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
  26-30.10.2015, No. 594  
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Foreign Policy

Hague court claims jurisdiction over South China Sea dispute in defeat for Beijing (SCMP)
An arbitration court in the Netherlands has ruled that it has jurisdiction to hear some territorial claims the Philippines has filed against China over disputed areas in the South China Sea. In a legal defeat for China, the Hague-based tribunal rejected Beijing's claim that the disputes were about its territorial sovereignty and said additional hearings would be held to decide the merits of the Philippines' arguments. China has boycotted the proceedings and rejects the court's authority in the case. Beijing claims sovereignty over almost the entire South China Sea, dismissing claims to parts of it from Vietnam, the Philippines, Taiwan, Malaysia and Brunei. After Thursday's ruling, China reiterated its position of not accepting or participating in the arbitration. […] The United States, a treaty ally of the Philippines that this week challenged Beijing's pursuit of territorial claims by sailing close to artificial islands China has constructed in the South China Sea, welcomed the decision, according to a senior US defence official. “This demonstrates the relevance of international law to the territorial conflicts in the South China Sea,” the official said, speaking on condition of anonymity. The official added: […] John McCain, chairman of the U.S. Senate's armed services committee, hailed the Hague ruling. “Today's ruling is an important step forward in upholding international law against China's attempts to assert vast and, in my view, questionable claims in the South China Sea,” he said. McCain said Washington should continue to support partner countries and allies such as the Philippines in the face of China's assertiveness, including through routine freedom-of-navigation patrols like the one that angered Beijing this week. Bonnie Glaser, a South China Sea expert at the Centre for Strategic and International Studies in Washington, called the outcome “a major blow for China given that the opinion explicitly rejects China's arguments that... the Philippines has not done enough to negotiate the issues with China.” The court said it could hear the arguments including one contending that several South China Sea reefs and shoals were not important enough to base territorial claims on. China has been building artificial islands on reefs in the sea and claiming control over the waters within a 19km radius. On seven other submissions, including that China had violated the Philippines' sovereign right to exploit its own territorial waters, the court said it would reserve judgment about jurisdiction until it had decided the merits of the case. No date has been set for the next hearings, which will also be closed to the public. The Permanent Court of Arbitration was established in the Netherlands in 1899 to encourage peaceful resolution of disputes between states, organisations and private parties. China and the Philippines are among its 117 member countries. The tribunal on Tuesday agreed it would take up seven of the 15 submissions made by Manila, in particular whether Scarborough Shoal and low-tide areas like Mischief Reef can be considered islands, as China contends. It will also mull whether China has interfered with Philippine fishing activities at Scarborough Shoal. But it set aside seven more pointed claims, mainly accusing Beijing of acting unlawfully, to be considered at the next hearing on the actual merits of Manila's case. ^ top ^

China, US navy chiefs hold hour-long talks on South China Sea in wake of Spratly sail-by (SCMP)
The navy chiefs of China and the United States held talks to discuss the South China Sea dispute on Thursday night following a US warship's sail-by near Beijing's artificial islands in the Spratlys. The video call between Chinese naval commander Admiral Wu Shengli and US naval operations head Admiral John Richardson lasted about an hour, according to US Navy spokesman Tim Hawkins. "It was professional and productive," Hawkins said, declining to give further details. Chinese defence ministry spokesman Yang Yujun earlier said Wu would convey to Richardson Beijing's "solemn position" on the US challenge. The teleconference was arranged in the light of recent events, an unnamed US official was quoted as saying by the Navy Times, a publication closely affiliated to the US Navy. Beijing responded furiously after the USS Lassen sailed within 12 nautical miles of Mischief and Subi reefs in the Spratly archipelago on Tuesday, with deputy foreign minister Zhang Yesui summoning Max Baucus, the US ambassador to China. The incident came ahead of next week's meeting in Kuala Lumpur among defence ministers from Southeast Asia, China and the US, as well as President Xi Jinping's visit to Vietnam, which has competing claims in the South China Sea. "We advise the Americans not to go any further in the wrong way. But if they insist, we will take all necessary measures. We have plenty of options," Yang said earlier on Thursday. He did not exclude the use of force to defend national security. Australia is also studying the possibility of sailing through the disputed waters, according to The Wall Street Journal. It had made plans for potential naval operations, the journal reported. Chinese analysts say that while Beijing is under domestic pressure to rebuke Washington over the move, it is well aware that a drastic response would be unwise as China preferred to minimise talk of its construction activities in the disputed waters. "The US side is trying to put the Chinese government under enormous pressure by manipulating Chinese public opinion with the idea of a US warship sailing within 12 nautical miles of the islands," said Xue Guifang, an international law expert at Shanghai Jiaotong University. "The more attention paid to this issue, the more China is at a disadvantage." Xue said reacting to the US challenge by sending China's own warships would not be wise. "The best reaction would be to ignore those foreign patrols," she said. In an indication that the People's Liberation Army was containing its response to the confrontation, a commentary in the official China National Defence News advised Beijing to maintain its composure while preparing to defend itself through its military. The newspaper cited Sun Tzu's The Art of War, pointing out that the use of force in settling conflicts was not the best choice. "The highest form of generalship is to balk the enemy's conspiracies," it said. "China has still to ensure that Sino-US ties remain relatively stable and that both sides are capable of managing their respective differences." Several port visits were already scheduled between the two sides' naval vessels, including next week's expected arrival in Mayport of a three-ship Chinese naval squadron on a world tour, the Navy Times reported. ^ top ^

Overseas help leads to more fugitives returned (China Daily)
331 individuals who fled are caught abroad, and 221 come back to China on their own Hundreds of crime suspects on the run overseas have been streaming back to China at the rate of about two a day, the result of a concerted international drive by the Ministry of Public Security and its counterparts abroad. In the first nine months of the year, 556 fugitives returned to China from 59 countries and regions, including Australia, Canada and the US, said Yang Shaowen, deputy director of the International Cooperation Department of the Ministry of Public Security. Most were "economic fugitives", he said. Many of the individuals on the run are suspected of graft and theft of public funds. Of the returnees, 331 had been arrested and sent back with the help of law enforcement agencies, 221 returned of their own volition and surrendered to authorities, and others had been prosecuted in the countries where they had taken refuge, Yang said. China has been working more closely with overseas law enforcement agencies since last year, and now has extradition treaties with 41 countries and judicial assistance treaties on criminal cases with 52 countries and regions. Since a list of the 100 most-wanted fugitives was published in April, the pace of law enforcement efforts has gathered steam. "The list is of great help for government departments in New Zealand in finding Chinese fugitives hiding in the country. Thanks to the publication of the information we were able to trace a suspect who entered the country through a student's visa in April," said Hamish McCardle, a police liaison officer at the New Zealand embassy in Beijing. The suspect's name was put into bank systems in New Zealand after the release of the list and the millions of dollars in deposits into the suspect's accounts in New Zealand were reported to law enforcement departments, he said. "Now I am working closely with my Chinese counterparts to further investigate the case. It takes some time to collect all the evidence and go through legal procedures," McCardle said. There is a tremendous amount of work needed to bring back fugitives, and if they remain in hiding it is hard for police officers to find them, said Chang Ning, deputy director of a squad in the economic crime investigation department of the ministry. Usually, the longer the fugitives stay in another country the more work that is needed to bring them back. Once they are granted citizenship of another country, the legal procedures of investigation and extradition are much more complicated, according to Chang. It took almost 10 years to bring back from Italy a suspect who embezzled 1.4 million yuan ($225,000) from her clients at the security company where she worked. The suspect, who was sent back in February, is the first extradited from a European country and is facing justice in China. China now has partnerships with 198 countries on public security affairs and has sent 62 police officers to embassies in 30 countries and regions. Apart from the increased efforts to crack down on economic crimes, China is ready to step up collaboration with all countries, especially the countries in central Asian and Europe that are included in China's Belt and Road Initiative to fight terrorism, smuggling of drugs and weapons, and cross-border gambling, Yang said. ^ top ^

Merkel's visit focuses on coordinating economic and diplomatic strategies (Global Times)
Chinese President Xi Jinping met with visiting German Chancellor Angela Merkel on Thursday in Beijing, as the two sides agreed to further enhance pragmatic cooperation and promote a bilateral strategic partnership. Analysts said the cooperation cemented during the visit will significantly advance Sino-German ties. During the meeting, Xi said that Sino-German relations not only affect the well-being of the two peoples but also affect China-Europe cooperation and global economic development. The comprehensive strategic partnership between the two countries should therefore also set its eyes on central Europe, Eurasian and the world. Merkel also met with Premier Li Keqiang earlier on Thursday. The two sides agreed to maintain frequent high-level contact, promote exchanges in various fields, improve coordination in major international affairs and seek more common interests in diplomacy and security. Li and Merkel agreed to a total of 13 deals concerning fields including finance, transportation, communication and healthcare cooperation between the two countries. China Aviation Supplies Holding Company signed an agreement with Airbus on Thursday to buy 130 planes from the European aircraft manufacturer. The order includes 30 wide-body A330 planes and 100 single-aisle A320 aircraft. Discussions between Li and Merkel also touched on other economic affairs, including the Asian Infrastructure Investment Bank (AIIB). "Merkel's visit will help escalate Sino-German relations to a new level with win-win cooperation," Ding Chun, director of the Europe Research Center at Fudan University in Shanghai, told the Global Times. Merkel is making an official visit to China from Thursday to Friday. It is her eighth visit to China since she assumed office in 2005. Ding said Merkel's frequent visits to China, which outnumber those of other European leaders, demonstrate the good relations between the two countries and their leaders. "Merkel's approach and attitude are rather pragmatic, and there will be a wide range of cooperation around China's 'Belt and Road' initiative," Zhang Min, a research fellow in European Studies of the Chinese Academy of Social Sciences, told the Global Times. Zhang said cooperation between China and Germany has a leading impact in the European community, so achievements made during Merkel's visit could stimulate more Sino-EU cooperation. The two countries also agreed to try to coordinate their economic strategies more, as China is pursuing programs similar to Germany's "Industry 4.0" initiative, which seeks to integrate conventional industry with information technology. As the year 2015 has been named the Year of China-Germany Innovation Cooperation, Li also called on the two countries to cooperate more in innovative development and modern urbanization as China encourages the expansion of entrepreneurship to promote growth. "We need to learn advanced technologies and concepts from Germany," Li said in his opening remarks at their talks, adding that China offers a big market for the European economic power. Merkel said she has confidence in China's economy and hopes that China and the EU will sign a bilateral investment agreement at an early date. Merkel will pay a visit to Premier Li's hometown of Hefei in East China's Anhui Province on Friday. Li has invited Merkel to pay another visit to China next year to co-chair the fourth round of bilateral governmental consultations. ^ top ^

China holding two more Japanese citizens, says Chinese official, after pair arrested earlier this year for alleged spying (SCMP)
China is holding two Japanese citizens in addition to two arrested earlier this year for spying, a Chinese official in Tokyo said on Thursday, but did not give further details, including whether they were also suspected of espionage. The official at the Chinese embassy in Tokyo was speaking days before Japan, China and South Korea hold their first three-way summit in three years at the weekend. Japan's Yomiuri newspaper said one of the people held, a woman, was arrested in Shanghai in June. The other, a man, had apparently been helping people fleeing North Korea. “In addition to the two who were arrested, one is being held and one is being watched at home,” the official said, quoting an embassy spokesman and declining to give further details. Asked about the two Japanese citizens held, Lu Kang, a Chinese Foreign Ministry spokesman, told reporters he was not familiar with the specific situation. Japan confirmed late last month that two Japanese people have been in custody since May and that they were doing everything possible to free them. There were reports of a third being held, but these remained unconfirmed. President Xi Jinping has overseen a tightening of already strict security laws and regulations, including setting up a new national security commission and renaming the national security law, which took effect in 1993, as the counterespionage law. Four Japanese nationals were temporarily detained in China in 2010 on suspicion of entering a military zone and taking photographs without permission. The detentions came at a time of escalating tensions between Tokyo and Beijing. China's then-ambassador to Iceland disappeared last year following reports he had been arrested by state security for passing state secrets for Japan. China has never explained what happened to him. Chinese ties with Japan have long been troubled by a territorial dispute and what Beijing sees as repeated failures by Tokyo to properly atone for wartime atrocities. ^ top ^

China and Germany agree that Syria needs political solution (SCMP)
Premier Li Keqiang and German Chancellor Angela Merkel agreed on Thursday that there must be a political solution to the crisis in Syria. Merkel started her two-day visit to China – her eighth – on Thursday morning, where she is also expected to meet President Xi Jinping later on Thursday evening. China has repeatedly expressed opposition to the use of force to resolve the crisis in Syria, saying that a political solution was the only way out. Russia last month began air strikes on targets in Syria in a dramatic escalation of foreign involvement in the civil war. This has been criticised by the West as an attempt to prop up Syrian President Bashar al-Assad, rather than its purported aim of attacking Islamic State. Li said the urgency of resolving the Syria situation issue was rising. “The most important thing is to seize the opportunity to implement a political resolution and set up an equal, inclusive and open political dialogue,” he told reporters. He said many global leaders had made suggestions about how to tackle the crisis. “We hope that we can put together these suggestions, and particularly through the United Nations, this organisation, advance the resolution of the Syria issue,” Li said, adding that China would continue to play a “constructive role”. “We need a diplomatic political solution,” Merkel said. “It is urgent to find one. At least there are signs for a format of talks that will bring the necessary participants together.” The United States and its allies have also been carrying out air strikes in Syria against Islamic State, and have supported opposition groups fighting Assad. While China generally votes with fellow permanent UN Security Council member Russia on the Syria issue, it has expressed concern about interference in Syria's internal affairs and repeatedly called for a political solution. China, a low-key diplomatic player in the Middle East despite its dependence on the region for its oil, has warned many times that military action cannot end the crisis. Merkel is under intense pressure over her handling of a wave of refugees in Germany, mainly from Syria and Afghanistan. Berlin expects between 800,000 and a million migrants to arrive in Germany this year – twice as many as in any year before. Li said China was extremely concerned about the refugee crisis, but that China expressed its “high degree of approval” to the relevant countries for their effort to appropriately settle the refugees and avoid a humanitarian crisis[…] Merkel said Germany would be pleased if the International Monetary Fund included China's yuan in the Special Drawing Rights currency basket, which comprises US dollar, euro, British sterling and Japanese yen. Germany would support a “very rapid” conclusion of the EU-China investment treaty, which would open the way for a feasibility study on free trade talks, Merkel said. She also announced China and Germany signed a deal that would see Chinese airlines buy 30 A330 aircraft manufactured by Airbus Group. The aircraft maker is battling Boeing for dominance of the Chinese market, where Boeing estimates demand for new planes will reach US$1 trillion over the next two decades. ^ top ^

Indonesia calls for US-China to 'restrain themselves', lashes US 'power projection' after Spratly sail-by (SCMP)
The Indonesian government expressed disapproval Wednesday over a “power projection” exercise conducted by the United States which saw a Navy destroyer enter what Beijing claims to be its territorial waters around artificial islands in the South China Sea. “We disagree, we don't like any power projection,” Coordinating Minister for Political, Legal and Security Affairs Luhut Pandjaitan told a small group of reporters. “Have you ever heard of power projection solving problems? In Afghanistan? In Iraq? The United States has spent trillions of dollars in Afghanistan and Iraq. What are the results? Hundreds of thousands of people were killed. And now, violence continues to happen in Iraq,” he added. Pandjaitan made the statement a day after the USS Lassen, based in Yokosuka, Japan, sailed near the Spratly islands, escalating tension between the United States and China. […] “We disagree, we don't like any power projection,” Coordinating Minister for Political, Legal and Security Affairs Luhut Pandjaitan told a small group of reporters. “Have you ever heard of power projection solving problems? In Afghanistan? In Iraq? The United States has spent trillions of dollars in Afghanistan and Iraq. What are the results? Hundreds of thousands of people were killed. And now, violence continues to happen in Iraq,” he added. Pandjaitan made the statement a day after the USS Lassen, based in Yokosuka, Japan, sailed near the Spratly islands, escalating tension between the United States and China. The U.S. warship's patrol within 12 nautical miles (about 22 kilometres) of Subi Reef in the archipelago represents the U.S. government's strongest action in recent years to challenge China's continued pursuit of territorial claims in one of the world's most important shipping lanes. China criticised the move as a “deliberate provocation.” The current situation in Afghanistan, Iraq and some countries in the Middle East, according to Pandjaitan, has been the result of power projection by powerful countries. “We don't want that, because we have seen that power projection will not solve any problem. Indonesia believes in the tradition of building dialogues and negotiations, because the results will be more positive than showing off your power,” he said. Saying Indonesia's relationships with both the United States and China are good, Pandjaitan called on the two countries to “restrain themselves.” He also reiterated Indonesia's commitment to playing an active role in making the region peaceful by pushing for dialogue between conflicting countries to help settle any disputes. U.S. Defence Secretary Ashton Carter indicated in Washington that the United States will continue its navigation in the waters. Philippine President Benigno Aquino, speaking to foreign correspondents in Manila, said he supported the US naval manoeuvres […] The United States informed nations in Southeast Asia, as well as Japan, this month of its intention to send naval vessels into the disputed archipelago, according to diplomats. ^ top ^

Chinese shipping firm COSCO plans to launch services to Europe through Arctic Northeast Passage, saving days in travel time (SCMP)
China's biggest shipping company COSCO intends to launch regular services through the Arctic Ocean to Europe, a spokeswoman said on Tuesday, as global warming makes the route viable and Beijing steps up its northern ambitions. The state-owned industry giant has only twice sent a vessel through the Northeast Passage, once in 2013 and again in a voyage completed this month, state media reported. The European Union is China's biggest trading partner and sailing via the Arctic rather than the Indian Ocean would cut shipping times by as much as nine days, according to previous reports. “There is an intention to open a regular line in the future and people are discussing it,” a spokeswoman for group subsidiary COSCO Container Lines said, without giving a specific timetable. Her comments came after the state-run Xinhua news agency reported on Monday that Chinese experts and officials had hailed the route as a “golden waterway” for trade. COSCO released a statement saying the company would “continue to promote normalisation of operations for the Arctic's Northeast Passage”. Earlier this month COSCO's Yong Sheng merchant ship completed a 55-day round-trip voyage between China and Europe using the Northeast Passage, Xinhua said. The same vessel carried out the firm's maiden journey on the route two years ago. China does not border the Arctic and has no territorial claim to any of it, but joined the Arctic Council as an observer two years ago. Observers say Beijing recognises the area's potential for scientific research and its strategic value. “With global warming and accelerated ice melting in the Arctic, summer voyages in the Northeast and Northwest Passages in the Arctic have become possible, with commercial development and environmental protection issues attracting the constant attention of international society,” COSCO said. ^ top ^

Chinese envoy calls on U.S. to lift embargo against Cuba (Xinhua)
China's permanent representative to the UN Liu Jieyi Tuesday called on the United States to end decades of embargo against Cuba. Liu made the remarks earlier in the day before the UN General Assembly adopted a resolution on the issue by a near-unanimous vote. Liu noted that the 2030 Agenda for Sustainable Development adopted in September has opened up new prospects, presented new opportunities and defined new goals for global development and international development cooperation. "Under these new circumstances, it is necessary to immediately put an end to the economic embargo and sanctions against Cuba," he said. It was the 24th time in a row that the General Assembly adopted the annual resolution presented by Cuba appealing for an end to the economic, commercial and financial embargo imposed by the United States of America. The measure this year garnered the highest level of backing at the United Nations. Altogether 191 UN member states voted in favor of the non-binding resolution, while the United States and Israel voted against it. The Chinese envoy said that it is regrettable that the American embargo against Cuba remains in effect, adding that it has inflicted enormous economic and financial losses on Cuba, impeding the efforts of the Cuban people to eliminate poverty, promote economic and social development and achieve the Millennium Development Goals. "It has impaired the rights of the Cuban people to survival and development, and adversely affected economic, commercial and financial interactions between Cuba and other countries," he added. China has always advocated respect for countries' right to autonomously choose their social systems and development paths and opposed using military, political, economic, or other means to apply unilateral sanctions against other countries, he said. In July this year, the United States and Cuba restored diplomatic relations, marking an important step in the normalization of relations between the two countries. "We hope that the United States and Cuba will maintain dialogue and consultation and consolidate the momentum of improvement of relations between the two countries," he said. China has noted that the United States has started to partially lift bans on tourist visits to Cuba as well as bans in commerce and telecommunication, and that the U.S. intends to push for the ultimate lifting of the trade embargo, said Liu. […] He noted that this will be in the common interest of the United States and Cuba as well as peoples of the two countries and will be conducive to the stability and development of the Americas as well as the common development of the international community. ^ top ^

The buying of Britain: Chinese biotech, insurance and tourism firms line up to make British acquisitions (SCMP)
Equipment makers, tourism agencies and insurers are joining China's mining, oil, and gas giants in investors in British business as mainland companies look to expand their horizons. China's deal to take a one-third stake in French power giant EDF's £25 billion (HK$300 billion) next-generation nuclear project at Hinkley Point attracted all the big headlines. However, that was only one of many deals signed during last week's British state visit by President Xi Jinping, involving 150 projects worth about £40 billion (HK$595 billion), which emphasised the nations' strengthening business ties. Before the global financial crisis Chinese firms focused largely on acquisitions in oil, gas and mining, yet since the start of the year firms have invested in more diverse industries including restaurants and hotels, transportation, real estate and technology, according to data from the financial services company Dealogic. Ping An Insurance, China National Travel Service (HK) Group, Taikang Life Insurance, Wanfeng Auto Holding Group and CSR Group, the mainland train manufacturer, are some of the companies that have made British acquisitions this year. Ping An bought Tower Place in London for £327 million in January, its second purchase in the city's financial district in less than two years. Then in April, CSR completed the £130 million buyout of the British submarine equipment maker. Specialist Machine Developments. China National Travel bought Kew Green Hotels in August for more than £400 million. "Britain is an established industrial power and London is a world leader in financial, professional and other services, such as in shipping, insurance and arbitration," said Carson Wen, of law firm Jones Day. "There is a lot that Chinese enterprises can investment in, license from, form partnerships with British enterprises." Beijing wants to encourage domestic companies to make foreign deals to help them update their products and technology and expand their market share, not simply generate profits. SinoVet, a Chinese animal health technology company working in the field of vaccines, set up a new facility near Edinburgh, which aims to use British animal health research and development expertise. Geely, the private Chinese car maker that owns Coventry's London Taxi Company - maker of the iconic London black cabs - invested an extra £50 million to build clean energy-fuelled taxis. A report by China's National Development and Reform Commission said Chinese and Britain businesses were "highly complementary to each other" and that there was now "tremendous" demand among mainland firms for British investment. Yet China, including Hong Kong, is far from being the biggest investor in the UK; its firms invested in 112 British projects in the 2014-15 financial year, which created 4,728 new jobs, the UK Trade and Investment's Inward Investment Report showed. Indian firms invested in 122 projects that created 7,730 jobs, while US firms invested in 564 projects that created 26,505 jobs. ^ top ^

Diplomatic immunity: husband and wife accused of murder flown back to China after Philipines shootings (SCMP)
A Chinese consular officer and her husband, who allegedly killed two other Chinese diplomats and wounded their consul-general in a Philippine city, have been taken back to China where they will be tried, officials said yesterday. Philippine police turned over the couple to Chinese authorities, who flew them to Xiamen, Fujian province on a chartered flight on Friday, two days after the fatal shooting at a restaurant, Foreign Affairs spokesman Charles Jose said. Police say the consul's husband has been accused of killing diplomats Sun Shan and Li Hui and wounding consul-general Song Ronghua on Wednesday at the Lighthouse Restaurant in Cebu, where China had established a consulate. Jose said the Chinese government had invoked diplomatic immunity for the couple under the 1961 Vienna Convention and a 2009 bilateral accord between Beijing and Manila. "They will be tried under Chinese law," Jose said. "They [Chinese authorities] asked for help, so the evidence obtained by [the Philippine police] will be shared with them." Regional police director chief superintendent Prudencio Tom Banas said the couple had not issued any statement that could explain the motive for the shooting partly because they could not speak English. The victims and the suspects were attending a birthday lunch in a private room at the restaurant when the shooting occurred, Banas said. Police senior superintendent Rey Lyndon Lawas said one of the restaurant staff heard arguments "over financial matters," before shots were fired. According to a Wechat message post by a friend of Song's, the diplomat said he was trying to stop the shooter and was hit by two bullets. "Thank you all for your love and blessings," Song was quoted as saying. China has previously insisted on trying its citizens accused of crimes in other countries. In July, 1982, Tang Jiansheng, a translator at the Chinese embassy in Maputo, Mozambique, killed nine staff with a gun within the embassy compound. Tang was deported to China and executed. ^ top ^

China's PLA seeks to bring cyberwarfare units under one roof (SCMP)
China's military chiefs are seeking to unify the country's cyberwarfare capabilities as they build a modern fighting force that relies less on ground troops. The plan is part of a broader shift towards a unified military command similar to that of the US to meet President Xi Jinping's goal of transforming the People's Liberation Army into a force that can “fight and win modern wars”. A move to a centralised command reporting to the Central Military Commission would better organise China's cyberwarfare capabilities, which are scattered across a variety of units and ministries. It would further elevate the role of cyberwar within a PLA that has long prioritised the army over the navy and air force, two branches that require a high level of computerisation skills. It could also worry the US if it accelerates the transformation of cyberwar as a military tool, given tensions over allegations China carried out significant hacks of US networks and companies. While the US and China recently agreed to broad principles to stop the theft of corporate secrets, the rules won't extend to traditional intelligence collection. A unified command would be “a pretty big deal” in organising domestic cyberforces to “win informationised local wars”, according to Council on Foreign Relations cyberspace programme director Adam Segal, citing a goal enshrined in China's first white paper on military strategy released in May. […] The military plays a major role across the government and the economy. Military-affiliated companies own factories and properties and invest in technology and aerospace companies. Its information warfare capabilities are currently housed in different departments and specialised units within the PLA, while the Ministry of State Security and the Ministry of Public Security also have cyber remits. The move could help leaders exert greater control over cyberspies who may be acting on their own accord or with only tacit permission from above. […] The PLA's first specialised information unit was set up in July, 2010, not long after the US Cyber Command went operational. “China already is a cyberpower and this will make them more powerful,” Lewis from CSIS said. “The PLA was carefully excluded from the Xi-Obama agreement. That's a problem, and finding ways to engage the PLA on cyber and other areas is crucial.” Xi, who chairs the CMC, has kicked-started the most sweeping overhaul of the military in at least three decades, announcing last month a reduction of 300,000 troops. He's endorsed a new military strategy for “information warfare”. In August 2014 during a meeting of the Politburo, a powerful decision-making body, Xi said China “must vigorously promote military innovation” and urged the military to “change our fixed mindsets of mechanised warfare and establish the ideological concept of information warfare”. The white paper from May cites building cyberforces as a “critical security development domain”. The PLA has found itself in the cross hairs of several hacking claims. FireEye's Mandiant division alleged in February, 2013 that it might be behind a group that hacked at least 141 companies worldwide since 2006. After the report was published, the US issued indictments against five military officials who were alleged members of that group. Chinese officials regularly claim the country is a victim of cybersecurity breaches and have repeatedly denied being the source of hacks of the US and other countries. […] ^ top ^

Sino-US naval ties 'best in history', says China's navy chief, as tensions rise over territorial disputes in South China Sea (SCMP)
Relations between the Chinese and US navies are their "best in history" and exchanges between the two will become more systematic in the future, China's military on Friday cited the country's naval chief as telling visiting U.S. officers. The comments by navy chief Wu Shengli come as Washington considers conducting freedom-of-navigation operations within 12 nautical miles of artificial islands China has built in the disputed South China Sea, without saying when it would do so. Such a move is likely to infuriate Beijing. China and the United States had worked hard to increase military interaction, holding joint drills and agreeing rules on encounters at sea and in the air, Wu said, according to the official People's Liberation Army Daily. “At present, relations between the Chinese and US navies are at their best time in history,” Wu was cited as saying. “Exchanges and communications are more trusting and effective.” This has not come easily, though, and is the result of hard work by both sides, he added. “In the future, exchanges between frontline forces from both countries will gradually become more systematic,” Wu said. There was no mention of the South China Sea. The US naval delegation Wu met earlier this week and visited China's sole aircraft carrier. The military's newspaper said they also visited a submarine school and a command college. China-US relations have become increasingly strained over Beijing's territorial claims in the South China Sea, through which US$5 trillion in ship-borne trade passes every year. Vietnam, the Philippines, Malaysia, Taiwan and Brunei also have claims in the area. ^ top ^



Domestic Policy

China to abandon three-decade-old one-child policy (SCMP)
China will abolish its decades-old, controversial one-child policy and allow all couples to have two children, Communist Party leaders said on Thursday after they wrapped up a four-day annual policymaking meeting. The fifth plenum of the party's 18th Central Committee also endorsed a new five-year economic plan, according to a communiqué released by Xinhua. But there was no mention of any reshuffle of the powerful Central Military Commission. Party leaders pledged to double the size of the economy by 2020 from 2010 levels as they approved a guideline for the 13th five-year plan. The plan runs from 2016 to 2020 and is the first since President Xi Jinping and Premier Li Keqiang came to office in 2012. The leaders also called for the development of a consumption-driven economy and to promote technology to replace exports and state-led capital investment as sources of growth. It gave no annual growth target for the next five years. But doubling the size of the economy in one decade would require annual growth of between 6.5 per cent and 7 per cent, a goal that could clash with efforts to pursue balanced and sustainable economic expansion. Analysts have been on the lookout to see if Beijing will value growth over reform. Li told party members last week that annual growth of at least 6.53 per cent was needed in the next five years to meet the goal of establishing a "moderately prosperous society", Bloomberg reported. The government is struggling with conflicting goals of pushing ahead with painful economic reforms and preventing growth from sliding too fast. The economy grew at just 6.9 per cent in the third quarter, the slowest rate in six years and lower than the official 7 per cent target for the year. Tao Wang, chief China economist with UBS Securities Asia, said the 13th five-year plan would require an annual average GDP growth target of between 6.5 per cent and 7 per cent to ensure per capita income doubled by 2020 from 2010. The communiqué said the country would continue to pursue sustainable growth through quality and efficiency. The decision to remove all remaining restrictions that limited some couples to having only one child marks the end of a policy rolled out in 1980 and which led to severe gender imbalances. It comes two years after the authorities began allowing couples in which one parent is an only child to have a second child. In European trading, shares in milk powder maker Danone rose 3 per cent on the news. […] The committee's 199 members and 156 alternates examined the plan, which will be put to the legislature in March. The plenum also elevated three alternate committee members to become full members to fill vacancies left by officials who were disciplined. Other reforms include deregulating price controls, and implementing better environmental protection policies. China will also extend old-age insurance to all of its citizens. ^ top ^

Social welfare priority for China's five-year plan, says Communist Party mouthpiece (SCMP)
Improving social welfare should be the main focus of the five-year plan discussed this week by senior government leaders in China, according to a commentary by the Communist Party's official newspaper. Creating jobs, raising people's incomes and food safety were also priorities, the People's Daily said. The party on Thursday endorsed a guideline for the 13th five-year plan, a blueprint for the country's socio-economic development from next year to 2020, as it wrapped up the fifth plenum of the 18th party congress. Xi Jinping, the party's general secretary, delivered an instruction on the guideline. The commentary in the Daily said the welfare of the people should be prioritised and problems in employment, income, social welfare and food safety should be solved. “Improving the people's welfare and promoting the overall development of the people should be the starting point and end point of all developments,” the article quoted an earlier Politburo meeting as saying. Efforts to improve people's livelihood would be strengthened, despite the uncertainties of the country's economic situation and resistance from some to reform, the commentary added. Downward pressure had increased on the economy and growth of government revenue has slowed over the past four years, but indicators of people's livelihood have nevertheless increased, the Communist Party mouthpiece said. It cited pension and medical reforms carried out during the last five years and said Chinese people had earned more and their burdens had been lessened as welfare improved. Government targets were also highlighted in another mainland news outlet. “More than 70 million people below the poverty line in China will be lifted out of poverty in the next five years,” the online news service quoted Xi as saying in a speech earlier this month on tackling global poverty. Chi Fulin, an adviser working on the five-year plan, told the Economic Daily that economic reform was a key priority. “The next five-year plan needs to crack the hard bone of structural reform with more resolution,” Chi was quoted as saying. The key was more support for the service sector, which now makes up 49 per cent of GDP output, Chi said, but it trails significantly behind developed countries. The education, medical and health sectors should also be opened up to private business, he said. ^ top ^

China to extend old-age insurance to all (Xinhua)
China will extend old-age insurance to its full population, the leadership decided at a key meeting which ended on Thursday. State capital will be used to augment the existing social security fund, according to a communique released after the four-day Fifth Plenary Session of the 18th Communist Party of China (CPC) Central Committee. Nearly 200 million Chinese are yet to be included in the country's old-age insurance scheme, said Yin Weimin, minister of human resources and social security in March. The communique further vowed that "China will implement the critical illness insurance system in full scale," suggesting that this insurance will also be rolled out to the entire population. As of the end of September 2014, about 650 million of the 1.3 billion Chinese were covered by critical illness insurance, preventing them from bankruptcy as a result of medical bills. The communique said China will "hold on to the path of development shared by all," working toward "development for the people, by the people and shared by the entire population." It also stressed equal opportunities and social security so that everyone can attain a moderately prosperous life. The government will ensure fairer distribution of capital to poor regions and those with high concentrations of ethnic minorities, and better care will be provided to children, women and seniors left in villages by their parents, spouses and children working in cities as migrant workers, the CPC vowed. The nation will also strive to improve education, promoting universal education for students of senior high school age while ensuring the policy of nine free years of compulsory education is applied nationwide. The communique said the government will remove high school education tuition fees for poor students and provide subsidies for them, "gradually" waiving tuition fees for people receiving secondary vocational education. On the medical front, the country will rationalize drug prices, coordinate health insurance with medical care, and set up a basic health and hospital management system covering both urban and rural areas, according to the document. It also stressed narrowing income gaps. ^ top ^

China NGOs win landmark environmental lawsuit (Global Times)
Two NGOs won an environmental damage lawsuit Thursday against a quarry in the east China's Fujian province. It is believed to be a landmark case made possible by China's strengthened environmental law. The case, filed by Friends of Nature and Fujian Green Home, opened in Nanping Municipal Intermediate People's Court of Fujian months ago, and the verdict was delivered Thursday. The two NGOs have accused four people of severely damaging vegetation on a hillside in Nanping City. The court ordered the defendants to clear work sheds, mechanical equipment and waste at a quarry within five months, and to restore vegetation they had damaged by planting trees over the next three years. They were also asked to pay 1.27 million yuan (200,000 US dollars) in compensation. According to the court, defendant Li Mingshuo transferred possession of his quarry without approval of authorities to the other three defendants in July 2008, who expanded the mining area, illegally occupied forest and damaged local vegetation. The total area of vegetation damaged by the four defendants, including land damaged by Li before the transfer, reached around 28.33 mu (1.9 hectares), the court said. "This is the first case filed by NGOs over non-pollution-related environmental damage since the amended Environmental Protection Law took effect on January 1, 2015. It offers a good example for future cases," said Lin Dongbo, deputy head of the court. The law allows any NGO of sufficient size specializing in environmental protection for more than five years to file civil cases over pollution and environmental damage for the good of the general public. China only has about 80,000 officials to enforce environmental laws, and they must oversee 1.5 million companies, not including unregistered ones. With the new law, about 700 organizations can join the fight. ^ top ^

Chinese author of 'Democracy is a Good Thing' resigns from Communist Party bureau (SCMP)
A prominent liberal who has written extensively about democracy and political reform has resigned from a Communist Party bureau, citing an interest in academics. Yu Keping, 56, said yesterday his resignation as deputy chief of the Central Compilation and Translation Bureau had been approved, and that he would move to Peking University's School of Government, reported yesterday. Yu rose to prominence when his book Democracy is a Good Thing was published in 2006. In it he discussed issues ranging from Western democracy to civil society, subjects rarely touched by Chinese officials. READ Yu wrote extensively on the advantages of democracy, arguing it provided equal opportunities for all and was a basic value of humanity. In an echo of Winston Churchill's quote that "democracy is the worst form of government, except for all the others", Yu wrote: "Among all the political systems invented and implemented by the human race, democracy is the one with the least defects. In other words, democracy is by far the best political system of the human race." He wrote that he was not calling for a replica of Western democracy, but for a type of democracy that matched China's reality. His high-profile discussion about democracy - and his position at the Central Compilation and Translation Bureau, which is under the party's central committee - fuelled speculation the party was to embark on significant political reform. Yu has also been candid about the Cultural Revolution. In an interview last year to commemorate the 110th anniversary of Deng Xiaoping's birth, Yu spoke highly of Deng's effort to "thoroughly denounce the cultural revolution" and "refute the personality cult". He also praised Deng's reforms to separate the government from the party and promote in-party democracy. But he also said many targets Deng had set for leadership reform had not been met. Since Xi Jinping became president in 2012, college lectures on civil society - one of Yu's specialisms - have been banned, as have those on freedom of speech and judicial independence. In addition, some of the mild democratic reforms made within the party under the previous leadership - such as in-party voting - have become targets of criticism, with party mouthpieces now condemning "deciding appointments solely on votes". Yu, who is four years shy of retirement age, said his resignation was a result of his interest in academics and sense of responsibility to political studies. He said he had tried to resign three or four years ago but had needed to help the bureau in a transitional period as it had seen three directors in four years. His focus would shift from "political reality" to political theories and history, he said. ^ top ^

Nation vows to safeguard wetlands (China Daily)
The China State Forest Administration and the WWF, one of the world's largest independent conservation organizations, signed a memorandum of understanding on Wednesday on Shanhai's Chongming Island, their first MOU to include coastal wetland protection. China has made efforts to protect wetlands across the country, including restoration and protection projects and promoting awareness, according to the State Forest Administration. In the past decade, more than 200 billion yuan ($31.4 billion) has been invested in protecting and restoring wetlands across China, according to the administration. In Hangzhou, Zhejiang province, more than 10 billion yuan has been invested in restoring its Xixi wetland, which now has 345 kinds of plants, 64 kinds of birds and 226 kinds of insects, according to the city's forest administration authorities. Under the agreement, the WWF will support the administration in research activities with other member countries in the East Asian-Australasian Flyway Partnership, a program that aims at protecting migratory water birds and the places they live. WWF will do monitoring and protection work on migratory shorebirds species in China's coastal wetlands, and continue its work on estuary wetlands including Shanghai's Chongming Dongtan Natural Reserve and Fujian's Minjiang. "China has committed itself to the protection of a crucial part of the coastline," said Wenwei Ren, director of the Yangtze footprint program of WWF China. Researchers said that new technologies such as remote sensing and monitoring by drones are being used to monitor and protect wetlands, and integrated approaches have been taken to ensure the development and safety of animals, birds and many other species that rely on the safety of wetlands. According to Ouyang Zhiyun, an environmental researcher with the China Academy of Sciences, protection of wetlands and species will be done in conjunction with urban development, construction plans, tourism and mining activities. ^ top ^

Chinese president Xi Jinping's trusted general in line for top PLA role (SCMP)
The top decision-making body of the Communist Party is to use its ongoing meeting in Beijing to vet top candidates to lead the military after 2017. The Politburo Standing Committee would use its fifth plenum to consider who would lead the Central Military Commission (CMC) after that date, sources close to the army said. The composition of the 10-member CMC, whose chairman is President Xi Jinping, would be a key part of any reshuffle for the next term of the central leadership. General Zhang Youxia, 65, director of the army's general armaments department and one of Xi's most trusted men, is tipped as the most likely new CMC vice-chairman for the president's next term from 2017-2022. However, the chances of graft-buster General Liu Yuan being promoted to the CMC were "slim", three independent sources told the South China Morning Post. The CMC is the top decision-making body of the PLA, and Zhang's promotion would smooth the way for Xi's ambitious plans to transform the PLA into a truly modern army, Hong Kong-based military observer Liang Guoliang said. […] Both Xi and Zhang are Shaanxi natives and "second-generation reds" - the children of revolutionaries. Their fathers were comrades from the 1940s. Zhang's father, General Zhang Zongxun, the PLA's head of logistics in the 1970s, commanded the PLA's Northeast Army Corps in 1947 when Xi's father, Xi Zhongxun, was political commissar. The junior Zhang joined the army at 18 and was assigned to the renowned 14th Group Army based in Kunming. Within 16 years, he rose to the rank of colonel following his exploits during the 1984 border conflict with Vietnam. Among the 10-member CMC, only he and Defence Minister Chang Wanquan, 76, took part in the campaigns against Vietnam in the 1980s. General Liu, the political commissar of the PLA general logistics department who heads the army's anti-graft campaign, is also a "princeling" - the son of Liu Shaoqi, a former president who was purged by Mao Zedong in the 1960s. But, unlike Zhang and other senior military leaders who joined the army as teenagers, Liu joined in 1992 when he was 41. Liu is said to be the man behind the downfall of the army's "three biggest tigers"- Gu Junshan, the corrupt former lieutenant general and deputy logistics chief, and former CMC vice-chairmen Guo Boxiong and Xu Caihou. However, two Beijing-based military sources said Liu's potential promotion faced "stronger resistance" because of his outspoken personality, and he "had offended many former and incumbent senior officials" amid the ongoing anti-graft campaign. "The anti-corruption campaign is just the first step Xi wanted to turn the PLA into a proper modern army, and the next move should focus on reform, which needs more capable, younger and loyal generals to implement Xi's orders," said another source, who asked not to be named. The third source said it was possible that the plenary session would consider the need for a third vice-chairman to prepare the succession of incumbent CMC vice-chairman General Fan Changlong, another of Xi's most trusted men, who had reached the retirement age of 68. Fan is the PLA's second in command, subordinate only to Xi. The other CMC vice-chairman, General Xu Qiliang, 65, will keep his post until the 19th party congress in 2017, two independent sources said. However, a fourth source said that Xi might keep both Fan and Xu until the end of his first term in 2017. In Xi's second term, Fan's No2 position would be filled by Xu, then it would be Zhang's turn to take over Xu's vacancy. ^ top ^

Chinese lawmakers among nearly 900 people arrested in anti-triad crackdown this year in Shanxi province (SCMP)
Chinese police have arrested nearly 900 suspected members of 150 organised crime gangs, including lawmakers – all from the same province – so far this year, mainland media has reported. The detentions in Shanxi province are part of a crackdown on triads. Xinhua reported on Monday that local police had solved 1,028 criminal cases so far this year, and arrested 869 suspects, including 27 provincial-level lawmakers, members of the provincial political consultative committee and other low-rank officials. Read more: Triad crime gangs have 'infiltrated government of resource-rich Shanxi' The report quoted a local public security bureau spokesman as saying that criminals infiltrating the province's key industries had been “efficiently battered and punished”. The spokesman was also quoted as saying that reports of crimes in suburban areas and coal mining districts had been cut by half. A village chief in Yuncheng city, identified only by his surname, Li, was arrested over his alleged involvement in seven different crimes, including the illegal occupation of farmland. Shanxi has been notorious for numerous cases where officials, gangsters, and businessmen have colluded in crimes for their mutual benefit. Mainland media magazine Caijing reported earlier this year that criminals hired by businessmen had planted moles inside police cadet schools to tip them off about police operations. In May, local police in Taiyuan detained 54 people who were alleged members of a criminal gang that was producing drugs in a rented apartment. The gang had been selling the drugs online through instant messaging platforms such as WeChat, and had also forced women into prostitution. Meanwhile, the frequent changes at the top of provincial police forces had also caused problems for law enforcement officials. In Taiyuan, the capital city of Shanxi, there had been four different police chiefs between 2008 and 2014. The city's current chief of police, Wang Fan, was parachuted to the role from the Ministry of Public Security in September last year, after his predecessor was investigated for allegedly covering up crimes carried out by local interest groups, mainland media reported. “Corruption will often lead to triad forces, and corrupt cadres facilitate the growth of gangsters,” Xinhua quoted the provincial public security chief Liu Jie as saying. ^ top ^

7-year penalty for spreading rumors on Net (Global Times)
Rumormongers can be sentenced to up to seven years imprisonment for spreading fabricated information online in China, media reported on Tuesday. According to China Central Television, those who publish false alarms on natural disasters, police notices or deliberately spread rumors on the Internet will be held for up to three years in prison if the spread of the false information has disturbed social order. Those whose rumor mongering causes serious consequences can be put behind bars for three to seven years. The punishments have been written into an amendment to the Criminal Law, which will take effect on November 1. China began in 2013 to implement a 10-clause judicial interpretation which defines what kind of online behavior could be regarded as "fabricating facts to slander others" and what could be regarded as "serious" violations. It rules that people face defamation charges if online rumors they post are viewed by more than 5,000 netizens or retweeted more than 500 times. Since the Ministry of Public Security's crackdown on rumormongers online in 2013, a local court in Beijing gave the first ruling on an Internet rumormonger last April. The netizen, who defamed celebrities and the government, was given a three-year jail term. According to a report issued by the China Internet Network Information Center in 2014, China has 490 million consumers of online news, 270 million people using microblogs, and 277 million social network users. ^ top ^

Sustaining growth while transforming the economy will be top priorities for China's 13th five-year plan (SCMP)
The Communist Party elite convened in Beijing on Monday to craft a road map for China's economic and social development over the next five years, as the country attempts to restructure its economy and escape the middle-income trap. Economic growth, institutional reforms, the environment and poverty alleviation were four of 10 areas that would be on the agenda, according to the party newspaper People's Daily. Targets in these areas were outlined by President Xi Jinping when he met party leaders from seven eastern provinces in May to discuss the country's 13th five-year plan, a blueprint for 2016-2020. That meeting took place before mainland stock markets plunged and quarterly GDP growth dipped below 7 per cent for the first time since 2009 amid the global financial crisis. Party leaders are reviewing the draft at the Jingxi Hotel in western Beijing at the party's closed-door fifth plenum, which continues until Thursday. Their top focus would be maintaining economic growth, People's Daily said. After more than two decades of rapid expansion, the mainland economy has entered a stage of slower growth which Xi has called the "new normal". While eager to sustain growth, the government has vowed to transform the economy into one driven not only by investment and exports, but consumption too. It is also looking to move away from a reliance on manufacturing, and to elevate the role of agriculture and services. "Shifting the focus from labour-intensive manufacturing to services will be of great importance to the national economy," said Liu Xuezhi, a Bank of Communications analyst. "It's obvious that Chinese manufacturers are losing their competitive edge due to higher labour and land costs, and it is the services sector that could help those workers who lose jobs at manufacturing plants." Innovation in fields such as technology, industry, design and business management has also been touted by the government as a new driver for growth. Modernising agriculture, protecting the environment and relieving poverty are also on the agenda. Professor Zhao Xijun, at Renmin University, said the plan had been drafted from a long-term perspective that would take previous five-year plans into consideration. It would not be based solely on events in the past year. "The timing of the 13th five-year plan is crucial, because by 2020, the nation is supposed to have met its first centenary goal, marking the 100th anniversary of the party's founding [in 1921], to complete the building of a moderately prosperous society," Zhao said. "The [plan] must keep that goal in mind. This is why poverty alleviation was singled out … a comprehensive moderately prosperous society means there are no poor areas." ^ top ^

Half of top leadership reshuffled before plenum (Global Times)
More than half of the Communist Party of China (CPC) Central Committee members elected during the 18th CPC National Congress in 2012 have been moved to different positions or were removed from their current jobs ahead of the CPC's fifth plenary session that kicks off on Monday. The large-scale reshuffle is extremely rare in the history of the CPC, a result, said observers of the anti-graft campaign, which has been of unprecedented severity, and to guarantee a solid start to China's new five-year blueprint amid a slowing economy. A WeChat account operated by Beijing's Party organ newspaper, the Beijing Daily, revealed that a total of 104 out of the 205 CPC Central Committee members have been promoted, demoted or expelled from their positions since 2012. Among them, 81 were promoted to key positions, 16 were transferred to less important posts, and seven were removed from their jobs. Some of the seven members may have their membership revoked during the fifth plenary session of the 18th CPC Central Committee that runs until Thursday, experts said. Since the sweeping anti-graft campaign was launched in 2012, the announcement of any personnel reshuffles has drawn greater attention. "The large-scale reshuffle helped select leaders of both action and bravery, as China needs such leaders to tackle the economic problems and ensure a strong start during the 13th Five-Year Plan (2016-20) period," Zhang Xixian, a professor with the Party School of the CPC Central Committee, told the Global Times. Discussion of the 13th Five-Year Plan is on the agenda of the plenary session, presided over by Xi Jinping, general secretary of the CPC Central Committee. The reshuffle will also pave the way for a smooth government leadership transition starting from 2016, said Ren Jianming, professor at the School of Public Policy and Management at Beijing's Tsinghua University. Many of the 81 members newly promoted to key positions were transferred from more marginal positions and jobs in remote areas, the Beijing Daily reported. One such member is Wang Yupu, former vice-chairman of the All China Federation of Trade Unions who became deputy head of the Chinese Academy of Engineering and then the chairman of Sinopec Group in May. Another is Nur Bekri, former governor of the Xinjiang Uyghur Autonomous Region who became head of the National Energy Administration in 2014. Some CPC Central Committee members who were former heads of State-owned enterprises were also promoted, such as Xu Dazhe, former head of the China Aerospace Science and Industry Corporation, who was appointed chief of the China National Space Administration in 2014. […] The anti-graft campaign has toppled seven CPC Central Committee members since 2012 including Ling Jihua, former head of the United Front Work Department of the CPC Central Committee, Zhou Benshun, the former Party chief of North China's Hebei Province, and Yang Dongliang, former director of the State Administration of Work Safety. After the likely revocation of their membership during the fifth plenary session, the resulting vacant positions will likely be filled by three alternate members. Most of the 16 members who stepped aside from key positions were aged 65 and above, and were transferred to legislature and political advisory bodies. More than 100 officials at ministry level or above have been brought down in the anti-graft campaign since 2012. ^ top ^

China's registration permit overhaul to give migrant workers welfare and education access (SCMP)
China has passed an ordinance on its nationwide registration permit system to give hundreds of millions of its migrant workers living in cities far from their birthplaces access to welfare services such as compulsory education. The existing system of houshold registration has long been blamed for social instability; even those workers who have lived in adopted cities for many years are not entitled to the same benefits as locals because they do not have a household registration for their new places of residence. Academics said the new system would improve migrant workers' right to basic welfare, including access to schooling, but more would have to be done before those with rural household registrations had the same privileges as their urban. The official ordinance has yet to be announced, but a draft, sent out for pubic consultation counterparts, or those leaving small towns and cities shared the benefits of permanent big-city residents last year, promised residence permit holders who had moved to cities away from their birthplaces for at least six months would be eligible for nine basic public services, such as education and some social benefits. The ordinance is part of the Beijing efforts to reform the household registration system known as the hukou, which it had hoped to complete by 2020. Critics say the existing system has blocked the free flow of talent and urbanisation as many social benefits, such as the entitlement to compulsory education and public social insurance, were tied to the household registration. The residence permit system will allow migrants to become permanent residents if they meet certain requirements, such as staying in adopted cities for a long enough period, or making social insurance payments over a period of years and having a stable job and place of residence. "Extra-large" cities, such as Beijing and Shanghai with populations of many millions, have the strictest requirements. "This is a just a design for the central government; it is up to local governments to come up with their own design to implement the residence permit system," said Lu Jiehua, professor of sociology at Peking University. Lu said the residence permit system was aimed at meeting the demands of more than 250 million migrant workers and eventually give them the same privileges as permanent residents. The draft sets basic principles for all types of cities, but big cities, such as Beijing, Shanghai and Guangzhou - with better social resources such as schools, hospitals and social benefits - will make it harder for immigrants to share equal entitlements. "The Ministry of Public Security had hoped that it would be able to set up a new household registration system by 2020, but it now looks very unlikely that the reform will be completed by then," Lu said. ^ top ^



"Poor" water-pollution control in Beijing-Tianjin-Hebei (Xinhua)
Cities and provinces have been named and shamed for poor water-pollution control, including Beijing and neighboring Tianjin Municipality and Hebei Province, the Ministry of Environmental Protection said on Wednesday. The ministry evaluated the implementation of two water pollution control guidelines that cover China's major drainage areas, including the Yangtze River and Yellow River, for the year 2014. Other regions brought to task include Henan and Hubei provinces, and the reservoir region of the Three Gorges Dam. Several counties and cities that ranked the lowest for water quality during the evaluation will not be allowed to begin new projects that could cause water pollution until they pass the next annual evaluation. These localities are Chaoyang District in Beijing, Jinghai County in Tianjin, Langfang City of Hebei, Xinxiang City of Henan, and Yichang City in Hubei. The 2011-2015 guideline on water pollution said that 60 percent of the country's major rivers and lakes should be clean enough to be sources of drinking water supply by the end of 2015. ^ top ^



Smart street lamps in Shanghai offer free WiFi access (China Daily)
The first batch of intelligent street lampposts made their debut in Shanghai on Monday. Not only can the smart lamps adjust their brightness at different times of the night, they can also enable citizens to be better wired to the city. Fifteen lamps, each 8 meters tall, have been erected along Dagu Road in Jing'an district. Each is equipped with a touch screen and an emergency button. By pressing the button citizens can get immediate access to the city's public service platform which in turn will coordinate the operation with different services. Other major features include free WiFi access, information inquiry and a charger for electric cars. The features have been selected to offer a public service and safety as well as energy efficiency, The highlight of the project is that it has integrated resources from all parties to bring about cooperation between them, said Lin Tao, deputy director of the 50th Research Institute of China Electronic Technology Group Corporation. The institute undertook the overall design of the project. According to Lin, the trial is expected to expand into other areas across the city from the first half of next year. Standards such as the structure and function of the lamps as well as locations will be set based on the outcome of the trial. ^ top ^

Shanghai vows to rein in booming property market amid evidence workers are put off from working there (SCMP)
In a surprise move to improve Shanghai's competiveness, the mainland's most developed city has rolled out a controversial policy - reining in a real estate boom it blames for deterring foreign investment. City officials say they are serious about capping property price growth despite speculation national austerity measures will be eased to spur the sector amid the economic slowdown. "We must be fully aware of the task of controlling the property market and stand firm against a property bubble. We can't blindly follow others' steps in making real estate policies," Shanghai Communist Party boss Han Zheng told a government conference. "If we fail to control the property market, the whole city's competitiveness will be dented," he added. Shanghai officials believe high property prices have become a stumbling block to its rise as an international metropolis because expensive flats - 5 million yuan (HK$6.1 million) for a two-bedroom home in the city centre is not unusual - are deterring workers from living there. Han's remarks sparked fears the city would veer off the road to recovery as real estate has long been its economic backbone. Rising home prices have also boosted residents' personal net worth. Developers and analysts believe Shanghai will use administrative measures to help developers reduce costs for homebuyers, charge higher taxes to owners selling properties to reduce the number of transactions, and order developers to build fewer high-cost homes. Falling overseas and domestic demand and Shanghai's efforts to eschew big infrastructure projects while transforming itself into a global financial and shipping centre have dragged on the city's growth in recent years, harming its status as the mainland's economic engine. Han did not elaborate on what measures the city would take to curb property prices. But analysts doubted any such policies would succeed, pointing out that Hong Kong remained the world's most expensive city for homes, despite government efforts to curb prices. According to Tospur Real Estate Consultancy, home prices in Shanghai jumped 18.2 per cent to 31,337 yuan per square metre in the first nine months of this year. More than 10 million square metres of housing changed hands in the same period, a jump of 64 per cent year on year. A high-end flat in a prime location can fetch more than 100,000 yuan per square metre - more than an average wage earner's yearly income. […] Shanghai's latest stance is in contrast to most local governments, who have pinned hopes on property prices to bolster their economies. "The policy is a fresh sign that the top Shanghai boss is playing a political game since he is a contender for a seat on the Politburo Standing Committee," said Eric Han, a local entrepreneur. "He wants to show the bosses in Beijing his ability to lead the city well." ^ top ^



Campaign on birth defect intervention held in Tibet (Global Times)
A campaign against birth defects, including free medical consultation and dietary supplements for pregnant women, was held in southwest China's Tibet Autonomous Region this week. The event on Tuesday and Wednesday was organized by the regional health and family planning commission and the government-backed March of Dimes Birth Defects Foundation of China. A group of doctors from Beijing's PLA General Hospital provided consultations on complicated cases in Lhasa, the regional capital. In addition, the doctors visited Doilungdeqen County, giving free consultations to villagers and folic acid supplements, milk powder and probiotics.8 "We hope the activities would help people know more about birth defects and help prevent them," said Guo Yucheng, deputy secretary-general of the foundation. During the event, the foundation donated 4 million yuan (about 630,000 US dollars) to genetic disease detection for 20,000 newborns in Tibet and will fund some critical cases. According to a 2012 report, newborns with defects accounted for 5.6 percent of the total births in China. About 35 percent died soon after birth and 40 percent suffered lifelong disability. ^ top ^



Beijing promises Hong Kong more help on economic development (SCMP)
The Communist Party has pledged to boost Hong Kong's role in China's economic development and opening up to the outside world in the document adopted at its fifth plenum, which ended yesterday. Promoting democracy, supporting economic development and facilitating social harmony in Hong Kong and Macau were highlighted as major tasks. The message came four months after Hong Kong's lawmakers voted down the Beijing-dictated model for the 2017 chief executive electoral reform. China-watcher Johnny Lau Yui-siu noted that the Communist Party had stressed Hong Kong's role in the "Greater China" concept, while messages about the city's democratic development were similar to what state leaders had said in the past. The document emphasised the importance of deepening co-operation between the mainland, Hong Kong, Macau and Taiwan, as well as enhancing the role of Hong Kong and Macau in the country's economic development and opening up to the rest of the world. The plenum also stressed the "One Belt, One Road" strategy, Beijing's push to drive cooperation among countries along the ancient Silk Road trading route to form a cohesive economic area. The document highlighted mainland support for "developing the economy", "improving people's livelihoods", "promoting democracy" and "fostering harmony" in the two cities. In September 2004, the fourth plenum of the Communist Party's 16th party congress stressed that maintaining long-term prosperity and stability in Hong Kong and Macau was a "brand-new subject". The third plenum of the 18th party congress, in November 2013, mentioned the need for broadening cooperation with Hong Kong, Macau and Taiwan. The central government's 12th five-year plan, from 2011 to this year, identifies Hong Kong as the "dragon head" of a regional financial system. Lau said: "My reading is that the emphasis lies in Hong Kong's strategic role in cross-strait relations, rather than the city's democratic development." The language about democratic development was "not new and not different" from what state leaders had said before, Lau added. "In the past, Beijing would not want Hong Kong and Taiwan, two capitalist entities, to get too close. But now it says the city should forge closer economic ties with Taiwan. Hong Kong's role will be to help pull Taiwan closer and eventually achieve the country's reunification." ^ top ^

Hardline Basic Law expert from Tsinghua University set to join Beijing's liaison office in Hong Kong as legal affairs chief, source says (SCMP)
A mainland expert on Hong Kong's Basic Law known for advocating a hard line on issues concerning the city's autonomy is expected to become the legal affairs chief of the central government's liaison office. A source familiar with the matter said Professor Wang Zhenmin, dean of Tsinghua University's school of law, would arrive in Hong Kong as early as next month to take up the post of director of the legal affairs department. Wang, 49, was formerly a member of the Basic Law Committee, a group of legal experts trusted with advising Beijing on the implementation of Hong Kong's mini-constitution. Liu Xinkui, the incumbent legal affairs chief, will retire soon. A mainland official handling Hong Kong affairs, who spoke on condition of anonymity, said Wang's expected appointment indicated mainland authorities attached great importance to sending talented officials with the right expertise to Hong Kong. "Wang is a prominent expert on Hong Kong's Basic Law. His appointment reflects the mainland authorities' new thinking in recruiting talent to handle Hong Kong affairs," the official said. Wang could not be reached for comment yesterday. Wang, who studied at the University of Hong Kong's faculty of law in the mid-1990s, told a seminar in the city in April that Hong Kong had a duty to safeguard national security and that introducing legislation to enact Article 23 of the mini-constitution was a "bottom line". In April last year, Wang said business interests must be protected in any reform of Hong Kong's political system. He said businesspeople should not be drowned out by the crowd when "one man, one vote" is introduced, as their role in keeping the city prosperous was vital. Those comments were part of his explanation of why Beijing insisted any candidates in future elections by universal suffrage for Hong Kong's chief executive should first be chosen by a nominating committee. Four months later the central government laid down its restrictive framework for reforms to the 2017 polls. Civic Party leader Alan Leong Kah-kit, a former Bar Association chairman, called Wang a "very conservative" person and said he had not been particularly friendly with pan-democrats after becoming one of the "new guardians of the Basic Law". However, Leong said: "I don't think anybody in this position would call the shots. This position is simply [for] technocrats." ^ top ^

Just don't mention Snowden: Hong Kong's justice secretary Rimsky Yuen 'charm offensive' in New York and Washington has conditions (SCMP)
Just weeks after President Xi Jinping's state visit to the United States, Hong Kong's justice secretary will visit New York and Washington this week to deliver a hard-sell of the city's legal prowess while riding the momentum of Beijing's global "charm offensive". But one subject not on the table is Hong Kong's controversial handling of an extradition request by the US for fugitive whistleblower Edward Snowden in June 2013. "The issue as mentioned is not on the agenda," a spokeswoman for the Department of Justice said last night. Rimsky Yuen Kwok-keung lands in New York on Wednesday evening local time. A spokeswoman said the trip would promote the city as "an international legal and dispute resolution services centre in the Asia-Pacific region and update the local community on developments". Jean-Philippe Béja, an expert on China's global relations at the Centre for International Studies and Research at Sciences Po in Paris, said the significance of Yuen's trip is "for sure, part of the charm offensive launched by Xi." Yuen's eight-day visit will start with a talk at Columbia University on the topic of the Basic Law under the "one country, two systems" principle, with a similar address to the National Committee on US-China Relations. "[Yuen's trip] means to 'explain' the new interpretation of the 'one country, two systems' formula," Beja said, "and, very much in line with Beijing's and Hong Kong government's consistent attitude, to tell Western countries that it still works in the financial and economic fields." "The message is this: don't meddle in our affairs, what matters to you is the economic and financial role of Hong Kong and its judicial independence in economic matters." ^ top ^

More than 100 injured in ferry crash in HK (Global Times)
A total of 124 people were injured when a high-speed ferry traveling from Macao to Hong Kong hit an unknown object in the water near Lantau Island on Sunday night, according to local media. The injured were sent to different hospitals, with five of them remained in a critical condition, eight serious, 40 stable, one uncategorised, while the other 70 discharged as of Monday morning. The vessel lost power after the crash which happened shortly before 7 p.m. on Sunday. The ferry, carrying 163 passengers and 11 crew members, was towed to the Government Pier in Central, Hong Kong's financial center, after the accident. Passengers described chaotic scenes as people stumbled around in the dark, some bleeding and others with injuries on their faces, arms and legs. The Hong Kong government said staff from the Marine and Fire Services Departments, the Marine Police, the Government Flying Service and the shipping company were involved to provide assistance. Hong Kong's Secretary for Transport and Housing Anthony Cheung and Secretary for Food and Health Ko Wing-man visited some of the injured at Pamela Youde Nethersole Eastern Hospital. Cheung expressed his sorrow over the incident, adding the Marine Department is investigating its cause. ^ top ^

'Let Hong Kong elect its own leader': Britain's David Cameron asks Xi Jinping to ensure city's political freedom (SCMP)
British Prime Minister David Cameron has sought assurance from President Xi Jinping, who is on a state visit to UK, that Hongkongers would be able to choose their own leader without Beijing's prior vetting, according to a report. Cameron touched on the political stalemate in Hong Kong for the first time during Xi's visit amid mounting criticism Britain had ignored China's human rights record for trade benefits, The Guardian reported. The remarks also came after Hong Kong's legislature voted down in June a Beijing-decreed political reform package for the 2017 chief executive election, which allowed Hongkongers to choose their own leader only from two or three candidates approved by a 1,200-strong committee. Chief Executive Leung Chun-ying has previously said his administration “has finished” the work on reform and would concentrate on addressing economic and livelihood issues in his remaining term. Spending the afternoon at the prime minister's country retreat, Chequers, on Thursday, The Guardian reported that Cameron sought assurance from Xi that Hong Kong would remain semi-autonomous and entitled to choose its own leadership without prior vetting by the Chinese government. Without confirming the media report, Foreign Ministry spokeswoman Hua Chunying reiterated that Beijing would support Hong Kong in implementing universal suffrage in accordance with the Basic Law, adding that the matter was China's internal affair. But Cameron's remarks failed to impress the city's pan-democrats. "He seems to be acting in response to media pressure from Britain and Hong Kong on his country's moral obligation to the former colony, but his wording is disappointing," said Civic Party lawmaker Dr Kenneth Chan Ka-lok, an international relations scholar at Hong Kong Baptist University. "While he deserves credit for asking Xi not to vet Hong Kong's chief executive candidates, this came too little, too late." Democratic Party chairwoman Emily Lau Wai-hing said it was "not enough" for Cameron to raise concerns over the city's political freedom to Xi in a closed-door meeting. "He should have raised it at a higher level occasion, such as a press conference or other public events," Lau said. […] Lau also held reservations on Cameron's quoted remarks that the city should remain "semi-autonomous". "It has always been 'a high degree of autonomy' [as in the joint declaration]. I hope Cameron would not mix that up and send a wrong signal to Chinese officials," she added. In its six-monthly parliamentary report on Hong Kong published in July, the British government backed pan-democrats' calls for the government to restart electoral reform to achieve universal suffrage, saying it was imperative for the “effective functioning of, and confidence in” the “one country, two systems” guaranteed by Beijing. The British government had urged Hong Kong lawmakers to study the political reform proposals, with Foreign Office minister Hugo Swire saying in March that Beijing's imperfect plan represented genuine improvement as “something is better than nothing”. Executive and legislative councillor Starry Lee Wai-king, chairwoman of the Democratic Alliance for the Betterment and Progress of Hong Kong, said Cameron's remarks were unlikely to speed up the process of constitutional reform as this could not be handled by the present administration. ^ top ^



Macao concludes major trade fair with 50 deals inked (Xinhua)
The 20th Macao International Trade and Investment Fair (MIF) concluded here on Sunday with 50 project agreements signed. According to the sponsor, Macao Trade and Investment Promotion Institute (MTIPI), the four-day event was participated by thousands of exhibitors from more than 50 countries and regions, with nearly 600 business negotiations held. As the major program of MIF this year, the Portuguese-speaking Countries Products and Services Exhibition attracted more than 150 exhibitors and was highly valued. An exhibitor called Jorge Cimeira from Portugal, said that compared with last year, the set up of the Portuguese-speaking Countries Products and Services Exhibition is effective. He also disclosed that his company has already received invitations from a number of mainland investors on being an agent of his products in the Chinese market. Another exhibitor Matilde Branquinho said that among all the products she brought to MIF, red wine was the most welcomed item. She believed that her company's participation in MIF was successful and hoped that they could continue to join next year. Catering to the new trends of E-commerce, a number of on-line shop operators and cross-border E-commerce operators have, for the first time, took part in the MIF, to conduct procurement negotiations, showcase their services and explore business and co- operation opportunities in the Portuguese-speaking Countries. Terry Fung, Strategic Partner Manager at Google Hong Kong believed that the series of activities held during MIF can enhance the awareness of Macao's small and medium-sized enterprises on E- commerce development and make use of this platform to develop their own business. The fair was a venue for 55 forums, conferences and product promotion programs highlighting high-profile topics of "Belt and Road" initiative, "Internet +", youth entrepreneurship and regional economic co-operation. The 21th MIF will be held from October 20 to 23 next year, the MTIPI disclosed. ^ top ^



China marks 70th anniversary of Taiwan recovery from Japanese occupation (Xinhua)
A gathering commemorating the 70th anniversary of the recovery of sovereignty over Taiwan from 50-year Japanese occupation was held here at the Great Hall of the People on Friday. Taiwan's return to the motherland was achieved after the victory in the war against Japanese aggression which had been won with efforts of all Chinese people including the Taiwan compatriots, said top political advisor Yu Zhengsheng at the commemorating ceremony. "China's sovereignty and territorial integrity has not been severed and the fact that the two sides belong to one China has not changed," said Yu, chairman of the National Committee of the Chinese People's Political Consultative Conference. Yu noted that it is the holy mission of all Chinese to safeguard the national sovereignty and territorial integrity and ensure that Taiwan's status as a part of China's territory is not changed. Compatriots across the Taiwan Strait are resolute and capable of thwarting all separatist attempts for "Taiwan independence," maintaining cross-Strait peace, and boosting further development of ties, he said. Yu stressed the significance of adhering to the path of peaceful development of cross-Strait relations. The political basis of adhering to the 1992 Consensus and opposing "Taiwan independence" and recognition of the fact that the two sides belong to one and the same China were hailed by Yu as "the most important." Yu called on people from both sides to oppose all words and deeds that hamper the political basis so as to prevent loosing the hard-won cross-Strait peace and what has been achieved through peaceful development of ties. In 1895, when China was defeated in the first Sino-Japanese War, the Qing government was forced to sign the unequal Treaty of Shimonoseki, ceding Taiwan and its affiliated islands to Japan. In 1945, upon the surrender of Japan at the end of World War II, China recovered territory occupied by Japan, including Taiwan. The victory of the Chinese People's War of Resistance Against Japanese Aggression and the recovery of sovereignty over Taiwan "re-established China as a major country in the world and opened up bright prospects for the great renewal of the Chinese nation," Yu said. "Compatriots across the Strait are of one family who had experienced ordeals together and have shared historical memory," he said, adding that Taiwan compatriots' special historical mishap is "a shared historical trauma" of compatriots across the Strait. "In face of some complex contradictions and differences, we are willing to explore ways to solve them on the basis of the principle of 'one China' and through equal consultations," he added. Yu said the mainland is willing to prioritize Taiwan people in sharing its opportunities in development, do things for them and jointly create bright future. In another development, an exhibition about the history of people in Taiwan resisting Japanese aggression was opened on Friday in the Chinese People's Anti-Japanese War Museum. Displaying 355 historical pictures and 416 relics, the exhibition shows the tragic and heroic history. WWII veterans and representatives from Taiwan attended the opening ceremony. ^ top ^

Remember the good Japan did for Taiwan, Taiwanese President Ma Ying-jeou says on second world war anniversary (SCMP)
Taiwanese President Ma Ying-jeou said yesterday it was important to remember the good things Japan did for the island while not forgetting the bad, as he marked 70 years since Japan gave up control of Taiwan at the end of the second world war. Taiwan was a Japanese colony from 1895 to 1945 and the then-Kuomintang government of China took over rule of the island after Japan lost the war. Japan had gained control of the island from imperial China. But the Kuomintang had to flee to Taiwan in 1949 after losing a civil war with the Communists, who to this day insist the island is an integral part of China and have never renounced the use of force to bring it under Beijing's control. Many Taiwanese have a broadly more positive view of Japan than people in China or Korea, saying that Japan's rule brought progress to an undeveloped, largely agricultural island. Speaking in Taipei to mark what Taiwan calls Retrocession Day, Ma said it was true Japan's invasion of China killed millions and issues like the "comfort women", as those forced to work in Japan's wartime military brothels are euphemistically known in Japan, still caused deep pain today. "But Japanese colonial rule of Taiwan also bought construction, like the Chianan Irrigation System and Wusanto Reservoir," Ma said, referring to two projects Japan oversaw. "This benefitted farmers in Taiwan, and we should naturally affirm it." Looking ahead, Ma said that both sides should adopt an attitude of "distinguishing kindness from grievances" and discuss things based on their own merits. "Only then can the Chinese and Japanese peoples build a great and lasting friendship," he said. Reviewing history based on facts was the best way to develop long-lasting friendships, Ma said. Ma said that by defending and developing Taiwan, it had evolved into a free and democratic society and achieved economic prosperity, the Central News Agency reported. The mainland's ruling Communist Party marked the anniversary on Friday by saying Chinese people have a "sacred mission" to ensure Taiwan was always considered part of China. ^ top ^



Mayor of troubled Chinese manufacturing hub Dongguan insists recovery is under way despite business closures (SCMP)
About 500 businesses closed their doors in Dongguan this year but mayor Yuan Baocheng insists the local economy is under control and denies a second wave of factory closures has hit the city since the 2008 global financial crisis. Yuan said on Wednesday that the closures were "a normal part of restructuring". “This year, we learnt that about 500 foreign and domestic businesses have closed,” Yuan said. “[Under] reasonable market competition, it's normal to see some business close and others open.” He said more than 21 per cent new corporations had registered in the city, representing a rise from 600,000 to 700,000 this year. “These figures show the economic structure and market changes fall within a controllable range,” Yuan said. The mayor's comments come amid growing concerns about the declining business environment in the city. Media reports have highlighted sudden business closures on the back of disappointing export figures while workers have taken industrial action demanding businesses settle outstanding wages before closing shop. The Pearl River Delta city once celebrated as the “world's manufacturing hub” has been hit by a wave of factory closures since the 2008 global financial crisis, prompting migrant workers to relocate to more promising cities. According to Taiwan's China Times newspaper, the number of Taiwan-owned businesses has plummeted from about 8,000 to some 3,000 since 2008. Meanwhile, mainland weekly The Economic Observer reported that about 72,000 business closed in Dongguan between 2008 and 2012. The claims were denied by Yuan, who said the city's economic performance was improving gradually and he was confident about the city's economic growth. Dongguan's economic output in the first three quarters of this year was worth 456 billion yuan, a 7.9 per cent increase over the same time last year. Yuan said Dongguan would benefit from Beijing's "One Belt, One Road" economic strategy as all modes of transport were improved to Southeast Asia, Central Asia and Western Europe. Yuan was previously quoted by China News Service as saying that 428 businesses closed in Dongguan in 2014. He denied this was a “wave of closures” but acknowledged some low-end manufacturing businesses had relocated to Southeast Asia. ^ top ^

China Headlines: China can accept, attain 6.5-pct annual growth in 2016-2020: experts (Xinhua)
Given looming downward pressure and ongoing economic restructuring, a lower average annual growth target of 6.5 percent will be acceptable and attainable for the world's second largest economy in the next five years, according to analysts. Chang Xiuze, a researcher with Tsinghua University and economist with a thinktank under the National Development and Reform Commission, said the policymakers should set a bottom line of 6.5-percent annual growth for 2016 to 2020 based on the current economic circumstance. "The economy will be confronted with even higher downward pressure, and the old economic goal set at 7 percent will be harder to deliver under a falling potential economic growth rate," Chang said. Tan Haojun, a prominent financial columnist, also advised economic planners to put the floor at 6.5 percent for economic growth. Leaders of the Communist Party of China (CPC) are discussing an economic blueprint, namely the 13th Five-Year Plan, for the 2016-2020 period at the ongoing fifth plenary session of the 18th CPC Central Committee. A growth target to direct economic and social development in the period is expected to be unveiled. The previous five-year plan (2011-2015) set an average annual growth target of around 7 percent, which will no doubt to be fulfilled by the end of this year. Between 2011 and 2014, the economy expanded by an annual rate of 8 percent. Economists believe Party leaders will lower the target amid the lingering economic slowdown and consider a less-than-7-percent growth rate acceptable to the economy. Chang said China can still create enough jobs with 6.5-percent economic growth, and Tan believes the growth rate can ensure the country to fulfill its ambitious plan to double 2010 gross domestic product (GDP) and people's income by 2020. The Chinese economy expanded 6.9 percent year on year in the third quarter of 2015, the first time the quarterly growth rate has dropped below 7 percent since the second quarter of 2009, but still in the lead among major economies around the world. Chang attributed the slower growth to a shift in economic engines, shrinking work force and pollution control. "The 'China Express' is in a period when old engines are losing strength and new ones have yet to function in full swing," he said. China can no longer count on exports, investment and the property sector to drive its economy, he said. Slowing global recovery, intruding sovereign debts problems, weak external demand and rising trade protectionism will challenge export-oriented economies, while investment -- the old economic therapy -- is falling and becoming less effective for stimulating growth. The property sector, despite a warming, remains far from a complete recovery. A falling working population, likely to see annual declines of 0.3 percent in the next five years, will mark the end of a demographic dividend and weigh on the slowing economy. China's hard battle against environmental pollution will also affect economic expansion, Chang added. While recognizing headwinds, Chang believes China is capable of attaining 6.5-percent annual growth in the next five years. China's speeding urbanization will foster domestic demand, Chang said. He expects urban residents will account for 60 percent of the total population by 2020, up from 54.77 percent last year. The opening up of the economy, including the Belt and Road initiative, Asian Infrastructure Investment Bank and free trade agreements, will provide fresh momentum for the economy. China's overall reform, with greater daring and resolution, will break vested interests and bring vitality to the economy, Chang said. Tan agreed. He said reforms will be pivot to refuel the economy, as reforms in state-owned enterprises and financial sector will give a fresh push to the economy. The expectations of lower growth target do not mean the economy will slip as pro-growth measures have started to take effect in multiple industries, Tan said. Despite weaker traditional industries such as steel and cement production, technology-intensive industries and sectors related to consumption and environmental protection are stepping on the fast track. The high-tech sector grew 10.4 percent year on year in the first nine months, outpacing China's general industrial output by 4.2 percentage points. […] In 2015, the government rolled out a string of pro-growth measures to tackle economic slowdown, by promoting monetary easing, stepping up infrastructure construction and nurturing new growth points. The People's Bank of China, the central bank, cut the benchmark one-year lending and deposit rates and reserve requirement ratio (RRR) on Oct. 23 to shore up the economy, marking the fifth RRR reduction and the sixth round of interest cuts since last year. The move will further reduce financing burdens on enterprises and serve as a boon for the real economy. ^ top ^

China's sixth interest rates cut in a year seen as bid to kick-start faltering economy, economists say (SCMP)
The mainland central bank's announcement of fresh stimulus moves to lower corporate funding costs and pump money into the economy is a clear sign that Beijing is determined to revive the faltering economy despite doubts about the efficacy of monetary easing. The People's Bank of China (PBOC) announced on Friday it would lower one-year interest rates by 25 basis points, bringing the benchmark to its lowest level in more than two decades. It was the sixth cut since November. It said low prices offered room to lower rates, noting downward pressure on the economy, slowing demand for industrial products and moderating investment. "The central bank may have finally become more concerned about deflationary pressure and the rising debt burden," USB economist Wang Tao said. Economists noted that the US Federal Reserve's decision to delay a rate increase in September offered a window for PBOC to lower rates before the Fed finally starts to raise theirs. The rate cuts, broadly within expectations, came four days after the release of dismal economic figures for the third quarter, including the slowest pace of GDP growth in more than six years, investment growth decelerating to a 16-year low and worsening deflationary risks. Declines in corporate and government income had started to hit employment and residential consumption, said China International Capital Corp, a mainland brokerage firm. The official urban unemployment rate rose slightly to 5.2 per cent in September from 5.1 per cent, and economists warned of increasing pressure of implicit unemployment in "zombie" state firms suffering from low productivity and heavy debt. With economic weakness likely to drag into the fourth quarter, the central bank's main priority would be to prevent a further slowdown this year, analysts said. Data for October may continue to fall short of expectations, including a further drop in power generation and coal consumption, said Sinolink Securities economist Li Yejin, who expected industrial output to grow by 5.3 per cent or less this month, versus September's 5.7 per cent. The central bank also lowered the required deposit reserve ratio for all banks, the fourth system-wide cut in the current cycle, saying the "pre-emptive move" would to counter the uncertain outlook for capital flows and offset the impact of a liquidity squeeze as firms paid major tax bills this month. "Amid continued capital outflows and falling CPI [consumer price index] inflation, we believe these cuts may be necessary to prevent a tightening of financial conditions," Goldman Sachs said. But the policy effects are expected to be limited as monetary easing alone cannot solve the deep-rooted problems in China. It would take years to retire obsolete capacity, which involves the reform of debt-ridden state firms. At the same time, growth in services cannot effectively offset the slowdown in manufacturing and real estate in the short run, and cultivating new engines of growth will need time. "We think further monetary easing can help reduce debt service burdens and improve corporate cash flows, but will be of limited use in supporting growth unless combined with fiscal measures and structural reforms," USB's Wang said. Liu Dongliang, an economist at China Merchants Bank, said the impact of monetary policy on the real economy was diminishing, and economic performance had been continuously lower than expected, requiring a bigger play by fiscal policy. ^ top ^

China to target financial sector in new anti-graft inspection (Xinhua)
The anti-graft authority is set to expand its inspections into more state entities this year, with its sight set on major financial institutions including the central bank, securities regulators and state-owned banks. According to anti-corruption plans set previously, teams from the Communist Party of China's Central Commission for Discipline Inspection (CCDI) will inspect all major state-owned enterprises that are under the direct stewardship of the central authorities. The CCDI released the findings from the second round of inspections this week. A statement released after a meeting Friday said that the third round will cover the People's Bank of China, the central bank, China Banking Regulatory Commission, China Insurance Regulatory Commission, China Securities Regulatory Commission and China Investment Corp.` Others include CITIC Group Corporation, a major financial conglomerate; state-owned banks Industrial and Commercial Bank of China and Bank of China; as well as China Life and the People's Insurance Company of China, two large insurers. China's two stock exchanges Shanghai Stock Exchange and Shenzhen Stock Exchange were also on the list. A total of 31 organizations will be inspected in this third round. Wang Qishan, head of the CCDI, said at the meeting that the inspections will ensure members adhere to the Party code of conduct and that policies are adopted and implemented. He added that violations, if left unchecked, would erode the Party's ability to govern and consequently the foundation by which it rules. CCDI officials were urged to lead by example through their own behavior. The CPC Central Committee published a revised version of its disciplinary regulations on Wednesday, as the CPC moves to improve the management of its 88 million members amid the sweeping anti-corruption drive. Thus far, many high-ranking officials have been felled, including Ling Jihua, a former member of the CPC Central Committee, and Song Lin, former chair of state-owned China Resources (Holdings) Co. Ltd. ^ top ^



Amended amnesty law to authorize 1,700 convicts release (Montsame)
Draft amendments to the Law on Amnesty were backed by parliament with 91.2 percent approval vote at Thursday's plenary meeting. The new Law on Amnesty has been adopted on the occasion of the 25th anniversary of the first permanent parliament in Mongolia. However, the President put a partial veto on the Law, directing this to series of more discussions on the bill. Parliament legalized a granting an amnesty for a crime of misappropriation or embezzlement of property, reflected in 150.3 of the Criminal Code of Mongolia. Meanwhile, the criminals who committed Appropriation of property by fraud (148-Criminal Code), Abuse of power or of office by a state official (263.1), Excess of authority by a state official (264), Forgery in office (270), Receiving of a bribe (268) and Spending of the budget funds contrary to their designation (273) shall not be pardoned. ^ top ^

Mongolia becomes member of UNHRC (Montsame)
Mongolia has been elected the member of the United Nations Human Rights Council (UNHRC). It happened after the election that took place during the 70th session of the UN General Assembly continuing in New York, USA. Mongolia collected votes of 172 countries and became the UNHRC's member for the first time. A total of seven countries ran for five quotes at the Asia-Pacific division, and Mongolia took the largest number of the votes. In the same division, the United Arab Emirates collected 159 votes, Kyrgyzstan—147, the Republic of Korea—136, and the Philippines—113 votes. The new members of the UNHRC are elected to staggered three-year terms. Mongolia is provided with possibilities to contribute to the international community for protecting human rights and to serve at an international level for making relevant decisions. The UNHRC is a United Nations System inter-governmental body whose 47 member-states are responsible for promoting and protecting human rights around the world. It is the successor to the UN Commission on Human Rights (UNCHR, herein CHR), and is a subsidiary body of the UN General Assembly. The council works closely with the Office of the High Commissioner for Human Rights (OHCHR) and engages the United Nations' special procedures. The General Assembly established the UNHRC by adopting a resolution (A/RES/60/251) on March 15 of 2006 in order to replace the previous CHR, which had been heavily criticized for allowing countries with poor human rights records to be members. ^ top ^

First Mongolia-China Expo to strengthen economic ties (Montsame)
The first Mongolia-China Expo opened October 23 in Hohhot, the capital city of China's Inner Mongolia Autonomous region. It will complete on Tuesday. The organizers of the Expo are China's Ministry of Commerce, Mongolia Ministry of Industry and the People's Government of Chinese Autonomous Inner Mongolia. The sides considered that the event themed “Developing cooperation corridor by connecting the Steppe Road with the Silk Road” will not only have effect on economic and business cooperation, but also expand cooperation in education, health and culture. The expo comprises four main events, including investment and trade agreement, exhibition, fair and cultural events. Some 800 Mongolians, including businessmen and delegates from companies and academic institutions, and 2,000 delegates from China's trade and industry spheres are taking part in the ongoing action, with a total of 8,000 political and business figures from two Koreas, Philippines, Germany, France, Russia, Japan and Australia, as well as from Hong Kong, Taiwan and Macao of the People's Republic of China. On Monday, Xinhua quoted the President Xi Jinping as saying in his letter to the Expo, “The first China-Mongolia Expo will serve as an important platform to improve economic cooperation and cultural exchange between China and Mongolia. China highly values the comprehensive strategic partnership between the two countries, and is ready to integrate China's 'Belt and Road' initiative with Mongolia's Steppe Road plan based on mutual respect, benefit, and win-win cooperation." In his congratulatory letter, Mongolian President Ts.Elbegdorj also lauded the role the Expo will play in the bilateral pragmatic cooperation and the Mongolia-China comprehensive strategic partnership. Chinese Vice Premier Liu Yandong said at the opening ceremony, that recent years have witnessed deepening political mutual trust, closer trade and economic cooperation as well as people-to-people exchanges between the two countries. ^ top ^

Project on decentralization policy to be implemented with SDC's financing (Montsame)
A project on supporting a decentralization policy will be implemented between 2015 and 2017 with a financing from the Swiss Agency for Development and Cooperation (SDC). The project has been formulated and its unit of staffers has been formed, said G.Ganbold, the Deputy Head of the Cabinet Secretariat for Government and the project's director, at the “Responsibility, monitoring and implementation” weekly online meeting on Friday. The decentralization project aims to help the Ministries, administrative and local units to work out more coherent, complex and appropriate policy based on precise budgetary and financial researches divided into territorial regions. By the PM's order, a working group has been set up to render a technical support to the formulation and a monitoring of the decentralization policy, Ganbold said. This group held its first meeting to present the project's purposes and to discuss a role, duties and participation of the working members. ^ top ^


Mrs. Mirjam Eggli
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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