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
  4-8.1.2016, No. 604  
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Foreign Policy

Xi underscores military building via reforms (Xinhua)
President Xi Jinping has urged the strengthening of the armed forces through reforms when inspecting troops in southwest China. Xi said the military must be guided by the objective of building a strong army, carry out military strategies under the new circumstances and advance army building through the enhancement of political awareness. Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, made the remarks during an inspection of the 13th Group Army stationed in the southwestern municipality of Chongqing on Tuesday. Xi also called for commanding the military in line with laws and rules when meeting with officers and soldiers at the headquarters of the 13th Group Army. The 13th Group Army has a tremendous military history dating from the 1930s. Xi himself once met with soldiers who participated in the rescue and disaster relief operations in the 2008 Wenchuan earthquake, and the 2013 Lushan quake. Touring the group's gallery, Xi called on the army to carry forward its glorious traditions, pass on the "red genes" and make sure that the troops follow the command of the CPC. ^ top ^

China looks to mediate Syria's civil war (China Daily)
Foreign minister Wang Yi urged opposition parties in Syria to participate in peace dialogues and negotiations without any preconditions when he met with a leader from the Syrian opposition force in Beijing on Thursday. The meeting with President of the National Coalition for Syrian Revolutionary and Opposition Forces Alptekin Hocaoglu came just two weeks after Beijing hosted the Syrian Deputy Prime Minister and Foreign Minister Walid al-Moallem. Observers see Beijing's engagement with both the Syrian government and the oppositions as a more active mediation role for conflict issues in the Middle East. A civil war broke out five years ago in the oil-rich country and has since turned the nation into a war-torn land with increasing terrorism forces. The UN Security Council unanimously agreed on a resolution last month, which calls for Syria peace talks to begin in early January. It also calls for a nationwide cease-fire in Syria to come into effect "as soon as the representatives of the Syrian government and the opposition have begun initial steps towards a political transition under UN auspices". While meeting with Alptekin Hocaoglu, Wang urged opposition parties in Syria to support the UN's peace effort and "participate in relevant talks and negotiations without preconditions". As a representative of the Syrian opposition parties, the National Coalition can adopt measures that are more positive to help bring a ceasefire and coordinate with the UN's efforts, Wang said. China has been pushing for peace and dialogues in Middle East issues, insisting that the primary judgment to solving those problems focuses on whether it will bring peace and happiness for the people there, Wang said, adding that China will continue to offer more humanitarian aid for Syria. Alptekin Hocaoglu arrived in Beijing on Tuesday for a four-day visit. He was quoted in a Foreign Ministry press statement saying that his coalition is ready to participate in the UN-led dialogue without any precondition, and advocate that the Syria government and oppositions should take measures to build trust gradually, and solve all problems through dialogue and negotiation. He said he hopes China will play a bigger role in pushing for the political solution of the Syrian issue. China has actively participated in international mediations to draw opposition parties in Syria to the negotiating table ever since the civil war broke out five years ago. China announced that it would extend an additional 40 million yuan ($6.06 million) in humanitarian aid to Syria while hosting visiting Syrian Deputy Prime Minister and Foreign Minister Walid al-Moallem, who arrived in December. Wang Mingming, a researcher of the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, said the efforts China has been making to bring a negotiation shows the country is playing a more constructive role in addressing Middle East Issues than before. Both the Syrian government and the Syrian opposition parties believe that China has a "relatively equitable" stance in the Syrian issue due to its "detached" position. Wang said, adding that he is optimistic that China will help address the issue. Former Chinese special envoy on the Middle East issues Wu Sike said the willingness to negotiate between the Syrian government and the Syrian opposition parties shows that the international community has realized military measures cannot solve problems, and the most urgent issue now is to work together to fight terrorism. "China has long been expressing its stance of addressing the Syrian issue through political solutions, and its effort to talk it through to both the Syrian government and opposition parties has paid off," Wu said. ^ top ^

Second test flights performed at Nansha Islands (China Daily)
China successfully carried out test flights of two commercial airliners on Wednesday at a newly built airfield in the Nansha Islands in the South China Sea. The airfield will provide more routes for flights over the South China Sea, according to a government media release. Insiders, who declined to be named, said the test flights were different from the one reported on Saturday. That flight aimed to test communication between the planes and the airfield, while Wednesday's were "real test flights". Foreign Ministry spokeswoman Hua Chunying confirmed on Saturday that China had finished building an airfield on Yongshu Jiao in China's Nansha Islands. It is the most southerly airfield in the country. She said Saturday's test flight was intended to check whether the runway met civilian aviation standards. Xinhua News Agency reported that two civilian aircraft departed from Haikou in Hainan province on Wednesday morning and landed on Yongshu Jiao after flights of nearly two hours. They returned to Haikou in the afternoon. The official media release by Xinhua said, "The test flights proved that the airfield has the capacity to ensure safe operation of large civilian aircraft." This will help with the transportation of goods and personnel as well as with healthcare on the islands, it said, adding that the airfield will also serve as an alternate one for flights in the region. Pan Wei, chief engineer at China Rescue and Salvage under the Ministry of Transport, said the airfield will significantly cut travel time between the Nansha Islands and the Chinese mainland. Pan said the airfield will help to ensure flight and navigational safety for airplanes and ships in the area and greatly improve the ability of marine salvagers. As a responsible country, China will continue to promote the building of emergency response and rescue facilities, Pan said. It will shoulder the international obligations of search and rescue operations, marine environmental protection, disaster prevention, and navigational safety in the South China Sea. Nearly 40 percent of global trade is carried through the South China Sea, which sees the passage of at least 40,000 ships annually. Vietnam and the Philippines have protested over the new airfield's completion. But Hua said on Saturday the test flight that day was completed "completely within China's sovereignty". ^ top ^

Sky Net' anti-graft drive retrieves 19 fugitives since 2015 (Global Times)
China's top disciplinary watchdog said Wednesday 18 of 100 people on its list of most-wanted fugitives who fled overseas were deported to China in 2015, over half of whom used to be among the chief leaders of their organizations. The "Sky Net" anti-graft operation, launched in April 2015, named 100 economic crime suspects who were evading arrest by hiding abroad. Together with Pei Jianqiang, the 10th highest suspect on the list, who was returned on January 1, the number of most-wanted suspects in Chinese custody stands at 19, according to a Wednesday statement of the Communist Party of China Central Commission for Discipline Inspection (CCDI) on its official website. Among those arrested last year, 11 headed State-owned companies and governmental agencies. A total of 863 people wanted for corruption had been arrested as of November, 738 of whom were arrested abroad, with 196 of them Party members and officials, the CCDI said. Forty-five percent of the 738 suspects were returned to China and another 41 percent were persuaded to return, read the statement. The progress is encouraging, considering tracking them down was difficult, especially as China has yet to sign extradition treaties with several countries, Zhuang Deshui, a deputy director of the Research Center for Government Integrity-Building at Peking University, told the Global Times. About 40 of the 100 suspects fled to the US while 26 escaped to Canada, said the CCDI. Over half of the 18 arrested in 2015 have hidden abroad for over five years, with some up to 15 years, according to the CCDI. Many of the suspects were using fake identification and hopped from one country to another, which made tracking them down more difficult, said the CCDI. Some countries that have various interpretations of corruption or consider the arrest political prosecution have made China's search more challenging, Zhuang explained on Wednesday. ^ top ^

China, Britain issue statement on Syria (Xinhua)
China and Britain issued a statement on Syria issue in Beijing Tuesday, agreeing to advance counter-terrorism and a political settlement in parallel. The statement was issued after the talks between Chinese Foreign Minister Wang Yi and his British counterpart Philip Hammond. The two countries voted in favor of the recent UN Security Council Resolution 2254 on Syria, and reconfirmed their support for a national ceasefire as set out in the resolution, said the statement. They will continue to engage actively in the International Syria Support Group (ISSG) and work with countries from around the region to ensure a Syrian-led and Syrian-owned political transition based on the 2012 Geneva Communique, according to the statement. China and Britain stressed that the Syrian people will decide the future of Syria, with the UN playing the role as the main mediator. They expressed deep concern over the continued suffering of the Syrian people and the deteriorating humanitarian situation following the conflict, which had already claimed hundreds of thousands of lives and displaced millions of people. There are 13.5 million Syrians in need of humanitarian assistance, said the statement. The two countries will attend a London conference in February with other 60 countries to discuss offering immediate assistance to Syrian people, including responding to the UN's urgent request for further funding. "Both our countries face threats from terrorism, and have a shared interest in defeating all terrorist groups in Syria and Iraq as designated by the UN Security Council," said the statement. They stressed continued support for efforts to tackle terrorism and its root causes in the Middle East and North Africa regions and elsewhere, including the ongoing conflict in Syria, according to the statement. "A political settlement is the only right way out of the Syrian crisis and is in the fundamental interests of the Syrian people. We will make unremitting effort to achieve this goal," Wang said at a joint press conference with Hammond. The world does not lack the ability or resources for the use of force, but steadfast determination and action for a political solution, Wang said. "The path leading to a political settlement may be difficult, but it is an effective tool to fundamentally resolve the problem," he said. China will continue to play a constructive role in its own way, Wang added. ^ top ^

Countries outside region play up test flights in South China Sea (Global Times)
Some countries outside of the South China Sea region are playing up China's test flights to the newly built airport at Yongshu reef of Nansha Islands and heightening tensions, observers said. Test flights were used by some countries as an excuse to complicate the situation in the South China Sea, Chen Xiangmiao, a research fellow at the National Institute for the South China Sea, told the Global Times Tuesday. The Chinese government conducted a test flight on Saturday to the newly-built airport on the Yongshu reef of China's Nansha Islands with a civilian aircraft in order to test whether or not the facilities on it meet the standards for civil aviation, which sparked criticism from countries in and out of the region, including Vietnam, the Philippines, the US and Japan. China's foreign ministry said the US should avoid creating regional tensions. "The US should say things conducive to regional peace and stability in a responsible, objective and just manner, rather than making remarks that mislead the public and disrupt regional peace and stability," Hua Chunying, foreign ministry spokeswoman said on Tuesday. Hua's remarks come after Senator John McCain, the chairman of the influential US Senate Armed Services Committee, criticized the Obama administration for delaying further "freedom of navigation" patrols within 12 nautical miles of China's artificial islands. "The test flight shows China's sovereignty over the South China Sea. It's unfair for the US and its allies to point fingers at China's justifiable actions on its own territory," Gu Xiaosong, an expert on Southeast Asian studies at the Guangxi Academy of Social Sciences, told the Global Times. Some countries outside the region have been meddling in the South China Sea disputes and profiting from the situation, Gu said. Aside from warnings from the US and Japan, India has set up a Data Reception and Tracking and Telemetry Station in Ho Chi Minh City, Vietnam, while the India Space Research Organization (ISRO) will soon be activated and will be linked with another station in Biakin, Indonesia, which will prove to be an important strategic asset for India in the region, The Economist Times, an India-based newspaper, reported on Monday. The news comes on the heels of the Chinese foreign ministry's response to Vietnam's protest, which clearly indicates India's attempt to complicate the regional dispute, Gu said. "India has no territorial disputes with China in the South China Sea. It wants to stir up trouble in the region to serve its own ends, which is to counterbalance China's influence," Gu said. Pooja Jhunjhunwala, a US State Department spokeswoman, said the US is concerned that these test flights have "exacerbated tensions and are inconsistent with the region's commitments to exercise restraint from actions that could complicate or escalate disputes," the Wall Street Journal reported Sunday. China has been exercising great restraint in the disputes over the Nansha Islands, so the US should stop uttering groundless accusations and pay more attention to its allies' ulterior motives in the region, Gu said. "The region may consider exacerbating tensions if the US and its allies continue being hostile to China's legitimate right to protect its own territory and efforts to promote regional security," Chen added. Vietnam filed a diplomatic protest on Saturday, while Philippine Foreign Ministry spokesman Charles Jose said Manila was planning to do the same, Reuters reported Monday. "The Philippines insists that the US project its military power in the region, while Vietnam dragged India into its oil business in the South China Sea," Gu said. "The two countries have no basis to accuse China of escalating the situation, since they are the ones which ignored China's proposition of regional cooperation and complicated the situation," Chen added. Chinese authorities have repeatedly stressed that the new islands would be for civilian use, such as coast guard activity and fishing research. Chinese President Xi Jinping clarified during his state visit to the US in October that relevant construction activities China is undertaking on the Nansha Islands do not target or impact other countries, the Xinhua News Agency reported. Moreover, China does not intend to militarize the islands, the report added. "China has no reason to flex its military muscles in the region, since its military is strong enough to protect its own territory. Civilian use of the islands shows China's desire to deepen cooperation with other countries and promote regional stability," Chen said. "The establishment of the airport in Yongshu reef will significantly promote China's ability to exploit the South China Sea. Though it might be hard for some countries to accept it, they should expect more civilian flights to the islands," Gu said. ^ top ^

Beijing calls for restraint in Iran-Saudi Arabia row (SCMP)
Beijing said on Tuesday it was concerned about the diplomatic row between Iran and Saudi Arabia and called on the two countries to exercise restraint. Foreign Ministry spokeswoman Hua Chunying (華春瑩) said the situation in the Middle East was “complex and uncertain”, and that the relevant countries should resolve their differences through dialogue and promote regional stability. “We have noticed that many countries of the international community have expressed similar concerns and positions,” Hua said. Saudi Arabia cut off diplomatic relations with Iran on Sunday in response to the storming of its embassy in Tehran in an escalating row over Riyadh's execution of Shiite Muslim cleric, Sheikh Nimr al-Nimr, an outspoken opponent of the ruling Al Saudi family. He was put to death along with 46 others said to be involved in al-Qaeda attacks that killed dozens in 2003 and 2004. Three Sunni-led countries – Bahrain, Sudan and the United Arab Emirates – also severed or downgraded ties with Iran. Khaled Khoja, President of the Istanbul-based National Coalition for Syrian Revolutionary and Opposition Forces, was in the Chinese capital yesterday, the first day of a trip that continues until Friday. The escalating tension between Saudi Arabia and Iran presented Beijing with a challenge, said Liu Zhongmin, a professor specialising in Middle East issues at Shanghai International Studies University. “China doesn't pick sides in the Middle East,” Liu said. “It has no allies, nor does it have enemies. It has maintained friendly relations with both sides of conflicts – even when Iran and Iraq were at war. “Beijing will continue the strategy to balance such relations with countries who are at diplomatic odds.” Liu said the tensions between Iran and Saudi Arabia were unlikely to escalate into military conflict. Such tensions had run for decades in the Middle East because the two countries supported opposing religious groupings. China relies heavily on the Middle East for oil, importing around 16 per cent of its supplies from Saudi Arabia and about 9 per cent from Iran in 2014. Lin Boqiang, an energy policy expert at Xiamen University, said the tensions could lead to short-term fluctuations in oil prices but were unlikely to affect China's imports. There was even an opportunity for Beijing to bargain with the two countries on prices as Iran and Saudi Arabia sought support from China. Yunnan University professor Xiao Xian said that unless a military conflict erupted, the tensions between Iran and Saudi Arabia would not affect China's imports of oil. ^ top ^

China, Britain vow AIIB cooperation, visa facilitation (Xinhua)
Chinese Foreign Minister Wang Yi and his British counterpart Philip Hammond met in Beijing Tuesday, vowing more cooperation between their countries in industry, finance and culture. They also said they will work together on visa facilitation, according to a press release issued after the meeting. It said China is looking forward to British Prime Minister David Cameron attending the G20 summit in China's Hangzhou this autumn, and will welcome him to visit China at a mutually convenient time to hold the bilateral annual prime ministerial meeting. The two countries should make full use of high-level dialogue to map out partnerships in culture, finance and security, the release said. Wang and Hammond agreed they should integrate their development strategies, notably China's Belt and Road Initiative and Britain's plan to upgrade its infrastructure, as well as their plans to revitalize manufacturing. Wang said China was ready to cooperate more in nuclear power, high-speed rail, as well as under the Asian Infrastructure Investment Bank (AIIB), which will start operating in mid-January. According to the press release, China and Britain will increase exchanges in culture, education, sports and healthcare. At a joint press briefing after their talks, the two foreign ministers announced new steps to relax visa rules. The two countries will reciprocally issue multiple-entry visas for up to two years to each other's citizens and China hopes that Britain will increase the validity of visas to 10 years to Chinese citizens "at a proper time." The two sides also vowed to conduct closer communication within international organizations such as the United Nations. Wang said China appreciated Britain working to speed up negotiation on a China-EU investment agreement and to start feasibility research of a China-EU free trade area as early as possible. He also expressed hope that Britain could push the EU to fulfill its obligations concerning determining the price comparability of subsidies and dumping, which came in the terms of China's ascension to the World Trade Organization. Hammond said Britain was excited to strengthen cooperation with China in infrastructure, nuclear power and finance, and he pledged that Britain will play an active role in the AIIB. He vowed to enhance cooperation with China in international affairs. Hammond's official China visit will last from Tuesday to Wednesday. ^ top ^

China slams Japan's islands rhetoric (Global Times)
China has the legitimate right to land a plane on its own territory, and Japan is merely sensationalizing the issue for political gain, experts said after Tokyo expressed concerns over the landing of a Chinese plane on an island in the South China Sea. China has indisputable sovereignty over the Nansha Islands and their adjacent waters, foreign ministry spokesperson Hua Chunying reiterated on Modnay. Japan's Foreign Minister Fumio Kishida told a press conference on Monday that Japan is "gravely concerned" over the landing of a Chinese plane in Yongshu Reef of Nansha Islands, and "Japan cannot accept [the act] which is escalating tensions [in the region]," the Kyodo News Agency reported on Monday. China has completed the construction of an airport on Yongshu Reef, Hua said on Saturday, adding that "the Chinese government conducted a test flight to the airport with a civil aircraft in order to test whether or not the facilities on it meet the standards for civil aviation. Such activities fall completely within China's sovereignty." "It is another often-played move from Japan to trumpet the 'China Threat' and stir up an 'anti-China chorus [with other countries,]'"Liu Jiangyong, vice director of the Modern International Relations Institute at Tsinghua University, told the Global Times. Japan's "concern" was indiscreet, as China did not land the plane on a foreign land or on Japanese territory, Liu said. Besides, it is a civilian aircraft and not a military plane, Liu added. The airport could conduct rescue and relief work for the benefit of other countries, Lü Yaodong, director of the Institute of Japanese Studies at the Chinese Academy of Social Sciences, told the Global Times. It could also facilitate scientific research and exploration in the waters, Lü said. Abe's government intends to hype the issue to win more votes in elections for Japan's House of Councilors in 2016, so as to revise Japan's post-World War II pacifist constitution, Liu added. China needs to continue to reiterate its stance and take legitimate actions despite such groundless concerns, experts said. "Japan will continue to cooperate with other countries to protect the freedom of the seas," Kyodo news quoted Kishida as saying. Kishida said the acts do not contribute to a peaceful resolution of the dispute," Japan's public broadcaster NHK reported on Monday. It could not be more clear who is escalating tensions, Liu said. He added that Japan has been provoking South China Sea-related issues regardless of China's concerns, though Japan is not directly involved in the issues. ^ top ^

'Grave concern': Japan expresses anger over China's test landing on Spratlys airstrip (SCMP)
The Japanese government has expressed “grave concern” over China's landing of a plane on an airstrip it constructed in a contested part of the Spratly Islands in the South China Sea. “Japan is gravely concerned about China's act, which is a unilateral change of the status quo” in the region and an attempt to make Beijing's massive and fast-paced land reclamation work in the disputed seas “a fait accompli,” Foreign Minister Fumio Kishida told a press conference on Monday. Japan “cannot accept [this act] which is escalating tensions and is a concern shared by the international community,” Kishida said. “Japan will continue to co-operate with other countries concerned to protect the freedom of the seas.” The Chinese Foreign Ministry said Saturday that Beijing “conducted a test flight to the airport with a civil aircraft in order to test whether or not the facilities on it meet the standards for civil aviation,” adding that the “activity falls completely within China's sovereignty.” It is believed to be the first time that China has allowed an aircraft to take off or land at the airstrip on Fiery Cross Reef, one of many artificial or artificially enlarged islands China has created in the Spratlys. China is asserting sovereignty over most of the South China Sea, which is also claimed in whole or in part by Taiwan, Vietnam, Brunei, Malaysia and the Philippines. A US Defense Department official also voiced concern Saturday that the test flight had escalated tensions in the region. Hanoi also protested, labelling the landing a violation of sovereignty which “influences peace and stability in the South China Sea”. “Vietnam resolutely protests China's above-mentioned action, asking China to immediately end while not repeating similar move,” said foreign ministry spokesman Le Hai Binh in Hanoi. ^ top ^

China applauds Russia's updated security strategy (Xinhua)
China on Monday hailed Russia's updated security strategy which spoke positively of Russia-China ties. Chinese Foreign Ministry spokesperson Hua Chunying said China had noted a document endorsed by Russian President Vladimir Putin on Thursday, an updated version of the security strategy adopted in 2009. Hua said Chinese President Xi Jinping and Putin met five times in the past year, and had reached important consensus in developing bilateral ties. No matter how global and regional situations change, China and Russia are committed to deepening their strategic partnership of coordination, promoting common development, and safeguarding global justice and world peace and stability, the spokesperson told a regular press briefing. The two countries, as permanent members of the UN Security Council and major emerging economies, will jointly boost high-level development of their strategic partnership of coordination, Hua said. China and Russia are committed to a new type of international relations featuring cooperation and mutual benefit, while maintaining regional and world peace and stability, she added. ^ top ^

President Xi Jinping lays down the law to the Chinese army in first 'precept' speech since Mao Zedong (SCMP)
President Xi Jinping (習近平) has outlined the direction of the People's Liberation Army in an official speech known as a “precept”, becoming only the second person to do so since the founding of the People's Republic of China. Observers say the development shows Xi is consolidating his authority and demanding loyalty amid his plans for massive military reform. Xi gave the precept speech, or Xun Ci, which literally translates as “admonishing words”, on December 31 to mark the launch of two new wings of the army and the establishment of a separate command for ground units, according to Xuexi Zhongguo, a smartphone app ran by the Central Party School. The only other leader to have given a precept speech to the military in the 67-year history of the People's Republic of China was Mao Zedong, who did so in 1952 and 1953. Xi, who is also chairman of the Central Military Commission (CMC), used the speech to call for his military reform plans to be fully implemented. Xi's ambitious modernisation plan would completely remodel the army, which was established in Mao's era, and would therefore put him on a par with – or even higher than – Mao in terms of his military authority, said Chen Daoyin, an associate professor at Shanghai University of Political Science and Law. “No other former CMC chairman – Deng Xiaoping (鄧小平), Jiang Zemin (江澤民) or Hu Jintao (胡錦濤) – has given a military precept before, which means Xi's power and authority is even higher than them,” said Chen. Zhang Lifan, a party historian, said the phrase “Xun Ci” suggested a sense of sternness and admonishment towards the lower ranks. “It also signals Xi's discontent and anxiety over the status of the army – the rampant corruption and the Soviet-style command structures,” he said. Xi was showing assertiveness in the overhaul to remove any resistance from within the army, said Zhang. ^ top ^

Beijing rejects Vietnam protest over South China Sea landing (SCMP)
Beijing has rejected a protest from Vietnam after a Chinese plane landed on a contested reef in the South China Sea, saying the operation took place within Chinese territory. A Chinese “test flight” landed on Fiery Cross reef, foreign ministry spokeswoman Hua Chunying said in an online statement late Saturday. Vietnam also claims the reef. The latest spat came after President Xi Jinping's visit to Hanoi in last November, mending fences with the neighbour who from time to time engage in bitter dispute with Beijing over the South China Sea. China has asserted its claim to almost all of the South China Sea by rapidly building artificial islands including airstrips said to be capable of hosting military jets. It began work in 2014 on a 3,000-metre runway on Fiery Cross reef in the Spratlys island group, around 1,000 kilometres from China's island province of Hainan. Hua said the test flight was civilian in nature, adding that the “relevant activity falls completely within China's sovereignty”. Hanoi earlier strongly protested at the flight, labelling it a violation of sovereignty which “influences peace and stability in the South China Sea”. “Vietnam resolutely protests China's above-mentioned action, asking China to immediately end while not repeating similar move,” said foreign ministry spokesman Le Hai Binh in Hanoi. Vietnamese officials also said they had asked Beijing to investigate the ramming and sinking of a Vietnamese fishing boat by a suspected Chinese boat. The fishermen were around 60 nautical miles from Con Co Island in central Quang Tri province on Friday when a foreign boat crashed into their craft. The 11 crew members were rescued but the boat sank, the fishermen told the VNExpress news site. The captain was quoted as saying that he saw Chinese characters on the foreign boat. Ha Le, deputy head of the Vietnam Fisheries Surveillance Department, said Chinese officials had offered to check on the report if more details became available. Relations between the communist neighbours have grown tense in recent years over the disputed Spratly and Paracel island chains. Rioting broke out in Vietnam after Beijing sent an oil rig into contested waters in 2014, and at least three Chinese people were killed. Hanoi has stepped up cooperation with the US, in what analysts say is a hedge against China's rising power. Several other claimants have also built facilities in the South China Sea but at a slower pace than China. The Philippines, Malaysia, Brunei and Taiwan also have claims to parts of the Sea, home to strategic shipping lanes as well as substantial oil and gas reserves. ^ top ^

China appoints new military top brass in overhaul aimed at boosting professionalism (SCMP)
China has appointed three new commanders to head the land forces of the People's Liberation Army and the new Rocket Force and Strategic Support Force, as part of the military overhaul to promote talented officers. Among the three top leaders is General Li Zuocheng, a decorated hero of the Sino-Vietnamese war and leader of disaster relief campaigns. He is the commander of the newly established army general command. Li, 62, led the Chengdu military region that covered Guizhou (貴州), Sichuan (四川), Tibet (西藏) and Yunnan (雲南). Meanwhile, two other officers, Gao Jin and Wei Fenghe, were appointed as the commander for the Strategic Support Force and the Rocket Force, formerly the Second Artillery Corps that commanded strategic missiles. Li is a native of Hunan (湖南) province, the “cradle of Chinese soliders”, and joined the PLA in 1970, aged 17. He was decorated for leading a PLA company in Guangxi (廣西) province to victory in a month-long battle during the Sino-Vietnamese war in 1979. Li, then the company commander, suffered severe injuries to his right arm and hand in the conflict, for which he was officially honoured as a “combat hero”. In the following two decades, Li was promoted to army commander. In 1998, he led his force from the front line in disaster relief operations following catastrophic floods on the Yangtze River. Former colleagues describe Li he as a man of great courage and integrity, unwilling to be involved in under-the-table deals. That reputation was also seen as the reason he was overlooked for promotion in the following decade, acquaintances said. Li finally joined the top ranks of PLA in 2008 when he was appointed deputy commander of the Chengdu military region, before becoming commander of the region in 2013 at age 60. Unlike Li, Lieutenant General Gao Jin, commander of the PLA's new established Strategic Support Force, has stronger academic background. Gao, 56, has a masters degree from the Second Artillery Engineering University, the only military school to train strategic missiles commanders. During his career, Gao published more than 20 research papers on the use of missiles and played a key role in establishing the PLA's Unit 15A, which oversees development of new-generation missiles, earning him several important distinctions in the army. In 2011, Gao became the chief of staff for the Second Artillery Corps and promoted to lieutenant general in 2013. Wei Fenghe, 61, commanded the Second Artillery Corps before it was recently renamed the Rocket Force. The unit commands nuclear and conventional strategic missiles and answers directly to the Central Military Command. ^ top ^

Chinese military launches two new wings for space and cyber age (SCMP)
China has officially launched two new wings of the military and established a separate command for ground units as it presses on with a massive overhaul of the armed forces. The Central Military Commission also released a guideline on Friday aimed a driving the rest of the reform programme. At an inauguration ceremony in Beijing on Thursday, President Xi Jinping conferred flags on the new PLA Rocket Force and PLA Strategic Support Force, as well as the general command for the Army of the People's Liberation Army. The Rocket Force is founded on what was the Second Artillery Corps – the PLA's strategic missile force – and will take charge of missiles and rockets, according to a source close to the army. The Strategic Support Force would be responsible for hi-tech warfare in space and on the internet, the source said. Defence ministry spokesman Yang Yujun said on Friday that the creation of the rocket force was consistent with China's nuclear policy and strategy. Xi said the inauguration of the commands of the three forces was a strategic step to establish a modern military system with Chinese characteristics. In its guideline, the CMC said the defence system would be restructured to build a modern military for the information age by 2020, with most of the reforms expected to be completed by the end of this year. It follows sweeping changes to the military's leadership and command system last year. Once the changes are in place the CMC will take direct charge of administering all military wings, including the PLA, the People's Armed Police, and the militia and reserve forces. Under the plan, four main vertical chains – command, development, administration and supervision – will be better defined with clear lines for decision-making, planning, implementing plans and evaluating processes. The five battle zone commands, which replace seven military regions, will focus on combat, and each of the various military services will pursue their own development. The departments of General Staff, Political, Logistics, and Armaments – or the so-called “four general departments” of the CMC – would be devolved into various departments to streamline the organisation. The guideline also calls for the creation an integrated command system that can operate in both war and peace time. The main changes to the composition of the armed forces, military academies and colleges, and armed police will be completed by the end of this year. The militias will also be trimmed and reorganised. More adjustments and improvements will be rolled out gradually from 2017 to 2020, as conditions allow, according to the guideline. At the inauguration ceremony, Xi urged the army to adapt to the digital age, explore new approaches in land warfare and transform itself into a powerful modern land force. He told the Rocket Force to improve nuclear deterrence and counterstrike capacity and advance its medium- and long-range precision strike ability. He called on the Strategic Support Force to leapfrog developments in key fields. ^ top ^

It's official: China building second aircraft carrier as concern mounts over claims to South China Sea (SCMP)
China is building its second aircraft carrier – its first domestically made one – the Defence Ministry confirmed yesterday as the country seeks to boost its naval capability amid rising regional tension. Defence ministry spokesman Yang Yujun said the carrier was being designed entirely using domestic technology and would be built in the port of Dalian in Liaoning province. “China has a long coastline and a vast maritime area under our jurisdiction. To safeguard our maritime sovereignty, interests and rights is the armed forces' ­sacred mission,” Yang said. The confirmation came after months of speculation by military experts and in media reports. Yang said the vessel's design drew on experiences from China's first aircraft carrier, the Liaoning, bought from Ukraine in 1998 and refitted on the mainland. Similar to the Liaoning, the new carrier will be conventionally powered, with a standard displacement of 50,000 tonnes, and will be able to operate the J -15 fighter jet. It will use a ski-jump take-off – a relatively outdated launch method – despite military analysts' assessment that China was capable of building a more advanced catapult system. Xu Guangyu, a senior researcher at China Arms Control and Disarmament Association in Beijing, said the ski-jump take-off was used as the J-15's design and its operators' training was all based on the Liaoning. “China needs the new aircraft carrier to be capable of combat as soon as possible,” he said. The Liaoning had amassed a lot of data covering ship usage, plane operation and even marine data in waters including the South China Sea, which the new carrier could instantly use, Xu said. But given a lack of experience and many technological challenges, China's first home-made vessel would take a longer time to build up its full fighting capacity, he added. It would probably be ready for use only in 2020, he said. The Pentagon, in a report last year, said Beijing could build multiple aircraft carriers over the next 15 years. But asked if China planned to build a third such vessel, Yang said only that the “relevant authorities” would take various factors into consideration. China is facing growing military pressure from factors such as the United States' arms sales to Taiwan as well as ship and plane patrols in the South China Sea, military analyst Ni Lexiong said. Aircraft carriers were necessary for China to extend its air supremacy, deploying its fighter jets wherever they were needed, he said, adding that the country required four carriers to meet its defence needs. “China is taking a steady pace in developing aircraft carriers. It will not simultaneously build multiple vessels.” Meanwhile, Yang also said the country was carrying out routine tests of a new long-range missile, after a US-based website said China had tested it from a railroad car, which would be difficult to locate in a conflict. Yang also said that General Liu Yuan, a high-profile military corruption whistle-blower close to President Xi Jinping, had retired from his position as political commissar of the People's Liberation Army's Logistics Department, confirming the South China Morning Post's report published on Wednesday. ^ top ^

Philippines signs up to AIIB articles (Global Times)
Philippine President Benigno S. Aquino III has approved the country's participation in the China-initiated Asian Infrastructure Investment Bank (AIIB), senior government officials said Wednesday. Presidential Communications Operations Office Secretary Herminio Coloma Jr. said Aquino gave his go-ahead signal following the recommendation of Finance Secretary Cesar Purisima. In a separate statement, Purisima said the Philippines will be signing the Articles of Agreement (AOA) of the AIIB before the end of the year. The government believes that the AIIB will augment and complement existing multilateral institutions in accelerating economic growth, he said. In a globalized world, connectivity is the name of the game and the AIIB is a "promising institution" addressing investment needs, and will help close financing gaps in many countries, he said. "I also see this as a chance for greater collaboration with member countries, especially with ASEAN, on regional infrastructure goals," he said. The Asian Development Bank has estimated Philippine infrastructure financing needs from 2010 through 2020 to be at $127.12 billion, requiring an annual investment of $11.56 billion. ^ top ^

PLA general who helped Xi battle graft in military retires (SCMP)
The general who helped China's president take on corruption in the PLA has stepped down, sources say, ending months of speculation he would lead a new military discipline inspection commission. Liu Yuan attended a farewell ceremony with colleagues from his General Logistics Department, where he was the political commissar, on December 23, according to the sources, adding he delivered a speech and shook hands. Liu is 64, one year below the mandatory retirement age for officers of his rank who are not members of the decision-making Central Military Commission. With his departure, President Xi Jinping loses a valuable ally in his ambitious campaign to cleanse the ranks of graft and consolidate the PLA's allegiance to the Communist Party and its leadership. Liu was instrumental in taking down dozens of corrupt senior officers, including Gu Junshan, the former lieutenant general and deputy director of the General Logistics Department. Gu was found guilty of bribery and embezzlement, among other crimes, earlier this year and given a suspended death sentence. Tasked with overseeing the military's housing, supplies and construction, the logistics department controls a massive budget and has emerged in recent years as the most problematic of the PLA's four main headquarters. Liu wrote a farewell letter to his staff earlier this month, saying he would be the “last political commissar of logistics” and he would “absolutely obey the reforms” that Xi has launched within the PLA. In the letter, Liu confirmed his role in exposing Gu's illegal activities. “No doubt Gu Junshan is a shame [of the department] … I did what I should have done as a political commissar.” The letter was circulated among Beijing military officials and posted by Luo Yuan, a retired major general, on his social media account. Liu's high-profile role in taking on corruption in the PLA fuelled speculation he would be appointed secretary of the new military discipline inspection commission – one of Xi's initiatives – and which is expected to begin operation in the new year. The agency, which General Du Jincai will head, will operate under direct control of the CMC and send out officers to the different arms of the military. Previously, the General Political Department sent inspectors to all headquarters. Liu was a “princeling” – the son of Liu Shaoqi, a former president who was purged by Mao Zedong in the 1960s. But unlike other senior military leaders who joined the army as teenagers, Liu signed up relatively late in life – at 41. Liu needed to demonstrate to other senior officials that he was willing to make any personal sacrifice that the leadership asked of him, a source said, adding the high-profile retirement indicated Xi's overhaul continued to face strong resistance from within the army. ^ top ^


Domestic Policy

China's internet regulator vows to make Communist Party 'strongest voice in cyberspace' (SCMP)
China's internet regulator has vowed to make the views of the ruling Communist Party the “strongest voice in cyberspace”, as part of efforts to strengthen its tightening grip on the net in the world's most populous country. The Cyberspace Administration of China also said after a two-day meeting that a priority this year would be “using Chinese views, Chinese plans to lead to a transformation in the governance system of the internet globally”. President Xi Jinping has championed a vision for cyberspace in which internet “sovereignty” rests in the hands of nations that can control the flow of information and fence off certain online content as they please. Since Xi took China's helm in early 2013 he has presided over a centralisation of domestic internet governance and broader efforts to control and often censor information online, experts say. Those efforts are aimed at maintaining stability, seen by the ruling Communist Party as a critical pillar of its rule. This year the administration would strive to “let the party's achievements in theoretical innovation and practical accomplishments become the highly held main tone and key themes in cyberspace”, it said in a statement posted on its website late on Wednesday. The work conference also discussed ways to improve the governance of cyberspace, but the report did not give details. China infamously operates a “Great Firewall”, the world's most sophisticated online censorship system which blocks - and, as of this year, also attacks - internet services the government deems unsavoury. ^ top ^

Rights lawyer who organized paid protests released from residential surveillance (Global Times)
At least one of a group of lawyers previously detained after being accused of organizing paid protests to sway court decisions was allowed to go home on Thursday after making bail, the lawyer's colleague confirmed with the Global Times on Thursday. Huang Liqun, a lawyer from Fengrui Law Firm, a firm known for its radical approach to rights cases, returned home Thursday after staying at a designated residence under surveillance for about six months, Huang's colleague Liu Xiaoyuan told the Global Times. Wang Fang, the law firm's accountant, was also allowed to go home on Thursday. Eight people from Fengrui Law Firm were detained by police on July 9 and 10 last year, Liu said. According to the Xinhua News Agency, the lawyers were seized by police "for organizing paid protests to sway court decisions in the name of rights protection." Xinhua said the group, which also includes several other members of Fengrui Law Firm, were suspected of being involved in disrupting public order and seeking profits by illegally hiring protesters and swaying court decisions in the name of "defending justice and public interests." At press time it is unknown whether Zhou Shifeng, a partner in the firm and lead suspect in the case, will be released. Liu said it will be announced by Sunday whether or not more of the detained lawyers will be released on bail or formally arrested. China Central Television in July last year broadcast excerpts of Zhou's confession. The report said that Zhou had admitted to charges, including inciting disorder. ^ top ^

Gay man sues for right to marry in China's first same-sex marriage lawsuit (SCMP)
A court has accepted China's first same-sex marriage case – lodged by a gay man against a civil affairs bureau for denying him the right to marry – in a decision hailed as a step forward for gay rights. While homosexuality is not illegal in China, and large cities have thriving gay scenes, same-sex marriage is not legal and same-sex couples have no legal protections. Sun Wenlin, 26, said a court in Changsha, southern Hunan province, had accepted his lawsuit on Tuesday. READ MORE: Fight for equality in Hong Kong: gay civil servant sues to claim same employee benefits as heterosexual couples “I think from a legal point of view, we should be successful,” Sun said. “Our marriage law says there is the freedom to marry and gender equality. These words can be applied to same-sex marriage.” Sun said he had filed the lawsuit in December because he wanted to form a family unit with his 36-year-old partner. Sun said he had tried to register to marry his boyfriend at the Furong district civil affairs bureau in June but was rejected by an official who told him “marriage had to be between a man and woman”. Officials at the Furong district civil affairs bureau could not be reached for comment and a court official in Furong, where the case will be heard, said the court “will not comment on cases before they are heard”. China is becoming more tolerant of homosexuality, which until 2001 was listed as a mental disorder, but many gay people remain under heavy pressure to stay in the closet. Activists said the court's acceptance of the case was significant and would likely lead to more such cases. “In China, courts often reject politically sensitive cases, so the fact that the lawsuit is accepted signals some official willingness to address discrimination against LGBT (lesbian, gay, bisexual and transgender) people, which is encouraging,” said Maya Wang, a China researcher at New York-based group Human Rights Watch. “But we will need to see if they actually win the case. If they do, it'd be a truly watershed moment for LGBT rights in China.” READ MORE: Taiwan pins same-sex marriage hopes on political change Sun's legal consultant, surnamed Ding, said the case would be heard within six months. “From the standpoint of improving visibility, this case is no doubt a victory,” said Ding, who declined to give her full name because of the sensitivity of the matter. Lu Jun, co-founder of anti-discrimination group Yirenping, said the case would bring more such legal action. “More people will know that marriage registration is a right,” Lu said. ^ top ^

Inspection team shifts to high gear, grills Hebei's top leaders (China Daily)
For the first time, Chinese environmental protection authorities have shown their teeth as part of State power by summoning provincial leaders for a talk-down session over local pollution problems. The central government's inspection team on environmental protection called the top bosses of Hebei province for a meeting on Tuesday, official media reported. Hebei, which surrounds Beijing and Tianjin, has many highly polluting heavy industries such as coal power, steel and cement. The province has recently seen repeated hazardous-smog alerts. Both Zhao Kezhi, provincial Party chief and Zhang Qingwei, governor of the province, were present at the meeting. Zhao pledged his support for the inspection team's work and to the provincial authorities' resolution to punish the officials found responsible for Hebei's heavy pollution - "especially for those suspected of dereliction and abuse of power". He made the remarks on Monday at the start of the inspection, which is expected to conclude on Feb 4. The inspection team's talk with Hebei officials focused on environmental problems in the province. The provincial authorities are all willing to listen to the inspectors' suggestions and requirements and to step up their effort to narrow the gap between the province's challenging realities and the central government's expectations, Zhao said. The inspection team has begun to collect information on the sources of pollution via telephone and email as well as by field investigations, and has received about 150 complaint calls daily, Central China Television reported on Tuesday. In contrast with previous inspections by the Ministry of Environmental Protection at city- and county-level governments and companies, the central government's inspection teams are now focusing on provincial governments and Party committees, according to a ministry statement. The inspection team's leaders are former and current deputy ministers of environmental protection and officials from the offices of the Communist Party of China Central Committee and the State Council - indicating the team's higher authority. The inspection results will go directly to the State Council and related ministries and will provide important references for officials' annual performance assessment and allocation of central funding or subsidies for environmental protection. The CCTV report said that when the team has exposed severe problems involving pollution and behavior of governments officials, it will report to the State Council directly and transfer the cases to personnel organizations, anti-corruption authorities and Party disciplinary organs. For any problems that are found, Hebei must take targeted measures to control the pollution and report the province's improvement plan to the central government within 30 working days. Hebei is the first province to undergo the inspection, and the other provinces will also have the inspections from central inspection teams within two years. CCTV quoted Zhang Shiqiu, director of the Environmental and Economy Institute of Peking University, as saying that the key improvement in the central inspection teams is their focus on the provincial Party committees and government and on any bad behavior such as abuse of power and corruption. "It's a good time to change the weaker inspection and law enforcement," she said. But it's more important to build a long-term mechanism for environmental protection to strengthen law enforcement and to upgrade the economic and energy consumption structure, she said. Hebei has seen severe air pollution since 2013. Six or seven of its cities have consistently been among the 10 most severely polluted cities in the country. ^ top ^

Chongqing comes in from the Bo Xilai cold with visit from Chinese President Xi Jinping (SCMP)
The southwest boomtown of Chongqing (重慶) might have put the disgrace of its former Communist Party chief behind it with President Xi Jinping (習近平) making the city the focus of his first domestic trip this year. The trip is also expected to focus attention on Chongqing's status as an important driver of economic growth. In the first visit to the city by a president in more than eight years, Xi toured Guoyuan Port on Monday afternoon and was briefed on shipping and rail transport, according to state-run Xinhua's social media account. “[The port] has great prospects,” Xi was quoted as saying. Xi later visited a factory operated by Beijing Orient Electronics, the country's biggest maker of semiconductor display devices. Chongqing is one of China's four municipalities but it has been a long time between presidential visits. “Where the top party leader goes and where he doesn't go has important symbolic meaning,” said Chen Daoyin, a political ­scientist at Shanghai University of Political Science and Law. “This trip is recognition for the new leadership in Chongqing.” Xinhua showed photos of Chongqing party boss Sun Zhengcai (孫政才) and Mayor Huang Qifan accompanying Xi on the visit. Both are seen as front runners for promotion in the next major personnel reshuffle. “The power transition of the 19th party congress [due in 2017] is coming and Xi doesn't seem to mind promoting people from other camps,” Beijing-based political observer Zhang Lifan said. Chen said the trip could also mean that Chongqing had “turned over the page of Bo Xilai”, the former Chongqing party boss who was jailed for corruption in 2013. Former president Hu Jintao (胡錦濤) was the last president to visit, touring in 2007, months before then-rising star Bo took over as its party secretary. Xi's trip is expected to focus attention on Chongqing's status as an important driver of economic growth. File Photo Bo raised eyebrows with campaigns to promote revolutionary songs and crack down on crime. Critics said the songs raised the spectre of the Cultural Revolution and the get-tough approach on crime involved serious infringements of the law. But the campaigns received national endorsement, including from then-vice-president Xi, who visited Chongqing in a show of support. On the sidelines of the National People's Congress in 2012, Bo said Hu attached great importance to Chongqing, and Hu would “surely come to visit”. But Hu never did make a trip under Bo's rule, and Bo was sacked after the NPC session ended. Zhang said Xi's visit on Monday could be “a declaration of authority over the former power base of his former rival”. Zhang said there were also economic implications to the trip. “The country's economy is sliding but Chongqing seems to be an exception … Bo laid the foundations for the growth. He brought in a lot of international companies when he ruled Chongqing,” he said. Chongqing was the fastest-growing provincial-level area in 2014 and the first half of 2015, ­according to official statistics. Both sites Xi visited on Monday started operating in 2013, well after Bo's fall from grace. ^ top ^

Li Keqiang urges less overcapacity, more innovation (Xinhua)
China must put "unyielding effort" into eliminating excess industrial capacity to make way for new growth engines, especially mass entrepreneurship and innovation, Premier Li Keqiang has said. Li made the remarks during the first inspection tour of 2016 on Monday and Tuesday in north China's Shanxi Province, which is known for large coal reserves and output. After visiting Taiyuan Iron and Steel Group, a world-leading stainless steel producer, Li said the steel sector is suffering badly from excessive production and flagging demand. "China should put unyielding effort into restructuring by eliminating outdated capacity and forbidding the construction of new capacity," he said. Companies should take pains in enhancing technology, quality and management to expand the country's effective supply with more quality products, Li said. In a coal mine of Xishan Coal Electricity Group, Li took a tramcar more than 300 meters underground to talk with miners and check the company's safety conditions. "The coal mining sector is facing hardship it has rarely seen in the face of a serious glut and plunging prices," he said. Mines should take the initiative in reducing output while helping laid-off workers find new jobs, according to the premier. Li also visited a technology park in Taiyuan with more than 200 high-tech companies. "China has huge market potential and bright prospects; growth impetus from innovation will create new jobs," Li said. He vowed more government support for entrepreneurs. The premier then went to a shantytown that will be renovated into apartment buildings this year, urging local governments to lessen people's wait times before moving into the new buildings. He also urged companies to innovate and take risks, after visiting a museum on ancient Shanxi merchants who played a dominant role in finance and trade during the Ming and Qing dynasties. ^ top ^

East China province reports one H7N9 case (Global Times)
Health authorities in the eastern Chinese city of Ningbo, Zhejiang Province, have confirmed one human H7N9 case. The patient from Yinzhou District is being treated in hospital, the city's health bureau said in a statement Tuesday. The patient has had contact with live poultry, it said. Ningbo has kept urban poultry markets closed since July and taken measures to prevent bird flu in the countryside markets. But as the winter comes, rural residents are at more risk of contracting the virus as many turn to breeding poultry in their homes in the cold conditions, it said. H7N9 is a bird flu strain first reported to have infected humans in March 2013 in China. It is most likely to strike in winter and spring. Last winter, human cases of H7N9 were reported in Chinese provinces and municipalities including Guangdong, Shanghai, Fujian, Jiangxi, Guizhou and Zhejiang. This winter, Guangdong and Shanghai have reported two cases. Health specialists advised that people steer clear of live poultry to reduce risk of infection. ^ top ^

Religious affairs official expelled from office, CPC (Xinhua)
Zhang Lebin, former deputy head of the State Administration for Religious Affairs, has been expelled from the Communist Party of China (CPC) and removed from office for "disciplinary violations." The Central Commission for Discipline Inspection (CCDI) of the CPC said on its website that after investigation it found that Zhang had formed cliques in violation of CPC rules. Zhang took advantage of his position and influence to seek benefits for others and accepted cash and gifts, perhaps in breach of the Criminal Law. As a Party cadre, Zhang had "lost his faith and seriously violated the Party's discipline," and did not cease his wrongdoings even after the Party's 18th National Congress in 2012. The decision to expel Zhang from the CPC and remove him from public office was approved by the CPC Central Committee and the State Council. His illicit earnings will be confiscated and his case passed on to the the judicial organs, the statement said. ^ top ^

China's President Xi Jinping sends warning to influential top cadres standing in his way (SCMP)
Chinese President Xi Jinping's (習近平) remark in a book published on Friday, that no one will be immune from punishment for corruption, is a warning to influential retired leaders or princelings who may be standing in his way, analysts say. While the analysts agreed that Xi was using his massive anti-corruption campaign to consolidate his power, they had different opinions on exactly which former leaders were being targeted. Xi had, in an internal meeting in February, said no one was ­immune from punishment, ­unlike in ancient times when emperors often granted their family members or favoured officials ­exemptions from legal penalties. “Under the rule of law, no one should have the wishful thinking of being pardoned, as there is no such thing as 'dan shu tie quan' or 'tie mao zi wang',” Xi said. His remarks were published last week in a collection of the president's previously undisclosed internal speeches. The book was edited by the top anti-graft watchdog, the Central Commission for Discipline Inspection. The phrase “dan shu tie quan” refers to an iron certificate granting its holder immunity from punishment. “Tie mao zi wang” translates literally to mean an “iron-capped king”, referring to those who enjoyed such privileges. Xigen Li, associate professor of the City University of Hong Kong's department of media and communication, said different interest groups would interpret the president's message differently. “[But] no matter how people interpret it, it implies the power of the speaker. The tone is set for things to come in China,” Li said. Chinese politics professor Jingdong Yuan, of the University of Sydney, said Xi's remark could be a message to those who dared obstruct his reform agendas or undermine his authority. “Whether or not, or how, to pursue this is really a question of what specific objectives are to be achieved. And they must be achieved to enhance and strengthen – not risk undermining or tarnishing – the image of the party,” Yuan said. “The key lies in finding the balance.” Beijing-based political analyst Zhang Lifan said Xi's remark was most likely a warning to party elders such as former president Jiang Zemin (江澤民) and his ally, retired vice-president Zeng Qinghong ( 曾慶紅 ), to stop standing in the way of his anti-graft drive or resisting his leadership. Zeng is, like Xi, a princeling – the son of a communist revolutionary. Xi's highly publicised anti-corruption campaign has brought down a long list of senior officials, many of whom were Jiang's close allies. They include former security tsar Zhou Yongkang (周永康) as well as Xu Caihou (徐才厚) and Guo Boxiong ( 郭伯雄 ), both former vice-chairmen of the powerful Central Military Commission. Steve Tsang, professor of contemporary Chinese studies at the University of Nottingham, said there were few in China who fit the description of an “iron-capped king”, but that he would not restrict Xi's potential targets to just Jiang and Zeng. “What about, say, [former president] Hu Jintao ( 胡錦濤 ) and [former premier] Wen Jiabao (溫家寶)?” Tsang said, adding that Xi's use of the phrase was a clear signal that there was truly no one who was “untouchable”. “We know there is still strong resistance within the establishment. There is therefore a need for Xi to send such a powerful signal to... deter those resisting from organising themselves,” Tsang said. But Li said Xi's remark also exposed weakness in the principle of governing the country by law. “If the law says it clearly, then follow the law. If the laws need explanations for practise, it should be done by the National People's Congress,” Li said. ^ top ^

CPC details role of local committees in governance (Global Times)
The Communist Party of China (CPC) has spelled out detailed instructions on how its local committees operate in a newly amended regulation, pinning high hopes on their role in strengthening the CPC's governance. "Whether these committees are competent and fully functional affect the Party's governance capacity, leading status and development of the Party and the country," said a statement accompanying Monday's release of the regulation by the CPC Central Committee. The regulation stressed the main role for local committees in enforcing the comprehensive and strict management of the Party, urging Party secretaries at various levels to lead Party management within their jurisdictions. According to the regulation, Party management refers to guidance and supervision over political affairs, officials' ideologies and organizational activities, with a focus on decision-making and the implementation of various policies. The stipulation is expected to bring the intra-Party code of conduct into local CPC officials' main focus, alongside local economic and social development. Official figures showed that the country had 3,218 local CPC committees in 2014, including 31 provincial-level ones, 397 at the city level and 2,790 county committees. While the previous regulation urged local committees to "operate within the realm of laws and Constitution," the amended version added "Party constitution and other intra-Party regulations," which usually contain harsher requirements on Party member behavior. Additional anti-corruption requirements raised in recent years, such as the banning of bureaucracy, hedonism and other undesirable work styles and the "three stricts and three earnests," have also been written into the amended regulation as part of the chapter on duty and obligations. According to the regulation, the standing committee of a local CPC committee that exercises the core leadership power in its jurisdictions should consist of 11 to 13 people at the province level and 9 to 11 people at city or county level. The CPC's local committees date back to 1921 when the CPC was founded and established the "local implementation committee" system. In 1927, the CPC amended its Party constitution and officially renamed the "local implementation committee" system to local committees. This amendment is the first in 20 years after the release of the regulation in 1996. It was approved last month at a meeting presided over by CPC Central Committee General Secretary Xi Jinping. A statement released after that meeting described local CPC committees as the foundation of the CPC's governance and that they are crucial to the sound implementation of decisions and objectives outlined by the central leadership. ^ top ^

Beijing 'silencing' outspoken rights lawyer with restrictions on suspended jail term (SCMP)
Rights lawyer Pu Zhiqiang, who was convicted for his online criticism of the Communist Party, will begin serving the terms of his suspended sentence on Tuesday after he declined to appeal, but the previously outspoken figure will remain under tight restrictions aimed at silencing him, his lawyer said on Monday. Although Pu will be able to go home, rights experts say the probation conditions of the suspended sentence will severely limit his personal freedoms and silence the lawyer known for his bold and charismatic personality. Two weeks ago, a Beijing court found Pu, known for fighting speech freedom cases, guilty of “inciting ethnic hatred” and “picking quarrels and provoking trouble”. It sentenced him to three years in jail but gave him a three-year reprieve. As a convicted lawyer, Pu would never be able to practise law again. His conviction was based on the content of seven microblog messages he sent, which were critical of the government's policies towards the Uighur ethnic minority in Xinjiang and sarcastic comments about two officials. After Pu was sentenced on December 22, he was put under “designated residential surveillance” – a form of detention outside jail – during the ten-day appeal period, his lawyer Shang Baojun said. He said Pu was first taken to an undisclosed location on the outskirts of Beijing, then was taken to his hometown, Tangshan (唐山), in Hebei (河北) province, to see his family. He then spent new year in Qinhuangdao (秦皇島), also in Hebei, where a picture of him with his wife in a restaurant was taken and has since been circulated online. He was under surveillance throughout, but his health and spirit appeared okay, Shang said. Shang said Pu's period of appeal would expire by the end of Monday and as Pu had already stated he would not appeal, his suspended sentence would officially begin on Tuesday, which meant he could go home but would remain on probation for the next three years. If Pu violates the terms of the probation or commits offences in that time, he will have to serve his original sentence. Under the terms, Pu will have to periodically report his activities to the authorities and seek police permission before leaving Beijing. The probation will also limit who he meets and subject him to the vague requirement of “abiding by law and administrative regulations as well as obeying supervision”. “It's very broad,” Shang said of the scope of the restrictions, expressing concern over the possibility that he may be effectively under house arrest. Rights experts fear such a broad scope means severe measures could be used to restrict Pu's freedom under the pretext of “proper” supervision and that police could threaten him with jail if he disobeys their instructions. Dissident lawyer Gao Zhisheng, sentenced in 2006 to three years' jail suspended for five years, was jailed shortly before completing his probation on the grounds of having violated its terms. ^ top ^

China's President Xi Jinping calls on Politburo to follow his lead (SCMP)
China's top Communist Party leaders have been warned to toe the party line and to ensure their family members steer clear of corruption. President Xi Jinping (習近平) issued the stern warning yesterday, as a Politburo meeting announced that the sixth plenary session of the party's top anti-graft watchdog, the Central Commission for Discipline Inspection, would be held on January 12-14. “Politburo members should stay in line with the Central Committee,” Xi told an earlier meeting of the country's top decision-making group as he urged the 25-man body to “stick to the correct political direction and remain loyal to the party”, as well as to “consciously and actively follow the party leaders' instructions”. He also called on them to “strictly educate and supervise” their family members against corruption, advising them “not to feel any superiority in power and position”, according to a Xinhua report released late on Tuesday. Analysts say Xi's call reflects his determination to strengthen his authority through the use of a rectification movement. Urging the Politburo to toe the party line suggested division among the leaders, they said. “This marks the launch of a party rectification campaign... It is a call to all Politburo members to follow the leadership,” said Steve Tsang, a professor of contemporary Chinese studies at the University of Nottingham. In theory, the Politburo proposes policies to be debated within and approved by the Central Committee, the party's highest organ of power. But in practice, the Politburo and its seven-man Standing Committee is where the real power lies. Tsang said Xi was now calling on the Politburo to accept and follow his lead on all policy matters. Resistance was expected, but Xi must be confident he would win, or he would not have made his remarks public, Tsang said. Since taking office three years ago, Xi has embarked on a sweeping campaign against deep-rooted graft, taking down dozens of corrupt top officials. Analysts say Xi is also trying to unify the Politburo, which has been split into factions under his two predecessors, Jiang Zemin (江澤民) and Hu Jintao (胡錦濤). Peidong Yang, a postdoctoral fellow with Singapore's Nanyang Technological University, said that as Xi's anti-graft campaign had encroached on vested interests in the party, it was now important for him to unify the party and consolidate his authority. Xi's remarks were made in a meeting this week for “criticism and self-criticism among comrades”, a Maoist practice. He urged the Politburo to hold firmly to their belief in Marxism, socialism and communism. Yang said Xi's emphasis on “mass line” ideology and his use of “criticism and self-criticism” appeared to have been inspired by late leader Mao Zedong's (毛澤東) ideas of party governance. But while urging party leaders to check themselves was certainly a deterrence against graft, the leadership should rely on institutionalised systems to curb corruption in the long run, Yang said. Tsang likened Xi's move to Mao's rectification campaign in 1942, in which the late leader consolidated his role within the party and implemented his adaptations of communism as the party's guiding ideologies. Xi's move would further deter corruption, but its real aim was to ensure that the party would think, speak and act as one under his leadership, the professor said. “But it will also significantly increase the party's risk of making a major policy error [as] mistakes are more likely when dissenting views are silenced,” Tsang said. ^ top ^



Guangdong reports third H5N6 case this winter (Global Times)
A third human H5N6 avian flu case has been reported in south China's Guangdong Province within two weeks, local health authorities said Thursday. The new patient is a 25-year-old man from Longgang District in the city of Shenzhen, the provincial health bureau said in a press release. The man, surnamed Cai, is in a serious condition and being treated in a hospital in Shenzhen, it said. It is the second H5N6 case in Shenzhen. The first patient died on Dec. 30. Gene analysis of a sample from the 26-year-old woman indicated her infection was from contact with live poultry or a poultry market. A 40-year-old woman in the city of Zhaoqing was also reported to be suffering from the virus and in a serious condition. Guangdong has reported four H5N6 infections in total, with the first in the provincial capital of Guangzhou in December 2014. The world's first human H5N6 infection was reported in May 2014 in southwest China's Sichuan Province. ^ top ^



Tibet website says Dalai Lama's clique is falling apart (SCMP)
A Chinese State-owned media website said there are signs the Dalai Lama clique is falling apart, as 2015 marked the golden anniversary of the founding of the Tibet Autonomous Region. The Dalai Lama and his clique mainly faced five difficult situations - his "successor" practicing cronyism, suppression of Shugden Buddhists and the promotion of "religious hegemony," increasing internal differences, corruption and less support from Western countries, according to an article written by Xia Yan on The Dalai Lama's first problem is his "successor" practicing cronyism. Citing an unnamed US-based media outlet, the report said the Dalai's "successor" allegedly abused his trust by practicing cronyism. The second is the Dalai Lama clique's alleged suppression of Shugden Buddhists, who revere a deity denounced by the Dalai Lama since 1996. A June 2015 report in the Guardian newspaper said about 100 protesters in New South Wales, Australia demanded that the visiting Dalai Lama end what they say is his persecution of Shugden Buddhists. The third is internal conflicts. The report said the family-centered clique is confronted with increasing internal strife. His younger brother Tenzin Choegyal was quoted by The New York Times as saying on December 7 that "we are finished once His Holiness is gone." The fourth is alleged corruption and nepotism which has made the clique less attractive to exiled Tibetans. The article also claims the Dalai Lama's support from Western countries such as the US is waning. ^ top ^

Dalai Lama murder plot 'a stunt': Tibet (Global Times)
China rejected media reports that it had attempted to assassinate the Dalai Lama, calling it "a stunt" set up by the Dalai Lama himself to attract international attention. State-run website reported Monday that police in India area "framing" China by beefing up security to safeguard the Dalai Lama in McLeod Ganj. According to a December 30 report on India's The Tribune newspaper, the State Home Department received a request to enhance security for the Dalai Lama "in view of the perceived threat to his life," and that "there have been several instances in the recent past when alleged Chinese spies with maps and documents containing secret information have been arrested around his residence." The newspaper also said that police have proposed the installation of high-resolution 360-degree cameras, baggage scanners and sophisticated sabotage-checking equipment at the entrance of the Dalai Lama's residence. Claims that China is sending spies to assassinate the Dalai Lama are groundless as he has been snubbed by many countries and has lost his international influence, said a separate report on on Monday. The report noted that the Dalai Lama is struggling to attract international attention and cover up his "internal and external troubles" by coming up with this stunt. ^ top ^

Internet reaches 80 percent of Tibet's villages (Global Times)
More than 80 percent of villages in southwest China's Tibet Autonomous Region have access to the Internet, according to the latest statistics. By the end of December 2015, 4,208 villages had broadband, accounting for 80 percent of the total, up from 19.6 percent five years ago, said Chochi, head of the regional telecommunications department. The length of optical cable has doubled in five years to reach 114,000 kilometers. About 1.87 million households, or 59 percent of the total, are now able to use the Internet, he said. The plateau region is known as "the roof of the world" due to its average altitude of over 4,000 meters, and building telecommunications infrastructure is difficult and costly. Telecom operators lowered Internet costs in Tibet in 2015, boosting e-commerce. The remote Ngari Prefecture is one of the most sparsely populated places in the world. People in the prefecture's Tsochen County started doing e-commerce in 2014. "By the end of 2015, revenue from e-commerce topped 4.1 million yuan (about 629,800 US dollars)," said Phubu Cering, head of the commerce bureau of Tsochen. The county's population was about 13,200. "Nine people in the county registered on Alibaba's trading platform, Taobao, to sell Tibetan incense, beef and cashmere products," Phubu Cering added. According to Chochi, the region will expand its 4G network in 2016. ^ top ^



Anti-terrorism school to be set up in China's northwest, where restive Xinjiang is located (SCMP)
China will launch its first anti-terrorism school in a university in the northwest, where the restive Xinjiang ( 新疆 ) region is located, following the counterterrorism law that took effect on the first day of the year. The Northwest University of Political Science and Law in Xi'an ( 西安 ), Shaanxi ( 陝西 ) province, said that the university was working on setting up an independent institution that would take in law graduates and teach them the latest anti-terrorism theories and practices. The institute would award masters degrees and doctorates in anti-terrorism studies, the university said. “The purpose is to develop specialised talents for anti-terrorism,” the university's president Jia Yu told a conference last week. The institute would be the country's first organisation dedicated to studying and teaching anti-terrorism, according to a report on the conference. Shaanxi province is in China's northwest, where Gansu (甘肅), Ningxia (寧夏) and Xinjiang are also located. Xinjiang has a large Muslim Uygur population. The Chinese government has blamed occasional ­violent incidents in Xinjiang on religious extremists and separatists in the region, calling them ­terrorists. Jia said the university aimed to become the country's main anti-terrorism think tank. It was already focused on anti-terrorism issues, running various research programmes and operating the China Anti-Terrorism Information website, according to Jia. Jia said the university's researchers had conducted several investigations in Xinjiang and that their reports had been delivered to the country's policymakers and suggestions adopted. China's new anti-terrorism law took effect on January 1, as the top leadership tries to clamp down on rising ethnic violence. The law requires the setting up of a state-level leading group on counterterrorism. Governments of at least city level are required to set up affiliated agencies. It also allows the People's Liberation Army to conduct counterterrorism operations overseas. Under the law, technology companies are required to share encryption keys and back-door access with state security agents seeking to prevent or investigate terrorist acts. Anti-terrorism experts would be in high demand over the next five years, and the university was keen to take advantage of this strategic opportunity, Jia said. ^ top ^



Mystery over Hong Kong bookseller's disappearance will only make it harder for Beijing to win hearts and minds (SCMP)
What's the true story behind the mysterious disappearance of Lee Bo and four others from a Causeway Bay publishing house known for its books critical of the central government? Only the missing five and those responsible know. Chief Executive Leung Chun-ying's body language at Monday's hurriedly-called press conference suggested even he is clueless. But if mainland security agents did indeed spirit Lee across the border, as is widely speculated, then it's idiocy on a monumental scale. Being heavy-handed against the opposition's often hostile attitude towards Beijing is one thing. Half the people opposed the Occupy movement. But abducting a Hong Kong bookseller is another. Not only does it instil the fear of white terror in the minds of Hongkongers, it's a godsend to those who paint the central government as a harsh communist regime that will not tolerate dissent. Leung's forceful statement that mainland officials have no right to enforce laws here helped somewhat in reassuring people, but only a credible explanation of the disappearance can put minds at ease. Few buy Lee's story that he voluntarily went to the mainland without travel documents to help with an investigation. For starters, it's illegal to cross borders without proper documents. We need the truth post-haste or Beijing will have an even tougher time winning the hearts and minds of Hongkongers. When is enough really enough? There's been so much gutter politics on every issue that we're all drowning in it. Surely, there comes a time when our politicians must recognise that the people are sick of endless battles over every issue, from stationing mainland immigration officials at the West Kowloon high-speed railway terminus and funding for the Hong Kong-Zhuhai-Macau bridge, to making Arthur Li Kwok-cheung chairman of the University of Hong Kong's governing council. The railway, the bridge and Li's appointment are now facts. White elephants or not, it's too late to scrap the two pricey projects. And Leung is not going to reverse his appointment of Li as council chairman, whatever you throw at him. Critics say Li's appointment is doomsday for academic freedom. But why not give him time to either show his critics were right or prove that he's the best thing that ever happened to HKU? Surely, that's better than embroiling HKU in endless confrontation, which helps no one except self-serving politicians. Critics say Leung was given three years but turned out to be a disaster for Hong Kong. But the fact is Leung received no honeymoon whatsoever. On the day he was sworn in, thousands marched to demand his ouster. Is it that unthinkable to make 2016 the year all sides called a truce so we can give compromise a chance? People are hurting. Homes are unaffordable. Salaries are stagnant. The poverty rate is high. The wealth gap is wide. Our competitors have surpassed us. It's time our political leaders – inside and outside the government – serve the people instead of themselves. ^ top ^

Sweden's foreign ministry takes 'serious view' over disappearance of publisher and naturalised citizen while in Thailand (SCMP)
The mysterious disappearance of a Swedish publisher in Pattaya has taken on a new diplomatic dimension, with Sweden's ministry for foreign affairs making it clear to the Thai authorities it takes a “very serious view” of the incident. Ministry spokesman Gabriel Wernstedt revealed that the Thai ambassador has been summoned to the ministry last month over the disappearance of Gui Minhai, who was born in mainland China but is a naturalised Swedish citizen. “The ambassador promised at that meeting to promptly inform the Thai Ministry of Foreign Affairs that Sweden takes a serious view of the situation,” Wernstedt told the South China Morning Post. Gui is co-owner of the Mighty Current publishing company, which specialises in books critical of the Chinese Communist Party. He vanished mysteriously while on holiday in Pattaya in October. In the weeks that followed, four associates also disappeared, either on mainland China or in Hong Kong, raising suspicions that they were kidnapped by Chinese agents. “Our embassies in Bangkok and Beijing are investigating this through local authorities. Swedish law enforcement authorities are working on the case. Our embassy in Bangkok has raised the issue with high-level Thai representatives,” Wernstedt said. “We still have no reliable information regarding the man's whereabouts.” Disappearing soon after Gui were the publishing house's general manager Lui Bo and business manager Cheung Jiping, as well as Lam Wing-kei, manager of Causeway Bay Books, and shareholder Lee Bo. Lee's wife suspected that he was kidnapped by mainland officers in Hong Kong. Lee phoned his wife and said he was “assisting with an investigation” on the day he went missing. The call was made from Shenzhen. Separately, Ming Pao quoted Gui's daughter as saying Lee told her he is a British citizen and she had informed the British police. According to The Guardian, a spokesman for the British embassy in Beijing said they are “urgently investigating with the relevant authorities”. ^ top ^

Maliciously stirring up conflict harms Hong Kong (Global Times)
Hong Kong media reported on the latest development of the alleged "missing person's" case of Lee Bo, a shareholder in Hong Kong's Causeway Bay Books, which clarify several key facts. First, Lee is indeed "assisting an investigation" in the Chinese mainland. Second, he was not taken away by Chinese mainland police officers. Lee allegedly went missing on December 30. According to his wife, his last phone call was made from Shenzhen, but his Mainland Travel Permit remains at his residence. The incident has been hyped up by some Hong Kong and overseas media outlets, with speculation running high that Lee was taken away by Chinese mainland police. Some people cannot wait to define the case as a "violation of One Country, Two Systems." Lee stated in his open letters that in an urgent need to tackle some problems confidential to others, he went to the mainland in his own way to assist in an investigation. According to newspaper Ta Kung Pao, Lee used a pseudonym and therefore there is no departure record that he had left Hong Kong. These follow-up reports were questioned by a few pro-opposition camp media outlets in Hong Kong, which claimed that he wrote the letters under coercion. However, the speculation is ideologically biased. Causeway Bay Books almost only publishes and sells mainland-related political books, many of which contain maliciously fabricated content. Those books have through various channels entered into the mainland and have become a source of certain political rumors, which have caused some evil influence to some extent. The bookstore is as matter of fact surviving by creating trouble for the mainland. It seems to have been deliberately creating a gray zone between Hong Kong and the mainland, while it makes profit by political provocation. A few people in Hong Kong are raising difficulties for the country. They constantly launch political attacks, the negative influences of which are no longer restricted to the city, but infiltrate the mainland in the new era of the Internet. This goes against the will of One Country, Two Systems. The Basic Law is supposed to let the city coexist harmoniously with the mainland, instead of making the two sides confront each other. Whoever maliciously stirs up conflict will offend the entire country, and betray Hong Kong's fundamental interests. Take Lee's incident, some people tend to hype it up in the first place, and guide it toward becoming a political issue, trying to create estrangement between Hong Kong and the mainland, while throwing mud at One Country, Two Systems. It is regretful. Believing in the country as well as the Basic Law should be the precondition whenever the city's residents discuss any new events. ^ top ^



Taiwan's opposition leader highlights risk of close ties with China as election looms (SCMP)
Managing risk is the key to economic and trade ties with the mainland, Taiwan's opposition leader Tsai Ing-wen said yesterday during a debate between candidates a fortnight before the island's presidential election. The comments by Tsai, chairwoman of the Democratic Progressive Party (DPP), come weeks after she called a plan by a mainland state-backed technology group to invest about US$2.6 billion in Taiwan a “huge threat” to the Taiwan's powerful semiconductor industry. “The DPP has never excluded economic and trade exchanges with [the mainland],” Tsai said in the debate. “But we pay attention to the management of the risks.” Tsai said the DPP, which leans toward independence for Taiwan, hopes to continue in the “spirit” of using risk management and control to manage economic and trade exchanges with China. Last month, Tsai said until doubts were resolved over plans by China's state-backed Tsinghua Unigroup to partly acquire three Taiwanese semiconductor companies, the plans were unlikely to be approved. The deals are still awaiting approval by regulators and company shareholders. Tsai, the front runner in polls, has tread carefully in discussing how she will engage mainland authorities if the DPP returns to power. The party has historically favoured the island's formal independence and says it believes only Taiwan's people can decide its future. Beijing takes this to mean it wants independence. Relations have improved since the ruling KMT's former chairman Ma Ying-jeou became Taiwan president in 2008, and the two sides have signed landmark trade and tourism deals. However, a public poll showed Tsai retaining a big lead ahead of the January 16 elections, despite a historic summit between Ma and his counterpart President Xi Jinping (習近平) in December. “You can dissatisfy the KMT, Ma Ying-jeou and so too Eric Chu, but please don't take your anger out on Taiwan's future,” Chu, chairman of KMT told yesterday's Television debate, calling Taiwanese people to change their mind to support KMT. Tsai is one of three presidential contenders, which also include Chu and James Soong, chairman of the People First Party. Taiwan votes for a new president and parliament on January 16. The defeated Kuomintang led by Chiang Kai-shek fled to Taiwan after losing the Chinese civil war to the Communists in 1949. Beijing has never renounced the use of force to bring what it deems a renegade province under its control. ^ top ^



China's offshore yuan hits record low as currency seen falling 10 per cent in 2016 (SCMP)
Offshore yuan touches 6.7511 to the dollar, the lowest on record since the market on the currency was launched in October 2010. China's offshore yuan tumbled on Thursday to its lowest level against the US dollar since the market on the currency was launched in 2010, with analysts forecasting the currency may well fall 10 per cent this year after dropping 2 per cent in the first four trading days of 2016. The analysts feel a further devaluation of the yuan would benefit China's sputtering economy but a weak yuan would hurt the stock market and lead to capital outflows from the world's second largest economy. The offshore yuan traded as low as 6.7511 on Thursday, the lowest on record since the market that allowed international investors to trade the offshore yuan mainly in Hong Kong was launched in October 2010. The currency bounced back to 6.6839 at noon but the currency is still down 1.76 per cent in the first four trading days of this year and down 7.44 per cent over the past six months. On the other hand, the onshore yuan traded by mainland Chinese traders, was also weaker by 0.55 per cent to trade at 6.5921, its weakest level since December 2010. This came after the People's Bank of China set the mid-price fix weaker for the eight day in a row by 0.5 per cent or 332 basis points to 6.5646. After its surprise devaluation on August 11, the PBOC has set the mid-price to reflect market conditions by using the previous closing price of the onshore yuan. Jasper Lo Cho-yan, a director of Tung Shing Futures, said the falling yuan is happening after a strong US dollar and worries over the Chinese economy. “There was panic selling of the yuan at the beginning of this year as all believe the currency will go down further this year. The PBOC obviously intervened in the market which has led the yuan to bounce back before the lunch break but the central bank would not fight against market forces as all believe the yuan will get weaker,” Lo said. “The yuan may well go down 10 per cent this year, after a devaluation of over 5 per cent last year. This would benefit exporters and industrialists as a cheaper yuan would increase their competitiveness. However, the devaluation of the yuan would hurt the mainland stock markets' performance and would lead to capital outflows out of the country,” he added. ^ top ^

Circuit breaker halts trading for the day in Shanghai and Shenzhen after benchmark index tumbles 7 per cent (SCMP)
Trading on the Shanghai and Shenzhen stock markets was called off for the day early on Thursday morning after the CSI 300 Index tumbled 7 per cent by 9.58am, triggering the second stage of a circuit breaker. Trading was earlier halted for 15 minutes at 9.42am after the index fell more than 5 per cent. It took just another minute for the index to fall a further 2 per cent when trading resumed, with the markets trading for only 13 minutes in total. At 10.03am, Hong Kong's Hang Seng Index was down 2.69 per cent, or 564.70 points, to 20,416.11. The mainland markets had finished Wednesday's trading with the biggest gain in three weeks, after the authorities intervened by propping up the markets on Tuesday. The Shanghai Composite Index advanced 2.3 per cent on Wednesday to close at 3,361.84. Overnight, the US markets plunged with oil prices, and on concerns over rising geopolitical tensions. The Dow Jones Industrial Average finished down 252.15 points, or 1.3 per cent, at 16,906.51 – its first close below 17,000 since October. The S&P 500 Index slid 26.45 points, or 1.3 per cent, to 1,990.26, its first close below 2,000 since mid-October. The Nasdaq Composite Index was down 55.67 points, or 1.1 per cent, to 4,835.76. Crude oil prices plunged 6 per cent, diving below US$35 per barrel for the first time since 2004 as data showing an unexpected glut of petrol in the US fed fears that a global surplus was still growing. Chinese e-commerce giant Alibaba slid 1.65 per cent to US$77.33 in New York. Internet company Baidu lost 0.94 per cent and closed at US$185.61 on Nasdaq. ^ top ^

China's circuit breaker mechanism sparks global market fluctuations (Global Times)
After the summer stock market slump last year, China's securities regulators decided to adopt a circuit breaker mechanism similar to those used in mature overseas markets to help curb excessive volatility. But it came as a shock when the mechanism was triggered on Monday, the first day it came into effect. The system suspends trading when the CSI 300 Index of blue chip stocks fluctuates by a certain degree compared to close of trading on the previous trading day. The index was down by 5 percent at 1:12 pm, triggering the first threshold of a 15-minute break in trading. After that, the market did not stabilize at all. Six minutes after trading resumed, the index was down by 7 percent, leading to a halt in trading for the rest of the day. Many analysts said the fall had nothing to do with the new circuit breaker mechanism, but they are deceiving themselves. The rout on Monday was definitely a result of the new system. No matter how perfectly designed a trading system is, it usually takes a long time for it to work properly. Most trading systems are flawed, and there are problems when they start. Under the new system, if the CSI 300 Index falls by 4 percent, investors will start to be concerned about the possibility that a trading suspension is imminent. Therefore, they tend to sell more before this point is reached, which has the effect of leading to the trading suspension. Then, after trading resumes 15 minutes later, investors are concerned that the 7 percent threshold might soon be reached, leading to even more irrational selling. As a consequence, the market quickly sinks to the 7 percent level. This is a vicious cycle, a self-fulfilling prophecy. The newly introduced circuit breaker mechanism was the catalyst for Monday's sell-off. Some foreign investors said it was because of the nature of China's stock market, in which roughly 80 percent of the investors are small retail investors, and with large institutions playing a smaller role than in mature overseas markets. In theory, this means there is a greater risk of collective panic. My bet is that investor sentiment is actually not so different across the world. Any kind of panic can spread easily throughout global markets and trigger massive sell-offs. Therefore, China's circuit breaker system, along with weaker-than-expected domestic economic forecasts and political tension in the Middle East, have led to global sell-offs. Markets in Japan, South Korea, Taiwan, Hong Kong and India all tumbled over 2 percent on Monday. And in Europe, the FTSE 100 in London closed down 2.4 percent, Germany's Dax index dropped 4.3 percent and France's CAC 40 declined 2.7 percent. The Dow Jones Industrial Average opened with a plunge of over 2 percent, and ended with a 1.58 percent loss. Even though it is not fair to attribute such fluctuations completely to China's newly adopted circuit breaker mechanism, it certainly had an effect. Perhaps the biggest concern is recent weakness in the yuan. On Monday, the yuan exchange rate against the US dollar weakened by 0.96 percent. Depreciation of the yuan will definitely exert an influence on China's stock market as well as the domestic financial market. This tendency is even more likely to lead to sell-offs in China's stock market than the newly adopted circuit breaker system. ^ top ^



China must change tack in dealings with North Korea after nuclear test, says US (SCMP)
The United States has urged China to try different approaches to deal with North Korea's nuclear ambitions as a long-time benefactor of the country. Secretary of State John Kerry discussed the issue with Foreign Minister Wang Yi during telephone talks in the wake of North Korea's nuclear test, he told reporters at the State Department. Kerry did not elaborate on what the US government wants China to do next. The talks came as the United States seeks to drum up international support for efforts to persuade North Korea to refrain from further provocative acts following what Pyongyang claimed was a successful hydrogen bomb test. Kerry said that as China has had “a particular approach” to addressing North Korea's nuclear ambitions, Washington had been giving Beijing “the space to be able to implement that”. “But today in my conversation with the Chinese, I made it very clear, that has not worked and we cannot continue business as usual,” Kerry said. Asked if he thinks it is time for China to get tough with North Korea, Kerry said, “It's time for everybody to make sure that this does not continue as business as usual.” Kerry also said he and Wang agreed to work closely together to determine the steps that we can take to address increasing concerns about the nuclear test. China has hosted six-nation talks aimed at ending North Korea's nuclear ambitions since the multilateral framework was launched in 2003. But the talks, which also involve Japan, the United States, Russia and two Koreas, have been stalled since 2008. Kerry and Wang agreed their countries would work closely in the UN Security Council, in which members are expected to discuss a fresh sanctions resolution against North Korea. Senator John McCain, chairman of the armed services committee, meanwhile criticised the US handling of the North Korean nuclear programme, saying in a statement that the reported test of a nuclear device represents “the latest example of the failed national security agenda of the Obama administration”. “We see a world that is desperate for American leadership, but only continues to be disappointed,” the Republican senator said. The United States as well as Japan and South Korea have become sceptical about North Korea's announcement that it detonated a hydrogen bomb after analysing data detected following the underground blast. But through a series of telephone conversations, US President Barack Obama and leaders from other countries that have a stake in North Korea's nuclear programmes have agreed on the gravity of the nuclear test and reaffirmed cooperation in addressing the issue, officials of the governments said. ^ top ^

Beijing 'maximizes' nuclear issue efforts (China Daily)
Beijing said on Thursday that it had "maximized its efforts" in addressing the Korean Peninsula nuclear issue, dismissing accusations that it had not done enough. After Pyongyang conducted what it called its first hydrogen bomb test on Wednesday, a senior official with the Foreign Ministry "elaborated China's stance (on the test) to the leading official of the DPRK embassy in Beijing", Foreign Ministry spokeswoman Hua Chunying said on Thursday. Speculation of countermeasures was unfolding on the Korean Peninsula, including a report that Washington and Seoul were considering steps amid rising international criticism of the DPRK's fourth test since 2006. Seoul's Defense Ministry said on Thursday that military leaders from the Republic of Korea and the United States discussed the deployment of US "strategic assets" in the wake of the test, The Associated Press reported. Hua said China "expresses concerns over the development of the situation" and the country is calling on all parties to "get back on the track of resolving the Korean Peninsula nuclear issue through the Six-Party Talks". The talks, which grouped the DPRK, the ROK, the US, China, Japan and Russia, stalled in December 2008. The first three nuclear tests were carried out in 2006, 2009 and 2013. Yang Xiyu, a senior researcher on Korean Peninsula studies at the China Institute of International Studies, said it is a "lose-lose" situation and no single party is winning after the test. The peninsula is drifting away from the goal of denuclearization, and any countermeasures taken by Seoul and Washington might only worsen the security situation on the peninsula, Yang said. Meanwhile, China "participated in a constructive manner" in an emergency closed-door meeting of the United Nations Security Council in New York on Wednesday, according to Foreign Ministry spokeswoman Hua. While doubts remained about the DPRK's claim of testing a hydrogen bomb, the UN meeting "strongly" condemned the nuclear test. A media statement said the Security Council members will "begin to work immediately on... measures in a new Security Council resolution". In Seoul, Cho Tae-Yong, the first deputy chief of the Republic of Korea's presidential security office, said on Thursday that the country will resume propaganda broadcasts beginning at noon on Friday with loudspeakers in border areas with the DPRK. Earlier broadcasts were stopped after an agreement was reached on Aug 25 to end a standoff with the DPRK. ^ top ^

China firmly opposes DPRK's nuclear test (Xinhua)
China "firmly" opposes the latest nuclear test conducted by the Democratic People's Republic of Korea (DPRK), according to a statement on Wednesday from the Chinese Foreign Ministry. The ministry made the statement after the DPRK announced Wednesday that it has successfully carried out its first hydrogen bomb test. "China is steadfast in its position that the Korean Peninsula should be denuclearized and nuclear proliferation be prevented to maintain peace and stability in Northeast Asia," Foreign Ministry spokesperson Hua Chunying announced at a press briefing. "We strongly urge the DPRK to honor its commitment to denuclearization, and to cease any action that may deteriorate the situation," Hua said. The peace and stability on the Korean Peninsula and in Northeast Asia meet the common interests of all concerned, Hua quoted the statement as saying. China is determined to advance denuclearization on the Korean Peninsula, and settle the nuclear issue through the six-party talks, Hua said. "The first H-bomb test was successfully conducted in the DPRK at 10:00 (0130 GMT) on Wednesday," the DPRK's state media KCNA said. The DPRK's previous nuclear tests occurred in 2006, 2009 and 2013. ^ top ^

North Korea's fourth nuclear test shows Beijing's waning influence (SCMP)
North Korea may have explained Wednesday's announced hydrogen bomb test as a response to U.S. “hostility,” but experts say it may more accurately reflect deteriorating relations with China. The question now is how Beijing will respond: not by abandoning its troublesome ally, experts agree, but perhaps by supporting further sanctions against it. Whether that would have any effect is in doubt. “In a way, this is a protest against Beijing,” said Bo Zhiyue, director of the New Zealand Contemporary China Research Center at Victoria University of Wellington. “They are saying: 'We can do whatever we want. This shows our independence, and we don't need your approval.' ”Scientists and officials say the test almost certainly did not involve a hydrogen bomb. But the fourth test of any kind of nuclear device by the isolated country would signal its continuing defiance of the outside world - including China, which has long expressed displeasure with Pyongyang's nuclear program. Televisions on display at an electronics store in Seoul, South Korea, show an image of North Kean leader Kim Jong Un during a news broadcast on North Korea's nuclear test on Wednesday. On Wednesday, China's Foreign Affairs Ministry said North Korea had “ignored” objections from the international community to its staging of such tests. “China firmly opposes this,” the ministry said in a statement. “We urge North Korea to fulfill its promise of denuclearization and stop any actions that would worsen the situation.” Spokeswoman Hua Chunying said at a regularly scheduled news conference that Beijing had not been warned before the test and would summon Pyongyang's ambassador in Beijing to lodge a protest. Experts say Beijing's influence over Pyongyang has diminished since Kim Jong Un took over as North Korea's leader at the end of 2011 and Xi Jinping became president of China in 2013. The two men have not met since assuming power, with Xi even snubbing his counterpart by visiting South Korea first in 2014. In October, there was talk of a thaw when Xi sent an envoy to attend a military parade in Pyongyang with a signed letter carrying the Chinese president's “best wishes” to Kim. But relations swiftly turned frigid again in December, after Kim declared that his country had developed a hydrogen bomb. Within 48 hours, a glamorous North Korean girl group, the Moranbong Band, packed up and left Beijing just before a scheduled debut concert there. That was less than a month ago. “The Moranbong Band incident basically revealed North Korea's intentions, and you could see that communication between China and North Korea is quite bad,” said Xuan Dongri, director of Northeast Asia Studies at Yanbian University in northeastern China. “China and North Korea's understanding of each other is deteriorating further.” […] On Wednesday, the Chinese Foreign Ministry's spokeswoman, Hua, said the talks were the “only practical and effective way to solve the North Korea problem.” China is North Korea's largest trading partner and supplies most of its neighbor's oil and gas, as well as about half of its foreign aid. But it has been unwilling to pull the plug for fear of toppling the Kim regime. Paul Haenle of the Carnegie-Tsinghua Center in Beijing agreed that despite Pyongyang's singling out of the United States, “the real attention is focused on China” and its response. China is likely to move cautiously, he said, but he did not rule out a tougher line from Beijing. “North Korea's defiance is not only an untenable burden on China's image as a credible and strong leader on this issue, but will also lead to an enhanced U.S. security posture in the region and increased cooperation between the U.S. and its Asia-Pacific allies - not something Beijing wants,” he said. “I don't think we can overlook the fact that Xi is a new and fundamentally different kind of Chinese leader,” Haenle added, citing Xi's historic decision to meet with Taiwanese President Ma Ying-jeou in November as an example. “While analysts have plenty of evidence to justify their assessments that China won't change course, I think we need to be open to the possibility that China could respond differently this time.” Meanwhile, in the U.S, presidential candidate Donald Trump has appeared on CNN and said he's sick and tired of the United States acting as the world's policeman and that the issue of North Korea is a problem for China to solve. Shi Yinhong, a professor of international relations at Renmin University of China, said that the test left China no choice but to back further U.N. sanctions against North Korea. But the Crisis Group's Xie cautioned that nothing would be done that might upset Beijing's bottom line. “For Beijing, a nuclear-armed North Korea is uncomfortable and disturbing, but a regime collapse in Pyongyang, leading to mass chaos next door and potentially a united Korean Peninsula with Washington extending its influence northward to China's doorstep, is downright frightening,” Xie said. ^ top ^



Mongolian Red Cross changes legal status (Montsame)
Parliament adopted the new version of Law on Legal Status of Mongolian Red Cross Society at the morning plenary meeting on January 7. It means that the society's legal status has been changed from “national society” to “national humanitarian assistance organization”. D.Sarangerel MP presented an introduction of the draft new wording, prepared by the Standing committee on social policy, education, culture and sciences. The lawmakers backed the upgraded draft with 83.7 percent approval. The draft new wording was submitted to parliament in August last year as a follow-up to the recommendations given by the International Federation of Red Cross and Red Crescent Societies about enhancing the legal environment, assisting the government, defining approaches to cooperate with state bodies. ^ top ^

Khan Bank named best of 2015 (Montsame)
The Banker magazine, a world premier banking and finance resource headquartered in London of UK, names Khan Bank as the Bank of the Year 2015, Mongolia, The news was published Wednesday on this bank's website. Providing global financial publication since 1926, The Banker magazine ranks banking and financial institutions based on financial performance, risk bearing capacity, innovative technology, sustainable business development, project implementations for SME development, as well as Corporate Social Responsibility. The 100 top international banks from Central and Eastern Europe, Asia-Pacific, Latin America and Middle East-Africa regions were nominated this year. As for the 2015 award, the judges stated that the emphasis was given to the strong financial performance, expansion of branches, products and services based on innovative technology, extension of self service Express Banking channel, project implementations directed to SME development and Khan Bank Foundation activities. ^ top ^

Mongolia and Hong Kong to ink agreement on criminal transfers (Montsame)
The cabinet, at its regular meeting on Monday, permitted the Minister of Justice D.Dorligjav to sign the Agreement on Criminal Case Legal Assistances between the Government of Mongolia and the autonomous government of Hong Kong special administrative unit of the People's Republic of China. According to data from the Ministry of Foreign Affairs, 127 Mongolians are living in Hong Kong. There two people, arrested and being investigated, and 21 jailed. With the signing of intergovernmental agreement, law enforcement bodies of the two countries can easily collaborate in investigation, judicial proceedings and prosecutions of criminal cases. It will also facilitate timely transfers of sentenced persons, who want to serve their sentences in Mongolia. ^ top ^

Programme adopted on urbanization and health (Montsame)
This programme was approved by the cabinet's decision on Monday. Obligations were given to the Ministers of Health and Sport and of Finance, and to the UB Mayor and governors of aimags, about reflecting implementation measures in the basic guideline of social-economic development and necessary money in annual state and local budgets, and financing the programme with loans and assistance from international organizations. Relevant officials were told to provide the programme's realization with a general management and organization and to report it to the government in first quarter of every year. Severely affected by urbanization problems, Ulaanbaatar city recorded every year 18-20 kinds of infectious diseases, and 50-54% of all infected people nationwide have been registered in the capital city. The national programme intends to make a safety index of city in order to form safe and healthy environment for Ulaanbaatar people.  ^ top ^

New Year address to nation by President Elbegdorj (Montsame)
On the New Year's eve, the President Ts.Elbegdorj addressed the nation welcoming 2016 from the State House. “My fellow citizens, I heartily greet you on this night on the eve of the New Year and wish all the best. "Soon we will bid farewell to 2015 and welcome 2016. The year of 2015 left a clear footprint in the history of humanity. The outgoing year has been a historic year for the world communities to identify their future goals and solutions for challenges. "In 2015, the United Nations member states adopted the Sustainable Development Goals pledging to work toward from until 2030. At the end of 2015, the UN Climate Change Conference in Paris reached a historic decision on saving and preserving the world for future generations. "Fruitful dialogues held and concrete steps taken to address numerous issues facing the world. Also, Mongolia is making its own contribution to address these issues. "In 2015, Mongolia welcomed its 3-millionth citizen and with all our will Mongolians are growing many. "In 2015, Mongolia was elected as member of United Nations Human Rights Council by winning the majority of the votes. "In 2015, a regular trilateral meeting between the Heads of State of Mongolia, the Russian Federation and the People's Republic of China took place and certain agreements were signed. "In 2015, the National Security Council, the President and the Government of Mongolia declared Mongolia in a state of permanent neutrality. This policy should only be related to the goals respecting the sovereignty and the development of Mongolia. This should also be consistent with our good-neighborly relations and cooperation. I have no doubt that our permanent neutrality policy will contribute to the regional security and the mutual understanding. "My fellow citizens, the year of 2015 was an important year for us to learn from our great history and define our future goals. In 2015, the birth anniversaries of the Khubilai Khaan, the Undur Gegeen Zanabazar, and other great dignitaries were commemorated. The 70th anniversary of Victory in the Great Patriotic War and the Liberation War was celebrated. Mongolia celebrated the 25th anniversary of the first free, democratic parliamentary election for the first time. Our prideful history is the power that we will create. In 2015, we learned from our history and now discussions on further solutions and actions are taking place. "The outgoing year of 2015 gave a great impetus to the development of Mongolia. We, the Mongolians, saw an opportunity to create many things in our country based on our free choice, creativeness, opportunity and recourse. Foundation has been laid for many factories and creations and some of them have begun to write their history. "Only we should be the initiators and creators for the development of our country. Mongolia is our common wealth. Our success depends on us. Good works and initiatives receive wide support. It is becoming more difficult to be arrogant and unaccountable. The public is demanding accountability and new solutions from decision makers. "Fellow citizens, a new year is coming. Let us strive to reinforce our previous achievements and accomplish far more in next year. Let us learn from our previous mistakes and move towards future prosperity. "The coming 2016 will be a year of responsible choice. We have to fulfill our important duty by electing politicians and statesmen who have good ethics, who possess values and who will serve for the common interest of the people of Mongolia. We have to make choice to strengthen human rights, opportunities and improve state accountability. "Heads of State or Government of Asian and European countries will gather in Ulaanbaatar in the summer of 2016. The 20th Anniversary of the Asia-Europe Meeting will be marked. Leaders of the countries of these two influential continents are awaiting fruitful dialogue and important results from the Summit. As a partner of ASEM, Mongolia is striving for the best. Mongolia's success and reputation concerns every Mongolian. Works implemented in this direction including infrastructure and other good results will benefit Mongolia. "The Games of the XXXI Olympiad will be held in Brazil in August 2016. Mongolians showed great success in sports, culture, mental and creation fields and I hope that we will exceed our previous achievements. "I wish the coming year of 2016 will give a new bright light to everyone's life. I wish you and your family good health, happiness and success. I wish all the best to all partners and friends of Mongolia. "I wish a Happy New Year to every single person on an official service at the moment. I convey all my best wishes to all Mongolians residing overseas. I appreciate everyone awaiting these greetings, which represent Mongolia. "I toast this milk for the happiness to all the people and the peace in the world and the peace in my country. "I wish to extend the first, warmest greetings for the New Year. May my Mongolia dwell eternally”, wished the President. ^ top ^

Regulation takes effect on assessing brokerage firms' capacity to pay (Montsame)
On January 1, 2016, the regulation on assessing and monitoring the capacity to pay of underwriter and brokerage firms came into force. The Financial Regulatory Commission has issued this regulation in order to protect the investors and clients and ensure transparency and fair market. According to the regulation, equity ratio of brokerage firms must be 100 or more. As for current assets, those must occupy more than 70 percent. In addition, guidelines on custodian bank report took effect on the first day of this year. First semiannual reports must be submitted within July 20, and annual reports – within February 10 of next year. The Stock Exchange reduced its service fees, in accordance with the 2016-2019 medium-term strategy, in order to activate the market. ^ top ^

Mongolia and China strengthen energy cooperation (Montsame)
A Memorandum of Understanding on cooperation has been signed by Ministry of Energy of Mongolia and by China National Complete Engineering Corporation. The company is the main executor of site work of the MonCement project. The MoU binds long-term sustainable cooperation between Mongolia and the People's Republic of China in energy sector in order to meet the increasing demand of power supply of Mongolia through utilizing Chinese practices of plant building and operations, said the State Secretary of the Ministry D.Delgertsogt. Present at the document signing ceremony were also the Energy Minister D.Zorigt and A.Tleikhan MP. ^ 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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