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
  5-11.7.2014, No. 532  
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Foreign Policy

Chinese, German PMs meet before official talks (Xinhua)
Chinese Premier Li Keqiang on Sunday evening held a brief meeting with visiting German Chancellor Angela Merkel, before their official talks scheduled on Monday morning. Li said he is looking forward to the official talks with Merkel on Monday, which will promote the two countries' mutual trust, deepen their cooperation in such areas as trade, finance, sustained development and culture, and strengthen their communication and coordination on major international and regional affairs. On Monday, Li will hold a red-carpet welcoming ceremony for Merkel, who is on her seventh China visit as chancellor. The two prime ministers will have official talks and meet the press at the Great Hall of the People. Li will also accompany Merkel to visit the Temple of Heaven, a famous scenic spot in Beijing. Calling Germany an important cooperative partner, Li said China was ready to work with it to promote a sound development of their comprehensive strategic partnership. He said Merkel's tour in Chengdu, southwest China's Sichuan Province, also the first leg of her China visit, will help strengthen the cooperation between west China and Germany. Merkel, on her side, said the bilateral relations with China are very important. To strengthen their cooperation will not only benefit the two countries but also give positive influence to the world. Saying her stay in Chengdu very impressive, Merkel added that Germany will expand comprehensive cooperation with China, conduct close communication and coordination on international and regional affairs, promote the bilateral ties to achieve more results, and jointly promote world's peace and development. Li also briefed Merkel with China's current development, saying the national development and improvement of people's livelihood are still a priority of the government. He said China needs a peaceful and stable external environment to develop. Taking history as a mirror will help better view the future and cherish the peace. China will unswervingly abide by a peaceful development path, and work with all other countries to make unremitting efforts for a world with lasting peace and common prosperity, the prime minister noted. After the meeting, Li also host a small banquet for Merkel, besides the official welcome banquet scheduled on Monday. Merkel went to the Diaoyutai State Guest House, where the meeting was held, upon her arrival in Beijing. During her stay in Chengdu on Sunday morning, she also attended a forum on urbanization cooperation between the Sichuan Province and Germany. Chinese President Xi Jinping and top legislator Zhang Dejiang will also meet Merkel during her China visit. ^ top ^

China-S. Korea relations enter new era after Xi's visit (Xinhua)
Chinese President Xi Jinping's July 3-4 visit to South Korea ushered in a new era in bilateral relations featured by "comprehensive upgrading" and "warming politics, hot economy." The short yet fruitful trip, described by some as "drop-ins among relatives," has pushed the strategic cooperative partnership between the two sides to new heights, setting a new milestone for the future development of bilateral ties. During his visit, Xi said that China and South Korea should be partners that share common development, jointly promote regional peace and Asia's revitalization, and boost world prosperity. Xi's remarks, that are in line with the needs of the two sides and reflect the common aspiration of the international community, have significantly enriched the two countries' strategic cooperative partnership and pointed the way to future development of bilateral ties. Strengthened mutually beneficial cooperation between the two countries and their increasingly intertwined interests can serve as a booster for regional development. China and South Korea, both of which had been plagued by poverty, share eagerness for growth and development. During Xi's visit, the two sides signed a deal on establishing arrangements for the Chinese yuan clearance in Seoul and agreed to push for the completion of their free trade agreement negotiation by the end of this year. Those decisions will boost South Korea's financial markets, and greatly promote the process of economic integration among Asian countries. Meanwhile, enhanced mutual trust and good neighborly relations between China and South Korea will play a role as regional stabilizer. The two countries, both of which had been ravaged by wars, share the earnest aspiration to have peace. During Xi's visit, the two leaders reached important consensus on the Korean Peninsula issue, pledging that the two countries are firmly committed to pushing for a nuclear-free Peninsula, maintaining the peace and stability on the Peninsula, observing the September 19 Joint Statement, which was issued after the fourth round of Six-Party Talks in 2005, as well as promoting the Korean Peninsula denuclearization process and facilitating resumption of the Six-Party Talks. The consensus will play a constructive role in easing tensions on Korean Peninsula and promoting peace and stability in Northeast Asia. An upgraded China-South Korea relationship and stepped-up cooperation will create a "win-win" situation for both sides, especially at a time when the political landscape in Northeast Asia is transforming and relations among countries are becoming even more complicated. While delivering a speech at the Seoul National University, President Xi pledged that China will always safeguard peace, promote cooperation and keep a learning mind. An increasingly prosperous China will provide a historic opportunity for the development of China-South Korea cooperation. The two nations, with ambitious visions and joint commitment toward stronger cooperation, will bring about a promising future for the region as well as the world. ^ top ^

China, Germany pledge to boost cooperation, cement partnership (Xinhua)
Chinese President Xi Jinping met with German Chancellor Angela Merkel here on Monday and pledged to cement the strategic partnership between the two countries. Recalling his state visit to Germany in March, Xi said China and Germany were pushing forward with a consensus on a comprehensive strategic partnership. Merkel's visit will provide a new driving force for the bilateral relationship. Both major powers, China and Germany are strategic partners and should look at bilateral affairs from a global perspective, Xi said. He proposed joint efforts to improve global economic governance and the international system to promote world peace, stability and prosperity. The sides should "take bigger steps" in their practical cooperation and work harder to create more joint-venture brands, highlight cooperation on manufacturing and make best use of the new RMB offshore trading center in Frankfurt. Xi welcomed Germany's enthusiasm for the Silk Road Economic Belt and German companies' competition in the Chinese market. Xi suggested the two sides increase cultural and people-to-people exchanges by working together on textbooks, art and literature, mutual understanding and friendship between the youth of the two nations, and encouraging media organizations to cover each other's country in a comprehensive and impartial way. For her part, Merkel said the German side hopes to give full play to the role of the mechanism of inter-governmental consultations and boost cooperation in an innovative way on finance, industry and information technology, aeronautics and astronautics, and social security. The chancellor said Germany will improve the investment environment to attract Chinese enterprises and facilitate visits between the people of the two countries. The German side stands ready to step up communication and coordination with China under multilateral mechanisms including G20, she added. Briefing Xi on the internal reform of the European Union (EU) and the EU's efforts to overcome the debt crisis, Merkel expressed her gratitude for China's support. Xi reaffirmed that China will support European integration and work as a good partner of European countries, adding that he hopes Germany will continue its important role in China-Europe relations. During the meeting, the two leaders exchanged ideas on governance and regional and international issues of common concern. Merkel is in China for a three-day visit at the invitation of her Chinese counterpart Li Keqiang. ^ top ^

Indian PM Modi praised for rebuffing China's power play on Brics development bank (SCMP)
Indian Prime Minister Narendra Modi was praised by leading Indian newspapers for standing up to China amid negotiations over the establishment of a multinational development bank, which could turn into the “next India-China flashpoint”. The world's two most populous nations along with Brazil, Russia and South Africa – dubbed the “Brics” countries – are in their last week of negotiations prior to a widely expected announcement of a new development bank. Indian media reported that the negotiation process had thwarted an alleged attempt by China to “dominate” the new lending institution by infusing more cash in it than suggested by India. The “Brics” bank is being set up to counter perceived excessive American influence on existing international and regional lending institutions such as the World Bank and Asian Development Bank. Brics countries have in the past called for a reform of the international lending system. Next week, the heads of state of these five largest fast-growing emerging markets are scheduled to meet in Fortaleza, in northeastern Brazil, to announce the establishment of their alternative lender at the first multilateral meeting attended by India's freshly minted prime minister. China “proposed to contribute more than its share to the bank, which would give Beijing greater control over its affairs,” the Hindustan Times reported on Monday, citing unidentified sources. The newspaper warned the bank could become the “next India-China flashpoint” amid a territorial dispute in the Himalayas and long-standing tensions over India's hosting of the Tibetan exile government. Another contentious issue is the bank's initial capital and its distribution among the five founding members. The bank's initial capital is widely expected to reach US$50 billion, with each Brics country contributing US$10 billion. The Calcutta Telegraph said on Sunday that the Chinese, however, proposed to contribute more than other founding members, raising the total endowment to US$100 billion. India rejected the Chinese proposal, the newspaper said. One compromise could be equal shares of capital for all the founding members, and thus equal votes, but then have trust funds, where some countries contribute more, argued Stephany Griffith-Jones, an economist at the Initiative for Policy Dialogue at Columbia University. "I do not think these discussions are evidence the Brics bank lending decisions will be politicized," she wrote in an email. "We should let it start working, before we can evaluate." The bank is expected to start lending in 2016, Brazilian officials have told Reuters. By then, its capital should increase from US$50 billion to US$100 billion through further contributions by the founding and possibly new Brics members, as well as debt emissions, the income from interests on loans. The future seat of the bank's headquarters has also not been decided yet and remains a contentious issue, Indian papers reported. Sujata Mehta, India's secretary in charge of economic relations at its External Affairs Ministry, told the Calcutta Telegraph that negotiations on the headquarters would continue this week. New Delhi, Shanghai, Johannesburg and Moscow are competing to host it, but Shanghai, the financial hub of the world's second-largest economy, is the widely favoured candidate. A third issue yet to be tackled is the new bank's first president. Unlike the World Bank and International Monetary Fund, where presidents are traditionally Europeans or Americans, the new Brics bank will have a rotating presidency among the five founding members. Modi's government has already voiced its preference for a first Indian president, according to The Indian Express. Six weeks into his administration, Modi has made overtures about improving ties with China. India's army chief, General Bikram Singh, returned to India from China over the weekend, ending the first visit of India's top soldier to the neighbouring power in nine years. Vice-president Hamid Ansari also met President Xi Jinping on a visit to Beijing last week. In the run-up to the summit in Brazil, which will include a first meeting between Xi and Modi, Indian media have already called on the Hindu nationalist premier to stand up to the neighbouring economic powerhouse. The Times of India conluded: “Modi's diplomatic skills in preserving India's interests will … be tested as Xi attempts to turn Brics into a platform from which to advance China's global agenda. The press departments of India's ministriy of foreign affairs were not available for immediate comment. Speaking at a press briefing on President Xi Jinping's trip to Brazil, Vice Minister of Foreign Affairs Li Baodong said discussions are still "ongoing in an intensive manner". Li said he was confident that consensus on remaining "technical issues" could be reached before the summit. The ministry's press office issued a similar statement shortly after Li made his comments. ^ top ^

Wen Jiabao makes rare appearance for breakfast meeting with old friend Angela Merkel (SCMP)
Former premier Wen Jiabao met visiting German Chancellor Angela Merkel for breakfast yesterday on the final day of German leader's three-day visit to China. In her speech at Tsinghua University, Merkel revealed that the two discussed Germany's semi-final match at the Fifa World Cup, which kicked off early this morning. When asked to comment on the game by a Tsinghua University student, Merkel said that Wen remarked that there might be more fans in China following the match than in Germany. "Up to 100 million Chinese could watch the game, which is more than the total population of Germany," Merkel said, triggering loud laugher among students. But the dedicated soccer fan, who frequently attends the German national squad's matches, admitted that it would very hard to beat host nation Brazil. With the exception of former president Jiang Zemin, retired state leaders traditionally decline diplomatic activities. It is first such meeting for Wen since he retired in March last year. Wen and Merkel are said to have developed a friendly relationship during previous meetings. Former leaders, including Wen, occasionally make public appearances such as book launches or visits to their hometowns or alma maters, usually - analysts say - to counter rumours about their health or political fate. The Wen-Merkel meeting also comes amid reports that Wen's family has accumulated massive wealth. Jiang held high-profile meetings with former US secretary of state Henry Kissinger in July last year in Shanghai and with visiting Russian President Vladimir Putin in Shanghai in May. This was Merkel's seventh trip to China as chancellor. Wen, who served from 2003 to 2013, preceded Premier Li Keqiang. As the second- and fourth-largest economies in the world, China and Germany have developed a close trading partnership since 2011, when Wen and Merkel led their nations' first intergovernmental consultations in Berlin to boost bilateral relations and map out long-term cooperation. ^ top ^

Sino-US strategic dialogue faces unprecedented test (Global Times)
After months of tension caused by cyber security and maritime disputes, an annual meeting between senior Chinese and US officials, which starts Wednesday in Beijing, is hoped to put the brake on a downward spiral in Sino-US relations. The sixth China-US Strategic and Economic Dialogue (S&ED), which aims to address problems between the world's two largest economies, will be held until Thursday. Among the issues the two sides are expected to discuss are the ongoing tensions in the South China Sea, denuclearization of the Korean Peninsula, the valuation of the Chinese yuan, and an ongoing deadlock in negotiations over updates to a 16 year-old World Trade Organization Information Technology Agreement. Chinese State Councilor Yang Jiechi and US Secretary of State John Kerry will co-chair the strategic track of the dialogue, while China's Vice Premier Wang Yang and US Treasury Secretary Jacob Lew will jointly head the economic track. This year's S&ED comes at a critical time, as the Washington Post noted that "the US-China relationship is facing its stiffest test since then US president Richard Nixon traveled to Mao Zedong's China in 1972." Washington has sided with Tokyo, which is locked in a territorial dispute with Beijing in the East China Sea, by sending fighter jets to an Air Defense Identification Zone set up by China and voicing explicit support for Japan during Obama's East Asia visit. In May, the US indictment of five Chinese military officers over so-called cyber espionage further irked China, which halted a China-US cyber security working group due to meet under the framework of the S&ED. Even before the S&ED formally starts, the two sides have already traded blame. On Monday, China's Assistant Foreign Minister Zheng Zeguang told a press briefing that the US "has made some wrong remarks and acts on maritime issues and cyber issues, bringing negative impact on bilateral relations." Zheng also dismissed the charges against the five Chinese officers as "intentionally fabricated by the US." A US official, who briefed reporters en route to Beijing, said Tuesday China's claim to the South China Sea is "problematic," and the tensions are "very relevant to the United States as a Pacific power," reported AFP. Yuan Zheng, a research fellow with the Institute of American Studies at the Chinese Academy of Social Sciences, partly agreed that bilateral ties are at a low ebb. "While it seems the threat of a confrontation looms, past experiences in China-US relations proved that whenever a confrontation is about to break out, the two leaderships will pull back from hostility," Yuan told the Global Times on Tuesday. Da Wei, director of the Institute of American Studies at the China Institute of Contemporary International Relations, cited the "strategic interdependency" between China and the US, saying that neither country can afford mutual destruction to their economy or security. Some people have said a clash between China and the US is inevitable due to the structural problems between an established power and a rising power. China holds the view that Washington's Asia pivot aims to constrain its development, while the US suspects that China wants to push it out of the region. "No one can deny the existence of structural problems, but if we let the structural problems dominate bilateral ties, there will be a lose-lose situation," said Yuan. "Both countries realized the problem, so they decided to build a new type of great power relations, which stresses no confrontation or conflict." "In the past seven months, bilateral ties went through a downward spiral, but I don't think the bottom has fallen out of the structure," he said. A similar view was also voiced by the US side on Tuesday. "The US-China relationship is a motion picture. It shouldn't be looked at as a snapshot," a second US official traveling with Kerry was quoted as saying by Reuters. "It is that grand epic big Hollywood motion picture in which there are a lot of actors and a lot of interests at stake, and the trajectory of any particular issue takes time to play out." The current round of the S&ED will provide a platform for candid and even blunt exchanges between the two sides. The economic track, which might see progress on the Bilateral Investment Treaty, is expected to help stabilize the relationship. "What really matters isn't the agreement list delivered after the S&ED. It is the positive momentum injected into bilateral ties by the dialogue following the negative trajectory of the past months," Da said. Yuan shared similar sentiments, noting Washington has already started pulling back. "Both sides will use the S&ED and Barack Obama's visit to Beijing in November to create a favorable atmosphere for warming ties. Prior to the start of the S&ED, the fourth China-US Strategic Security Dialogue was held in Beijing on Tuesday. The meeting was chaired by China's Vice Foreign Minister Zhang Yesui and US Deputy Secretary of State William Burns. Chinese President Xi Jinping will attend the opening ceremony of the S&ED events and deliver a speech. Xi and Premier Li Keqiang will meet the US delegations. ^ top ^

Xi meets Russian presidential administration chief (Xinhua)
Chinese President Xi Jinping on Wednesday met with Russian presidential administration chief Sergei Ivanov. President Xi said his close contact with Russian President Vladimir Putin shows the special characteristics of the China-Russia relationship. Xi said he is looking forward to meeting with President Putin in Brazil during the sixth BRICS leaders' meeting this month and welcomes Putin to attend the APEC meetings in November in Beijing. He said he believes that they will reach further consensus on deepening and expanding bilateral cooperation. Xi urged relevant departments of the two countries to act in close coordination and ensure all bilateral mechanisms run smoothly to fully implement the consensus he reached with Putin. China and Russia will jointly hold activities to commemorate the 70th anniversary of the victory of the World Anti-Fascist War, Xi said, calling on the two sides to strengthen cooperation so as to make the activities a success. Ivanov said the close contact between President Putin and President Xi has vigorously promoted the Russia-China comprehensive strategic partnership of coordination. The two countries signed a series of agreements with epoch-making significance during President Putin's state visit to China in May, Ivanov said, stressing Russia will work with China to fully implement the two presidents' important consensus. He said Russia will work with China to push forward pragmatic cooperation, enhance coordination in major projects, youth exchanges, security and law enforcement as well as jointly crack down on the three evil forces of terrorism, separatism and extremism. The two countries will observe the 70th anniversary of the victory of the World War II to show the two countries' significant contributions, he said. Li Zhanshu, member of the Political Bureau of the CPC Central Committee and director of the General Office of the CPC Central Committee, was present at the meeting. ^ top ^

China US confrontation would be disaster: Xi (SCMP)
Chinese and US leaders Wednesday renewed calls to seek cooperation over confrontation at a high-level annual meeting, in an effort to reverse a downward spiral in bilateral ties over the past months. The sixth China-US Strategic and Economic Dialogue (S&ED), which runs until Thursday in Beijing, saw candid discussions between senior officials on a wide range of issues, covering cyber security, maritime disputes, nuclear non-proliferation, and a more level playing field for US goods and services in the Chinese market. There was also progress on climate change cooperation. Addressing the opening session, Chinese President Xi Jinping warned that a confrontation between China and the US would be "a disaster" to both countries and the world. Noting there is no existing experience or model for building a new type of great power relations, Xi said it is not surprising to see difficulties or even turbulence in bilateral ties. "The problems are not something to be afraid of. It is critical that we tackle those problems together instead of being led by them," he said. The S&ED comes at a difficult period in China-US relations, due to Washington's criticisms over Beijing's handling of maritime disputes with its neighbors and its indictment of five Chinese military officers over so-called cyber espionage. At the dialogue, the US tried to reassure Beijing of its intentions. In a letter to delegates, US President Barack Obama said, "We remain determined to ensure that cooperation defines the overall relationship." US Secretary of State John Kerry, co-chair of the strategic track of the dialogue with Chinese State Councilor Yang Jiechi, also reiterated that the US was not seeking to "contain" China. "I can tell you that we are determined to choose the path of peace and prosperity and cooperation, and yes, even competition, but not conflict," he said. Proposing methods to stabilize bilateral ties, Xi said the two countries' judgments over each other's strategic intentions will have direct impacts on their policies and ties. "We shouldn't make mistakes on this fundamental issue, or there will be repeated mistakes," he warned, while clarifying that China is sticking to a path of peaceful development. Zhou Qi, a research fellow with the Institute of American Studies at the Chinese Academy of Social Sciences, said Xi's proposal got to the nub of recent tensions between China and the US, in which misunderstandings of each other's strategic intentions had accumulated. "Noises [against bilateral cooperation] in both countries and the complex situation in the region led to ambiguous perceptions of each other's strategic intentions," said Yu Wanli, a professor of international relations at Peking University. "Xi's remarks are not only directed at those in the US but also at some people in China, who hold radical views [on China-US relations], reminding them to recognize the overall situation," Yu said. Much of the Chinese public holds the view that Washington is seeking to contain the country, while the US fears that China is seeking to push it out of Asia and claims that Beijing is "aggressive" in its maritime disputes. "The severe miscalculation of China's intentions is a result of ideological differences, [and the US] clinging to the China threat theory and a Cold War mindset. And to some extent, the US is doing it on purpose due to its bias," said Chu Shulong, a deputy director of the Institute of International Strategic and Development Studies at Tsinghua University. Chu also acknowledged that while the Chinese leadership and scholars hold a relatively objective view of US intentions, a majority of the public have misinterpreted Washington's policy toward China as "merely containment." The S&ED, though few substantial outcomes are expected, provides the opportunity for both sides to listen to each other. Despite China's suspension of a cyber working group under the S&ED due to the US indictment of its officers, senior US officials named the issue of cyber security a priority, according to a statement posted on the US State Department's website. According to Reuters, a senior US administration official said Kerry "made the case to the Chinese for the wisdom of getting back to work in the working group." An anonymous State Department official told a special briefing in Beijing on Tuesday night that the US is also going to ask China to freeze its infrastructure construction on islets it occupied in the South China Sea. For its part, China is highlighting cooperation on counter-terrorism, with Yang, the State Councilor, stating that there shouldn't be double standards on the issue. At the economic track, US Treasury Secretary Jacob Lew pressed China to move to a market-driven exchange rate. In response, China's Vice Premier Wang Yang, who co-chairs the economic track, said China will quicken the pace of reform, but it could not be rushed. "If reforms go too fast, we could be bogged down in details and make fatal mistakes in China's reform and opening-up. If it's too slow, China's reform process could be affected and the US... will put pressure [on China]," he was quoted as saying by Reuters. On Wednesday morning, a joint session on climate change was held under the S&ED, which endorsed a report submitted by a joint working group. On the previous day, the two sides signed eight partnership pacts aimed at cutting greenhouse gases. However, divergence still remains over the common but differentiated responsibilities in curbing climate change. China insists that developed countries should provide funds and technologies for poor countries, while the US argues that China should not be categorized as a developing country. The S&ED, which covers some 60 topics, this year also saw some new issues added to the talks. At the Strategic Security Dialogue held on Tuesday, civilian and uniformed military officers from China and the US discussed shared interests in space security issues, which was added to the list for this year following last year's introduction of discussions on missile defense and nuclear issues. ^ top ^

President Xi welcomes Obama to visit China for APEC summit (Xinhua)
Chinese President Xi Jinping said on Thursday that he welcomes and expects talks with Barack Obama when the US president visits China to attend the APEC Economic Leaders' Meeting in November. Xi made the remarks while meeting with two delegations for the sixth China-US Strategic and Economic Dialogue (S&ED) and the fifth China-US High-Level Consultation on People-to-People Exchange (CPE) held in Beijing on Wednesday and Thursday. In his remarks, Xi praised the progress of the meetings, urging the working groups of both sides to implement the consensus of this round of S&ED and CPE. Xi said the new model of China-US relationship is drawn from the experience of bilateral ties over the past 35 years. Xi said he and President Obama are determined to ensure healthy and stable growth of China-US ties on a correct track. "China is willing to make concerted efforts to this end," he said. US Secretary of State John Kerry, for his part, described this round of dialogue as "excellent." He said Xi's strong speech opened the annual meeting and had raised the level of the dialogue. He quoted Obama as saying the United States welcomes and hopes to see a "strong, prosperous and stable" China. Xi called on the two sides to speed up negotiations on the Bilateral Investment Treaty, increase military contact, and boost cooperation in dealing with climate change. "China and the US should seek common ground while reserving or resolving differences and conflict," Xi said, urging the two sides to build a relationship of mutual respect and win-win cooperation, without conflict and confrontation. The S&ED was co-chaired by Chinese Vice Premier Wang Yang and State Councilor Yang Jiechi, as well as Kerry and US Treasury Secretary Jacob Lew. The CPE was hosted by Vice Premier Liu Yandong and Kerry. ^ top ^

China issues white paper on foreign aid (Xinhua)
China on Thursday issued its second white paper on foreign aid, elaborating how the nation helps other developing countries reduce poverty and improve livelihood without imposing political conditions. The white paper, China's Foreign Aid (2014), says as the world's largest developing country, China appropriated 89.34 billion yuan (about 14 billion U.S. dollars) for foreign assistance through grant, interest-free loans and concessional loans from 2010 to 2012. "When providing foreign assistance, China adheres to the principles of not imposing any political conditions, not interfering in the internal affairs of the recipient countries and fully respecting their right to independently choosing their own paths and models of development, " the document said. China first began to provide foreign aid in 1950, when it provided material assistance to the Democratic People's Republic of Korea and Vietnam, according to an earlier white paper on foreign aid issued in 2011. Before the updates on foreign aid from 2010 to 2012, China had offered aid to 161 countries and more than 30 international and regional organizations, already providing 256.29 billion yuan in aid to foreign countries, data from the previous white paper showed. From 2010 to 2012, over half of China's foreign aid went to African nations, according to the new white paper. During the period, China provided foreign assistance in forms such as undertaking complete projects, dispatching medical teams and volunteers, offering emergency humanitarian aid, and reducing or exempting the debts of the recipient countries. Recipient countries of China's foreign aid from 2010 to 2012 included 51 African nations, 30 Asian countries, nine in Oceania, 19 in Latin America and the Caribbean and 12 European countries. Besides, China also provided assistance to regional organizations such as the African Union, according to the white paper. "Developing countries, especially the least developed ones, are still confronted with the tough task of poverty reduction and development," the white paper said. The document called for the international community to mobilize more development resources to promote economic and social development of developing countries to eliminate poverty worldwide. In total, China undertook the construction of 580 projects in 80 countries, including 80 hospitals, 85 schools and 156 economic infrastructure facilities. Also, China relieved nine least developed countries and heavily indebted poor countries, namely, Tanzania, Zambia, Cameroon, Equatorial Guinea, Mali, Togo, Benin, Cote d'Ivoire and Sudan, from 16 mature interest-free loans totaling 1.42 billion yuan. One of the important objectives of China' s foreign assistance is to support other developing countries to reduce poverty and improve the livelihood of their peoples. China will respect and support developing countries' exploration of development paths suited to their own national conditions and make concrete efforts to help other developing countries promote social and economic development, it noted. The white paper vowed to continue increasing the input in foreign assistance, saying China is willing to work with the international community to make greater contribution to the development of mankind. ^ top ^

China and US agree to be more open about their military activities (SCMP)
China and the United States have pledged to keep each other better informed of their major military activities and launch consultation on rules of behaviour in military and maritime affairs as they seek to contain conflicts. State Councillor Yang Jiechi also said the two nations would step up consultations on Asia-Pacific affairs, a major area of friction, but reiterated China's sovereignty of disputed waters that has caused tension between Beijing and its neighbours. Officials from the two nations struck a conciliatory note on Sino-US ties when wrapping up their two-day strategic and economic dialogue in Beijing yesterday. The US delegation was led by Secretary of State John Kerry and Treasury Secretary Jack Lew, while Yang and Vice-Premier Wang Yang headed the Chinese teams. In his meeting with Kerry and Lew after the talks, President Xi Jinping said China would make "unrelenting efforts" to put Sino-US ties on a healthy track. Both nations should "reduce troubles" and "seek common ground while accommodating their differences", Xi was quoted as saying by state-run CCTV. One result of the talks is the call for a substantive defence dialogue and more risk-reduction measures. The two sides also agreed that Chinese maritime law enforcement agencies and the US Coast Guard should set up a working group to discuss rules of behaviour. A joint working group to prevent the proliferation of weapons of mass destruction and related technologies would also be established, it was agreed. Yang added that the two nations also agreed that a constructive Sino-US relationship was crucial to the stability of the Asia-Pacific region, and that they would strengthen coordination on regional affairs through multilateral platforms, such as the summits of the Association of Southeast Asian Nations. Both sides agreed to conclude negotiations on the text of a bilateral investment treaty this year and begin talks on which sectors to exclude from the treaty in 2015. Kerry said the talks showed that the two nations could boost cooperation while managing their differences. "We seek a relationship defined not by strategic rivalry, but by practical cooperation on common challenges and constructive management of differences," he said. But conflicts between the two sides persist, with Yang calling on the US to "honour its commitment of not taking sides" in territorial disputes between China and its neighbours, while Kerry said China should show restraint. ^ top ^


Domestic Policy

China court jails Christian pastor for 12 years (SCMP)
The pastor of a Christian church in central China was sentenced to 12 years in prison on Friday in what supporters say is a crackdown aimed at curbing fast-growing religious activity, his lawyer said. Zhang Shaojie of the Nanle County Christian Church in Henan province was convicted of fraud and of gathering crowds to disturb public order, according to lawyer Yang Xingquan. Zhang's church is sanctioned by the government, which allows worship only in state-monitored groups, but has been involved in a dispute with local authorities over land for a new building. By official estimates, China has 23 million Christians. The country also has a large number of unsanctioned underground, or home, churches that have attracted millions of worshippers and have been targeted in repeated crackdowns. A report by the Washington-based Pew Research Centre said there were probably 67 million Christians in the country in 2010, including 58 million Protestants and 9 million Catholics. The ruling party is wary of religion as a possible rallying point to challenge its rule and uneasy about the rapid spread of Christianity three decades after Beijing loosened social controls in pursuit of economic development. In the eastern province of Zhejiang, where Christianity has been particularly popular, local governments have been tearing down crosses on Christian churches, even if they have been officially sanctioned, on the grounds that they lack construction permits. The crackdown on Christian churches could be an extension of an ongoing campaign to suppress the growth of civil society in the country, said Professor Yang Fenggang, a sociologist and expert on religion in China at Purdue University in the US. The churches might have become a target because Chinese Christians, perhaps emboldened by the growth in the number of followers around them, are more likely to assert their rights, Yang said. “In China, Christianity or Protestantism is different from other religions somehow. One is that they have local congregations, they gather together regularly, showing support for each other spiritually, but that could spill over into social action,” Yang said. “The increasing number of Christians, perhaps, gives Christians more confidence to resist human rights violations and civil rights violations. I think size does matter.” In Nanle, phone calls to the county court rang unanswered on Friday. Yang, the lawyer, said Zhang had told the court that he would appeal. Zhang was detained last year after the land dispute, but the lawyer said he was targeted due to his popularity in a region that has seen rapid growth in the number of Christians. “In the eyes of the authorities, Christianity is growing too fast there, and Pastor Zhang was too influential,” Yang said. Zhang was convicted of instigating years-old disputes involving his congregation members, even though the disputes with a dentist, an insurance business and a family planning office were long dismissed, Yang said. The pastor also was accusing of swindling money, but prosecutors failed to produce a key witness to testify, Yang said. Bob Fu, president of the US-based Christian rights group China Aid, said the verdict against Zhang was “totally unacceptable”. “This case shows the Chinese government continues to cover up religious persecution with fabricated criminal charges against an innocent church leader,” Fu said in an e-mailed statement. ^ top ^

Discipline organ requires on-campus ideological awareness (Global Times)
Party discipline inspectors announced Monday that they had identified major issues during a probe into Shanghai's Fudan University, adding that the school needs to strengthen its "Party building." The inspection began at the end of March, and continued through May 8, according to an announcement posted on the website of the Communist Party of China's Central Commission for Discipline Inspection (CCDI). Dong Hong, the leader of the investigatory team dispatched to Fudan University, pinpointed several key problems spotted during the time, including disorderly management of research expenses and breaches of regulations during the construction of a satellite campus. Dong also cited school management's conducting of commercial activities during their tenure in office, and the lack of a well developed oversight system. A complex web of affiliated hospital branches also makes management and regulations difficult and prone to corruption. Dong suggested the university strengthen its "Party building" by conducting more research on the political stance and ideology of teachers and students, creating a monitoring system for overseeing school expenses, and banning its board members from commercial activities. "We will strengthen our political awareness and political stance," Zhu Zhiwen, Fudan University's Party secretary, responded, "We will also identify the weak links in our anti-corruption management, and carry out deeper reform of our management system." The same day, another two inspection teams announced major results during inspections in Liaoning and Henan provinces. The Liaoning provincial government was criticized for not being sensitive enough in carrying out Party duties related to political discipline, not attentive enough to problems occurred during organizing elections, and falling short in addressing the Four Disciplinary Problems and observing the Eight-Point Code of Conduct. Such was the conclusion Monday of Chen Guanglin, the leader of the Liaoning inspection. Provincial Party officials were accused of over-spending for ceremonies, vehicle purchase, and in using public money for entertainment. The Four Disciplinary Problems - formalism, bureaucracy, hedonism and extravagance - were identified by the CPC as the major problems the Party is facing. The Eight-Point Code of Conduct, issued by the central government in 2012, is meant to reduce bureaucracy and improve ties with the public. Henan Province has also received similar warnings, as its officials allegedly colluded with the business sector by taking bribes during land auctions. "Hedonism and bureaucracy are still prevalent, even though the local government is executing the Eight-Point Code of Conduct," Ouyang Song, leader of the Henan team, said when he released the findings of his team's investigation. Related findings have been passed onto the CCDI and related departments. ^ top ^

Disgraced generals Xu Caihou and Gu Yunshan should have open trials, military law expert says (SCMP)
A People's Liberation Army veteran and legal expert has called for public courts martial of disgraced retired top general Xu Caihou and deputy logistics chief Gu Junshan to set a powerful precedent for speeding legal reform in the military. Writing exclusively today in a Chinese-language article for the South China Morning Post online, Dr Zeng Zhiping said the Communist Party should use Xu's case to show its determination to improve the army's transparency and redouble its modernisation push. Experts claimed the idea has garnered support from army officers - but they warned that under the current system it may be impossible, even after the trial, to disclose details due to political sensitivity. Xu, a former vice-chairman of the Central Military Commission, is the most senior official in the armed forces to be brought down in the anti-corruption drive of President Xi Jinping. He was expelled from the party in last week for alleged corruption after he was accused of taking bribes and selling military promotions from 2004 until last year. Gu, a lieutenant general and a top ally of Xu, was charged with crimes including bribery and embezzlement in March. Both are expected to be brought before closed courts martial. Zeng, a retired lieutenant colonel and military law expert at Nanchang Institute of Technology in Jiangxi, called for change. He wrote: "The opening up of courts martial is a basic requirement for a modern and powerful army." Disclosing details of the cases would let the public see the details of their alleged crimes - but military secrets would stay classified. Public hearings would also give officers experience of military justice and help build respect for the army, he wrote. "Opening up judicial proceedings has been an old principle to prevent abuse of power. The rejection of open courts martial is always a powerful way to excuse corrupt and ignorant [behaviour]." Xu Guangyu, a retired major general, warned it would take time for the judicial system to evolve. "The idea of increasing transparence in PLA courts martial is good, but these two cases should be handled within the existing legal system due to their seriousness and complexity," he said. "I believe some details of the two cases will be disclosed later. Don't worry about the abuse of power in the hearings because many eyes are monitoring them [despite the trials being held behind closed doors]." However, military observer Ni Lexiong said political considerations were central in not letting the cases of Xu and Gu be heard openly like the trial of former Chongqing party chief Bo Xilai who received a life sentence for graft. "Bo was just a local official, but both Xu and Gu were top officials in the PLA. Public hearings will definitely expose more senior officials involved in their cases, which would totally ruin the PLA's image at home and overseas," Ni said. The Guizhou Daily yesterday said party leaders should introduce ideological programmes to keep up military morale. ^ top ^

Hainan province deputy governor under investigation for 'severe violations' (SCMP)
Hainan deputy governor Tan Li, who has close ties to the family of the late paramount leader Deng Xiaoping, has been placed under internal investigation by the Communist Party, amid a widening graft probe targeting retired security tsar Zhou Yongkang. Tan is suspected of "severely violating laws and discipline", according to the Central Commission for Discipline Inspection's announcement yesterday. He is the second Hainan deputy governor to come under investigation. Last week, Ji Wenlin, who was once Zhou's personal secretary, was expelled from the party for corruption and adultery. Ji is now facing prosecution for graft. Tan is one of many senior cadres who may have received money from convicted Sichuan tycoon Liu Han, who himself was connected to Zhou, the South China Morning Post reported in April. The Post reported then, citing sources, that investigators in Liu's case had discovered that a senior Hainan official previously working in Sichuan had received about one million yuan (HK$1.25 million) in gifts from Liu, including rare artefacts and cash for his daughter's wedding. Liu was convicted on charges of leading a gang on a crime spree, and was sentenced to death in May. In June, Liu lodged an appeal. Tan, 58 and a Chongqing native, started his career in Sichuan and rose up the ranks in Guangan and Mianyang cities, where he served as party chief between 2001 and 2009. He was then transferred to Hainan and became a deputy governor and member of the provincial party standing committee in 2010. Two sources in Sichuan said Tan was close to Deng's family. One of the sources said Tan's mother was a family assistant to the late paramount leader. Tan was appointed party chief of Guangan, Deng's hometown, in 2001. During his four years in office, he organised the memorial marking the centenary of Deng's birth, the rebuilding of Deng's former residence and the establishment of an ecological preservation area around it. After the Wenchuan earthquake in 2008, Tan, then party chief of Mianyang, was given the sarcastic nickname of "Tan Xiaoxiao", meaning "Tan smile smile", by internet users because he was seen with a big smile after the catastrophe. Local media reported that his promotion to the Hainan post was due to his outstanding work on earthquake relief and reconstruction. ^ top ^

Move to more independent courts (SCMP)
China's top court has unveiled a roadmap for its five-year reform plan to boost judicial independence, giving judges more authority in rulings by unleashing them from interference by local governments. The reform was a top priority of President Xi Jinping's administration, senior judges said, as relieving the country's 200,000 judges from being virtual administrative cadres in the civil service would make it one of the boldest proposals in decades. "The change is remarkable, as it will allow judges to focus strictly on trials, not administrative duties," said Zhang Yongjian, a senior judge at the Supreme People's Court. "Being a judge is different to other jobs, as the court has more power and its rulings have a greater impact on people's lives." He Xiaorong, director of the court's reform office, said yesterday in Jinan, Shandong, that the reform would address many deeper issues that have resulted in justice not being served. Provincial-level boards would be set up to appoint and promote judges, and a similar committee would monitor judicial conduct, He said. Such measures also aim to improve court officials' professionalism and independence. Another part of the reform is meant to address and remedy judicial errors He also said he wanted to see lawyers playing a larger role in helping the judicial process become more based on the rule of law, which would build public confidence. One area he specifically mentioned was that a lawyer's right to cross-examine a witness must be protected. Regional circuit courts and intellectual property courts will also be set up to meet the public's needs. The agenda for the court reform was introduced after chief justice Zhou Qiang said on Tuesday at a meeting with the nation's top judges in Jinan that the administration of justice was to take place in public. "A transparent judiciary would also supervise and regulate the use of judicial power, and this in turn force judges to improve their professionalism," Zhou said. Legal experts said was still too early to be optimistic about the reform. Tong Zhiwei, a professor at the East China University of Political Science and Law in Shanghai, said the reform only existed on paper for now. "These are all good ideas," Tong said. "But to put the ideas into practice might require legislators to revise the constitution or the higher authorities to make bold policy changes." The new five-year plan for court reform, the forth of its kind, is part of a broader judicial reform that is expected to be fully introduced after the Communist Party's plenary meeting later this year. The party pledged at its last plenum in November to deepening judicial reforms. An unnamed official serving on the judicial reform panel told Xinhua earlier that a pilot scheme would be introduced in several cities, and that provincial and lower level courts would be managed independently from regional governments to avoid allegations of political interference. Xinhua also said cases would be handled only by presiding judges and not local party's politics and law committees, now seen as one of the biggest obstacles to judicial independence. ^ top ^

Outspoken writer released after turning himself in over Tiananmen anniversary event (SCMP)
The novelist Murong Xuecun was questioned and later released by the police after he admitted he was involved in a private gathering to commemorate the 25th anniversary of the suppression of the pro-democracy movement in Tiananmen Square. Several rights activists were detained after attending the event in May, including the civil rights lawyer Pu Zhiqiang. Murong Xuecun, whose real name is Hao Qun, was unable to go to the gathering as he was attending an event at the University of Sydney in Australia, but he released a public statement on Saturday saying one of his essays on the crackdown was submitted to the meeting and he wanted to show his support for those detained. "I oppose their detention. I have done the same thing as them and should not enjoy any sort of exemption," he said in the statement, which was circulated on social media over the weekend. "I will stay at home for the next 24 hours waiting for arrest, but please call me to make an appointment if you fail to make it in the next 24 hours," he said. Hao also wrote in a column in The New York Times in May about the speech he sent to the gathering. "Reciting such an essay at a private gathering can violate China's laws," he said. "By the government's logic, I, too, have committed the crime of 'picking quarrels and provoking trouble'. I am going to turn myself in." Beijing police called Hao on Tuesday and asked him to come in for "a cup of tea", a euphemism widely used on the mainland for a summons, Hao said in an interview with the German broadcaster Deutsche Welle before heading to the station at dusk. "The police called me about an hour ago. I asked them to wait as we've already scheduled this interview," he said. He added he was prepared for a jail sentence. "No one likes or wants to be imprisoned, but I want to do the right thing," he said. "If a jail term is the price I have to pay, then so be it." Human rights lawyers and activists, including Guo Yushan and Zhang Qingfang, stayed outside the police station and live blogged the progress of the case to support Hao. He was released after midnight and joined his supporters for a late-night snack, Guo posted on his social media account. An attempt to contact Hao yesterday by the Post yesterday was unsuccessful. Pu, who also was detained ahead of the 25th anniversary of the Tiananmen Square crackdown, was formally arrested last month for "creating disturbances" and "illegally obtaining personal information". Police said they were also investigating other alleged offences. ^ top ^

China promotes transparency in officials' corruption cases (Xinhua)
China's top procuratorial authority has ordered the promotion of information transparency in the investigation and prosecution of senior officials' corruption cases and other duty-related crimes. The Supreme People's Procuratorate (SPP) on Wednesday published a circular urging procuratorial agencies at all levels to make public information about major cases of suspected offenses by officials. The move is expected to make information disclosure about such cases a regular practice instead of case-by-case discretion. The public will be informed in a timely manner of cases such as suspected duty-related violations by provincial-level officials and those behind serious accidents or major food and drug safety scandals, according to the circular. Information to be published should include the suspects' identities, the crimes they are suspected of, basic facts and latest developments in cases during investigation, arrest and prosecution. Such information will be available in various forms, including text, statistics, photos and videos, it said. However, the circular also stressed that information about state secrets or personal privacy shall not be disclosed. The SPP said that starting in March this year, it launched microblog accounts on some major Chinese websites such as and To date, 6,700 pieces of information about prosecutors' work have been released by these accounts, attracting a total of 8.5 million followers and subscribers. ^ top ^

Birth rate holds steady after one-child policy eased, but there won't be further easing (SCMP)
The birth rate has remained stable following the mainland's easing of the one-child policy, a senior official in charge family planning has said. But the authorities would not allow all parents to have a second child, as the extra births would cause the population to spike, the official said. Yang Wenzhuang, chief of the grass-roots family planning department of the National Health and Family Planning Commission, said about 271,600 couples had applied to have a second child, with permission given to 241,300. It had been estimated there would be about two million extra births every year in the first five years after the easing. "Many factors contribute to parents' decision to have another child, such as the attitude of the first child, the career plans of the mother, housing and employment. It also shows the influence of policy on birth is dropping," Yang said. The commission estimates the population will hit 1.38 billion by next year, below the 1.39 billion target set out in the 12th five-year plan. The population is projected to reach 1.41 billion by 2020, also below the target of 1.45 billion set by the central government in 2006. Twenty-nine of 31 provinces and regions - all except Tibet and Xinjiang - have relaxed the one-child policy since the National People's Congress approved the easing of rules but left it to provincial lawmakers to enact. Zhejiang province, which became the first to relax the policy on January 17, has seen 43,100 applications and 2,444 extra children born. The province's health care and family planning authority initially predicted 80,000 extra births but now expects a quarter that number, said Wang Guojing, deputy director of the Zhejiang Health and Family Planning Commission. "There has been no sudden increase in the birth rate and the birth order is very steady," Zhang said. The mainland first loosened the one-child policy in 1984 by allowing couples in rural areas to have a second child if the first one was a girl. Rural and urban couples who are both only children themselves were also allowed to opt for a second child. Under the recent relaxation, the policy extends to couples in which only one partner is an only child. A survey by the commission last year found 80 per cent of married people aged 22 to 44 wanted to have two children. Further easing the policy would sharply increase the potential number of births. The number of fertile women who have given birth to one child but not a second is 139 million, according to the commission. But of those women, only about 10 million are only children. "A universal two-children policy will introduce a serious baby boom in a short period of time and put a lot pressure on public services such as health and education," said Zhai Zhenwu, a demographer from Renmin University. ^ top ^

Academics at Chinese Academy of Social Sciences assessed on ideological purity (SCMP)
Scholars working for the Chinese Academy of Social Sciences (CASS) should be judged mainly on their loyalty to communist ideology, the People's Daily has said, in yet another warning for the think tank's academics to toe the party line. The party mouthpiece said adherence to orthodox ideology should be the top criterion for assessing the performance of those working for CASS, which is the central government's top think tank and a premier source of insight into social policy. "CASS will list ideology as criterion for the assessment of cadres and [those who] violate political discipline will be fired without exception," the article said. Zhao Shengxuan, vice-president and deputy party chief of CASS, was quoted as saying that the academy would "treat political discipline as a criterion of the utmost importance in the assessment of the academics". The warning comes after an official with the party's anti-graft and discipline watchdog warned of "infiltration by foreign forces" in the academy. In an internal speech on June 10, Zhang Yingwei, head of the party's discipline inspection office at CASS, accused the institute of being "infiltrated by foreign forces" and "conducting illegal collusion during [politically] sensitive times". Zhang said the academy had some "political problems", without elaborating. Analysts said the tightening of ideological control on academics reflected fears among top leaders over cracks in the government's armour in the world's last major nation under one-party rule. "The efforts to strengthen the ideological control on academics reflect the leadership's overwhelming fears that communist rule in the country is under threat," said Zhang Ming, a professor of political sciences at Renmin University. The warnings to CASS come amid President Xi Jinping's sweeping ideological campaign targeting liberal intellectuals and an intense crackdown on political dissent. The People's Daily article cited several top CASS party officials as saying that efforts must be made to build the academy into a stronghold of orthodox Marxism. The academy founded a school of Marxism in February, and the first batch of 100 graduate students would begin their doctoral studies on Marxist theory this summer. CASS said it had invited prestigious scholars to be doctoral mentors. But Zhang Ming said most mentors recruited for the programme were those known for their conservative views. ^ top ^

Assessment report reveals water risk in China (Xinhua)
World Wildlife Fund (WWF) on Thursday released a report on China's water environment, naming the Haihe River and Lake Taihu along the Yangtze River as the most polluted waters in the country. Using a five point assessment system, the Haihe River, which flows through Tianjin, scored five points, the worst possible level. Lake Taihu scored 4.6, Wang Lei, a researcher with the WWF, told the 2014 Eco Forum Global in Guiyang, capital of southwest China's Guizhou Province. Water which threatens biodiversity exposes the unbalanced relationship between water and development, she said, calling for economic transformation from resource-heavy to eco-friendly development. Sponsored by the WWF Beijing office, the study was conducted by the Development Research Center of the State Council and the China Institute of Water Resources and Hydropower Research from 2012. ^ top ^



Beijing makes final three on shortlist for Winter Olympics in 2022 (SCMP)
Beijing is one of three cities still in the troubled race to host the 2022 Winter Olympics. Almaty in Kazakhstan and Oslo in Norway also made the list of finalists, as had been expected after the withdrawal of Stockholm in Sweden, Krakow in Poland and Lviv in Ukraine. Lviv dropped out a week ago amid the continuing turmoil in the country. Krakow pulled out in May after voters rejected the bid by a 70 per cent margin. And Stockholm withdrew in January after politicians refused financial backing for the city's bid for the winter games. The International Olympic Committee approved the three remaining contenders as official candidate cities, rather than cut the field any further. The cities must submit their detailed bid files to the IOC by January. The host city will then be selected by the full IOC membership in Kuala Lumpur, Malaysia, on July 31 next year. But the final decision may be a two-horse race with Oslo's bid still uncertain. The Norwegian government has yet to back the project and will not make a decision until the autumn. Polls have shown that more than half the population opposes the bid. Officials from the Beijing 2022 Winter Olympic Bid committee said they would host the games economically. "We will try our best to take advantage of the stadiums built for the 2008 Beijing Olympics," China Olympic Committee deputy secretary general Zhao Shuan said. He added that the only approved new work for the winter Olympics was a speed skating stadium, to be built west of the Beijing Olympic Park, and a downhill race track in Yanqing county in Beijing's northwest. Beijing - bidding to become the first city to host both the summer and winter Olympics - plans to hold the alpine events in the satellite city of Zhangjiakou, 190km away. Beijing has said a successful bid would aid development in that part of Hebei province. In a bid to dismiss fears the region around Zhangjiakou was too polluted to host the Olympics, the city's mayor said: "Zhangjiakou is a city where you can take a deep breath." ^ top ^



Tibetan writer placed under house arrest 'over dinner invite from John Kerry's delegation' (SCMP)
A well-known Tibetan writer said today that she and her husband have been placed under house arrest in Beijing as China plays host to US State Secretary John Kerry for the latest round of US-China talks. Tsering Woeser, who has been advocating Tibetans rights, said state security officers arrived at her Beijing home late last night, shortly after she and her husband Wang Lixiong returned from a trip. The state security officers refused to give a reason for the home detention, but Tsering Woeser said she believes it is related to a dinner invitation she received from the US Embassy, possibly with Kerry himself. The US Embassy in Beijing did not immediately reply today when asked for a comment. Tsering Woeser was awarded last year's International Women of Courage Award by the US State Department, but Beijing banned her from travelling to Washington to receive the award. At the award ceremony, Kerry praised Tsering Woeser for her courageous writings on Tibetan people and their causes at a time of deteriorating human rights. ”Tsering Woeser has emerged as a clarion voice of the people, even as the Chinese government has worked to curtail the flow of information from Tibet,” Kerry said at the time, according to a transcript posted on the State Department's website. Tsering Woeser said the US embassy had called her while she and Wang were travelling outside Beijing to extend an invitation to a Wednesday dinner, which she said she accepted over the phone. She said the embassy never said whom she would meet but she thought it could be Kerry, who wrote her a letter following last year's award. ”If I were to meet him, indeed, I would like to reply to his letter in person and offer my thanks,” Tsering Woeser wrote on her Facebook page. “But regrettably, I am now under house arrest.” ^ top ^



HSBC downgrades outlook for Hong Kong citing market fears over Occupy Central (SCMP)
Hong Kong's biggest bank downgraded the city's stock market prospects yesterday, citing the risks from the Occupy Central movement. The bleak assessment came as leaders of the civil disobedience movement considered bringing forward to next month their plan to block streets in Central, with support from student groups who staged a rehearsal on Chater Road after the July 1 march. "We reduce Hong Kong to underweight on concerns about negative news flow," analysts at HSBC wrote in the bank's flagship equity investment strategy report for the third quarter. "Occupy Central … could sour relations with China and may hurt the economy." But Occupy co-organiser Dr Chan Kin-man said he believed the sit-in would create only a temporary disturbance. "What we are pursuing is the long-term transparency and accountability in the government, which is good for the economy," Chan said. "Investors should not worry as this will be a very peaceful protest." The Occupy movement wants genuine universal suffrage for the 2017 chief executive election, with the public having the right to nominate candidates, a proposal Beijing rejects. The HSBC report comes 10 days after ratings agency Moody's restated its negative outlook on the city's banking system, citing concerns about risks to lenders from rapidly expanding exposure to mainland borrowers. Hong Kong is one of three markets in Asia outside Japan that HSBC is downgrading for the third quarter - alongside South Korea and the Philippines. But Fan Cheuk-wan, Asia Pacific managing director for Credit Suisse Private Banking and Wealth Management, said she believed that Occupy Central would not have a huge impact on the financial system as the industry had taken precautions. "Foreign investors are more concerned whether the central government is adjusting the policy of 'one country, two systems' towards Hong Kong," Fan said, adding investors also saw judicial independence as essential. This month, the Hong Kong government is expected to submit a report on the public consultation on political reform to the Standing Committee of the National People's Congress. The committee will next month draw up principles for the electoral reform framework. Chan said the Occupy Central sit-in protest would begin if the committee stated principles that did not satisfy international democratic standards. The Federation of Students, the organiser of the sit-in rehearsal, said the revised timetable was "reasonable" and it would join the protest. ^ top ^

Hong Kong to join WTO talks on green goods (Xinhua)
Hong Kong will negotiate with 12 World Trade Organization members on the Environmental Goods Agreement, which seeks to eliminate tariffs on a range of eco- friendly goods, the Government of the Hong Kong Special Administrative Region said Tuesday. Hong Kong's export trade will benefit from the elimination or reduction of tariffs when the agreement is implemented, according to a statement posted on the government's official website. The elimination of tariffs will also lower the cost of green goods, promoting their wider adoption and improving the environment. The negotiations will also attempt to address non-tariff issues relevant to trade liberalization in environmental goods, the statement said. Other WTO members joining the negotiations include Australia, Canada, China, Chinese Taipei, Costa Rica, the European Union, Japan, New Zealand, Norway, Singapore, Switzerland and the United States. ^ top ^



Occupy-style public vote on universal suffrage to be held in Macau (SCMP)
On the heels of Hong Kong's unofficial referendum on reform last month which drew almost 800,000 voters, a similar citywide poll is being planned for Macau ahead of the election next month of its chief executive. Residents will be asked only two questions in the seven-day poll from August 24 to 30. First, whether universal suffrage should be implemented by 2019 in Macau, and second, if they have confidence in the so-far unchallenged incumbent chief executive Dr Fernando Chui Sai-on. If a challenger surfaces, however, the second question will expand to ask voters their choice of candidate for the August 31 election. “It would be the very first referendum in Macau targeting the chief executive election,” Sulu Sou Ka-hou, of Macau Conscience which initiated the poll, told the South China Morning Post on Monday. “We hope to create a drastic and sharp contrast between the polling results of the 400-strong election committee and the public.” Sou said the group wanted to exert pressure on both the central government and Chui's administration to show that Macau residents also demand democracy, and to express their “discontent” with the incumbent chief executive. Unlike Hong Kong's Basic Law, Macau's mini-constitution does not specify universal suffrage as the ultimate goal of its political system. And the government has no timetable for implementing “one man, one vote” for its chief executive and legislative elections. In order to enter the race, hopefuls for the chief executive post need to secure at least 66 votes from a 400-strong election committee which is overwhelmingly dominated by pro-establishment members. The same members will then pick the winner. Sou said Macau's democratic camp held a similar referendum two years ago to get people's opinion on political reform. However, only 2,600 citizens took part in the vote due to insufficient preparation and promotion. He expected that the turnout for the planned referendum next month would be substantially greater following the massive rally in May to condemn a bill that would have lavished benefits on outgoing chief executives and certain other government officials. That protest was attended by 20,000 people according to organisers, the biggest demonstration in the city since residents rose up in 1989 to oppose the bloody Tiananmen Square crackdown. It was also seen as the “political awakening” of a city often viewed as apolitical. Sou said they had planned the poll at the beginning of the year and it had no direct relationship with Occupy Central's referendum last month, which touched a nerve with Beijing and was labelled “illegal”. Macau voters will be able to cast their ballot via website from August 24 to 30, Sou said. Polling stations will also be opened on August 24 and 30, from 11am to 9pm, although locations are still being confirmed. The results are expected to be announced on August 31, the day the official chief executive election takes place. Poll organisers are consulting the public on whether holders of Macau ID aged 16 or above – or aged 18 or above – should be allowed to vote. ^ top ^



Top political advisor meets Taiwan commerce delegation (Global Times)
Top political advisor Yu Zhengsheng on Monday said the mainland is willing to open its service sector to Taiwan when meeting with a delegation from Taiwan's General Chamber of Commerce, headed by chairman Lai Cheng-i. "Cross-Strait relations should keep making progress and the two sides should increase interaction and deepen communication, continually enhancing mutual understanding," said Yu, chairman of the National Committee of the Chinese People's Political Consultative Conference. While promising to open mainland's service sector, Yu also said Taiwan's enterprises have the capability to take the opportunities generated in the mainland market. Yu also expressed his hope that the chamber of commerce could bridge cross-Strait service sectors. ^ top ^

Fujian aims to build bonds with Taiwan (China Daily)
Fujian province wants to learn from Taiwan's experience in building harmonious neighborhoods and creating urban design, a top provincial official said. During a meeting with residents of Zhongshun neighborhood in Taipei's Wenshan district on Thursday, You Quan, top leader of Fujian province, said more people-to-people exchanges in neighborhood-building between the mainland and Taiwan should be encouraged in the future. The meeting at a residential complex on Thursday came on the fourth day of You's trip. The first Fujian Party chief to make an official cross-Straits visit, You began his trip to the island on Monday. The itinerary, which had the theme "Visiting Friends and Relatives and Seeking Mutual Development", covered seven Taiwan cities and counties, including Kaohsiung, Taichung and Nantou. You met with grassroots representatives of local businesses as well as members of the public during his previous stops. At the sixth Straits Forum in mid-July in Xiamen, Fujian, You said a special bond exists between Fujian province and Taiwan due to their proximity. The inseparable historical and cultural ties between the province and Taiwan are a solid base for the two regions to deepen cooperation, he added. Dai Shugen, a researcher with Xiamen University's Taiwan Research Institute, said such grassroots visits reflect the officials' desire to learn the real thoughts of Taiwan people. The visit will further ease anxiety in Taiwan over the rapid development of cross-Straits ties after a recent protest against a service trade pact, he said. The pact, signed in June 2013, would open 80 of the mainland's service sectors to Taiwan and 64 Taiwan sectors to the mainland. ^ top ^



Chinese Premier stresses innovation-driven economic upgrading (Xinhua)
China needs to use innovation and intelligence as well as diligence to support its economic upgrading and job creation, Premier Li Keqiang has said. China has abundant human resources, a huge market and deep-rooted culture, so there is much potential to develop its creative industry, Li said during an inspection tour of Changsha, capital of central China's Hunan Province, and Zhuzhou City in Hunan on Thursday and Friday. China should improve its products through intelligence and bolster job creation and industrial development through innovation to create a better Chinese image on the global stage, he said. Li encouraged college students to unleash their potential through employment and running businesses, saying the government needs to create a platform for them and the whole society should encourage innovation and be tolerant of failures. The size of market for Chinese products depends on the potential of creativity. To make Chinese-manufactured equipment flourish on the global market, its competitiveness should be giving clients most bang for the buck and its lifeline lies in the high quality, Li stressed. Key projects conducive to economic restructuring including railway building in central and western China are important targeted controls measures, Li said. China needs to continue streamlining administration and delegating more power to lower-level governments to spur market vitality. Governments need to create a fair competition market environment and enhance their efficiency to help enterprises increase profits, he added. ^ top ^

Unleashing the power of innovation (China Daily)
Is China about to lead the world as an innovator again? The world's second-largest economy invented gunpowder, the compass, printing and papermaking, but has fallen behind not just in recent decades but for most of the last two centuries. After reform and opening-up in the late 1970s, China became the workshop of the world, mainly through low cost original equipment manufacturing. Now, however, as China's economy starts to slow and wages rise, there are greater incentives for Chinese companies to innovate to improve profitability by greater productivity. Although China's investment in R&D is still just 38 percent of that of the United States, according to the China Europe International Business School, a number of Chinese companies are now beginning to make breakthroughs. Ninety-three Chinese companies are now in the top 2,000 global companies in terms of R&D intensity (R&D spending as a percentage of sales), ranked by the EU Industrial R&D Investments scoreboard in 2012. While this is fewer than the 658 from the US, 527 from the European Union and 353 from Japan, it represents significant progress. Huawei Technologies Co Ltd, the telecommunications giant, is the highest-ranked Chinese company-31 in terms of spending, investing some $3.5 billion on research, almost a quarter of its total sales. PetroChina Co Ltd, the State-owned oil company (66) and another telecommunications company, ZTE Corp (94), make the top 100. In fact, ZTE made the most patent applications by any company in the world in 2012. Many Chinese companies are acquiring technology through acquisitions with high profile deals such as computer giant Lenovo Group Ltd buying the Motorola handset division from Google Inc this year for $2.91 billion. Chinese companies are also snapping up R&D facilities in the US and Europe. There have been several acquisitions of German small and medium-sized businesses in engineering and manufacturing technologies. Many expect this to be a significant trend in the next decade. Much of the progress has been in line with the Chinese government's Five-Year Plan (2011-15), which places emphasis on achieving breakthroughs in areas such as integrated circuits, space research and nanotechnology. ^ top ^

China, US to discuss yuan, monetary policy (China Daily)
China and the United States will discuss the yuan's value as well as the impact of US monetary policy at a meeting this week, Chinese Vice-Finance Minister Zhu Guangyao said on Monday. Top Chinese and US officials, including US Treasury Secretary Jack Lew, will hold their annual talks in Beijing on July 9-10 at a meeting known as the Strategic and Economic Dialogue. "Both sides will conduct candid and deep policy dialogues on the RMB (yuan) issue and issues concerning China's domestic financial reforms," Zhu told reporters at a briefing. Zhu said China had urged Washington to pay attention to the possible "spillover effect" of changes in its monetary policy on the world economy, as the Federal Reserve unwinds its quantitative easing. "We hope the monetary policy of the United States, as the largest developed country and main reserve currency issuer, would be responsible," Zhu said. "As the quantitative easing ends and the process of rising interest rates - or monetary policy normalization - starts, we will have candid discussions with the US side on its impact on the US economy, the global economy, including China," he added. ^ top ^

Credit growth to bolster economy (Global Times)
China will continue its prudent monetary policy and maintain moderate liquidity in a bid to achieve reasonable growth in loans and social financing amid downward pressures in the second half, the central bank said on Monday. China's economic growth is within a reasonable range, and there are positive changes in the economic and financial structures, but the country is still facing a complicated situation with divergent policies of major economies, the People's Bank of China (PBC) said in a statement released after its second-quarter meeting. Also on Monday, Premier Li Keqiang told a news conference with German Chancellor Angela Merkel in Beijing that China's economic development improved in the second quarter compared with the first quarter, but downward pressures could not be underestimated. A batch of measures has been taken so far this year to stabilize growth, promote reform and adjust the economic structure, Li said. Li noted that the central government will strengthen its policy fine-tuning and targeted measures to stimulate market volatility, increase the supply of public goods and support the development of the real economy. "China has the capability and conditions to achieve major economic goals for the whole year," Li said. The country has set the annual GDP growth goal at 7.5 percent. Li's recent remarks indicated that the targeted measures to stabilize growth include renovation of run-down areas and infrastructure construction such as building railways and water projects, Xu Gao, chief economist of China Everbright Securities, said in a research note sent to the Global Times on Monday. China's economic growth dipped to 7.4 percent in the first quarter of this year, the lowest level since the third quarter of 2012. Foreign investment banks including UBS and Goldman Sachs as well as domestic financial institutions such as Bank of China and Bank of Communications estimated the growth rate would slightly rise to 7.5 percent in the second quarter. In the second half, there are two major risks that should be highlighted - deflation in the industrial and manufacturing sectors as well as debt default risks, Bank of Communications said in a research note sent to the Global Times. The monetary policy in the second half should seek a balance among stabilizing growth, preventing risks and lowering leverages, the bank said. The central bank implemented two rounds of targeted reserve requirement ratio cuts in the first half of this year, a move to support the agricultural sector and small enterprises. Xu from Everbright Securities expects similar moves will be adopted to address enterprises' financing difficulties. "As large amounts of debt will be due in the second half, a reasonable growth in social financing will help prevent default risks," Zhang Lei, a macroeconomic analyst at Minsheng Securities, told the Global Times Monday. New yuan-denominated loans are expected to reach 10 trillion yuan ($1.61 trillion) in 2014, up 14 percent from a year ago. The country's total social financing is also expected to reach 18.5 trillion yuan this year, up from 17.29 trillion yuan in 2013, Bank of Communications estimated. The PBC also noted that it would push forward market-oriented interest rate reform and deepen reform in the yuan exchange rate formulation, and try to keep the yuan's exchange rate largely stable in equilibrium. Zhang expects a long-awaited deposit insurance system to be rolled out soon. The deposit insurance system is considered a precondition for freeing deposit rates, the last and most important step of interest rate liberalization. "But the interest rate liberalization will still take time as the conditions are not suitable right now and a hasty move will bring most financial institutions under huge pressure," Zhang said. ^ top ^

CPI increase likely to slow down in June (Xinhua)
An upcoming release of official economic data is likely to show that the consumer price index (CPI), the main gauge of inflation, might moderate to a growth between 2.3 and 2.4 percent in June, down from 2.5 percent in May, economists predicted. A median forecast by Bank of Communications (BOCOM) on Monday said the CPI probably grew 2.4 percent in June. Tang Jianwei, an analyst at BOCOM said food prices, which account for around one-third of the weighting in CPI calculation, were generally stable in June, and prices of vegetables, meat and sea products began dipping in the second half of June. The forecast is the same as one made by Agricultural Bank of China (ABC). ABC economist Fan Junlin also said inflation probably grew by 2.3 percent in the first half of 2014. Government data on June inflation as well as the producer price index is due on Wednesday. Economists predict that inflation will continue with a tempered growth rate in the second half of the year. Whole-year inflation is expected to stay within 2.5 percent. Given that inflation remains under control, analysts said this will leave room for the government to further ease monetary policy in the coming months. "I think macroeconomic policies will be further relaxed in the second half of the year. Fiscal policies will be made more active with an eye on boosting growth as well as restructuring," said Zhou Jingtong, a senior analyst at Bank of China. Zhou also predicted that central bank policies will become more flexible and targeted, and it might also expand cuts in reserve requirement ratios for certain banks. ^ top ^

Bank of China in first yuan bond issue in Paris (Global Times)
The Bank of China issued yuan-denominated bonds in Paris for the first time on Tuesday, raising 2 billion yuan ($326 million) in the process, the Paris Europlace organization said. The issue was the latest step toward closer cooperation between China and France in the financial sector since their central banks established a clearing house for yuan transactions in June. Paris wants to become a leader in Europe for trade in China's controlled currency. The bond issue "completes the Bank of China Paris' financial activities plan," a statement said in reference to the Paris branch of the People's bank of China, the central bank. The sale was managed by BNP Paribas, Crédit Agricole-CIB and HSBC, and aimed at "supporting the commercial and financial development of eurozone companies that are active in China," the statement said. China is trying to increase global use of its currency by easing controls and widening the band within which the yuan is allowed to trade against foreign currencies. The creation of a yuan clearing house in Paris makes it easier for French-based firms to carry out commercial operations and make investments in China. ^ top ^

Weaker June inflation data may prompt more stimulus from Beijing (SCMP)
China's consumer inflation cooled slightly more than expected in June, pointing to lingering weakness in the economy which could prompt Beijing to launch further stimulus measures to shore up growth. The consumer price index (CPI) rose 2.3 per cent in June from a year earlier, down from 2.5 per cent in May, the National Bureau of Statistics said yesterday. The producer price index (PPI) dropped 1.1 per cent in its 28th straight month of decline, versus a market consensus for a fall of 1 per cent, signalling that demand in the domestic economy remained lukewarm. "The weak inflation data leaves more scope for Beijing to step up use of targeted measures and even opens the opportunity window for blanket easing policy, such as an interest rate cut, to support economic growth," said Wang Jin, an analyst at Guotai Junan Securities in Shanghai. Most economists believe Beijing will roll out fresh stimulus measures in coming months to ensure 2015 economic growth meets its target of 7.5 per cent, but they are divided whether it will stick to small-scale measures used so far or take more aggressive steps such as interest rate cuts or a nation-wide reduction in bank reserves. Policymakers are reluctant to announce a massive stimulus programme like the one adopted during the 2008-09 global financial crisis, which fuelled inflation. "Subdued inflation means monetary policy will have plenty of room to ease further over the coming months," Julia Wang, an economist at HSBC said in a note to clients. "We think the central bank will likely continue to do so in a targeted manner." The weaker June inflation reading was mainly due to lower pork and vegetable prices. The CPI fell 0.1 per cent in June from May, versus a forecast of no change in monthly prices. In the first half of this year, average consumer inflation was 2.3 per cent, way below the official ceiling of 3.5 per cent set by the government at the start of the year. With inflation clearly not a threat for now, the government and central bank have the scope to loosen policies further to bolster the economy. "Further monetary policy easing across the board will still be needed to help lift confidence in China's economy," said ANZ economists in a research note. ANZ believes Beijing will reduce reserve requirement ratios for all of the country's banks in the third quarter. So far, it has relaxed the requirement only for banks which are significant lenders to small companies and the farming sector. Premier Li Keqiang said earlier this week that economic growth quickened in the second quarter from the previous three months. But he added the economy still faces downward pressure. The central bank said on Monday it would use a mix of monetary tools to keep overall liquidity at an appropriate level. ^ top ^

June CPI shrinks, indicates further policy easing (Global Times)
China's consumer price index (CPI), a main gauge of inflation, shrank slightly from May, the National Bureau of Statistics (NBS) announced Wednesday, prompting expectations of further policy easing in the second half of the year. The CPI figure grew 2.3 percent year-on-year in June, down from 2.5 percent in May. "The lower inflation rate in June was mainly because of the lesser impact from the carryover effects from last year, and fewer new factors for price gains compared to May," the Xinhua News Agency quoted Yu Qiumei, a senior NBS statistician, as saying. China's producer price index (PPI), released by the NBS on the same day, dropped 1.1 percent year-on-year in June. The decline, however, narrowed from the 1.4-percent fall in May. Although the data marked the 28th consecutive monthly decline, the narrowed drop reflected some "positive changes" in industrial sectors, Yu noted. In the first half of 2014, average consumer inflation stood at 2.3 percent, far below the official ceiling of 3.5 percent set by the central government at the start of the year. Analysts said the country does not currently face much pressure to control inflation. "Inflation will not be a constraint for policy easing in 2014. More policy easing is expected to sustain the growth momentum in the second half," Chang Jian, China economist with Barclays Capital, told the Global Times Wednesday. "We expect the government to accelerate fiscal spending and open up more infrastructure sectors to private sector participation," Chang said. Weak inflation pressure indicates further policy easing, especially monetary policy, which will have more room in the months to come, Xu Gao, chief economist of China Everbright Securities, said in a research note sent to the Global Times on Wednesday. "The June CPI figure is not as weak as that of April, easing the pressure on policy makers, so we expect no major policy adjustment in the future," Xu said. ^ top ^

China, S.Korea to hold FTA negotiations (Xinhua)
China and South Korea planned to hold the 12th round of negotiations for a bilateral free trade agreement (FTA) next week after leaders of the two countries agreed last week to wrap up the talks by the end of this year, South Korea's trade ministry said Thursday. This round of talks will be held for five days from Monday in Daegu, South Korea, according to the Ministry of Trade, Industry and Energy. The ministry said the two sides will hold a comprehensive and intensive discussion on goods, services, investment and cooperation areas during the upcoming talks. The upcoming talks will come after Chinese President Xi Jinping and his South Korean counterpart Park Geun-hye held a summit meeting in Seoul last week. The two presidents vowed to endeavor to finish the negotiations before the end of 2014, pledging to expand the bilateral trade volume to $300 billion in 2015. Trade between the two countries surpassed $270 billion in 2013. China and South Korea launched the FTA negotiations in May 2012, and had completed the first stage of talks in September 2013. The two countries tentatively agreed to abolish tariffs on 90 percent of all products during the first-stage talks, but they opened the door for raising the threshold during the second-phase negotiations. Concluding the pact will not be smooth sailing as negotiators will have to resolve contentious issues such as China's access to South Korea's agricultural market and South Korea's access to China's auto market, credit rating firm Moody's said in a report released Thursday. ^ top ^

PBOC verifies Bank of China money-laundering accusation (Xinhua)
China's central bank is currently verifying media report accusing a state-owned commercial bank of breaching the country's money-laundering rules, a spokesman said Thursday. "We have noticed the media report about a commercial bank's cross-border renminbi business, and are verifying related facts," said the unnamed spokesman of the People's Bank of China. China Central Television (CCTV), the state TV broadcaster, reported on Wednesday that several domestic branches of Bank of China were suspected of money laundering via its "Youhuitong" service, which enables cross-border transfer of large sums of yuan abroad for clients. In recent years, China's cross-border renminbi business saw rapid growth as the country responded to the needs of economic and financial market development at home and abroad, according to the spokesman. "During business expansion, institutions must comply with laws and regulations, improve their related rules and prevent legal and operational risks," the spokesman said. ^ top ^

Foreign trade picks up, short of expectation (Global Times)
Chinese imports picked up, while export numbers also improved slightly in the world's largest trading nation in June, although growth was less than expected. Though challenges remain, trade is projected to rebound in the second half of the year, a customs official said on Thursday. Exports recorded 7.2 percent year-on-year growth in June, below a market consensus of 10.4 percent, and a 0.2 percentage point increase from May's figures. Imports in June increased 5.5 percent year-on-year, versus a 1.6 percent year-on-year fall in May, customs data showed. China's trade surplus totaled $31.6 billion in June, narrowing from May's $35.9 billion. "Despite being below consensus, June exports expanded at a healthy pace and are consistent with export growth momentum in the first five months of 2014," Lu Ting, chief China economist at Bank of America Merrill Lynch, said in a research note on Thursday. The customs data showed exports worth $1.06 trillion and imports of $959 billion during the first six months of 2014, up 0.9 percent and 1.5 percent from a year earlier, reversing a decline during the first five months of the year. Trade with the EU and US - China's top two trading partners - grew by 9.6 percent and 2.8 percent year-on-year. Export growth was helped by stable external demand and supportive trade policies, Zheng Yuesheng, spokesperson of the General Administration of Customs, said at a press conference in Beijing. Steady economic growth at home, recovering external demand, and disappearance of an inflated trade base that emerged during January to April 2013 should lead to a better trade outlook during the second half of the year, he said. Many analysts speculated that the inflated trade base was the result of domestic companies' round-shipping goods to increase export figures. "Trade growth is expected to accelerate in the third quarter … yet the 7.5 percent trade growth target for this year remains a tough mission," Zheng said. China's labor-intensive exports occupied a declining share of trade with major trading partners including the US, the EU and Japan, ceding ground to cheaper labor in Southeast Asian nations like Vietnam, India and Bangladesh, Zheng noted. Rising labor costs and restraints on energy consumption weakened the competitiveness of China's labor-intensive exports. Initiatives adopted by developed markets to revitalize their own manufacturing sectors have led to cooling foreign direct investment in China, which has had a negative impact on Chinese manufacturing exports, Zheng said. Frequent trade frictions and remedial actions taken by the trading partners have also weighed on China's export prospects, he said. Official data show that China was on the receiving end of 92 trade remedy investigations by trade partners, worth a total of $3.66 billion in trade, during 2013. Trade protectionism has intensified this year, with the US filing six cases against Chinese exports in May alone, while the EU slapped antidumping and countervailing duties on solar glass from China. Solar glass is used in solar panels for its exceptional ability to transmit light. A fall in commodity prices, including iron ore, coal and soybean, is expected to extend into the second half of the year, which will be a drag on China's trade figures, Zheng said. "The trade surplus exceeded $30 billion again in June, and it continues to add pressures on yuan appreciation in the foreseeable future. Large trade surplus amid the Sino-US Strategic and Economic Dialogue has again put the yuan in the spotlight, facilitating renewed yuan appreciation," Liu Ligang, chief China economist at ANZ Banking Group, said in a research note on Thursday. An appreciating yuan will weigh on Chinese exports. "It is still hard to be optimistic about the trade figures," Xu Gao, chief economist at China Everbright Securities Co, told the Global Times on Thursday. Both exports and imports in June fell by 4.4 and 2.7 percent from May despite modest year-on-year growth, customs data showed. An economic recovery in the US will likely not offset slackening economies in the EU and Japan during the next few months, indicating limited external demand for China's exports, Xu said. The General Administration of Customs is mulling an expansion to the Shanghai free trade zone pilot program for simplifying customs declaration procedures across more of China's regions as a way to facilitate trade, Zheng said. An integrated customs declaration system in Beijing and Tianjin started operation on July 1, enabling traders to save 20 to 30 percent on declaration and logistics costs. The new system will extend to Hebei Province on October 1. Shanghai, Zhejiang and Jiangsu will undergo the same integration process in October, with extension to a further eight provinces and municipalities along the Yangtze river by early 2015, he noted. ^ top ^


DPRK and South Korea

North Korea softens fiery rhetoric with promise to send cheerleaders to South (SCMP)
North Korea said on Monday it will send cheerleaders along with its athletes to the Asian Games in the South as a gesture of peace after weeks of firing rockets and fiery rhetoric. North Korea, which regularly threatens to destroy its neighbour in a sea of flames, is sending 150 athletes to the Games in the South Korean port city of Incheon which begin on September 19. The two sides are technically still at war after their 1950-53 civil conflict ended in a truce, not a peace treaty. The North's cheerleaders have proved a huge attraction in rare appearances in the South since the war, with tightly choreographed routines and messages of peace and unification. “It is necessary to put an end to all kinds of calumnies and vituperation that foster misunderstanding and distrust among the fellow countrymen,” the North said in a statement carried by the official KCNA news agency. “We have decided to dispatch a cheerleading squad along with the athletes to the 17th Asian Games in order to improve relationships between the North and the South and to create an atmosphere of national reconciliation.” Pyongyang issued another call on Monday for a lowering of military tensions with Seoul, even as leader Kim Jong-un oversaw firing drills on an island near the sensitive maritime border. A government statement carried by KCNA said it was time to end “reckless hostility and confrontation” and called on Seoul to scrap its annual joint military drills with the United States. Last week the North's top military body had called for both sides to halt all hostile military activities – a suggestion Seoul dismissed as “nonsensical” in the light of Pyongyang's nuclear weapons programme. The latest offer is also likely to receive short shrift, as South Korea has repeatedly made it clear that the annual joint drills are non-negotiable. North Korea makes periodic peace proposals which are mostly seen as rhetorical devices for international consumption. The latest statement came as Kim continued a tour of front-line islands with a visit to an islet in the Sea of Japan, or East Sea where, according to KCNA, he watched a firing drill. On Saturday, Kim had monitored an apparently large-scale army, navy and air force exercise involving a mock assault on a South Korean island. South Korea's Unification Ministry said on Monday that North Korea must not repeat “unreasonable” demands. Spokesman Kim Eui-do said the South Korean government supports the successful hosting of the Asian Games and will discuss the North's plans to send athletes and the cheering team with organisers of the games. North Korea boycotted the 1986 Asian Games and the 1988 Summer Olympics, both in Seoul, but attended the 2002 Asian Games in Busan, the 2003 University Games in Daegu and the 2005 Asian Athletics Championships in Incheon. At all three events, the North dispatched cheering squads, mostly comprised of young women – called an “army of beauties” in South Korea – which often received more attention than the country's athletes. Among the 2005 squad was Ri Sol-ju, according to South Korean officials, who later married North Korean leader Kim. Outside analysts say North Korea seeks to improve ties with South Korea and other countries to help attract foreign investment and aid to revive its economy. ^ top ^

DPRK calls for ending confrontation, improving north-south ties (Xinhua)
The Democratic People's Republic of Korea (DPRK) has called for ending confrontation on the Korean Peninsula and improving north-south ties, the official KCNA news agency reported on Monday. The DPRK made a four-point proposal clarifying its principles and stances on easing tensions on the peninsula and achieving "independent reunification" of the nation, one day before the 20th anniversary of the death of former top leader Kim Il Sung. The DPRK government called on both sides to end reckless hostility and confrontation and blaze a road toward reconciliation and unity, the KCNA quoted a statement as saying. It described the current situation on the peninsula as "grave" when a single remark or tiny friction may cause destruction of the nation as hostility and confrontation have reached extremely high level. The DPRK asked South Korea to make a bold decision to change its confrontational policy and suspend all kinds of north-targeted military exercises conducted with "outsiders." The statement also urged both sides to reject dependence on "outsiders" and settle all issues through their own efforts. "The north and south should never fall victim to outsiders keen on catching fish in troubled waters through the division of Korea," it stressed. The government also suggested both sides seek "reasonable reunification proposals." Fellow countrymen have been increasingly demanding reunification be achieved through a "federal formula" on the Korean peninsula where different ideologies and social systems exist. In the June 15 joint declaration, it added, both countries acknowledged that common points exist between the "low-level federation" system proposed by the DPRK and the "confederation" supported by South Korea. "The north and south should specify the reunification proposals and make efforts to realize them," the statement said. The June 15 declaration was issued at a historic 2000 summit between late South Korean President Kim Dae-jung and late DPRK leader Kim Jong Il. It led to a period of rapprochement between the two sides that saw large scale bilateral cooperation and the promotion of economic ties. ^ top ^

Limping N.Korea leader leads tribute for Kim Il-sung (Global Times)
A visibly limping Kim Jong-un presided over an official memorial in Pyongyang on Tuesday for the 20th anniversary of the death of his grandfather and North Korea's founder, Kim Il-sung. The meeting, broadcast live on North Korean state TV, began as Kim walked into a conference hall packed with thousands of party and military officials who rose to applaud the young leader. Kim appeared to be limping slightly as he walked to his seat, and the cameras cut away as he left the memorial which lasted a little more than 30 minutes. He did not address the meeting. The reason for the limp was not apparent. Kim has recently concluded a series of visit to frontline military installations on the maritime border with South Korea. The leadership podium was set against a backdrop of a red flag surrounding the giant portrait of a smiling Kim Il-sung. The eulogy was read by North Korea's nominal head of state, Kim Yong-nam, who hailed the elder Kim as the "greatest leader in human history" and offered a long list of his accomplishments, punctuated by lengthy and regular applause. "Thanks to the powerful army created by the great leader Kim Il-sung, we have successfully overcome all challenges," he said. Kim Yong-nam also called for the entire country to "unite under the respected leadership" of Kim Jong-un to build a prosperous future. Kim Il-sung led North Korea from its establishment in 1948 until his death on July 8, 1994. He was succeeded by his son, Kim Jong-il, who also ruled until his death in December 2011 when power was transferred to his son and current leader Kim Jong-un. Kim Jong-un bears a striking physical resemblance to his grandfather, which he has underlined with his style of dress and haircut. Like Kim Il-sung, he does not shy away from public speeches and is regularly seen hugging and posing for photos with soldiers. Kim Jong-il was far more aloof, and only spoke once at a major public event during his 17 years in power. ^ top ^

China supports improvement of DPRK-ROK ties: spokesman (Xinhua)
China said on Tuesday it supports the Democratic People's Republic of Korea (DPRK) and the Republic of Korea (ROK) to improve their ties through dialogue. "China always supports the two countries to improve their relations and realize reconciliation and cooperation, and to achieve independent and peaceful reunification ultimately," said Foreign Ministry spokesman Hong Lei at a daily press conference. Hong made the remarks while commenting a statement issued by the DPRK, which said it will send a cheering squad to the upcoming Asian Games scheduled for Sept. 19 to Oct. 4 in ROK city of Incheon. "We hope the two sides could continue to show goodwill, reach consensus and strive for the improvement of ties, so as to jointly maintain the region's peace and stability," Hong said. ^ top ^

China urges peace, stability on Korean Peninsula (Xinhua)
A Chinese Foreign Ministry spokesman on Wednesday urged joint efforts to safeguard peace and stability on the Korean Peninsula after Seoul said Pyongyang fired two short-range missiles. "Under the current circumstances, we hope all parties can do more to ease the current tension so as to jointly maintain regional peace and stability," spokesman Hong Lei said at a daily press briefing. The Democratic People's Republic of Korea (DPRK) fired two short-range missiles into its eastern waters early Wednesday, media of the Republic of Korea (ROK) reported, citing the ROK's Joint Chiefs of Staff. ^ top ^

North Korea fires more missiles into sea (Global Times)
North Korea on Wednesday fired what appeared to be two short-range missiles into the sea in the latest in a series of launches interspersed with spurned peace overtures to South Korea. A spokesman for the Joint Chiefs of Staff in Seoul said the two missiles were fired from the western province of Hwanghae into the Sea of Japan. "We suspect they were short-range ballistic missiles," spokesman Um Hoy-sik told AFP, adding that the range was around 500 kilometers. UN resolutions bar the North from conducting any ballistic missile tests, and Japan was swift to condemn the launches. "We have lodged a strong protest against North Korea," the Japanese government's top spokesman told a regular press briefing in Tokyo. The protest was made through diplomatic channels in Beijing. "These latest missile launches violate past UN Security Council resolutions that ban any launch by North Korea using ballistic missile technology," Chief Cabinet Secretary Yoshihide Suga added. It was the fourth missile test in less than two weeks. The previous launches had preceded a state trip to South Korea by Chinese President Xi Jinping. One of the previous launches was hailed by the North's state media as that of a new "cutting-edge" guided missile marking a "breakthrough" in its military capabilities. Wednesday's test came as North Korea announced the death from a heart attack of Jon Pyong-ho, a retired general seen as a chief architect of its missile and nuclear weapons programs. According to the NK Leadership Watch website, Jon supervised the development of medium-range ballistic missiles in the 1990s, and offered the designs to Pakistan in exchange for detailed information on gas centrifuge technology and uranium enrichment. US intelligence said Jon was a key figure in the North's international weapons trade that involved shipping components for missiles, nuclear reactors and conventional arms to countries including Iran, Syria and Myanmar. Over the years, he was individually named in sanctions imposed on North Korea by the United Nations, US and European Union. ^ top ^

Japan rejects report of DPRK providing list of abductees (Xinhua)
The Japanese government rejected in its entirety a newspaper report that Tokyo has received from Pyongyang a list containing around 30 names of Japanese citizens living in the Democratic People's Republic of Korea (DPRK), some of whom had been kidnapped by DPRK agents in the 1970s and 1980s. Chief Cabinet Secretary Yoshihide Suga said that such a list did not exist and was not presented to Tokyo by Pyongyang. Suga was referring to a front page report carried by the Nikkei business daily, Japan's largest business daily, saying that following the erroneous report published by the business daily, the government will file a protest. "It's clearly a false report," Suga, the government's top spokesperson told a regular press conference Thursday in response to the front page article that had ran on the popular business daily. "All the reported facts are erroneous. There were no facts like that at all," Suga said of the article, which was the paper's headline story in that edition. "We are now preparing to protest," said Suga. The Nikkei reported that DPRK officials provided the list of Japanese nationals living in the DPRK to Tokyo representatives, during bilateral negotiations held in Beijing on July 1, prior to Tokyo and Pyongyang agreeing to a quid pro quo deal that has seen Tokyo lift some of its unilateral sanctions on the DPRK in exchange for the reopening of investigations into the DPRK's abductions of Japanese nationals. "What the paper reported did not take place in the meeting or during break time," Suga said, adding that, "the DPRK has never presented such a list since it agreed in late May to investigate the whereabouts of Japanese abductees." But according to the Nikkei, the list shows the names, dates of births, occupation status and family composition of around 30 Japanese people, purportedly abducted by the DPRK. The newspaper said that details contained on the list of abductees largely matched the information held by the Japanese authorities. The Nikkei, a week earlier, ran a story saying a list containing a double-digit number of abductees had been presented by the DPRK to Japan during the Beijing meeting. But the government swiftly denied the report. In 2002, the DPRK admitted to having abducted 13 Japanese nationals in the 1970s and 1980s, and then claimed the matter had already been settled with Japan, with five of the abductees being repatriated and the remaining eight being declared dead. But Japan at that time called on the DPRK for clearer evidence and a deal broke down between the two sides in 2008. Currently, Prime Minister Shinzo Abe seems content with the actions of the DPRK in as much as they have taken an unprecedented step in forming a special committee with a mandate to carry out serious investigations and make decisions at a state level, under the auspices of both the DPRK's National Defense Commission and the Ministry of State Security. Foreign Minister Fumio Kishida told a parliamentary committee recently that a visit by Prime Minister Shinzo Abe had been discussed and the premier himself has hinted at a possible trip if the abductions proceedings hit a decisive stage. A tacit nod to potentially thawing relations between Tokyo and Pyongyang. Former prime minister Junichiro Koizumi visited the DPRK in an official capacity in 2002 and 2004, in two separate bids to normalize ties between the two nations. ^ top ^



Foreign Minister of Germany is paying an official visit to Mongolia after 18 years (Info Mongolia)
On July 06-07, 2014, the Federal Minister for Foreign Affairs of Germany, Mr. Frank-Walter Steinmeier is paying an official visit to Mongolia upon the invitation of the Minister for Foreign Affairs of Mongolia, Mr. Luvsanvandan BOLD within the framework of the 40th anniversary of the establishment of diplomatic relations between the two states. On Sunday, July 06, Federal Minister Frank-Walter Steinmeier and accompanying delegation were welcomed at the Chinggis Khaan International Airport by authorities headed by Deputy Foreign Minister of Mongolia D.Gankhuyag. Afterwards, the Foreign Ministries of Mongolia and Federal Republic of Germany chaired by two Ministers held a bilateral talk at the Ministry of Foreign Affairs in Ulaanbaatar. During the official talks, Mongolia expressed its interest to boost bilateral relations and cooperation with Germany, particularly, in the fields of mining, mineral resources, trade and economy, and introduce European standards in the sectors of transport, infrastructure, construction and education through German quality into Mongolia. Moreover, Mongolian side also expressed its satisfaction to participate as a partner country in ITB-2015 international tourism fair to be hosted in Berlin in 2015. Following the official talks, the two Foreign Ministers made a briefing for the media and Minister L.Bold noted that Mongolia-Germany relations and cooperation are increasingly developing in all spheres, namely in politics, defense, trade and economy, culture, education and science in compliance with the mutual interest and international relations principles and expressed a confidence that the present visit of Mr. Steinmeier would make a vital contribution to further bilateral relations and cooperation while enriching the history of traditional friendly ties between the two nations. In his statement, the Federal Minister F.W.Steinmeier confirmed that the Government of Germany has a great determination to deepen relations and cooperation with Mongolia, especially in the economic spheres and noted the two countries are succeeding in developing intensively bilateral ties and collaboration in all directions, particularly, in the areas of culture, science and archeology. Germany is thankful to Mongolia for sending its contingents to Afghanistan who serve together with German peacekeepers. Furthermore, Mr. Steinmeier noted that the sides agreed on fostering bilateral relations and cooperation in the fields of economy, mineral resources, environmental protection, nature friendly technologies, and renewable energy. Afterwards, a mini-Naadam was organized to distinguished guests from Germany at Chinggisiin Khuree Tourism Complex, about 20 km from UB, where Minister of Culture, Sports and Tourism Ts.Oyungerel and other officials were present. The official visit of the Federal Minister F.W.Steinmeier to Mongolia is being conducted at the level of Foreign Minister of Germany after 18 years. On Monday, July 07, Minister F.W.Steinmeier will pay courtesy calls on the President of Mongolia Ts.Elbegdorj and Prime Minister N.Altankhuyag and hold a meeting with the Deputy Prime Minister and Chairman of the Mongolian part of the Mongolian-German intergovernmental commission, Mr. D.Terbishdagva during which a round table is expected on economic cooperation issues. ^ top ^

Mongolia and Italy to broaden cooperation in Defense sector (Info Mongolia)
A delegation from the Ministry of Defense of the Italian Republic led by Secretary General of Defense/National Armaments Director, Lieutenant General Enzo Stefanini is conducting a working visit to Mongolia on July 06-08, 2014. In the frameworks of the visit, the Secretaries General of the Defense Ministries of Italy and Mongolia, Lieutenant General Enzo Stefanini and Major General Zagdsuren BOLDBAATAR have held a meeting discussing bilateral ties between the Ministries and exchanging views on current cooperation and further measures to carry out. During the meeting, parties agreed that although the bilateral relations between the sectors had been established in 1997 by appointing reciprocal Defense Attaches, current collaboration has been almost stopped; nevertheless, this visit with a large delegation plays an important role to boost. Moreover, the two Secretaries exchanged opinions to further broaden Mongolia-Italy defense industry cooperation, particularly, in peace support operations, military training and defense industrial sector as well as potentiality to be expanded in the regular high-level and mid-level official visits between the two Ministries of Defense. Also, Lieutenant General Enzo Stefanini held a meeting with the Vice Chairman of the General Headquarters of Mongolian Armed Forces, Major General B.Bayarmagnai. Afterwards, Italian delegates visited the Military Training Center of Mongolian Armed Forces or so-called Five Hills Training Center in Tuv Aimag and got acquainted with activity of Military Unit No.084. ^ top ^

President Ts.Elbegdorj meets the Prime Minister of the Kyrgyz Republic (Info Mongolia)
The President of Mongolia Ts.Elbegdorj received the Prime Minister of the Kyrgyz Republic, Djoomart Otorbaev at the State Affairs Ger Palace on July 08, 2014. At the beginning of reception, Premier Dj.Otorbaev conveyed sincere greetings of President of the Kyrgyz Republic Almazbek Atambayev to the state head Ts.Elbegdorj and noted that the President Ts.Elbegdorj's state visit to Bishkek conducted in 2012 is highly valued. Also, Mr. Djoomart Otorbaev conferred an invitation from the President of Kyrgyzstan to President Ts.Elbegdorj to visit the country to attend the World Nomad Games 2014, where participants from Turkey and Central Asian countries will compete in wrestling, horse races and traditional nomadic games that will take place in September 2014. Prime Minister Djoomart Otorbaev expressed Kyrgyzstan's interest to learn Mongolia's model, experiences and principles of democratic transition, market economy, human rights and democratic fair elections. He emphasized that Mongolia and Kyrgyz peoples have many similarities in customs, lifestyle, culture and history and that is why Mongolia's model of democracy meet Kyrgyzstan's need. Prime Minister said that there are wide opportunities for two countries to develop cooperation in mining, animal husbandry and tourism sectors. He underlined possibilities for Mongolian entrepreneurs to come to Kyrgyzstan cooperating in agriculture and farming, because of the country's pleasant climate. President Ts.Elbegdorj underlined the importance of fair registration of voters and using electronic voting machines during the elections. President said that it is important to exchange representatives, particularly Parliament members between the two countries to sharing mutual experiences. President briefed about “From a Big Government to a Smart Government” program that has been implementing and in the scope of this initiative, Budget Transparency Law was ratified recently by the Parliament of Mongolia. Moreover, President noted that the Honorary Consulate of Mongolia will be soon opened in Bishkek, Kyrgyzstan. ^ top ^

Mongolia celebrates the Honorary Day for the State Flag, the July 10th (Info Mongolia)
On July 10, 2014, the President and the Commander-in-Chief of the Armed Forces of Mongolia, Tsakhia ELBEGDORJ and other officials, resident foreign Ambassadors and visiting high-level guests including Prime Minister of Kyrgyzstan and Defense Minister of Qatar have attended the ceremony of the Honorary Day for the State Flag of Mongolia. At the beginning of ceremony, President Ts.Elbegdorj delivered an opening remark and the military parade dedicated to the Day and National Naadam Festival took place at the Chinggis Square, Ulaanbaatar. The President issued a decree in 2011, to support people's effort and initiative to honor the State Flag, which is the symbol of national independence and sovereignty. People of Mongolia have been celebrating the Honorary Day for the State Flag since 2008 annually on the eve of the Naadam Festival. On the same day, celebrating the 2,223rd Anniversary of the Mongolia's First Statehood, the 808th Anniversary of the Great Mongol Empire, the 93rd Anniversary of the People's Revolution and the 2014 National Naadam Festival, President of Mongolia Ts.Elbegdorj, Speaker of the State Great Khural (Parliament) Z.Enkhbold, Prime Minister N.Altankhuyag, Members of Parliament and Government and citizens' representative laid wreaths to the Statue of D.Sukhbaatar and paid tribute to the Statue of Chinggis Khaan. ^ 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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