bigger role for market forces and a vibrant private sector with local and foreign participants. ^ top ^


DPRK and South Korea

S.Korea, DPRK begin talks in Kaesong about running joint factory park (Xinhua)
South Korea and the Democratic People' s Republic of Korea (DPRK) started their first talks in six months on Thursday in Kaesong, the DPRK's border town, about running the inter-Korean factory park, Seoul's unification ministry said. Six South Korean delegates crossed the inter-Korean land border into Kaesong, the DPRK's border city some 10 km north of the military demarcation line, and began talks at around 10 a.m. local time as scheduled, the ministry said. The two Koreas agreed last year to hold the joint management committee meeting every quarter, but it has been halted since December last year amid rising tensions on the Korean Peninsula following the joint military exercise between South Korea and the United States in February. "It will be an opportunity for a comprehensive review on productive normalization of the Kaesong industrial zone," chief South Korean delegate Lee Kang-woo told reporters before heading to the dialogue venue. Lee said the delegation will focus, during the dialogue, on the constant passage of South Korean workers to and from the inter- Korean factory park and the introduction of the Internet connectivity. The two Koreas have test-run the electronic passage system via the radio frequency identification (RFID) since January. South Korea aimed to operate the system constantly. Seoul has also called for early introduction of the Internet connectivity at the joint factory park. The electronic passage system will allow South Korean workers to visit the Kaesong industrial complex and return home at any time on days when they are permitted to visit the site. Currently, South Korea should fax a list of workers to the DPRK a day before their trip to the joint industrial zone. The DPRK has allowed only those on the list to travel to the zone during a designated time. The Kaesong industrial complex, the last remaining symbol of inter-Korean economic cooperation, is home to 120 South Korean small companies that produce mostly labor-intensive products such as shoes and garments. ^ top ^

DPRK test-fires newly developed missiles (Xinhua)
The Democratic People's Republic of Korea (DPRK) announced Friday that it has test-fired "newly developed cutting-edge ultra-precision tactical guided missiles." DPRK leader Kim Jong Un guided the test-fire at the central monitoring post, according to the official KCNA news agency, which lauded the new weapons as "another shining success" in the efforts to manufacture "high-precision, lighter, automatic and intelligent weapons and equipment." The test-fire also helped the Korean People's Army (KPA) get "the master key" to producing world-class short-, medium- and long-range guided weapons and maximizing their striking precision and power, the KCNA added. Kim "expressed great satisfaction" with the results and expressed the belief that his country would "manufacture more ultra-precision tactical guided weapons capable of taking the decisive initiative in any operation and battle of modern warfare, " it said. The test-fire, the KCNA added, came at a time when the United States, South Korea and other allied forces "are going extremely reckless in the moves to isolate and stifle the DPRK and unleash a war of aggression." The KCNA did not specify when the test-fire took place, but South Korean media reported Thursday that the DPRK fired three short-range projectiles into its eastern waters. "The rockets were fired in succession from coastal areas near its eastern city of Wonsan at around 5 p.m. in a northeastern direction, and landed in international waters," South Korea's Yonhap news agency quoted the Joint Chiefs of Staff (JCS) as saying. "Their range is some 190 km, and we are now looking into exactly what type of rockets" they were, a JCS official was quoted as saying. Also on Thursday, the DPRK accused the South Korean military of firing shells toward the waters of the DPRK from the waters around Yonphyong Island "without any prior notice." Describing the incident as a "reckless provocation," the Command of the Southwestern Front of the KPA warned that the KPA is fully prepared to strike back. ^ top ^



President of China Xi Jinping to pay a state visit to Mongolia near future (Info Mongolia)
On June 24-26, 2014, Minister for Foreign Affairs of the People's Republic of China, Mr. Wang Yi will pay an official visit to Mongolia upon the invitation of the Minister for Foreign Affairs of Mongolia, Mr. Luvsanvandan BOLD. The Government guidelines to adhere during the visit was discussed at the Cabinet meeting held on June 21, 2014 and it was agreed to submit to the Prime Minister for an approval. The visit of the Foreign Minister Wang Yi would expand strategic partnership and cooperation in all sectors, and expected to give impetus to mutual trust and understanding, and strengthen collaboration in the frameworks of international and regional cooperation. Also, the visit aims to prepare reciprocal high-level visits to be implemented near future, for instance, the state visit of the President of China Mr. Xi Jinping to Mongolia, moreover, to deepen partnership between the two Foreign Ministries, exchange information and opinion on bilateral relations and other issues of mutual interests as well as it considered to reach common understanding between Mongolia and China. During the visit, the two Foreign Ministers will have bilateral talks and Minister Wang Yi will pay a courtesy call on the President Ts.Elbegdorj, Prime Minister N.Altankhuyag and Deputy Prime Minister, Chairman of Mongolia-China Intergovernmental Committee D.Terbishdavga. In 2014, Mongolia and the People's Republic of China are celebrating the 65th anniversary of the establishment of diplomatic relations, which was enacted on October 16, 1949. ^ top ^

North Korean delegates are visiting Mongolia to exchange experiences in tourism sector (Info Mongolia)
On June 20-25, 2014, North Korean delegates led by Deputy Director-General of the National Tourism Administration of the DPRK Mr. Mun Tae-gil are conducting a working visit to Mongolia and during their stay in Ulaanbaatar, delegates attended a workshop “Mongolia's Tourism Sector's Development Prospects and Further Policy to Adhere”. The visit is being implemented following up a state visit of the President of Mongolia Ts.Elbegdorj to the DPRK conducted last year that aims to introduce Mongolia's tourism sector's policy being carried out, to broaden bilateral collaboration and exchange experiences in the relevant sphere. On June 23, 2014, the North Korean delegation was received by Minister of Culture, Sports and Tourism Ts.Oyungerel, where parties shared views on broadening cooperation in tourism sector and on the same day, Deputy Minister of Foreign Affairs D.Gankhuyag also held a meeting with delegates. In the frameworks of the visit, North Korean delegates intend to visit the main tourist destinations of Mongolia, besides to visit the Institute of Finance and Economics in Ulaanbaatar meeting Mongolian private entities to introduce DPRK investment policy in their tourism sector and discuss an issue on training professional personnel. ^ top ^

Foreign Minister of the People's Republic of China, Wang Yi is paying an official visit to Mongolia (Info Mongolia)
At the invitation of the Minister for Foreign Affairs of Mongolia, Mr. Luvsanvandan BOLD, Minister for Foreign Affairs of the People's Republic of China, Mr. Wang Yi is paying an official visit to Mongolia on June 24-26, 2014. This is a response visit after conducted by Foreign Minister L.Bold to China in January 2014. Today, the two Foreign Ministers arranged an official talk and reached a general consensus on several issues such as joint celebration of the 65th anniversary of the establishment of diplomatic relations between Mongolia and the PR of China in 2014, accelerating big projects in the frames of joint trade and economic partnership, as well as strengthening cooperation in culture, education, science and humanitarian sectors. Following the bilateral talks, two Foreign Ministers called a press conference and in his statement, Foreign Minister L.Bold noted, “The year of 2014 is announced as a Mongolia-China Friendly Exchange Year and in this regard wide range of measures have been successfully implementing. As a result of these measures, we confident that the friendly relationship and mutual understanding between our two people would be more strengthened. Moreover, high-level reciprocal visits have been stabilizing in recent years, and trade and economic cooperation is actively taking place. Also, the two countries are successfully collaborating in the scope of bilateral and regional cooperation mechanisms. On the basis of all these, Mongolia-China strategic partnership and cooperation have been deepening”. Today, the relationship between Mongolia and China is growing at the most favorable time in the history of relations. There is no issue of disputes between the two countries, and we believe to work more actively in future for the global and regional peace and security, emphasized the two Ministers of Foreign Affairs during their statement. During his visit, Foreign Minister Wang Yi will pay a courtesy call on the President of Mongolia Ts.Elbegdorj, Prime Minister N.Altankhuyag and Deputy Prime Minister D.Terbishdagva respectively to exchange views on bilateral relations and partnership. ^ top ^

President Ts.Elbegdorj offers a trilateral high-level meeting in Ulaanbaatar between Mongolia, Russia and China (Info Mongolia)
Today on June 25, 2014, the President of Mongolia Tsakhia ELBEGDORJ received Foreign Minister of the People's Republic of China Wang Yi. At the beginning of meeting, President Ts.Elbegdorj noted that the bilateral relations between Mongolia and the PR of China have been actively developing in all sectors in recent years and reached at the top friendly level and further said, “It is very consistent with Mongolia's position that China is pursuing a more open and comprehensive policy towards neighboring countries”. In the scope of the 65th anniversary of the establishment of diplomatic relations between the two countries, the year of 2014 is announced as a Mongolia-China Friendly Exchange Year. In this regard, bilateral friendly relations will be strengthened by promoting reciprocal travel of children, youths, public servants and civilians, underline parties. During the meeting, Foreign Minister Wang Yi expressed his grateful to meet the President Ts.Elbegdorj and conveyed sincere greetings of the President Xi Jinping. In his greetings, President of China mentioned a warm meeting with President of Mongolia exchanging views on issues of bilateral relations during the Fourth Summit of the Conference on Interaction and Confidence Building Measures in Asia took place in Shanghai last May and expressed his confidence to see the President Ts.Elbegdorj soon in Ulaanbaatar. Minister for Foreign Affairs of the People's Republic of China Wang Yi visited Mongolia 11 years ago and during this visit noted that Mongolia has been changed a lot in terms of Mongolia's successful achievements and efforts. Minister also underlined that the President Xi Jinping anticipates conducting a state visit to Mongolia soon, which is considered as historical significance after President Hu Jintao, who paid a state visit to Mongolia 11 years ago. Foreign Minister Wang Yi emphasized that the Government of China's policy is to respect the two countries' paths of the flourishment and support each other, moreover to strengthen mutual trusts between the two states and to respect each other's sovereignty and territorial integrity as well as security issues. Minister Wang Yi also pointed out that Mongolia's initiation on "Ulaanbaatar Dialogue" raised by the President Ts.Elbegdorj makes significant contributions towards regional and international peace and partnership. President of Mongolia Ts.Elbegdorj mentioned his suggestion of the possibilities of a trilateral high-level meeting in Ulaanbaatar between Mongolia, the Russian Federation and the People's Republic of China and expressed his gratitude to the invitation to participate at the APEC Summit as a guest of honor. ^ 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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