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
  15-19.2.2016, No. 610  
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Foreign Policy

China faces rising drug trade problem (Global Times)
China faces increasing problems from drugs from overseas penetrating the country, with about 90 percent of heroin and methamphetamine tablets seized in 2015 originating in the Golden Triangle in Southeast Asia, according to a 2015 drug report released Thursday. The Golden Triangle, an area bordering Thailand, Myanmar and Laos on the Mekong River, remains the primary source of domestic heroin and meth tablets, said the 2015 China Drug Situation Report, released by the China National Narcotics Control Commission (NNCC). About 8.8 tons of heroin and 12 tons of meth tablets were seized in China in 2015, according to the report. There are some 46,700 hectares of poppy fields in the Golden Triangle, which can produce over 600 tons of opium or 60 tons of heroin every year, and the annual production of meth tablets in the area was far more than heroin. International drug traffickers from regions such as Africa have been transporting heroin from Central and Western Asia's Golden Crescent to China, which is another major problem, the report said. The Golden Crescent extends through Afghanistan, Iran and Pakistan. Authorities found that drug dealers from Africa, South America and Hong Kong smuggled cocaine from South America hidden in delivery packages and suitcases to South China's Guangdong Province and to Hong Kong. Authorities seized 98 kilograms of cocaine from nine provinces in China in 2015. […] A total of 1,927 foreign suspects were arrested and 13 tons of drugs seized in 2015. The suspects came from 39 countries, including Myanmar, Vietnam, Nigeria, and Pakistan. Of the 122 cross-border cases targeted by the Ministry of Public Security, 1,287 suspects were arrested, up by 42 percent year-on-year. Liu said that the growth in the number of foreign suspects detained last year was a result of stricter police crackdowns and deeper international communication. "Drug dealers from West Africa are the biggest group among foreign drug suspects in China," a narcotics control officer with the Beijing Municipal Public Security Bureau, who asked for anonymity, told the Global Times. Some suspects from Africa present more difficulties to police, the officer said, as they often use obscure dialects as jargon in the illegal drug trade, so translators were needed to help in the investigation. By amount seized, most foreign drugs originated from the Golden Triangle, but of foreign suspects arrested, most were African, he said. As to whether these newly arrested foreign suspects could be sentenced to death, Liu said Thursday that everyone is equal before the law whether Chinese or foreign. China has executed dozens of foreign drug suspects in recent years, although no accurate figures are available. Five Filipino drug traffickers were sentenced to death in 2011 for carrying over 4 kilograms of heroine to China. Four Japanese drug traffickers have been executed in China since 2010. According to China's Criminal Law, people who are convicted of smuggling, selling, transporting or producing more than 1 kilogram of opium or 50 grams of heroin or meth or a large amount of other drugs may face the death penalty. Foreign drug dealers usually obtain Chinese visas by posing as students or refugees, and then traffic drugs in China with other compatriots. If they get deported, they change their identity and reapply for a visa, returning to China to continue their trade, news website reported in 2014. […] China seized 79 tons of domestically-made illegal drugs including meth and ketamine in 2015, accounting for 77 percent of the total drugs seized in the country, according to the NNCC report. Chinese authorities arrested 194,000 suspects in 2015, and seized 102.5 tons of drugs of various kinds, up 15 and 49 percent respectively, according to the NNCC. Young people under 35 made up the majority of the drug users and traffickers in 2015. Among the current 2.3 million registered drug users in China, 1.4 million or 60 percent were aged from 18 to 35, and 43,000 or were under the age of 18. There were more gun-related drug cases and instances of armed drug trafficking and violent resistance to law enforcement by drug dealers in 2015, which posed a huge threat to drug enforcement action, Liu said. ^ top ^

China to lure more foreign workers and investment by relaxing 'green card' rules (SCMP)
China is hoping to attract more overseas talent and investment by making it easier for foreign nationals to obtain a “green card”. Permanent residency was presently open to too few foreign nationals and standards for granting the status were too high, said state news agency Xinhua, quoting a directive from the State Council and the Communist Party's Central Committee. Under present regulations, which came into effect in 2004, foreigners holding permanent residency do not need a visa to enter the country. They may invest, drive and enrol their children in schools without requiring further approvals or paying extra fees. Until last June, only those foreigners who worked in government departments or laboratories of “key national projects” could apply for the status. The rule was then relaxed to include researchers at more institutes, including those with international funding. The directive yesterday said foreign nationals in other industries should also be allowed to apply for the status – but it did not specify which ones. It urged all levels of government to simplify application procedures. Last February, Premier Li Keqiang (李克強) told foreign nationals in China that Beijing would make it easier for them to apply for permanent residency. The rules surrounding permanent residency stipulate that only applicants who invest a certain level, or who make “outstanding contributions” to China, can be granted the status. They also require applicants to be “healthy”. These requirements will not change. The directive noted that some foreigners who held permanent residency had not received their due benefits. It said that they should be included in the national social welfare system and be entitled to provident funds and medical insurance. It also vowed to loosen restrictions on duration of stay. Under the present system, green card holders must stay in China for more than three months each year, or for more than one year in five if they have special permission. Qualified applicants need to have worked in China for at least four years and been in the country for at least three of the previous four years, according to the directive last June. ^ top ^

ICBC laundering probe: Chinese embassy expresses concern as five Madrid bank directors are arrested (SCMP)
China's embassy in Spain has issued a statement expressing concern over the raid of the Madrid offices of the Industrial and Commercial Bank of China (ICBC) by Spanish police, who arrested five of the bank's directors as part of a probe into suspected money-laundering. The bank is suspected of allowing funds earned through the alleged crimes of smuggling, tax fraud and labour exploitation to be transferred “to China in a way that appeared legal”, police said in a statement. The EU police agency Europol, which supported Spanish authorities in their investigation, announced the five arrests in a separate statement. Armed police guarded the entrance of the branch located on the leafy Paseo de Recoletos, a wide boulevard in the centre of Madrid, on Wednesday. Suspects were led away in black hoods. The embassy's statement on Wednesday said the Chinese government “always demands that the offices of accredited Chinese companies working abroad strictly abide by the laws, both of China and the country they were working in.” The embassy said that according to the information it currently possesses, “these offices in Spain have acted according to these demands,” and added that it had not received any information about the operation “from any official department in Spain”. Chinese Foreign Ministry spokesman Hong Lei on Thursday said Beijing hoped Spain would handle the matter “legally and fairly, protect the lawful rights of Chinese companies and their employees, and earnestly safeguard Sino-Spain relations”. The raid was a follow-up to an operation carried out last year that targeted Chinese gangs based in Spain, suspected of importing huge amounts of goods from China without declaring them on customs forms, to avoid import and tax duties. That operation involved more than 65 raids in Barcelona, Madrid and Valencia and led to over 30 arrests and the breakup of several illegal sweatshops where Chinese immigrants worked. The crime groups allegedly deposited their money with ICBC, which is accused of sending the funds to China without checking their origin as required by law. One of the crime groups that was broken up last year is suspected of having laundered “an amount known to be as of the moment 40 million euros” in the branch, the police statement said. Europol said Spanish investigators then uncovered other Chinese and Spanish crime groups that are suspected of also using the services of ICBC in Spain to launder money earned through illegal activities. The agency said it deployed a unit to Madrid to assist Spanish authorities with intelligence which found signs that the alleged money laundering had links to activities in France, Germany and Lithuania. […] A police statement said a judge in Parla, a southern Madrid suburb where many Chinese store wholesalers are located, had ordered the search of the branch. ICBC is the world's largest bank by market capitalisation. It entered the Spanish market in January 2011 with the inauguration of its branch in Madrid. A year later it opened a second branch in Barcelona. The Chinese lender's foreign operations accounted for about 10 per cent of its total assets at the end of last year. Just over 191,000 Chinese nationals legally live in Spain, making the Chinese immigrant population the fourth largest foreign community in the country, according to national statistics institute INE. ^ top ^

China urges Australia to be impartial on South China Sea disputes (Global Times)
Chinese State Councilor Yang Jiechi on Thursday urged Australia to be impartial on territorial disputes in the South China Sea in his meeting with visiting Australian Foreign Minister Julie Bishop. Australia is not a directly involved country and should abide by its commitment to impartiality on sovereignty and territorial disputes in the South China Sea, Yang said, according to a press release from the Foreign Ministry. He urged Australia not to participate in or take any action that may harm regional peace and stability or China-Australia relations. Yang said islands in the South China Sea have been China's territory since ancient times, and China has the right to maintain its territory, sovereignty and maritime interests. China's construction of the islands is mainly for civil use and aims to provide public goods to the international community. The limited self-defense facilities deployed on the islands are the result of China's right to self-defense granted by international law, which has nothing to do with militarization. It is natural and fully legitimate, Yang said. The state councilor also discussed the development of the China-Australia comprehensive strategic partnership with Bishop in the meeting, who is visiting from Tuesday to Thursday. ^ top ^

Beijing calls missile deployment 'hype' in defending use of armaments in South China Sea disputed islands (SCMP)
Beijing has defended the deployment of armaments in the South China Sea after the United States and Taiwan said it had installed surface-to-air missiles on a disputed island in the Paracel chain. Analysts said Beijing's move had been a long time coming and more military facilities would be mounted in the Paracels, where China considers its claims are less disputable than in other parts of the sea. News about the missile deployment on Woody Island, also known as Yongxing in China, was first reported by Fox News, which cited a US official, and confirmed by Taiwan's defence ministry yesterday. The mainland defence ministry said defence facilities on “relevant islands and reefs” had been in place for many years to safeguard China's territorial sovereignty, adding that the latest reports about missile deployment were nothing but “hype”. Chinese foreign ministry spokesman Hong Lei said yesterday he was not aware of the specifics of the deployment but that any arms would be used for defence and were not part of a military build-up. Foreign Minister Wang Yi said news of the deployment had been “created” by certain Western media and they should instead focus on the civilian facilities China had been building in the area. The Fox News report said it had obtained satellite images indicating that the Hongqi-9 air defence system had been set up on Woody Island, which is controlled by China but also claimed by Tiawan and Vietnam. The system has a range of 200km. Xu Guangyu, a retired People's Liberation Army general, said the system was commonly used on Chinese islands and would be a normal addition to Woody Island, which houses the municipal government of Sansha city in Hainan. The city was set up in 2012, nominally to administer several island chains in the South China Sea. The news came as US President Barack Obama called for a halt to reclamation and militarisation in the South China Sea as he concluded a summit with leaders of the Association of Southeast Asian Nations. Woody Island is not a reclaimed island. The leaders issued a statement at the end of the two-day event calling for a peaceful resolution of sovereignty disputes in the South China Sea, but they avoided mentioning China by name. Tensions in the region have increased as Beijing has carried out extensive reclamation work to expand islands in disputed areas of the sea. The US has twice sent warships to patrol near disputed islands held by China. The latest mission, dubbed by the Pentagon an operation to exercise the right to freedom of navigation in open seas, took place last month in waters within 12 nautical miles of Triton Island, also part of the Paracels and close to Woody Island. Jin Canrong, a professor of international relations at Renmin University in Beijing, said China installing the missile system on Woody Island was a direct response to the Triton patrol. “China's logic is that we have to build up military facilities on those islands for self defence purposes, but to what extent depends on how much of a threat we feel we're under,” Jin said. The first US patrol took place near islands further afield in the Spratlys chain of the South China Sea, but Beijing views the patrol in the Paracels last month as a stronger provocation as they are closer to its shores and under tighter Chinese control. More military facilities could be deployed, analysts said, depending on Washington's next move. Wu Shicun, president of the National Institute for South China Sea Studies, said the US patrols had prompted China to reassess the necessity for military deployments in the area. “The assessment is that security is not ensured and that the existing facilities in the island chains are not effective to protect safety there so China has to enhance its defence capabilities,” he said. Jin said any furthur military deployment would be focused in the Paracels. […] ^ top ^

China vows win-win cooperation between OBOR, Juncker plan (Xinhua)
China vowed to take efforts with Europe to make the synergies between the country's ambitious One Belt One Road (OBOR) initiative and the EU's (European Union) 315-billion-euro investment plan a win-win cooperation. "It is highly encouraging that China and the EU are getting to grips with the enormous possibilities and opportunities presented by the One Belt One Road initiative," Yang Yanyi, head of Chinese Mission to the EU, told Xinhua. The "Belt and Road" initiative, proposed by Chinese President Xi Jinping in 2013, was widely viewed as a major strategic move for China as it seeks to link China with Europe through central and western Asia via the New Silk Road Economic Belt and connect China with southeast Asian countries, Africa and Europe through the 21st Century Maritime Silk Road. China and the EU declared to build synergies between the initiative and the European Commission President Jean-Claude Juncker's investment plan during the seventeenth China-EU summit in last June. Three months later during a high-level economic dialogue, Brussels announced that China became the first non-EU country to announce contribution to the Juncker Plan. This year continued to witness progress on cooperation between the two projects, particularly in prioritized areas including connectivity, financing and digital economy, Yang told a workshop in European Parliament on Wednesday. With infrastructure as a part of great significance both in One Belt One Road initiative and the Juncker Plan, Beijing and Brussels agreed to further improve their infrastructure links. In January, the first working group meeting of China-EU connectivity Platform was convened as a follow-up to the MOU on the establishment of EU-China connectivity platform. They agreed to share information, promote seamless traffic flows and transport facilitation, develop synergies between relevant initiatives and projects, identify cooperation opportunities between respective policies and sources of funding. The two sides will work to "actively explore business and investment opportunities" and create a favorable environment for sustainable and inter-operable cross-border infrastructure networks in countries and regions between China and the EU, said Yang. On financing, China has already made public and motivated its interest in participating in the European Fund for Strategic Investment, a core fund worth up to 21 billion euros functioning as the main channel to mobilize the Juncker Plan. The two sides have so far held three meetings of technical working group on China-EU Cooperation on Investment. During the latest one in January, experts from China's Silk Road Fund, designed in part to foster investment in countries under the One Belt One Road initiative, the European Commission, and the European Investment Bank exchanged views on co-investment vehicle. […] On digital economy, the two sides sought to achieve a better synergy between Europe's digital agenda and China's Internet Plus strategy and to benefit the 1.1 billion Internet users in both China and the EU. They signed a key partnership on 5G telecommunications in September and now, according to Yang, were taking steps to deepen dialogues and cooperation in areas of information and communications technology. Yang said China's One Belt One Road initiative was "very straightforward", aiming to forge closer economic ties, deepen co-operation and expand development in the Eurasian region, and build a community of common interest. Under this initiative, "either building a network of road or high speed rail will not just be a matter of financing, rather it calls for local players, communities, national and local governments to participate meaningfully and in a way," Yang noted. […] ^ top ^

PLA's fighter jets go up for sale (China Daily)
China appears to have given the green light for its domestically-developed J-10 fighter jet to be exported as the country looks to attract buyers at an overseas air show. A large-scale model of the FC-20, the export version of the J-10, is on display at the China National Aero-Technology Import and Export Corp booth at the six-day Singapore Airshow 2016, which kicked off on Tuesday. It is an unspoken rule in China's defense sector that weapons solely designed for the People's Liberation Army are never displayed at foreign exhibitions, so the model's appearance in Singapore carries a clear indication: that China now wants to promote the warplane to the international market. The J-10 is a third-generation, multirole combat aircraft designed and produced by Aviation Industry Corp of China. It features a canard delta wing design, a fly-by-wire flight control system and is regarded by military experts as one of the best fighter jets in the world. First entering service as the J-10A with the PLA Air Force in 2004, the plane was declassified in 2009 and by February 2014, the PLA Air Force and PLA Navy's aviation units had at least 260 of the jets in operation, British think tank the International Institute for Strategic Studies has estimated. The country has also developed at least two upgraded versions of the aircraft-the J-10B, which has started to be delivered to the PLA Air Force, and the J-10C that is still in the testing stage, Chinese media reported. Speculation has been rife in recent years among Chinese military observers and their foreign counterparts about when the J-10's export would be approved. Potential buyers named by foreign media include Pakistan, Iran and Argentina, but none have been reported to be in substantial negotiations with China so far. Ma Zhiping, former general manager of China National Aero-Technology Import and Export Corp, said in September 2013 that several foreign countries from Asia, Africa and South America had "expressed interest" in the J-10, with his company expecting a huge market for the plane. Wang Ya'nan, deputy editor-in-chief of Aerospace Knowledge magazine and an expert in aviation, said selling fighter aircraft was never an easy task as such arms sales were often influenced by a host of geopolitical factors. […] ^ top ^

Africa Economy: China is the leading financier of infrastructure projects in Africa (Xinhua)
China has eclipsed multilateral agencies and Western donors to emerge as the leading financier of large scale infrastructure projects in Africa, a report launched by a British financial advisory firm, Deloitte Limited revealed on Tuesday. The 2015 Africa Construction Trends Report states that China has provided bulk of finance to help implement mega infrastructure projects like roads, seaports, railways and power transmission lines in the world's second largest continent. Speaking during the launch of the 2015 Africa construction trends report in Nairobi, Mark Smith, a partner, Capital projects at Deloitte Consulting Limited noted that Beijing will remain an influential player in efforts to modernize Africa's infrastructure. "China remains the dominant source of finance for infrastructure projects in Africa. The country is financing and building massive projects like roads, railways and ports," said Smith. The 2015 Africa construction trends report says that infrastructure projects valued at 375 billion U.S. dollars were at different stages of implementation across the African continent. According to the report, a total of 301 mega infrastructure projects in diverse sectors like transport, energy, mining, real estate, water supply and telecommunications were being implemented in the continent. Smith said that China has overtaken governments, domestic private sector and western donors to emerge as the leading source of finance for development of new infrastructure projects in Africa. Chinese expanding footprint in Africa's infrastructural modernization will not shrink despite an economic slump experienced in the Asian giant and across much of the developed world. Smith noted that African countries will continue to rely on China for capital and technology to help implement large scale infrastructure projects. […] He revealed that in East Africa, China has provided 8 percent of funding for infrastructure projects like transport corridors and power supply. Chinese funded infrastructure projects will hasten growth of Africa's economies, promote intra Africa trade and unleash jobs for the youth. Gabriel Ouko, the Director, Infrastructure and Capital Projects, Deloitte Consulting Limited noted that mega infrastructure projects financed by China have modernized Africa's economies while attracting foreign direct investments in the continent. "A modern and reliable infrastructure is key to catalyze economic growth in Africa. Chinese investments have modernized our roads and made it possible to have reliable and cheaper power supply," Ouko said. He stressed that political stability, policy and regulatory reforms were key to attract foreign direct investments in Africa's infrastructure. ^ top ^

Two Uyghur men deny Bangkok blast role (Global Times)
Two Chinese ethnic Uyghur men on Tuesday told a Thai military court they had nothing to do with last year's deadly bomb attack in Bangkok. Most of those killed in the August 17 explosion at the Erawan shrine near a busy Bangkok intersection were foreigners. More than 120 were wounded at the shrine, a popular tourist attraction. "I am an innocent Muslim," Yusufu Mieraili, one of the two accused, told the court. Mieraili asked the court to accelerate proceedings, as he had already spent six months in jail. Mieraili and Adem Karadag, also known as Bilal Mohammed, heard the charges against them at a court in the Thai capital's historic quarters. They arrived shackled and handcuffed with shaved heads and wearing beige Thai prison uniforms. They face 10 charges, including murder, premeditated murder and illegal possession of explosives. Police said both men had confessed to having a role in the explosion. Karadag's lawyer Schoochart Kanpai said on Tuesday that his client had never confessed. "Defendant number one (Karadag) is not going back on his word," Schoochart told reporters outside the court. "He never confessed." Schoochart said he had asked the court to look into his client's allegations that he was tortured in custody. The junta has said it was unlikely the two suspects were tortured while in military custody. The next stage in the case will take place on April 20-22, when both sides will review evidence. No group claimed responsibility for the August attack, which Thai authorities have said was in retaliation for a crackdown on human smuggling gangs and not a terrorist attack. ^ top ^

Australia warned over South China Sea remarks (Global Times)
China on Tuesday warned Australia against doing anything that could harm regional peace, after Australian Foreign Minister Julie Bishop said she would press China to explain its construction activities on South China Sea reefs and support the Philippines' right to seek international arbitration over territorial disputes with China. Observers said Australia is not likely to risk jeopardizing better ties with China, though it is trying to imitate the US' increasingly assertive gesture over the South China Sea issue. Bishop was on a two-day visit to Japan before she flew to Beijing on Tuesday to meet with Chinese officials. Speaking in Tokyo before departing, Bishop said she plans to push for an explanation over construction activities on the reclaimed reefs in the South China Sea when she meets with Chinese Foreign Minister Wang Yi. "The focus will be on what China proposes to do with the structures. What can we expect from the lighthouses and the assets that are there? What are they going to do with them?" the Sydney Morning Herald quoted her as saying. Bishop also expressed her support for the Philippines' challenge to Beijing at an arbitration court in The Hague over their disputed territories in the South China Sea. "We recognize the Philippines' right to seek a resolution to the matter through arbitration, but we urge all claimants to settle their disputes peacefully without coercion, without intimidation," she said. Hong Lei, a Chinese foreign ministry spokesman, said China has repeatedly said it will not recognize the case, as the Philippines' unilateral act does not meet international laws and the South China Sea code of conduct reached by China and ASEAN countries. "Australia should not selectively avoid the facts," Hong told a regular press meeting in Beijing. He stressed that it is China's right to self-defense to deploy the necessary national defense facilities on its own territory, and that they will not hinder freedom of navigation or over-flight. The main function of the facilities on the islets and reefs is for civilian purposes such as maritime search and rescue, disaster relief, scientific research and navigation safety, he added. "Australia should adopt an objective and impartial position and avoid doing anything to harm regional peace and stability," Hong said. In January, several Chinese airlines tested a 3,000-meter runway built on Yongshu Reef. Chinese experts said Bishop's remarks reflect the stand of the government of Prime Minister Malcolm Turnbull. Since Turnbull assumed office last year, Australia reportedly advised China to stop island construction in the South China Sea. He is now weighing whether to join US patrols in the South China Sea, reported the Sydney Morning Herald. The US sent warships twice into a 12 nautical mile radius around Chinese islands in the past few months, which the Chinese government has condemned as acts of provocation. The South China Sea is not Australia's core interest, but the country has been using the issue as a hedge to increase its presence in the region, said Wang Xiaopeng, an expert on maritime and border studies at the Chinese Academy of Social Sciences. Supporting the Philippines' arbitration move is part of Australia's plan toward this goal, Wang said. "But the territorial disputes are between China and each of the claimant countries, and outside interference will only complicate the situation and impede solutions." However, experts believe that given the growing ties between China and Australia, the Australian government is unlikely to take substantial steps to harm their relationship. "Australia is conducting a delicate balancing act between China and the US," Wang told the Global Times on Tuesday. "As a US ally, Australia has been showing that it supports US policy in the South China Sea, so that it can gain the strategic support of the US in return for enhancing its regional influence," Wang said. "But Australia may not follow through with its tough talk, as it does not want to lose China, a country with which it has made significant progress in trade and cultural exchanges." ^ top ^

First train from China to Iran stimulates Silk Road revival (China Daily)
First cargo train from China to Iran arrived in Tehran on Monday, indicating a milestone in reviving the "Silk Road," which has opened a new chapter of win-win cooperation between China and Iran. The train, also referred to as Silk Road train, has passed through Kazakhstan and Turkmenistan to Iran, travelling a distance of 10,399 kilometers. It had left Yiwu city in East China's Zhejiang province on January 28. This train was carrying dozens of cargo containers, according to the deputy of Iran's Road and Urbanism Minister, Mohsen Pour-Aqaei, who made a welcome speech after the arrival of the cargo train at Tehran Train Station on Monday. As known to all, ancient Silk Road trade route had served as an important bridge for East-West trade and brought a close link between the Chinese and Persian civilizations. The "Belt and Road" initiative was raised by Chinese President Xi Jinping in 2013, which refers to the New Silk Road Economic Belt, linking China with Europe through Central and Western Asia, and the 21st Century Maritime Silk Road, connecting China with Southeast Asian countries, Africa and Europe. "To revive the Silk Road Economic Belt, the launch of the train is an important move, since about 700 kilometers of trip has been done per day," said Pour-Aqaei, who was present at the welcome ceremony of the train in Tehran's Railway Station. "Compared to the sea voyage of the cargo ships from China's Shanghai city to Iran's Bandar Abbas port city, the travel time of the train was 30 days shorter," he said. Pour-Aqaei, also the Managing Director of Iran's Railway Company, added that according to the plan, there would be one such a trip from China to Iran every month. The travel of cargo train from China to Iran is part of a Chinese initiative to revive the ancient Silk Road used by the traders to commute between Europe and East Asia. Tehran will not be the final destination of these kinds of trains from China, the Iranian deputy minister said, adding that in the future, the train will reach Europe. This will benefit Iran as the transit course for the cargo trains from the East Asia to Europe, he said. Chinese ambassador to Iran Pang Sen told Xinhua that as one of the cooperation projects after Chinese President Xi Jinping's state visit to Iran, the cargo train is playing a important role to promote construction of the "Belt and Road" initiative. Meanwhile, the railway line from Yiwu to Tehran provides the two countries an express and efficient cargo trade transportation method, Pang said, adding that the countries along the railway line will furthur upgrade rail technology with the aim to make its transportation ability faster and better. ^ top ^

Obama scores victory by hosting Asean in US but breakthroughs unlikely, analysts say (SCMP)
Eight years ago, hosting all 10 Southeast Asian leaders in the United States at the same time would have been unthinkable, so it's natural the summit in Sunnylands California this week is being touted as a crowning moment in Washington's push to improve relations with the region under US President Barack Obama. But as leaders of the Association of Southeast Asian Nations group leave the California oasis resort on Tuesday, they will continue to tread carefully between regional great powers while seeking to reap the benefits of playing one off against each other, analysts say. The two-day event was the first of its kind to be held in the US between Washington and Asean, a move the analysts said underscored the progress made under Obama's efforts to re-engage with the region. “Under Obama, the relationship has improved quite considerably, and I think this summit is to sort of cap that achievement,” said Ian Storey, a senior fellow at the ISEAS Yusof Ishak Institute in Singapore. All Asean leaders attended the summit with the exception of Myanmar's outgoing president Thein Sein, who was represented by Vice-President Nyan Htun. While American officials have said the talks were not about China, state media responded with scepticism. Citing “international public opinion,” a commentary on Monday carried by the Global Times said the summit demonstrated the US desire to further contain China. The choice Sunnylands as the location – which hosted an important summit with Chinese President Xi Jinping in 2013 – has prompted some to speculate about the underlying message. Richard Heydarian, an assistant professor at Manila's De La Salle University, said Beijing had interpreted the Sunnylands meeting between Xi and Obama as a signal the two powers were to have joint condominium in the region. By inviting the Asean leaders to the same venue, Heydarian said, Washington was reminding Beijing that its plan in the region also included the bloc. The Obama administration's “pivot to Asia” has been criticised by Beijing as fuelling tensions in the region, in particular in the strategically important South China Sea. Maritime territorial disputes, which have strained China's relations with some of its neighbours in recent years, were among the key issues to be discussed at the summit. The leaders focused on trade and economic cooperation in earlier meetings. But symbolism aside, there has been little expectation the meeting would yield any substantial progress, particularly in the South China Sea disputes. A lack of unity and worries over being trampled by big-power rivalries meant Asean states would continue with their careful balancing act, analysts said. […] The region had increasingly found itself being pulled in different directions in the rivalry between the United States and China, Bisley said. “Asean has always wanted to avoid being a place where great powers fight, if that happens they end up being squished.” But Storey from ISEAS Yusof Ishak Institute said the competition between Beijing and Washington was far from the point where Asean states would be forced to choose sides and could be a blessing in disguise. […] While China has been a key economic anchor in Asia over the past decade, many countries still see the US as the region's major security architect. To boost its economic influence, Washington has spearheaded the Trans-Pacific Partnership trade pact, which does not include Beijing. The region has been courted by many major powers in recent years. In May, a similar summit between Asean and Russia, also the first of its kind, will be held in Sochi. ^ top ^


Domestic Policy

Hard times: China's challenges demand bigger role for centralised leadership, says Communist Party mouthpiece (SCMP)
State media have sought to justify attempts to consolidate Xi Jinping as the “core” of the Communist Party's leadership, arguing that expanded centralised authority is needed to meet the complex and arduous challenges facing the country. An article released on Wednesday night through the WeChat account operated by the overseas edition of People's Daily said Xi would have more “authority and commitment” to “reshape China's political landscape” and “take overall responsibility for various party tasks”. It follows a series of moves in recent weeks to define Xi as the “core of the party's leadership”, tactics that have raised concerns the party is deviating from the long-standing collective, consensus-driven model. The article, penned by member of a writers group called “the Study Group”, elaborated on a statement issued after a Politburo meeting last month. That statement demanded that party officials “enhance their political awareness and view of the general situation”, maintain loyalty to the leadership “core”, and “align” with the leadership under Xi. Xi has also issued rallying calls to his colleagues in both the elite 25-member Politburo and the innermost seven-strong Standing Committee, urging them to unite behind him in “thought and action”. In addition, the party propaganda machine has ramped up a nationwide campaign for officials' to “align” to such a “core”. Xigen Li, associate professor at City University's media and communication department, said the two new terms from the Politburo meeting “emphasised alignment and control, which symbolises low or no tolerance of deviation from the centre”. Li said that while alignment and control could unify action and behaviour, the approach might not always align and control thinking in a world where people were exposed to a wide range of thoughts and ideology. Li also warned that the lack of freedom to take the initiative risked stifling creativity and encouraging a wait-and-see attitude in situations that demanded immediate attention and solutions. The article on Wednesday night said centralised leadership was imperative because China was struggling to avoid the so-called middle-income and Thucydides traps. The article also said that reforms being rolled out had “moved the cheese of many groups and individuals”. Any split in the party was a political danger, it said. The “middle-income trap” describes economies that become stuck when they reach a certain level of economic ­development. It applies to many countries in Latin America, the Middle East and North Africa. The Thucydides Trap refers to the danger of conflict when a rising power rivals a ruling power – as Athens did in the 5th century BC and Germany at the end of the 19th century. It is often used as a reference to the rivalry between China and the United States, as seen by recent tension over disputed waters in the South China Sea. ^ top ^

Future gaokao may include core socialist values items (Global Times)
China may include questions on core socialist values in future national college examinations, also known as gaokao, an official from the Ministry of Education has said. Gaokao should guide students to distinguish between socialist core values and Western ideologies, and test questions need to reflect the progress made in the political to technological fields, Guangzhou Daily reported Thursday, citing an article written by Jiang Gang, director of National Education Examinations Authority under the Ministry of Education (MOE). In the article published by the semimonthly magazine China Higher Education, Jiang said subjects like Chinese and politics are better in testing core socialist values, as the latter can "penetrate socialist core values education into test questions to improve their judgment and strengthen faith in socialism ideals with Chinese characteristics." The article discussed how the exams should test students' knowledge of socialist core values, innovation, rule of law and traditional Chinese culture. Specifically, it said that geology exams should guide students to focus on "major geological problems" during China's modernization efforts and global development, while questions on history can "demonstrate the superiority of China's socialist rule of law." Jiang's article is believed to be an indication of future gaokao reform, as the government vows to establish a new gaokao system by 2020. ^ top ^

Save Our Statue: dramatic protest in China to save ex-leader Hua Guofeng's figure from being demolished (SCMP)
More than a thousand people have gathered outside the burial place of former Communist Party chairman Hua Guofeng in China's northern Shanxi province since Wednesday night, protesting against local authorities' plans to tear down his statue. The plan was put on hold last night, reported after news of the protest circulated online. Residents had on January 27 erected the bronze statue of Hua, Mao Zedong's hand-picked successor who led the party from 1976 to 1981, at a square outside Hua's cemetery in Jiaocheng county. But just two days after February 16, the 95th anniversary of Hua's birth, they found signs that the statue would soon be taken down. “After it got dark on Wednesday, the statue was covered with a red cloth and a scaffold built around it, drawing attention, so people started to gather to protect the statue,” said one local, surnamed Pang. Photos online showed people crowded near the statue. Scuffles ensued between residents and police, who tried to disperse the crowd, videos showed. On Thursday afternoon, at least hundreds of people remained in the area, with some having travelled from other parts of the province. A news section of quoted a local publicity official as saying that the removal of the statue was stopped on Thursday night. The report put the estimated number of protesters at 10,000. The Jiaocheng police bureau did not give an official comment. Hua, although only a transitional figure between Mao and Deng Xiaoping, was highly respected in his hometown, Jiaocheng. “Hua made tremendous contributions to the country, there's nothing wrong in building a statue of him,” read a message circulated among locals. Hua cemented his place in the party's history with his part in toppling the “Gang of Four” in 1976, bringing an end to the Cultural Revolution. “With you in charge, I am at ease,” Mao reportedly told Hua during Mao's final days. Some locals expressed concern that if the authorities tore down Hua's statue, it would signal an intention by the central government to abandon Mao's beliefs and school of thought. “Mao's statue in Henan province was torn down. It [might be] the same [for Hua],” Pang said. Last month, a 37-metre-tall golden statue of Mao in a Henan village was removed days after it was erected. A village official said the statue had not been approved. Hua's cemetery in Jiaocheng drew controversy when it was built in 2011, with some questioning if it was too luxurious. The local government had funded the 12-million-yuan (HK$14.3 million) project hoping to attract tourists to the county. ^ top ^

China's poverty relief 'grading scheme' will rate top officials based on how much they improve life for the poor (SCMP)
Senior officials will be judged on a new set of criteria to assess progress on poverty relief efforts. The move – the country's latest effort to lift people out of poverty by 2020 – comes months after President Xi Jinping described eliminating rural poverty as the toughest part of building a “moderately prosperous society”. Despite three decades of stellar economic growth, some 71 million people still live in poverty on the mainland, earning less than 2,300 yuan (HK$2,750) a year. Most of them live in the central and western parts of China. The criteria, released by the general offices of the Communist Party's Central Committee, will evaluate provinces' efforts to identify, help and reduce their impoverished population. It will also check if poverty relief funds are being put to good use. It will apply to 22 provinces in central and western China, and the State Council Leading Group Office of Poverty Alleviation and Development will conduct the assessments annually until 2020. An independent party, scientific research agency or NGO will conduct inspections, surveys and studies in accordance with the criteria, according to a statement from the offices. Officials who meet the poverty alleviation target will be rewarded, but those who fail to deliver satisfactory results risk punishment. The evaluation will serve as a major reference for assessing government officials' performances, the statement said. Shandong University professor Wang Zhongwu said the criteria were a warning for local governments not to neglect their duty of helping the poor, Xinhua reported. For years, China's “poverty counties” have enjoyed favourable policies, and officials have been unwilling to rid their counties of the status. There have also been cases of poverty relief funds being misused or embezzled. This month, Fujian province announced eight cases of irregularities in the use of such funds. Last year, 20 Guizhou counties were found to have pocketed or embezzled the funds. In 2014, 200 million yuan of poverty relief funds in Hainan province were found to have been misused. ^ top ^

S China trade hub steps up inbound Zika checks (China Daily)
At Baiyun International Airport in south China's Guangzhou, four infrared devices on the ceiling read body temperatures, sending signals to a nearby monitor. China confirmed a second imported Zika case Monday, six days after the first. Both entered the mainland through Guangdong. "Once abnormal body temperature is detected, the monitor will go red and an alert will be set off. After years of improvement, we can ensure each and every traveller's body temperature gets checked," said Meng Chuanjin, deputy head of the entry-exit inspection and quarantine bureau of Guangdong Province. Guangdong, south China's province with the metropolitan cities of Guangzhou and Shenzhen, is at the center of exchanges between China and South America where Zika appears to originate. Both patients had stayed in Venezuela. Guangdong is under great pressure to keep viruses out of the country with the huge amount of people coming and going through the province, nearly 12 million through Baiyun alone in 2015. More than 30 customs officers have been trained to identify possible infectees even if their temperature is normal, Meng said. Guangdong started screening for Zika virus in 2014 and examined more than 800 suspected cases, including the two confirmed ones. As the weather gets warmer and trade with South America picks up pace, it will be even more difficult to keep Zika in check, Meng said. "We are planning to offer free medical checks for those who have travelled to epidemic areas or were in contact with patients. They can decide on their own whether to take the tests for early diagnosis and treatment," he added. The second patient was stopped in Baiyun on Friday before being confirmed with Zika on Monday. The first patient was discharged from hospital on Sunday after a full recovery. Symptoms of Zika, which spreads through mosquito bites, include fever, joint pain, a rash, conjunctivitis, headache and muscle pain. ^ top ^

What NOT to learn from Zhou Yongkang and Ling Jihua: Fall of China's corrupt party 'gangs' a lesson for its cadres (SCMP)
China's Communist Party cadres were warned on Tuesday to learn from the downfall of factions of corrupt officials, known as the “Petroleum” and “Secretary” gangs. The stern warning was meant for other factions within the party, who were believed to still be operating more in their clique's interests than in the party's, according to analysts. “[We] must constantly be alert of, discover and punish in time those who form their own circles within the party,” said an article published in the mouthpiece of the top anti-graft watchdog. “The Petroleum Gang and the Secretary Gang have already been eradicated. They are lessons to be learned and others should watch their steps. If you don't toe the line, get out,” read the piece in the China Discipline Inspection Paper on Tuesday. Many top cadres who had worked with the state-owned oil sector have been sacked for corruption in President Xi Jinping's massive anti-graft drive. The highest-ranking official in the faction, known as the Petroleum Gang, was former security tsar Zhou Yongkang. Another handful of senior officials fired for graft were part of the Secretary Gang. Among them were Ling Jihua, former top aide to ex-president Hu Jintao, and Zhou Benshun, former Hebei party boss who had served as Zhou Yongkang's secretary. Besides taking bribes – a criminal offence – they formed factions within the party, which is a violation of party rule. “They were involved in both economic and political corruption,” said Zhuang Deshui, deputy director of the Clean Government Centre at Peking University. “They tried to contest the party's leadership and interfere with the implementation of party polices.” Zhuang said the warning was meant for other factions still operating within the party. “The official wording is a warning for other similar interest groups within the party... such as clusters in certain monopolised industries,” he said. Beijing-based political commentator Zhang Lifan echoed Zhuang's view. “The emphasis by the Central Commission of Discipline Inspection (the top graft watchdog) suggests there could be similar situations of disobedience,” he said. Competition within factions was likely to rise ahead of a power reshuffle at the 19th party congress meeting to take place in the later half of 2017, Zhang said. The warning came as more than half of all party chiefs at provincial localities in the past month referred to Xi as the party's “core”. The term has in the past been used only when the party was led by a political strongman. It has been used in reference to former leaders Deng Xiaoping and Jiang Zemin, but fell out of use under the leadership of Xi's predecessor Hu. Analysts believe the emphasis on “core” leadership is Xi's latest bid to consolidate power to deal with factions within the party. ^ top ^

China's prosecutors make terror fight a top priority (SCMP)
Safeguarding national security and higher-profile roles in counterterrorism and financial services regulation are among the top priorities for mainland prosecutors, according to Xinhua. Citing the Supreme People's Procuratorate (SPP), Xinhua reported yesterday that prosecutors would also more rigorously pursue violators of work safety laws, following a series of major industrial accidents in recent months, including Tianjin's warehouse blasts and a landslide at a Shenzhen construction dump. The report comes after last month's annual central political and legal affairs work conference, which ordered law enforcement, the judiciary and prosecutors to redouble their efforts to prevent and contain terrorism risks, as well as safeguard political, financial, public and cyber security. State media reported earlier this week that the global manhunt for alleged graft fugitives and anti-corruption efforts would remain priorities for the country's top prosecutor's office. The SPP said local procuratorates should be proactive in crackdowns against criminal syndicates, extremely violent individuals, and criminal activity involving courier and logistics services. It will also step up efforts against internet crime, including fraudulent financing activities through online platforms. The national legislature passed a sweeping and controversial national security law in July, defining any threat to the state's power, sovereignty, or the sustainable growth of the economy as a threat to national security. Political security was a fundamental element of the work on ­national security, the law said. But some analysts raised fears about further limits on civil liberties from efforts to make political security a high priority for the legal system, including prosecutors. “Political safety means the unshakable leadership role of the Communist Party,” said Chen Daoyin, an associate professor at Shanghai University of Political Science and Law. “Anything, including speech, that challenges the leadership of the party could be a target of legal punishment.” Beijing-based criminal lawyer Yang Xuelin said:“Political safety is not a legal term. It's not defined by the constitution, criminal law or the criminal procedure law. “It's beyond understanding that the top legal institute makes it their work priority.” Beijing-based human rights lawyer Li Fangping said the implications of the emphasis were “obvious”. “It will provide stronger legal support for the crackdown on civil society,” Li said. The prosecutors were likely to be more cooperative with the police in approving arrests and indictments, he added. Li's concern was echoed by professor Fu Hualing, an expert in Chinese law at the University of Hong Kong. “The emphasis on national security could signal heavy sentences for a handful of cases deemed related to subversion of power, including the few rights lawyers connected to the Beijing-based Fengrui law firm arrested last year,” Fu said. The office had also grown more focused on production safety, Fu said. “It is usually settled through administrative means or fines. The new focus is a result of the blast in Tianjin.” Beijing blamed lax regulation and law enforcement for a massive blast hit a Tianjin warehouse in August that killed 165 people. The SPP said it would tighten enforcement and request that courts hand down immediate jail terms instead of suspended sentences. ^ top ^




Foreigners working in Beijing can now buy apartments immediately (China Daily)
Foreigners with work permits who have no properties in Beijing can now buy one residential apartment, with the threshold of at least one year working in the city removed, local authorities have said. Foreigners working in Beijing can buy properties and branches of foreign companies can purchase non-residential properties to be used as offices, the Beijing Municipal Commission of Housing and Urban-Rural Development said over the weekend. In addition, people from Hong Kong, Macao and Taiwan and overseas Chinese can buy one apartment in Beijing when they work, study or stay in the city. The new regulation took effect on Feb 4. Before the new regulation, foreigners were required to work at least for one year to become eligible to buy an apartment in Beijing, which is one of the country's five cities that restrict non-residents to buy properties in order to curb rising house prices. Early this month, the Ministry of Housing and Urban-Rural Development and five other ministries jointly promulgated a new regulation to overhaul the access of foreign capital to the Chinese housing market. As the regulation took effect, Beijing lifted the threshold. Liu Siwei, a researcher at the Beijing Real Estate Research Institute, said the new policy meets the demand for residential use as the city aims to become a center for international exchanges. ^ top ^



Officials deny Dalai prayer claim (Global Times)
An official in Aba Tibetan and Qiang Autonomous Prefecture, Southwest China's Sichuan Province, said Thursday authorities have no knowledge that local Tibetans have been conducting private prayers for the health of the Dalai Lama. Ethnic Tibetans in Aba county of Aba Tibetan and Qiang Autonomous Prefecture in Sichuan and in Guinan county of Hainan Tibetan Autonomous Prefecture in Northwest China's Qinghai Province have been praying in secret for the speedy physical recovery of the Dalai Lama, Radio Free Asia (RFA) quoted Tibetan sources as saying on Wednesday. The Dalai Lama traveled to the US in January to receive prostate treatment at the Mayo Clinic in Rochester, Minnesota, United Press International reported on January 19. "We have yet to learn of private services so far while local Tibetans are busy celebrating the Tibetan New Year and the Monlam Prayer Festival," Jiang Gang, head of the publicity department in Aba county, told the Global Times on Thursday. A majority of Tibetans attend religious services - such as sutra chanting - in local monasteries to pray for a bumper harvest in the new year, which is irrelevant to politics, Jiang said. When reached by the Global Times on Thursday, Zhang Shengjun, deputy head of the publicity department in Guinan county, also said he was not aware of any private prayer services. Some Tibetans in the areas in question have also held prayer services via mobile messaging app WeChat, RFA reported. Although authorities have cut off Internet service in Aba for some time, locals were aware that the Dalai Lama had undergone treatment in the US, according to RFA. Jiang denied that Internet service has been occasionally suspended in Aba county, explaining that it is futile to cut Internet service since such a step cannot prevent the spread of information about the exiled spiritual leader in the county, which borders Qinghai and Gansu provinces and therefore sees large incoming and outgoing flows of people. Jiang also said the local Internet watchdog has yet to notice any online information about the services. ^ top ^

New city to be established in China's Tibet (Xinhua)
China's State Council, or the cabinet, has approved the application of Shannan in Tibet Autonomous Region to become the fifth prefecture-level city in the region, local authorities announced on Tuesday. As part of the status upgrade, a city committee of the Communist Party of China, government, the people's congress standing committee, and the city's political advisory body will be established. Located in southeastern Tibet with an average altitude of 3,700 meters, Shannan is the fifth prefecture-level city in Tibet after the regional capital Lhasa, Qamdo, Xigaze and Nyingchi. Shannan, which borders Indian and Bhutan, is the birthplace of the ancient Tibetan civilization with the region's first King, first palace, first piece of farmland, first temple and first religious script. ^ top ^



Hundreds relocated as 5.0-magnitude quake jolts Xinjiang (Global Times)
A total of 158 people had been moved to safety as of Friday evening, after a 5.0-magnitude earthquake struck a county in northwest China's Xinjiang Uyghur Autonomous Region Thursday night, local authorities said. Local civil affairs authorities said cracks appeared in 311 old houses. Among them, 87 were seriously damaged and five collapsed. The tremor jolted Xinyuan County at 9:10 p.m. on Thursday at a depth of 8 km. The epicenter was 59 km away from the county seat. No casualties had been reported as of 5 p.m.. About 1,800 public servants at various levels have been summoned to relocate residents, ease panic and raise relief materials, local sources said. ^ top ^



NPC deputy says Beijing should better educate its law enforcement agents on not operating in Hong Kong (SCMP)
After the mysterious disappearance of bookseller Lee Po, Beijing should “step up on educating its law enforcement officers” that it is illegal for them to operate in Hong Kong, the city's biggest pro-Beijing party urged on Thursday. National People's Congress deputy Ip Kwok-him, from the Democratic Alliance for the Betterment and Progress of Hong Kong, said he would also urge Beijing to improve the notification mechanism between mainland and Hong Kong authorities, after it took a month for Guangdong police just to confirm that Lee was assisting in an investigation in the province. These are among the 22 proposals that the DAB will make during the annual meeting of the two legislative and consultative bodies of China, the NPC and the Chinese People's Political Consultative Conference, in Beijing next month. After going missing in Hong Kong at the end of last year, Lee, who sold books critical of the Chinese leadership, was widely believed to have been abducted by mainland officers, although he allegedly wrote letters to deny this. Earlier this week, it was reported that Lee could face more than 10 years behind bars for allegedly “blackmailing” the subjects of the books his store published. Ip said education was important as it was not enough for officials to know that it was unlawful to enforce mainland laws in Hong Kong. “To implement this rule under the 'one country, two systems' principle, we need law enforcement officers to understand the law more clearly as well,” he said. “We will also discuss this when we have the chance to the meet the relevant authorities in Beijing,” he said. Apart from discussions involving Lee's case, Ip said his party would also urge the central and local governments to come up with a co-location proposal that would not contravene Basic Law and the “one country, two systems” principle. The Hong Kong government is asking the Legislative Council to approve an extra HK$19.6 billion in funding for a high-speed rail link from West Kowloon to Guangzhou, but pan-democrats fear that the co-location of mainland and Hong Kong immigration officials at a joint checkpoint would set a precedent for mainland officers to exercise powers in the city. The NPC and CPPCC's annual session lasts from March 1 to 16, but Ip said the local delegates would need to return to Hong Kong if the Legco's finance committee decided to meet on March 11 and 12 to debate on the funding. ^ top ^

Four-way talks on Hong Kong copyright bill ends in hostility, paving way for further filibustering (SCMP)
The first four-party meeting between copyright owners, internet users, officials and lawmakers ended in hostility on Wednesday, paving the way for further delays and filibustering for the ill-fated copyright bill. A representative in favour of more protection for Internet users walked out towards the end of the two-hour meeting, while copyright owners stood firm on their opposition to counterproposals by pan-democrats. The government, too, cast doubt on further amendments before a legislative vote on its existing proposal. The person who walked out was Ah Ling of the Concern Group of Rights of Derivative Works. She complained that participants were just repeating their positions. The Bar Association weighed in on the controversy and sided with copyright owners in disagreeing with any hybrid of alternative exemptions favoured by pan-democrats and internet users. Lawmakers from both the pro- establishment and pan-democratic camps asked the government to propose something new. In particular they called for a “limited” adoption of the “fair use” model used in the United States. “I told the government [during the meeting] there should be a conservative version of fair use,” Civic Party lawmaker Dennis Kwok said. […] But the copyright owners took a stern view of the suggestion, saying they would not consider fair use as the Hong Kong model of fair dealing had been in place for a long time. “Any hybrid law that comprises the current bill and the three proposals from pan-democrats would be objectionable and worse than existing laws,” said Copyright Alliance spokesman Peter Lam Yuk-wah. The Hong Kong bill suggests that exemptions should cover parody, commentaries, reporting of current affairs and pastiche. Apart from fair use, pan-democrats also want user-generated content and contract-override exemptions currently in force in other common law jurisdictions. Even internet rights groups that attended the meeting questioned whether a “limited” version of fair use – which would only exempt non-commercial adaptation of copyrighted materials – would be enough. Glacier Kwong Chung-ching, spokeswoman of the Keyboard Alliance, said: “We don't know yet if the government will propose any amendments and, in case they prefer limited fair use, what exactly will be limited.” Kwong added that the government was irresponsible for not putting forward any new proposal that could narrow differences among stakeholders. Commerce minister Greg So Kam-leung, however, said it would be “irresponsible” for the government to propose a middle-ground proposal when both sides were still far from reaching a consensus. He also said it was impossible for the government to put forward a new amendment bill within a short time due to the complexity of the issue. He said more refinements could be introduced after the bill took effect. The Bar Association's special committee on intellectual property issued a statement shortly before the meeting, saying the government bill offered broader protection to internet users than laws in overseas jurisdictions. But it added: “[We recommend] a study to immediately commence on further broadening the fair dealing exemptions, such as private non-commercial use in certain types of works.” Citing the Bar Association report, So urged pan-democrats to be “reasonable” and put an end to filibustering. […] ^ top ^

Hong Kong student group Scholarism to form political party, contest Legislative Council poll (SCMP)
Student activist group Scholarism has confirmed that it will form a political party and field at least two candidates to run in the Legislative Council election in September. It is the latest in a series of developments that highlight young Hong Kong activists' rise in political prominence in recent years. Oscar Lai Man-lok, a core member of the group, told the Post that he was considering running in the Kowloon East constituency to bring changes to the city's youth policy and raise awareness about Hong Kong's future after 2047 – the year when Beijing's promises under the “one country, two systems” principle are due to expire. The move raised questions about whether the group's plan would backfire and hinder the campaigns of pan-democrats, whom a political scientists described as “facing a crisis” amid internal competition. But Lai said: “We just want voters to have more choices, and those who agree with our means of protest and political discourse can vote for us.” Lai, who will turn 22 this month, said he would become a social worker after graduating from the Hong Kong College of Technology's higher diploma programme this summer. The youngest lawmaker ever elected in Hong Kong was the Democratic Party's James To Kun-sun, who was 28 when he won in 1991. In the district council poll in November, young candidates – including some inspired by the pro-democracy Occupy movement in 2014 – turned in an impressive performance, signalling a desire among the electorate to see fresh faces take centre stage. But Scholarism, which made its name in 2012 when it led a campaign that forced the government to shelve its national education curriculum, has stayed away from elections. However, Scholarism leader Joshua Wong Chi-fung wrote on his Facebook page that they had been meeting “umbrella soldier” organisations on their plan to create a new party. Wong will not stand for election as he is 19 – two years younger than the age at which people can contest polls. Lai added that Wong and another core member of Scholarism, Agnes Chow Ting, were among about 20 people actively discussing the formation of a party and they would finalise their plan in April. He suggested that the new party could be formed by core members of Scholarism and several other young activist groups, but it had yet to be decided whether Scholarism would stay as a separate entity or merge into the new party. Democrat district councillor Au Nok-hin also revealed that some Scholarism members discussed a joint campaign with him, but they did not come to any consensus. Currently, the five seats in Kowloon East are occupied by Democrat Wu Chi-wai, the Civic Party's Alan Leong Kah-kit and three Beijing loyalists. Democrat Sin Chung-kai suggested that while he welcomed participation by more parties, “the reality of politics” was that the new party could dilute the pan-democrat voter base, leaving the pro-establishment camp at an advantage. Chinese University political scientist Ma Ngok expressed similar concerns. […]. ^ top ^

Beijing's top official in Hong Kong brands Mong Kok rioters 'radical separatists inclined to terrorism' (SCMP)
Beijing's top man in Hong Kong broke his silence over the Mong Kok riot on Sunday, branding those who took part as “radical separatists” who were “inclined towards terrorism”. The searing indictment by Zhang Xiaoming, director of the central government's liaison office, was an indication of Beijing's tougher line on social unrest in Hong Kong, putting the rioters in a similar category with separatists in the Tibet and Xinjiang regions. But when asked if Hong Kong needed to enact its own national security legislation under Article 23 of the Basic Law in the wake of Monday night's violence, Zhang said the two issues were not at present related. Zhang offered his remarks yesterday after the spring reception of the rural interests group Heung Yee Kuk, almost a week after the overnight mayhem in one of the city's busiest districts saw 65 people arrested on rioting and other charges. “We, like many Hongkongers, were shocked and distressed by the Mong Kok riot,” said Zhang. “I strongly condemn the violent and illegal acts of … those thugs.” The actions of the “radical separatists” were “leaning towards terrorism”, he added. Zhang also condemned the “strange” arguments suggesting the riot was justifiable, as he expressed confidence that the city's government and police force would bring the rioters to justice. “We will not [allow] this very small number of radical separatists to destroy the most precious rule of law in Hong Kong,” he said. “We strongly believe justice will definitely prevail over all kinds of evil.” Chief Executive Leung Chun-ying, who attended the same reception as Zhang, reinforced the envoy's message that the rioters only represented a small minority in Hong Kong. Leung also promised to support any police demands for more manpower and equipment following their evaluation of the force's response to Monday night's chaos. “There are indeed some people, although a small proportion, trying to reflect some extreme political demands by escalating violence,” the chief executive said. “Therefore, the police force must have sufficient manpower and equipment in facing these new challenges.” Leung noted most of those arrested were unemployed people, rather than students, with a considerable number belonging to what many have described as extreme political groups. He suggested the chaos was neither triggered by the police's attempt to clear the unlicensed food stalls during the Lunar New Year holiday nor the city's hawker policy, adding political parties should not try to justify the unrest. But pan-democrats yesterday urged Leung not to shirk his responsibility in addressing the unrest and its causes. “Violence of course should be condemned,” said Labour Party lawmaker Dr Fernando Cheung Chiu-hung. “But Leung should reflect on why Hong Kong is getting more and more turbulent under his governance in the past three years.” More than 300 academics and professionals to date signed a petition demanding the government establish an independent committee to thoroughly investigate the violence. The committee, chaired by incumbent or retired judges, should identify the facts and causes of the clashes as well as plans to prevent similar incidents in future, the petition stated. It continued that if the government did not address the causes of the conflict and only used “high-handed methods” in its response, “further resistance and conflict of increasing violence and gravity” could ensue. The petitioners said they would ask the legislature to invoke its special authority under its powers and privileges ordinance to look into the matter should the government ignore their requests. Separately, three open letters to Hong Kong's young people said to be penned by four mainland youths, urging them not to resort to violence, went viral online. The letters were released last week on the online messaging service WeChat and printed in various mainland publications, sparking extensive debate. Meanwhile, Rita Fan Hsu Lai-tai, the city's deputy to the National People's Congress Standing Committee, said there was no need to implement Article 23 after the riot as she believed local police and authorities were able to maintain public order. ^ top ^

Lee Po 'involuntarily removed' from Hong Kong to mainland China, says UK government (SCMP)
Britain has demanded from China's leadership the “immediate return” of the “involuntarily removed” Lee Po to his hometown, calling the missing bookseller's case a “serious breach” of the Sino-British Joint Declaration. The renewed diplomatic tension over Lee comes as the UK government expressed “serious concern” over the level of rights and freedoms enjoyed by Hongkongers, claiming they had come under “unprecedented pressure”. British Foreign Secretary Philip Hammond highlighted concerns about academic freedom and freedom of the press in the foreword of his latest six-monthly report on Hong Kong, released on Friday. The report comes amid warming relations between China and the UK in the wake of President Xi Jinping's historic visit to London last year. The UK became the first government involved in Lee's case to suggest that Chinese agents were behind his disappearance in December. Lee, a British citizen, is one of the owners of publishing house Mighty Current which runs Causeway Bay Books, specialising in publications detailing power struggles and scandals in the Communist Party. Lee, and four of his business associates who went missing last October have resurfaced on the mainland, either becoming subjects of unspecified investigations or assisting in them. “Our current information indicates that Mr Lee was involuntarily removed to the mainland without any due process under Hong Kong SAR law,” the report noted. “We have called, in our contacts with the Chinese government at the highest level, for Mr Lee's immediate return to Hong Kong.” Lee's case, it added, constitutes a “serious breach of the Sino-British Joint Declaration on Hong Kong” and “undermines the principle of 'One Country, Two Systems'”. The report concluded that both the Hong Kong and Beijing governments could do more to maintain confidence in the city's high degree of autonomy. “We urge the authorities in Hong Kong and Beijing to take the necessary steps to maintain confidence in the system and the sanctity of the rights, freedoms and values it upholds,” Hammond added. The Hong Kong government responded swiftly with a statement calling the British assertion “speculative”. It gave an assurance police would continue to follow through the cases and conduct investigations “even after the wife of Mr Lee Po cancelled her report to the police”. The government also reiterated that “only Hong Kong law enforcement agencies”could enforce laws in the city. The UK government report also highlighted concerns – despite London's view that one country, two systems had “continued to function well” in many areas – that there were “specific grounds” for concern. Apart from Lee's case, the report noted that the Joint Declaration protected academic freedom. It reported in detail the University of Hong Kong controversy, including the rejection of former law dean Professor Johannes Chan Man-mun's promotion and the appointment of former education minister Arthur Li Kwok-cheung to lead HKU's governing council. Another issue that has “given ground to concern” for London is Hong Kong's press freedom. The report said the British government would “continue to monitor” the situation after detailing the Journalists Association's report about physical threats and self-censorship on media workers, concerns about Alibaba's purchase of the South China Morning Post which have already been rejected by both parties, and the police detention of journalists following education minister Eddie Ng Hak-kim. ^ top ^



Taiwan denies entry to Tibetan, Uyghur activists for religious freedom forum (Global Times)
Tibetan and Uyghur activists were denied entry to Taiwan to attend a forum which begins on Thursday, a decision made out of consideration for the Chinese mainland, analysts say. Lobsang Sangay, the "prime minister" of the "Tibetan government in exile," and Rebiya Kadeer, president of the World Uyghur Congress, an organization mainland considers as a terror group, cannot enter the island, former "vice-president" Annette Lu Hsiu-lien was quoted by Taiwan news site as saying on Tuesday. "As of now, we have yet to receive their visa applications," Hsu Chien-lin, public relations director of Taiwan's "National Immigration Agency," told the Global Times on Wednesday. Sangay and Kadeer were invited to attend the first Asia-Pacific Religions Freedom Forum in Taiwan from Thursday to Saturday. "We were informed last week by the Taiwan representative office of the Tibetan government in exile that the Ma Ying-jeou administration signaled that it is inconvenient for Sangay to enter," Lu said. An employee at the Department of International Information Services of Taiwan's "Ministry of Foreign Affairs" said there was no other information apart from the statements made by its spokeswoman Eleanor Wang. Wang had said that their visa applications should be accepted and reviewed by relevant departments, while the "foreign ministry" was not the responsible government body, local newspaper Liberty Times reported on Tuesday. "The regional government has taken into account the possible fierce reaction from the mainland if the two sensitive figures had been allowed entry," Hu Benliang, an associate research fellow at the Institute of Taiwan Studies of the Chinese Academy of Social Sciences, told the Global Times. Besides, the two separatists' stance is like "Taiwan independence," which is against the consensus of the one-China principle reached across the Straits, Hu said. He noted the Lu may attempt to warn newly elected regional leader, Tsai Ing-wen, not to abandon the party's pro-Taiwan independence stance when dealing with cross-Straits ties. ^ top ^

Taiwan quake death toll at 116, search ends (Xinhua)
The death toll from an earthquake that struck southern Taiwan a week ago stood at 116 by Saturday, and the searching has come to an end as the missing were all accounted for. The 6.7-magnitude quake hit Kaohsiung city at a depth of 15 km at 3:57 a.m. last Saturday, according to the China Earthquake Networks Center. Local monitoring authority put the scale at 6.4-magnitude. The city of Tainan bore the brunt of the quake, especially a 16-storey apartment building built in 1992 in the Yongkang district. The U-shaped Weiguan Jinlong building fell down toward a road on its east seconds after the quake, accounting for 114 deaths, among 289 taken out of the building by rescuers, according to an official update on the casualties. At the time, the Weiguan Jinlong was crammed with more than 380 people, including many relatives of residents. Many families rent apartments there as the building was next to a popular primary school. Among the deceased, more than 30 were under 16 years old. Rescuers started searching efforts soon after the quake. In the first three days, known as the "golden 72 hours" for saving lives after a disaster, they prioritized the search for any signs of life. On Monday, the last four survivors were rescued from the debris, including 45-year-old Tsao Wei-ling, who was trapped in the seventh floor with her husband and their 2-year-old son. After being trapped for 52 hours, Tsao was saved and rushed to the hospital. Unfortunately, neither her husband nor her son had survived. "When the quake came, I sat up to hug my son, and my husband immediately rushed over to hug us," she told rescuers. After emergency treatment, Tsao is now recovering from serious dehydration and rhabdomyolysis. A middle-aged man, a 8-year-old girl and her aunt were also saved on Monday. Family members of the missing had wished for more miracles but were disappointed. At 3:57 p.m. Saturday, the body of the last missing resident was found in the ruins, putting an end to continuous search of lives for seven and a half days. Lin Ming-hui, developer of the Weiguan Jinlong building, was arrested on suspicion of negligent homicide, along with two other men from his management team. At the scene of the collapsed building, many rectangular commercial cans can be seen inside the walls exposed by the quake, apparently having been used as building material. Polystyrene was also found to be mixed in with concrete. After the quake, local authorities started to evaluate damaged buildings reported by residents in Tainan. By 4 p.m. Saturday, more than 120 buildings were evaluated as not suitable for people to live in. Some of them must be dismantled, while others have to be consolidated. The Chinese mainland has offered help. Xi Jinping, general secretary of the Communist Party of China Central Committee, on Sunday conveyed condolences to the victims in the earthquake. Earthquakes frequently hit Taiwan. Most of them are minor, but a 7.3-magnitude quake, the strongest to hit Taiwan in about 100 years, shook the island on Sept. 21, 1999, leaving more than 2,000 people dead. ^ top ^

US urges talks between mainland China and Taiwan amid uncertainty after election (SCMP)
The administration of US President Barack Obama said on Thursday it is urging mainland China and Taiwan to maintain dialogue amid concerns that the election of an independence-leaning party on the island could heighten tensions in one of Asia's security hotspots. A US House of Representatives foreign affairs panel on Asia examined the implications for Washington of the January election, which has throws new uncertainty over the relationship between democratic Taiwan and the communist mainland, which claims the island as its own territory, to be recovered by force if necessary. The US is Taiwan's most important ally and the source of defensive arms, but it has applauded the easing of cross-Strait relations under the outgoing Nationalist government, which fostered economic cooperation with China. Senior State Department official Susan Thornton said the US had called on Beijing to show restraint and flexibility in working with Taiwan's new administration under Tsai Ing-wen's Democratic Progressive Party, which takes office in May. She said Tsai understood her obligations to pursue a policy to enable cross-strait stability, and Beijing said it would look to see what Tsai proposed. Thorton said she was hopeful the two sides could come up with a basis for continuing exchanges. “I think there is a will on both sides to do so,” Thornton told the panel. Mainland China is demanding that Tsai, like her predecessor, agrees that the mainland and Taiwan are part of a single Chinese nation. Tsai has refused to endorse Beijing's “one China principle”, but has not publicly rejected it either. Republican and Democratic lawmakers were critical of Beijing's attitude. “Despite her underscoring her intention to maintain the status quo, and saying, 'There won't be provocation and there won't be surprises', we cannot say the same for China.” said Republican representative Matt Salmon, who chaired the panel. “A steady stream of threats to Taiwan's national security are an everyday reality for Taiwan and its people.” Lawmakers urged more US arms sales and support for Taiwan's membership in international organisations. Bonnie Glaser, an expert witness from the Centre for Strategic and International Studies think tank, said the Obama administration had approved US$14 billion in arms sales to Taiwan since taking office in 2009, but had provided mostly secondhand equipment and additional munitions, apparently because it was worried about upsetting US relations with China. Democratic representative Gerry Connolly highlighted US foot-dragging over a request for diesel submarines, which had been pending for 15 years. Thornton said the administration was continuing to work on that request. Without naming China, Thornton said, “pressure to squeeze Taiwan out of international organisations is growing”. She said the US supported Taiwan's membership of organisations that did not require statehood, including Interpol, the International Civil Aviation Organisation and the World Health Organisation. […] ^ top ^



Good news for China's economy... and bad news, too: Beijing poised to increase money supply to boost growth but risks on rise (SCMP)
The good news is China is ready to flood the economy with money, but the bad news is that the country's slowdown is set to deepen, according to a senior government economist. Zhu Baoliang, director of the economic forecast division at the State Information Centre, a think tank affiliated with China's economic planning agency, said the central bank would maintain an accommodative monetary environment this year to ensure growth of more than 6.5 per cent and to avoid any form of financial, currency or debt crisis. But the monetary support was unlikely to generate strong growth as the effect of stimulus measures in driving growth was wearing out, he said. “The 2016 growth target is ­between 6.5 and 7 per cent, but the actual growth rate will be ­closer to 6.5 per cent,” Zhu told the South China Morning Post in an exclusive interview. “For 2017, China's gross domestic product growth will move towards 6 per cent.” A growth rebound would not come until 2018, said Zhu, who has studied the Chinese economy for almost 30 years and advises policymakers. He said China's broad money supply growth target was expected to be set at 13 per cent, budgeted fiscal deficit set at 3 per cent of GDP, and that new yuan loans could reach 12 trillion yuan (HK$14.3 trillion) this year. Premier Li Keqiang will announce government targets for growth and credit during the annual National People's Congress early next month. National Development and Reform Commission head Xu Shaoshi was this month cited by local media as saying that China had set its 2016 growth target within a range of 6.5 to 7 per cent Zhu said that as exports declined and consumer spending stagnated, China would have to rely on government-led spending, mainly in infrastructure, to boost economic development. As the economic slowdown deepens, it seems Beijing is, again, pursuing headline GDP growth at the cost of much-needed structural changes. Chinese banks handed out a record 2.5 trillion yuan in new credit in January, and eight ministries jointly instructed financial institutions to boost support to the industrial sector. But economists from ANZ, Bank of America and Credit Suisse said the big jump in lending last month was unlikely to continue. China would not greatly expand bank lending unless it was rolling out a big stimulus package, said Liu Li-gang, ANZ's chief China economist in Hong Kong. Zhu said excessive bank credit was “certainly unfavourable” for the country's aim to phase out obsolete facilities and cut leverage ratio in the economy. “The reform process is almost in paralysis. There's little progress in four core areas: state-owned enterprises, the fiscal system, financial industry and land ownership,” he said. “Economic growth is slowing, fiscal revenues are shrinking, overcapacity is worsening and financial risks are on the rise. It's really urgent now; reforms must proceed.” Zhu said 2016 would be a particularly risky year for the mainland economy. “Financial risks are certainly around the corner, and you never know where risks may float,” he said. Policymakers would be ­extremely careful to prevent “systemic or contagion risks” in China's banking, stock, bond and currency markets, he added. While China had won a battle to keep the yuan exchange rate under control, the war was not yet over, the economist said. “The maximum yuan depreciation against the dollar should be within 5 per cent a year – it's a matter of expectations, and it would be a nightmare for China if grandmas started queueing at banks to change their yuan for dollars.” ^ top ^

Chinese ambassador refutes claims against China amid global market fluctuation (Xinhua)
Chinese Ambassador to the United States Cui Tiankai on Tuesday rejected accusations against China for the current global market fluctuation, saying that China's contribution to the global economy remains strong and that it is playing "a pioneering role" in the structural reform that the world desperately needs. In an opinion piece published on the Wall Street Journal, Cui said China, for no logical reason, is "often used as a scapegoat for the current global market fluctuation," which includes the slumping stocks, continued decline in oil prices and the volatility of the values of currencies in emerging markets since the start of the year. Cui highlighted a few points to help people understand the reality behind the world-wide economic volatility. First, China's economic growth remains strong and its contribution to the world economy remains impressive. Cui said the growing middle class is now the driving force of consumption in China. According to the World Bank, the Chinese economy grew at an average annual rate of 8.7 percent between 2009 and 2014, compared with the world average of 2 percent. In the same period, China was the stimulant behind 30 percent of global economic growth. In 2015, China was still one of the largest and fastest-growing economies, with a growth rate of 6.9 percent, and it contributed 25 percent to global economic growth. Second, China's real economy in the long term has not been harmed by the stock market turmoil that began in August. The fluctuations in the still developing stock market "shouldn't be taken as reflective of general sentiment about the Chinese economy or its overall performance," he wrote. Third, Cui rejected implications by news outlets that the Chinese government has intentionally devalued the Chinese currency, the yuan, to boost exports. "This claim is false," Cui said. "While the economic slowdown has contributed, China's currency depreciation is mainly the result of an exchange rate reform launched last year to follow international standards and to establish a more flexible system linked to a basket of currencies, thus letting markets play the decisive role." Cui said that the reform has worked. […] Fourth, downward pressure on oil prices is largely attributable to competition for global market share between traditional oil suppliers and new shale oil producers, while the lifting of sanctions against Iranian oil exports has also contributed to lower oil prices. The ambassador said there is still significant demand for commodities among Chinese consumers. China imported 112 million tons of grain between January and November 2015, up 27.3 percent year on year. The imports included 25 percent of U.S. beans and 40 percent of U.S. cotton production. The crude oil imports also increased by 8.8 percent, he said. […] A large Chinese stimulus package in 2008, which played an important role in preventing a meltdown of the world economy, also led to the serious problem of overcapacity and structural imbalance in the Chinese economy, which has caused the current economic slowdown. […] He said Chinese leaders are determined to see structural reforms, though they are by no means easy and come with risks. "China is, in fact, playing a pioneering role in the structural reform that the global economy desperately needs, hence it should be applauded and encouraged," he wrote. "A prosperous China benefits the world. As the host of the 2016 G20 (Group of 20) summit, China is ready to work with the rest of the world to pool wisdom, advance international economic cooperation and improve global economic governance to achieve a strong, sustainable and balanced growth," Cui said. The two largest economies in the world, China and the United States have an important role to play, he added. ^ top ^

Chinese banks hand out record HK$3 trillion of loans in bid to bolster mainland's slowing economy (SCMP)
Chinese banks handed out a record amount of new loans last month to help China's slowing economy, central bank data showed on Tuesday. The 2.51 trillion yuan (HK$3 trillion) in loans in January was almost triple the level of the previous month. It also marked a hefty rise from the previous record of 1.89 trillion yuan in March 2009 when China was in the midst of a financial crisis and rolling out a massive stimulus package. The unprecedented amount of new credit from banks in a single month comes as growth in the world's second largest economy is rapidly slowing. China's economy grew at its slowest rate in a quarter of a century last year. Liu Li-Gang, chief greater China economist at ANZ based in Hong Kong, welcomed the increased bank lending. […] While Chinese economic growth is lukewarm and corporate profitability sluggish, there is real demand for bank loans from “good companies”, said Liu. […] Long-term loans with a maturity longer than a year to corporate and governmental agencies amounted to 1.06 trillion yuan in January, the biggest component in January's lending, according to the central bank. The growth in long-term lending was significant, according to Tao Dong, chief economist for Asia, excluding Japan, at Credit Suisse. A large portion of the cash went to local government platforms as they were often regarded by lenders as safer than private businesses, Tao wrote in a research note. Shen Jianguang, the chief economist at Mizuho Securities Asia in Hong Kong, said the lending spree last month was unlikely to be maintained and bank credit for the whole year was expected to be within 12 trillion yuan. […] The risk of bad loans is rising rapidly on the mainland and undisciplined lending from banks is set to add to pressure weakening the yuan exchange rate despite signs of the currency stabilising in recent days. Kyle Bass, the founder of Hayman Capital Management, wrote in a note to investors last week that “Rapid credit expansion in the Chinese banking system will result in significant credit losses that will require the recapitalisation of Chinese banks and materially pressure the Chinese currency”. The top US hedge fund manager warned that China's banking system losses “could exceed 400 per cent of the US banking losses incurred during the subprime crisis”. Bass wrote that China has conducted the “largest banking system experiment in world history” by encouraging its banks to undertake massive infrastructure funding programmes. Chinese banks will lose approximately US$3.5 trillion of equity if China's banking system loses 10 per cent of assets, he wrote. Chinese commercial banks ended last year with non-performing loans at their highest ratio since June 2009, according to official data. The China Banking Regulatory Commission said on Monday that 1.67 per cent of loans by year-end were non-performing, up from 1.25 per cent a year earlier. In terms of value, the stockpile of problematic loans on Chinese bank account books hit a decade high at the end of 2015. Meanwhile, the People's Bank of China is clearly aware of the correlations between domestic lending and the yuan exchange rate. In its latest quarterly monetary policy implementation report, the central bank said it was reluctant to ease monetary policy too much to hurt the stability of the yuan. A cut in banks' required reserve ratio may lead to “growing pressure on the local currency to depreciate”, capital outflows and a drop in foreign exchange reserves, according to the central bank report. Liu at ANZ described the central bank's comments as very unwise. […] Thanks to strong bank credit, the broad measure of credit available for the Chinese economy also hit an all-time high in January. China's aggregate social financing, which covers bank loans, trusted loans, commercial paper credit, bonds and stock financing, stood at 3.42 trillion yuan in January, nearly double the 1.82 trillion yuan in December last year. Among other financial indicators released by the central bank on Tuesday, bank loans in foreign currencies dropped US$6.8 billion in January as Chinese companies sought to reduce their exposure to debts in US dollars while deposits in foreign exchange increased US$19.6 billion. The broad measure of money supply, M2, rose 14 per cent at the end of January, accelerating slightly from the previous month. ^ top ^

China's commercial banks face HK$1.45 trillion in 'non-performing loans': bad debts rise to highest level since 2009 (SCMP)
Chinese commercial banks ended 2015 with non-performing loans at their highest ratio since June 2009, according to official data. The figures come as a top US hedge fund manager warns that losses in China's banking system “could exceed 400 per cent of the US banking losses incurred during the subprime crisis”. The China Banking Regulatory Commission said on Monday that 1.67 per cent of loans by year-end were non-performing, up from 1.25 per cent a year earlier. The percentage of “special mention loans”, or loans very likely to become non-performing, rose to 3.79 per cent by the end of December, the highest percentage since China started to publish the indicator in 2014. By value, non-performing loans at the end of December were at their highest since June 2006. The rising loan risks come just as the country's economy is quickly losing steam. The government is relying on strong bank lending to keep growth afloat despite the waning effectiveness of the credit, with big chunks of the cash believed to flow into unprofitable state-backed projects or even “zombie” companies. Bank lending for 2015 was a record high, surpassing levels in 2009 when Chinese banks pumped out money to finance a massive stimulus package. Despite that, economic growth slowed to 6.9 per cent, its lowest level in a quarter of century. In a note to investors last week, Hayman Capital Management founder Kyle Bass said “rapid credit expansion in the Chinese banking system will result in significant credit losses that will require the recapitalisation of Chinese banks and materially pressure the Chinese currency”. Bass said China had conducted the “largest banking system experiment in world history” by encouraging its lenders to undertake massive infrastructure spending programmes. He forecast that Chinese banks would lose roughly US$3.5 trillion of equity if the system lost 10 per cent of its assets. The growth in both non-performing loans and special mention loans last year totaled 1.22 trillion yuan (HK$1.45 trillion), just 370 billion yuan less than the 1.59 trillion yuan profits made by all Chinese banks last year. ^ top ^



China reaffirms balanced way to solve Korea nuclear issue (Xinhua)
China on Wednesday urged all parties involved in the Korean nuclear issue to resume talks amid looming UN sanctions against Pyongyang for missile launch. The UN Security Council was discussing a new resolution with aims to prevent the Democratic People's Republic of Korea (DPRK) from "going too far on a wrong path," said Chinese Foreign Minister Wang Yi. However, all parties should not give up the efforts to resume talks, as well as the responsibility to maintain the peace on the Korean Peninsula, Wang said while speaking at a joint press briefing after his talks with visiting Australian Foreign Minister Julie Bishop. Pyongyang launched a satellite-carrying rocket on Feb. 7, which was seen as a cover for a long-range ballistic missile, after conducting its fourth nuclear test on Jan. 6. Under UN Security Council resolutions, the DPRK is banned from firing any kind of ballistic missile. The DPRK should "pay the price" for repeatedly violating the UN Security Council resolutions, Wang said. Wang compared the Korean nuclear issue with the Iran nuclear deal, saying the long suspension of the six-party talks on the Korean nuclear issue resulted in a situation that "no one wants to see." Therefore, all parties should consider the resumption of talks while discussing a new UN Security Council resolution, he said. He said the denuclearization of the Korean Peninsula and a truce-to-peace mechanism should be pursued at the same time to solve the major concerns of all parties in a balanced way, while defining a target for the negotiation. "This is reasonable and will help us find a thorough solution. China is ready to have further discussion with all sides," Wang said. Wang reiterated that sanctions and military means were not solutions, but only exacerbate the situation. The Chinese government always supports a political solution, in accordance with the UN Charter to peacefully solve disputes, which is in the common interest of the parties concerned and the international community. Bishop is paying an official visit from Tuesday to Thursday at the invitation of Wang. She also attended the third round of bilateral diplomatic and strategic dialogue. ^ top ^

China voices opposition to S. Korea's THAAD deployment plan (Xinhua)
Chinese Vice Foreign Minister Zhang Yesui on Tuesday expressed opposition to South Korea's plan to deploy a sophisticated U.S. missile defense system after a meeting here with his South Korean counterpart. Zhang met in Seoul with South Korean First Vice Foreign Minister Lim Sung-nam to co-chair the seventh China-S. Korea high-level strategic dialogue between foreign ministries. The senior-level dialogue came after South Korea and the United States agreed to begin talks about deploying the Terminal High-Altitude Area Defense (THAAD) in the South Korean territory in response to the Democratic People's Republic of Korea (DPRK)'s nuclear and missile threats. Pyongyang launched a long-range rocket, which some see as a test of banned ballistic missile technology, on Feb. 7 following its fourth nuclear test on Jan. 6. Zhang told reporters after the meeting in Seoul that he exchanged views with Lim about the THAAD issue, among other issues, and said China expressed oppositions to the THAAD deployment. Zhang said China attaches great importance to ties with South Korea, and is ready to work along with the country to boost the sound development of bilateral relations, noting that China is firmly committed to the denuclearization of the Korean peninsula, which conforms to the common interests of China and South Korea. China opposes the DPRK's nuclear test and rocket launch, and supports a new and effective resolution at the UN Security Council, but sanctions are not an end in themselves, and a fundamental solution to the issue should be sought through dialogue and negotiations, Zhang said. The senior Chinese diplomat urged relevant parties to act prudently, in an apparent reference to Seoul and Washington that have agreed to launch talks about the THAAD deployment. China hopes relevant parties would show respect for China's interests and act with prudence, as the deployment is not conducive to easing the current tension and maintaining peace and stability in the region, but would impair China's strategic security interest, Zhang said. The THAAD, designed to track and destroy ballistic missiles at an altitude of 40 km to 150 km, has been put under suspicion about its operational effectiveness in South Korea as hundreds of shorter-range DPRK missiles can fly at a much lower altitude. There are also safety concerns as the THAAD X-band radar emits super-strong microwaves, allegedly harmful to human bodies within 3.6 km while paralyzing electronic devices and airplanes within 5.5 km. South Korean officials said the two sides had "candid, in-depth, and constructive" discussions on bilateral ties and the security conditions on the peninsula. South Korea attaches great importance to ties with China and is ready to work for their further development, and would maintain consultations and communications with China regarding the THAAD deployment issue, said the S.Korean officials. ^ top ^

Beijing urges US-N.Korea talks (Global Times)
China on Monday urged the US and North Korea to meet and resolve their problems, as top Chinese and South Korean diplomats hold discussions in Seoul on Tuesday on tensions in the Korean Peninsula. "The focus of the nuclear issue on the peninsula is between the US and North Korea," Chinese Foreign Ministry spokesman Hong Lei told a daily news briefing. "We urge the US and North Korea to sit down and negotiate to explore ways of resolving each other's reasonable concerns, and to finally achieve the goal we all want." North Korea launched a long-range rocket on February 7 carrying what it called a satellite, drawing renewed international condemnation just weeks after it carried out a nuclear bomb test. It said the launch was for peaceful purposes, but Seoul and Washington have said it violated UN Security Council resolutions because it used ballistic missile technology. North Korea's nuclear bomb test last month was also banned by a UN resolution. China, while frustrated with North Korea, said it does not believe sanctions are the way to resolve the problem and has urged a return to talks. Numerous efforts to restart multilateral talks have failed since negotiations collapsed following the last round in 2008. Meanwhile, Chinese and South Korean officials are set to discuss the current situation in the Korean Peninsula in Seoul on Tuesday. Chinese Vice Foreign Minister Zhang Yesui and South Korean First Vice Foreign Minister Lim Sung-nam are scheduled to co-chair the seventh high-level strategic dialogue scheduled on Tuesday in Seoul, said Hong. The two sides are expected to exchange views on bilateral relations, the current situation in the Korean Peninsula and other issues of mutual concern. South Korea last week suspended operations at the Kaesong industrial zone, as punishment for the rocket launch and nuclear test. On Thursday, Pyongyang called the action "a declaration of war" and expelled the South's workers. Kaesong, which had operated for more than a decade, was the last venue for regular interaction between the two Koreas. Asked about the zone's shutdown, Chinese spokesman Hong said the peninsula was in a "complex and sensitive" phase. "We hope all sides can take steps to ameliorate the tense situation," he said. The sixth high-level strategic dialogue was held on June 3, 2013 in Beijing. ^ top ^



Parliamentary Office delegation visiting South Korea (Montsame)
A delegation led by S.Batbold MP is paying a visit to the Republic of Korea in order to learn experiences in local governance. The delegation consists of B.Boldbaatar, secretary-general of the Parliamentary Office; heads of the Citizens Representative Khurals (Council) of some aimags; and other officials. Their visit is being realized within a project on empowering local self-governance bodies, co-implemented by the Parliamentary Office, the Swiss Agency for Development and Cooperation (SDC) and the United Nations Development Programme (UNDP). On Tuesday, the delegation held a meeting with Mr Park Won-soon, the Mayor of Seoul City, after getting familiarized with Administration of Seoul. After this, a chairman of the international relations division of Seoul Woon Seok Baek highlighted the measures Seoul is taking for decentralization. The visit will continue until February 21.  ^ top ^

ASEM Summit 2016 information center to open at MONTSAME agency (Montsame)
The 11th ASEM Summit preparation commission has scheduled to officially open its information center this March 1 at the MONTSAME news agency. This decision was made on Tuesday at a meeting of the sub-working group of the ASEM Summit for media and propaganda affairs, chaired by A. Ganbaatar, an advisor to the President of Mongolia on public relations. The information center at the MONTSAME will provide all the information concerning the ASEM Summit preparation and other related activities. The sub-working group also heard a presentation about opening a media center at the “Shangri-La” hotel for foreign journalists. Obligations were given to some officials to issue a list of necessary facilities for this center and to resolve the preparation such as the Internet speed and provision of fast delivery of information with a support from the domestic companies. A meeting will be held soon among entities and investors to discuss donation matters for the Summit, and a final proposal will be reviewed by the national council. ^ top ^

Cabinet meeting in brief (Montsame)
The cabinet on Monday reviewed results of the President's participation in the 46th Annual Meeting of the World Economic Forum held January 19-23 in Davos of Switzerland, and obliged the FM to submit the issue to the National Security Council (NSC). - The cabinet approved a Mongolia-Bulgaria intergovernmental protocol on classifying international contracts, signed January 13 of 2016 in Ulaanbaatar. - The cabinet backed in principle draft amendments to the laws on traffic safety and on administrative responsibilities, formulated by Kh.Temuujin MP. - The cabinet considered a draft amendment to the law on the State Great Khural (parliament), initiated by O.Baasankhuu MP, and decided to pass him some proposals. ^ top ^

CEDAW to consider Mongolia's report on rights of women (Montsame)
The UN Committee on the Elimination of Discrimination against Women (CEDAW) is to consider the Report on Women's Right in Mongolia on February 19. Under Convention on the Elimination of All Forms of Discrimination against Women (1979), it is obligatory to the parties to report to the Committee each year. The CEDAW is to touch upon matters of protection of women under violence, social mentality on gender, lack of access for women to politics and social life, marriage contracts, property owning, citizenship of a child with Mongolian mother and an expat father, high rate of abortion, access to contraception approaches, as well as the issues concerning indigenous, minority and stateless women, and female and underage heads of households. ^ top ^

Mongolian FM at 52nd Munich Security Conference (Montsame)
The chief diplomat of Mongolia L.Purevsuren has taken part in the 52nd Munich Security Conference which ran February 12-14 in Munich of Germany. Within the event, which brought together Foreign Ministers, Defense Ministers, authorities of the European Union and the NATO, Mr Purevsuren held bilateral meetings with officials of some countries to share views on a preparation for the 11th ASEM Summit that will take place this July in Ulaanbaatar. The Munich Security Conference is an annual conference on international security policy, it has been taking place since 1963. It is the world's largest gathering of its kind. Over the past four decades, the MSC has become the most important independent forum for the exchange of views by international security policy decision-makers. Each year it brings together some 350 senior figures from more than 70 countries to engage in an intensive debate on current and future security challenges. This year's action mostly considered issues of combating terrorism, refugees, conflicts in the Middle East, Syria and impact of China over the international area. One of the best outcomes at the conference was a concurrence between Russia and the USA to ceasefire in Syria. ^ 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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