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
  9-13.5.2016, No. 622  
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Foreign Policy

China, Arab world agree to take belt and road initiative as lodestar for bilateral ties (Xinhua)
Chinese Foreign Minister Wang Yi said here Thursday that both China and the Arab world agree to take the Belt and Road Initiative as the lodestar to promote their relations. Wang made the remarks at a joint press conference with Arab League Secretary-General Nabil al-Araby and Qatari foreign minister Sheikh Mohammed Bin Abdulrahman Bin Jassim Al-Thani after the 7th Ministerial Meeting of China-Arab Cooperation Forum. He said the initiative is a historic opportunity for China and the Arab nations to boost common development and national rejuvenation, while urging the two sides to be each other's most reliable and long-lasting partners. At the meeting, the two sides agreed that connectivity, industrial production capacity, as well as cultural and people-to-people exchanges are the three key pillars underpinning their cooperation within the Belt and Road Initiative. Wang told the reporters that China and the Arab nations have huge potential in building infrastructures such as railways and ports, while the cooperation in production capacity is aimed at accelerating the industrialization of the Arab nations. He said that the two sides have also realized that they should firmly support each other in maintaining their respective core interests, and easing regional tensions through dialogues. The Arab world at the meeting reaffirmed that they support China's sovereignty and territorial integrity, and oppose religious extremism and separatism, including separatist acts against China. They also support China's efforts to peacefully resolve territorial and maritime differences with certain nations through friendly dialogues and negotiations. The Arab nations stressed that the rights of sovereign nations as well as the UN Convention on the Law of the Sea signatories in choosing how they solve their disputes should be respected. Wang also said that China supports the Palestinians to establish an independent nation, adding that both sides believe that more efforts should be exerted to promote the political solutions to regional hotspots, including the Syrian crisis. Earlier in the day, at the closing ceremony of the meeting, the Chinese foreign minister said China and the Arab world are now facing new challenges and opportunities in boosting economic development, urging both sides to take the meeting as a chance to further promote their cooperation to new levels. He also called on the two sides to enhance their communication and coordination in international and regional affairs, and step up pragmatic cooperation within the framework of the belt and road initiative and expand cultural and people-to-people exchanges. ^ top ^

Chinese newspaper Global Times blasted over editorial on Donald Trump and poll on unifying Taiwan by force (SCMP)
The mainland's top internet regulator slammed the news portal run by the hawkish Global Times tabloid this week for running sensationalist polls and reports on sensitive issues, according to a source with direct knowledge of the matter and a Radio France Internationale report. Among the offending items were a poll last month about whether mainlanders supported unifying Taiwan by force, an editorial on US presidential hopeful Donald Trump, and an op-ed on the looming release of the last Tiananmen prisoner. Global Times game lets players re-take Diaoyus, kill Japanese online (In the written criticism circulated to senior editors of other major mainland news portals, the Cyberspace Administration of China said the Global Times' decision to run the poll ahead of the inauguration of Taiwan's pro-independence president-elect this month prompted a strong reaction from the island. About 85 per cent of respondents to the poll on Taiwan supported unification by force, and 58 per cent of those agreed the best time for it would be within five years. The poll was “a serious violation of news discipline and had caused serious political consequences”, the CAC said. “All websites should learn from the lesson and refrain from polls.” The CAC summoned Global Times' management on Monday, RFI reported. Calls to the tabloid for comment last night went unanswered. ' The CAC also criticised the newspaper for hyping up its coverage on the United States, North Korea, the South China Sea and Hong Kong. It told its management to rectify its content and re-educate its reporters and editors over the next month. Global Times is well-known for its bellicose and nationalistic tone and its news coverage often attracts controversy. It is affiliated with People's Daily and has repeatedly spoken out on sensitive topics while other outlets have been subject to heavy censorship. China's party paper turned on by Hillary Clinton's 'bisexuality' (Despite the paper's pro-government stand, chief editor Hu Xijin said in an address at the Chinese University of Hong Kong in 2014 that Global Times was a market-based newspaper rather than a state media outlet. In the editorial on Trump, the paper erred by deploying a popular internet phrase used to mock the Chinese government, saying the “current session of the American people” should be blamed for Trump's popularity. Mainland internet users often skirt censorship by blaming social problems on the “current session of the people” instead of the administration. In the editorial on Tiananmen dissident Miao Deshun, the paper said anyone who “bet on the wrong side of history will have a life that weighs less than a feather”. It was the only mainland media mention of Miao, 51, the last political prisoner arrested over the 1989 protests to be freed. He is due to be released in October. ^ top ^

Showdown in the South China Sea: how ruling by Permanent Court of Arbitration may play out in Asia (SCMP)
Tensions have flared in the Asia-Pacific region just weeks before a key international court ruling on claims in the South China Sea, with nations growing increasingly embroiled in a war of words. Beijing claims much of the South China Sea, putting it at odds with four other nations, along with Taiwan. Manila wants the court to declare that Beijing's claims must comply with the United Nations Convention on the Law of the Sea, to which both the Philippines and China are parties. Beijing has refused to participate in the case before the Permanent Court of Arbitration in The Hague and said it would not accept the decision, which could come this month or in June. Washington has shown a determination to maintain what it calls freedom of navigation throughout the trade route, and US President Barack Obama has said his nation would hold China to account if Beijing chose to go against international rules and norms, without elaborating. Beijing claims that more than a dozen nations in Asia, Europe and Africa have lent at least partial support to China's argument that territorial disputes should be addressed solely by the nations directly involved, without interference from non-claimants. Topping the list of allies are Russia, India, Poland, Sudan, Pakistan, Belarus as well as rival claimant Brunei. The Chinese Foreign Ministry has taken a swipe at the process, with Ouyang Yujing, head of the department of boundary and ocean affairs, saying last week that the arbitration was nothing more than “a political farce in the guise of law”. Furthermore, the tribunal had put its impartiality at stake by agreeing to accept the case, despite Beijing's opposition, Ouyang said. State-controlled media have called the case a US-led ruse to fuel anti-Chinese sentiment and contain China. “Once Asean loses the plot in the South China Sea, we can expect... claimants to go at each other,” he said. Even state media has cautioned against over-optimism, noting that most of Beijing's allies “do not necessarily support China's sovereignty and territorial claims in the South China Sea completely”. Shi Yinhong, a professor of international relations at Renmin University, said China's justification for its sovereignty, rooted in historical claims, were not popular with its neighbours, making it unlikely Beijing would win greater international support. SSThere's no denying that we basically are on our own in this fight in the South China Sea Shi Yinhong, foreign affairs expert, Renmin University “There's no denying that we basically are on our own in this fight in the South China Sea,” he said. “Ties with our neighbours are important, but we have realised that without military might, we will not be able to win this battle in the South China Sea. “So with respect to the South China Sea, rather than operate under international norms and rules, their attitude is, 'We're the biggest kids around here. And we're gonna push aside the Philippines or the Vietnamese.' It's not a zero-sum game,” Obama said in a TV interview late last month. Echoing the US and the European Union, Hugo Swire, British minister of state responsible for East Asia, warned last month that China should respect the arbitration ruling, which must be binding on all parties. China's assertiveness had provided its neighbours with a clear and palpable threat, which may have played into Washington's hands, according to Batongbacal. “Washington could not have done anything more effective to make Asean states come closer and welcome US involvement in the region than what China has done,” Batongbacal said. He said the court ruling would also lend legal support to the US' positioning in the region. China to build up atoll in contested South China Sea, source says( But Shi said the friction ­between China and the US and ­regional allies was likely to ­become the new normal in the Asia-Pacific region. “Tensions may further escalate because, for Chinese leaders, their ultimate goal is to make its military strong enough to deny the US' right to freedom of navigation and gradually squeeze all the rival claimants out of the South China Sea,” he said. ^ top ^

China urges Japan not to return to path of militarism (Global Times)
China urges Japan not to go down the path of militarism again, a Foreign Ministry spokesman said on Wednesday when commenting U.S. President Barack Obama's upcoming visit to Hiroshima, Japan. "We hope that by inviting other countries' leaders to Hiroshima, Japan will show the world that it will never again follow the path of militarism which has inflicted grave suffering on its own people, the people of its neighbors and the rest of the world," said spokesman Lu Kang at a daily press briefing. The two atomic bombs the United States dropped on Hiroshima and Nagasaki before the end of WWII crushed the illusions of Japanese militarists on making a last stand, and caused massive civilian casualties, said Lu. Japanese civilians who suffered in the nuclear bombings deserve our sympathy, he added. "An important lesson we have learned from WWII is that we should take history as a mirror, prevent the tragedy of war from happening again, and firmly uphold the post-war international order," Lu said. The White House said Tuesday that Obama will visit Hiroshima later this month, but will not apologize for the nuclear attacks. ^ top ^

China opposes US distortion of navigation freedom: spokesman (Global Times)
China on Wednesday suggested the United States, when talking about "freedom of navigation," make a distinction between commercial ships and warships. Freedom of navigation for commercial vessels has never been obstructed in the South China Sea, said Foreign Ministry spokesman Lu Kang at a daily press briefing. US assistant secretary of state for East Asia and the Pacific Daniel Russel said on Tuesday in Vietnam that freedom of navigation operations were important to smaller nations. "If the world's most powerful navy can not sail where international law permits, then what happens to the ships of navy of smaller countries?" Russel told reporters. The United States appears to advocate freedom of navigation for military vessels in the South China Sea, which is against international law, said Lu, noting that no other country in the world would even suggest such a thing. According to the UN Convention on the Law of the Sea (UNCLOS), foreign vessels enjoy the right of innocent passage through territorial seas, but military vessels are not endowed with the same right, said Lu. The United States refused to ratify the UNCLOS and introduced "freedom of navigation" operations in 1979. These operations have met with opposition from the very beginning, especially from smaller nations, he said. "We hope the US will respect basic facts when talking about the feelings of smaller nations," he said, suggesting the United States sign and ratify the convention as soon as possible to give its words on international law more force. China on Tuesday expressed "resolute opposition" to a US warship patrol in the South China Sea near Yongshu Jiao in the Nansha Islands. The warship, USS William P. Lawrence, illegally entered Chinese waters near the islands on Tuesday without the permission of the Chinese government. ^ top ^

China takes Qatar key partner for belt and road initiative: FM (Xinhua)
Chinese Foreign Minister Wang Yi said here on Wednesday that China takes Qatar as a key partner to promote the "Belt and Road" initiative. He made the remarks while meeting with Qatar's head of state, Emir H H Sheikh Tamim Bin Hamad Bin Khalifa Al Thani, one day ahead of the seventh ministerial conference of the China-Arab States Cooperation Forum (CASCF). During that talks, Wang said that bonding the initiative with Qatar's National Vision 2030 can usher in an even brighter future for bilateral pragmatic cooperation between the two. As a strategic framework of the cooperation between China and the Arab world, the "Belt and Road" initiative refers to the "Silk Road Economic Belt" and "21st Century Maritime Silk Road," infrastructure and trade networks put forward by Chinese President Xi Jinping in 2013. The initiative also shares common cooperative opportunities with the Qatar National Vision 2030, a roadmap for future development launched by Qatari government in 2008. "China would like to further promote our bilateral cooperation in such fields as infrastructure, energy, productivity, finance, help Qatar to improve its independent development capacity, and further coordinate with Qatar over political solutions to the hot issues in this region," said Wang. For his part, the Qatari emir said his country appreciates China's role in its cooperation with the Arab countries and attaches great importance to the belt and road initiative, pledging to support China over its positions on sovereignty-related issues. The Qatari leader also hoped to have stronger cooperation with China in all fields, and pledged to play an active part in the belt and road initiative. Also on Wednesday, Wang met in a separate meeting wirh Qatari Foreign Minister Sheikh Mohammed Bin Abdulrahman Bin Jassim Al-Thani. China hopes to maintain the high-level exchanges with Qatar and enrich our bilateral relations, Wang told his counterpart, stressing that Beijing will encourage Chinese companies to play an active role in Qatar's infrastructure construction. Wang also said that China would like to maintain its communication and cooperation with Qatar in both international and regional affairs. The Qatari foreign minister said the his government will take every effort to facilitate Chinese companies' operation and investments in his country and support China's positive role in major regional and international issues of common concern. Under the theme of "Jointly Building 'Belt and Road' to Deepen Strategic Cooperation," the seventh CASCF ministerial conference will be held in Doha, the capital of Qatar, on May 12. ^ top ^

Chinese vice premier stresses global taxation cooperation (Xinhua)
Worldwide taxation cooperation should be boosted to accelerate development of the global economy, Chinese Vice Premier Zhang Gaoli said on Wednesday. China pays much attention to global cooperation on tax collection to fight international tax avoidance and help developing countries improve their taxation capacities, Zhang said at the opening ceremony of the Tenth Meeting of the OECD Forum on Tax Administration (FTA) in Beijing. This year's meeting focuses on the implementation of new international tax rules. Taxation is a key foundation of government, and a key tool for global economic governance. Global cooperation should be boosted to protect various countries' interests and facilitate economic growth, Zhang said. More should be done to fight international tax avoidance and support developing countries in building taxation capacities, he noted. A key reform for China's taxation was to substitute business taxes with value-added taxes, Zhang said. From May 1, the transition that began in 2012 in certain industries, was applied to the remaining four sectors -- construction, consumer services, finance and real estate. After the transition, tax burdens should go down, Zhang said. China has a taxation system favorable to entrepreneurship and innovation, he added. This is the first time for China to host FTA, the world's top meeting on tax administration. The meeting is one of a series of events related to the G20 Hangzhou summit in September. ^ top ^

US embassy reaches out to Chinese online (Global Times)
The US Embassy in Beijing and popular Chinese question-and-answer website jointly started an online discussion in late April, raising concerns among some about whether the embassy was pushing US ideology via cultural exchange. "Discover the US" was hosted by the US Embassy and featured eight guests answering questions, including four US diplomats, a professor of political science and environmental law, a Fulbright scholar at Nankai University, a political blogger and a theatre worker. "It is hard for a man to say he is totally immune to the influence from the other side of the Pacific Ocean even though he has never stepped into the US. The diversified culture and unique style of its cities have attracted people from all walks of life," read the introduction posted on Zhihu organized this activity, which has since been viewed over 1 million times, since topics on the US - especially related to visas and education - are always popular on Zhihu, Wang Bohan, an employee who was responsible for running the roundtable, told the Global Times. There are 43 questions listed on the activity's webpage, ranging from "how to get cheap Broadway tickets" to "what jobs do counsels or members from the election campaign do after the end of the presidential election." More than 10 questions are about visa rules. The four diplomats participated in discussions and gave 26 answers to netizens' questions. The query "how to evaluate the abrupt appearance of a group of US diplomats on Zhihu" was posted on the website soon after the event. An anonymous user wrote that diplomats gave positive introductions of US society when answering questions and their adept communication skills helped export US values and culture. People-to-people Yin Yungong, an expert on the socialist system at the Chinese Academy of Social Sciences, told the Global Times that this event was "ideological publicity" in the name of cultural exchange and the US is using social media in China to enlarge its influence, especially among young people. Benjamin Weber, the spokesperson from the US Embassy, told the Global Times that "as part of its role as the representative of the people of the United States to the people of China for cultural and people-to-people diplomacy, the embassy employs its own social media platforms and participates in a range of media activities at the invitation of Chinese organizations and media." He also said that the embassy's public diplomacy is meant both to explain the US in all its diversity to Chinese audiences and also to foster vibrant and open discussions involving a wide range of few points about issues of interests to the American and the Chinese people. Zhihu wanted to invite some qualified guests - visa officers and diplomats from the US Embassy - to give professional answers to questions on the US, including its visa rules, education, culture and traveling in the country, said Wang. Wang added that the activity comes on heels of the "2016 China-US Tourism Year" launched in March and a recent US government announcement of new visa rules. "Talich," a user who was invited by Zhihu to join the discussion, told the Global Times that if the Chinese Embassy in the US was invited by, a US website similar to, it would take the opportunity to garner "publicity in a same way" and it is the US diplomats' job to deliver messages and burnish the nation's image. Aside from starting an official account on Sina Weibo, the US Embassy also runs a public WeChat account and releases notices about embassy activities via It is not surprising that the US Embassy runs so many social media accounts since it has more resources and influence than other nation's embassies and China has an important place in US foreign policy, a press officer from a European embassy in China, who asked for anonymity, told the Global Times. The US Embassy runs more than 60 accounts on social media in China, Nandu Weekly reported. The press officer said that running accounts on social media in China helps embassies have more interactions with Chinese people, but some of their posts may face a backlash from netizens if they think they are offensive. "Some of our posts may be blocked by social media over 'sensitive' words, even if the content itself has nothing to do with sensitive news. For example, Sina Weibo blocked one of our posts because it contained the word zhou when it was announced that Zhou Yongkang, a corrupt official, was being arrested," said the press officer. Newspaper headline: Digital diplomacy. ^ top ^

China encourages more Chinese enterprises to invest in Chad: state councilor (Global Times)
The Chinese government encourages more Chinese enterprises to come to and invest in Chad, said visiting Chinese State Councilor Yang Jiechi here on Saturday. During a meeting with Chadian President Idriss Deby in the Chadian capital, the Chinese state councilor said that Chinese President Xi Jinping and President Deby, who held talks on two occasions last year, have provided guidance for the future development of Sino-Chadian relations. China and Chad face new opportunities in bilateral cooperation, said Yang. China stands ready to make joint efforts with Chad to implement the important consensus reached by the heads of state and further enhance mutual trust, said Yang. As steps are taken to materialize the fruitful outcomes achieved at the Forum on China-Africa Cooperation (FOCAC) summit, China would also like to work with Chad to enhance strategic cooperation in development and strengthen bilateral cooperation in the petrochemical industry, farming and animal husbandry, infrastructure construction, water conservancy, human resources development, poverty reduction and green development, he said. China encourages more Chinese enterprises to come to Chad for investment and cooperation, and contribute to the social and economic development of Chad, said Yang. For his part, President Deby commended China for her long-standing advocacy of African unity and development, hailing China as a great friend of the Chadian and African people. Fruitful results have been achieved and hearts have been won over through the cooperation between Chad and China, and between Africa and China, said Deby. The Chadian side is quite satisfied with the development of bilateral relations, and is grateful of the Chinese help in Chad's economic development, said the president, adding that his country welcomes the investment of Chinese enterprises and is willing to further promote mutually beneficial cooperation in various fields. Also on Saturday in a separate meeting, Yang and Chadian Prime Minister Albert Pahimi Padacke agreed that bilateral cooperation for mutual benefit has been fruitful and the two countries will take more steps to enhance pragmatic cooperation in the fields of communication, electricity, mining, water conservancy, farming and animal husbandry. ^ top ^

Wang Yi, Renzi meet in Rome on Italy-China relations (Global Times)
Italian Prime Minister Matteo Renzi met Chinese Foreign Minister Wang Yi in Rome on Thursday after the 7th joint meeting of Sino-Italian governmental committee and the 3rd meeting of Sino-Italian businessmen association. Italy attaches great importance to China's status and influence in the world, and hopes to deepen friendly relations with China, strengthen mutual beneficial cooperation in the areas such as trade, investment, and push forward Italy-China comprehensive strategic partnership, Renzi said during the meeting. Renzi said he looks forward to attending the G20 summit set for September in Hangzhou, China and is willing to work closely with the Chinese side to help achieve positive results for the summit. At the meeting, Wang Yi noted that positive progress has been made in bilateral cooperation in five priority areas agreed by both countries' leaders. The Chinese side is willing to tap new fields of China-Italy cooperation, step up efforts to create synergy between development strategies of both countries, and promote the long-term, healthy and stable development of bilateral ties, the Chinese foreign minister said. China appreciates the active role of the Italian side in the implementation of the Belt and Road initiative, and is willing to work with the Italian side for common development and prosperity in both countries and in Eurasia, Wang said. The Chinese foreign minister welcomed Renzi to attend the G20 summit in Hangzhou, saying the Chinese government is willing to enhance dialogue with the Italian government in order to ensure success of the event. ^ top ^


Domestic Policy

Minister vows help in graft fight
China will strengthen efforts and inject new impetus into global coordination in the fight against corruption, a Chinese government minister pledged on Thursday. Minister of Supervision Huang Shuxian made the promise when he joined dozens of world leaders and high-level officials in London for the Anti-Corruption Summit. "The Chinese government has made cooperation, the pursuit of fugitives and the recovery of criminal proceeds part of its work plan on anti-corruption," Huang said at the summit. He said China will continue to pursue fugitives and their illegal assets, adding that since 2014 it has brought back 1,657 fugitives suspected of corruption and economic crimes from 71 countries and regions and recovered illegal assets worth 6.29 billion yuan (about $1 billion). "We will crack down on transnational commercial bribery, punishing such activities by both Chinese companies overseas and foreign companies in China," Huang said. The summit was attended by leaders including British Prime Minister David Cameron, Afghan President Ashraf Ghani and Nigerian President Muhammadu Buhari. It focused on the cost of corruption, as well as how to expose, punish and eradicate it. While Britain is pushing global efforts, China's measures have already attracted international attention. Bernard Dewit, chairman of the Belgian-Chinese Chamber of Commerce, said the Chinese leadership has placed anti-corruption measures high on the agenda on the basis that the rule of law applies to everyone. "The efforts in this campaign should continue with respect for the law, which will help foreign investors to have more confidence in the institutions of the countries they are investing in, as well as their local partners," Dewit said. ^ top ^

Probe of diplomat continues (China Daily)
A former senior diplomat has been expelled from the Party and transferred to judicial authorities for further investigation. The Central Commission for Discipline Inspection of the Communist Party of China announced on its website on Thursday that Zhang Kunsheng, former assistant minister of the Ministry of Foreign Affairs, had seriously violated Party rules and undermined the Party's image. Investigations found that Zhang violated the eight-point austerity rules by visiting private clubs or expensive resorts, trading power for sex, and refusing to report personal matters such as true income and assets. Zhang also resisted the commission's investigation, the CCDI statement said. The commission said Zhang had been transferred to judicial authorities on suspicion of taking advantage of his posts to seek gains for others and to take bribes. Zhang, who was born in Shanxi province in 1958, began his diplomatic career at the Foreign Ministry in 1985. ^ top ^

Cultural Revolution 'won't' recur (Global Times)
As the 50th anniversary of the Cultural Revolution (1966-76) approaches, reflections on the tumultuous period have been gaining momentum while a minority of radical leftists is holding commemorative events to challenge the long-held official judgment defining the movement as "10 years of catastrophe," a decade experts believe will not be repeated in China. On May 16, 1966, a circular was passed at a conference of the Political Bureau of the Central Committee of the Communist Party of China, in which Party leader Mao Zedong believed that the power usurped by the capitalist-roaders could be recaptured only by carrying out a great cultural revolution. The notification marks the start of a decade-long campaign which some historians said threw China into the abyss of chaos and lawlessness. Books depicting the Cultural Revolution were published this year, including the English version of The Cowshed: Memories of the Chinese Cultural Revolution, a book written by Ji Xianlin, a prestigious Peking University professor, in which narrated his life as a prisoner of the Red Guards during the Cultural Revolution, according to news portal Many people, especially those who mistreated others during the Cultural Revolution, have publicly apologized to the victims. After Chen Xiaolu, a former Red Guard and son of Chen Yi, a marshal who was among those who led the revolution, made a public apology to his high school teachers for attacking them during the Cultural Revolution in 2013, others who participated in the revolution have showed public remorse. During the Sixth Plenary Session of the 11th Central Committee of the Communist Party of China in 1981, a resolution on "certain questions on the history of our Party since the founding of the People's Republic of China" was passed, in which the Cultural Revolution was completely negated and criticized as "a long drawn-out and grave blunder." Despite the government's acknowledgement, the Cultural Revolution remains divisive. Some, like Xia Guozan, a 40-year-old Mao admirer from Jingzhou in Central China's Hubei Province, said the Chinese society's disavowal of the Cultural Revolution has partly led to some of today's social problems, including the "conflict between the average citizen and those with vested interests." Those who share Xia's views commemorated the period in Xi'an, Shaanxi Province on May 8, pledging to support the Cultural Revolution to the end, as well as to glorify it with songs idolizing the late Chairman Mao Zedong, according to the Shaanxi-based leftist website, which has become unavailable as of press time. Others have blamed the current social problems on the lack of a complete and thorough reflection of the Cultural Revolution. "The leftists regard the Cultural Revolution as a people's movement against the bureaucracy and yearn for its return. Others question the Party's leadership by calling for a so-called radical reflection. Both have deviated from the official definition of the Cultural Revolution and should not be encouraged," Su Wei, a professor at the Party School of the Communist Party of China Chongqing Committee, told the Global Times. "As long as the [country] upholds the correct Party leadership and adhere to the Party's basic line, the Cultural Revolution cannot be restored," Su said, adding that it is an unwavering principle to completely negate the Cultural Revolution. "Generally speaking, China's reform and opening policy is successful, which has led to the country's rising power and booming economy," Zhuang Deshui, a deputy director of the Research Center for Government Integrity-Building at Peking University, told the Global Times. Zhuang added that there is no "economic and political space for the Cultural Revolution." ^ top ^

60% of career women say no to second child, report finds (China Daily)
Nearly 60 percent of working mothers in China don't want to have a second child, according to a report on the nation's career women. It comes as Sunday marked the first Mother's Day following the relaxation of the four-decade family planning policy in January to allow all couples to have a second child. The report, released ahead of Mother's Day by Chinese job recruitment site, also found that of 29.39 percent of women who have not given birth, 20.48 percent said they don't want a child. Zhaopin questioned 14,290 career women on their work and life choices. Asked why they don't want to have a child, more than 56 percent of interviewees cited the cost. The second concern was the amount of time, energy and attention involved. Other concerns included career risks, the pain of childbirth and little faith in their marriages. More than 70 percent said they would not consider leaving their jobs to become mothers, while only 18.53 percent said they would take this into account. Wang Yixin, a senior consultant at Zhaopin, said most career women think it is impossible to live solely on their husbands' paychecks. "Other reasons involve their own ambitions. They fear that if they stop working, they will become isolated from a dynamic society and lose their career prospects," Wang said. Peng Xi, 29, a marketing employee for a pharmaceutical company, has been married for two years and still hasn't decided whether to have a child. "My mother has urged me to have a child before I'm 30. However, raising a child in Beijing is a huge financial burden," she said. Peng is also worried about losing promotion opportunities, a concern shared by many women worldwide. Feng Lijuan, a senior expert on human resources at Chinese job-finding platform, said, "Taking the economic situation into consideration, it is not realistic to require companies, especially fast-growing startups, to provide absolute equality when choosing their employees. "Chinese women shoulder more family responsibility. It is not just about maternity leave — a female employee might only get back to work three to five years after having her first child. "If a job requires frequent business trips, extra work and more attention to work instead of to the family, a capable male candidate would be more suitable," Feng added. "It is not about gender choice — I would say this is a market choice." ^ top ^

41 missing as landslide hit hydropower station in SE China (China Daily)
A total of 41 people were missing as of 9: 30 p.m. after a heavy rain-triggered landslide hit a hydropower station in southeast China's Fujian Province on Sunday morning, said the head of the station's construction contractor. The landslide, which occurred at about 5 a.m. in mountainous county of Taining, has unleashed about 100,000 cubic meters of mud and rocks downhill, burying a temporary shed at a hydropower station construction site and damaging its offices. Lyu Mengjing, Party secretary of Sinohydro Bureau 16 Co., Ltd, which is responsible for the construction along with Sinohydro Bureau 12 Co. Ltd, said at a press conference on Sunday night that rescuers will continue searching for the 41 workers from the two companies. Another 13 people are being treated at a local hospital. All are in stable condition, authorities said. The site under construction is an extension of the Chitan hydropower station, an affiliate of Huadian Fuxin Energy Limited Company. Construction began in November 2015 and is expected to begin operation in August 2017. Armed police arrived at the site around 5 p.m. Sunday and joined existing rescuers to search those still missing. Rescuers are also working to clear the roads leading to the landslide site after multiple cave-ins. Boulders, mud and twisted steel bars are scattered around the landslide site. Sniffer dogs are working alongside over 600 rescuers to help detect any signs of life from the debris. Dozens of excavators are digging through the pile. Dozens of ambulances and army vehicles are on standby should anyone are uncovered from the debris. Intermittent rainfalls have complicated the rescue efforts. Authorities said precipitation in Taining is 35 percent higher than historical average since this year. In the 24 hours ending 11 a.m. Sunday, precipitation has hit up to 215.7 mm in parts of Taining, triggering landslide. "We were still asleep when the mountains began to jolt very strongly and before we know it, sand and mud are flowing into our room." said Deng Chunwu, who survived the landslide by hiding underneath a supporting pole along with three other people in their work camp. Deng added that their room has been pushed 10 meters further by the flowing mud. "It's been raining all the time over the past couple of days and I didn't think it was a big deal," Deng said. "But the rain last night was more fierce than ever." Deng and his roommates were sent to hospital at 9 a.m. Sunday. One of them was critically injured. All those treated in hospital are in stable condition, according to doctors. Chinese President Xi Jinping has urged maximum efforts to ensure a speedy rescue mission. Premier Li Keqiang issued a written instruction calling for full efforts to search for and rescue those missing in the landslide and to treat the injured. Torrential rainfall hit much of eastern and southern China over the weekend. China is poised for a major flood year. The world's largest hydropower project, Three Gorges Reservoir, on China's longest river, the Yangtze,recorded inflow of 17,800 cubic meters per second on Sunday, the highest since 1992. ^ top ^

New rule targets military corruption (China Daily)
Termination of the Chinese military's commercial activities will strongly lessen incentives for military-related corruption while consolidating the PLA's combat capability, military experts said. "Some commercial fields engaged in by the People's Liberation Army units are actually prone to corruption and other misconduct. The corruption case of Gu Junshan and those of other senior officers were closely connected to their involvement in businesses," said Senior Colonel Gong Fangbin, a political education researcher at PLA National Defense University, referring to Gu, former deputy head of the PLA's logistics authority, imprisoned in a embezzlement and bribery case. "The military's involvement in the commercial sector has also aroused suspicion about whether it properly uses defense funds," he added. "Moreover, there have been concerns that the PLA would use its advantages in a race for profits and overpower civilian competitors." The closure of the PLA's businesses would focus all of its concentration on honing combat readiness, he said. On Saturday, the PLA and the Armed Police Force selected 17 units to be the first to close their commercial activities such as housing rentals, medical services and hospitality. The move came after the death of Wei Zexi, a young university student who received experimental cancer treatment at a military hospital in Beijing, triggering a huge public outcry. General Zhao Keshi, head of the Central Military Commission's Logistical Support Department, said on Saturday that the chosen units are tasked with exploring effective ways to shut down businesses. In March, the Central Military Commission ordered the PLA and the APF to end all commercial activities within three years. It told units to stop signing new contracts and to negotiate with civilian clients to try to cancel existing ones. Gong said commercial activities usually exist in military hospitals, performance groups and publishing houses, major targets of the ongoing troop cuts announced by President Xi Jinping in September. ^ top ^



Political winds raise red flags over Cultural Revolution-style gala (SCMP)
The Great Hall of the People next to Tiananmen Square in the heart of Beijing has long been a national symbol of power and political importance. It's the place where top Chinese leaders meet to make policies, receive foreign heads of state, and attend galas singing the praises of the Communist Party on important occasions. But it came as no surprise that a storm of public outcry erupted over the news that a gala show featuring “red songs” praising late leader Mao Zedong, staged in a style reminiscent of the Cultural Revolution, was held in the hall on May 2 during the May Day break. The concert reportedly featured songs popular in the revolution's heyday against the backdrop of propaganda posters from the period. One of the posters urged “the people of the world to unite to defeat the American invaders and their lackeys”, a phrase from a speech Mao gave during the Korean war in the 1950s. It came at a very politically sensitive time ahead of the 50th anniversary of the political movement, which some analysts believe started on May 16. The concert also staged several songs to praise President Xi Jinping and featured one signature tune of Peng Liyuan, Xi's singer wife. That fuelled further concerns over attempts by the propaganda officials to promote a cult of personality around Xi, particularly after recent reports suggested the president's office had ordered authorities to tone down efforts to praise him. Accusations fly thick and fast over Chinese cultural group's Cultural Revolution 'red songs' concert (According to the fliers for the show, the event had enough support from powerful backers to win permission to stage it in the hall. The concert was sponsored by an office to promote socialist core values under the Communist Party's powerful propaganda department; an office under the Communist Youth League; the China International Culture Exchange Centre under the ministries of culture and civil affairs; and the China National Opera and Dance Drama Theatre, one of the country's leading performance groups. The public reaction was strong and swift after Ma Xiaoli, a daughter of a revolutionary cadre persecuted during the Cultural Revolution, first posted news of the event on social media on Thursday, calling it a throwback “to the culture of the Cultural Revolution” and accusing the organisers of “taking a step back in history”. The decade-long Cultural Revolution started by Mao plunged the country into one of its darkest periods in modern history, and the party leadership has long banned public activities associated with the period. The strength of the backlash forced some of the sponsors to try to distance themselves from the show – the propaganda department reportedly denied it had an office promoting socialist core values, and the China National Opera and Dance Drama Theatre and the regulator under the Beijing municipal government that approved the show released statements on Friday saying they were duped by a third-party promoter. The promoter owns a newly formed pop group known as the 56 Flowers, comprising 56 young women singers. It's billed as the world's biggest singing group. According to the flier, the group was scheduled to perform in Hong Kong on July 1, and in Taiwan on July 7 but it's not clear if the shows will go ahead after the outcry. The head of the promoter also seemed to disavow any responsibility, saying “we are merely actors”, according to an interview posted on mainland websites on Friday and later deleted. Indeed, officials' attempts to distance themselves sound disingenuous as such a show involving hundreds of performers in such a politically sensitive place must have been pre-screened by censors and sponsors. 'Whole world should unite to defeat the American invaders and their lackeys': controversy sparked online by 'red songs' at concert in Beijing( The saga adds another interesting twist to the political manoeuvring playing out in the corridors of high power in Beijing as liberals and leftists wage an increasingly tense tussle to sway the leadership over the direction of the country. Interestingly but perhaps by coincidence, the show was staged on the same day the party announced it had put Ren Zhiqiang, an outspoken property tycoon and party member, on one-year probation for online comments criticising Xi's propaganda policies. In February, Ren questioned Xi's major policy announcement that all state media organisations must serve the party, inviting strong attacks from some media outlets which drew on language widely used in the Cultural Revolution to label him as “opposing the party” and calling for his expulsion from the party. But the strong censure of Ren caused its own backlash among intellectuals, forcing the authorities to delay their official judgment. The eventual one-year probation was considered a light punishment. Now the authorities have reportedly launched an investigation into the saga involving the show and their assessment can hopefully give another sign to gauge which way the wind is blowing in the increasingly foggy world of mainland politics. ^ top ^



Hong Kong police to mount biggest security operation for a visiting Chinese state leader (SCMP)
Hong Kong police are mounting their biggest security operation for a visiting state leader, citing the threat of international terrorism and radical localism in the city. Starting from next Tuesday, about 6,000 police officers will be deployed each day to protect the chairman of the National People's Congress Standing Committee, with the risk level for Zhang Dejiang raised to the maximum “very high” during the three days he spends here. The manpower deployment will be up to three times that arranged for the visits of a sitting premier and president in recent years, when the risk level was considered “high”. Not since 2008, when Hong Kong hosted the equestrian competitions of the Beijing Olympics, has there been a security presence of this size throughout the city, a top government source told the Post. Police are now finalising the measures for Zhang, who will land at Hong Kong International Airport around noon next Tuesday. The source cited the recent terrorist attacks in Europe and the threat posed by separatists from China's troubled Xinjiang region as risks, adding that there was also potential danger from rising localist sentiment and radical protests. Referring to an alleged bomb plot aimed at disrupting a critical Legislative Council vote that was busted by police last June, and a blast in a rubbish bin during the Legco debate on the controversial copyright bill, the source said: “They showed that radical localists must not be neglected during major events or the harm could be as severe as a terrorist attack,” the source said. They showed that radical localists must not be neglected during major events or the harm could be as severe as a terrorist attack Zhang will be escorted around town by his personal bodyguards, elite security personnel from the Central Security Bureau, and top officers from the VIP Protection Unit of the Hong Kong police force. At least 3,000 police officers, including those from the local Counter Terrorism Response Unit, Police Tactical Unit and Airport Security Unit, will be on duty at any given time during Zhang's visit. Joining them will be snipers from the elite Special Duties Unit, known as the “Flying Tigers”. “Each shift lasts 12 hours. So we need 6,000 officers a day and it will take up a headcount of around 18,000 for the three-day operation,” the source continued. In contrast, police deployed only about 2,000 officers each day during then vice-premier Li Keqiang's visit in 2011, and about 3,000 officers when then president Hu Jintao came to Hong Kong in 2012. Both leaders made home visits in Kowloon East. Zhang will stay at the Grand Hyatt Hotel in Wan Chai and deliver a keynote speech at the Belt and Road Summit on China's trade strategy, to be held at the Convention and Exhibition Centre next Wednesday. The force's elite search teams will secure the area after a thorough inspection. The source said larger areas than before would be declared off limits outside the venues than during the state leader visits. More than 250 water barriers, weighing two tonnes each when full, will be used to cordon off restricted zones, while demonstration zones will be designated much further away than usual. “Protesters will not be able to see Zhang for sure,” he said. It is understood that the force has not granted approval to any application for protests or demonstrations so far. Police are ready to use a powerful pepper spray-based solution for riot control in case of trouble during Zhang's visit, while tear gas rounds and riot guns have already been loaded onto Emergency Unit vehicles. The source revealed that Police Commissioner Stephen Lo Wai-chung and his deputies would supervise the command centre at their Wan Chai headquarters during the visit, and top brass would issue direct orders to district commanders on the frontline. Officially, the force refused to confirm any of the security arrangements on Wednesday, only stating that it “monitors terrorist trends to ensure a high state of readiness” for all visiting dignitaries. ^ top ^



Macau leader accused of 'favouritism' after 100m yuan university donation (SCMP)
Macau's leader is facing deepening allegations of favouritism, after it was revealed that a semi-official foundation he oversees passed 100 million yuan (HK$120 million) of public money as a donation to a Guangzhou university, where he is a key board member. Fernando Chui Sai-on, Macau's chief executive, is facing growing protest calls from opponents who questioned why lawmakers and the public were kept in the dark as funds of this scale were funnelled out of the city, which is financially independent from the rest of China. According to Jinan University, the recipient of what it called “a record-breaking sum of goodwill”, Chui recently pledged that the government would make the donation via the Macau Foundation. Counting the cost? Macau leader tells public collapse in gaming revenue will not hit livelihoods( Chui is both the deputy head of the university's board and chairman of the foundation's board of trustees. His brother, Chui Sai-cheong, heads the foundation's supervisory board. “The huge sum of money was misappropriated under the table,” said Sulu Sou Ka-hou, of the pro-democracy New Macau Association. “Chui has to step down and cancel the payment.” Defending the decision, a Macau government spokesman called it an act of “reciprocity” in return for the nation's long-standing support to the SAR. “It is in fact a duty to contribute to the nation's development and education,” he said. But the association was not satisfied with the reply, saying it would step up action if the government failed to explain further. Macau to extend land and sea administrative area( It is not the first time Chui's government has come under fire for its financial decisions. Last year, it vowed to give “part of” its financial reserves to the Guangdong government for investments with higher returns. The foundation, meanwhile, said Jinan University, which is administered by the overseas Chinese affairs office under the State Council, is a “a public institution that [pursues] public interests”. It stressed that the university was key to nurturing Macau's talent, having enrolled nearly 20,000 Macau students. The university was not ranked by leading international assessors QS or Times. It is attractive to Hong Kong and Macau students whose grades are not good enough for local options, said a Macau lawmaker, who spoke anonymously. ^ top ^



Silk road tourism opens new window to know China (Global Times)
"I have been deeply interested in the silk road since I was a child, now I've finally got a chance to really experience it," Heinrich Schultz, a 77-year-old German retiree, told Xinhua on Thursday when he started a bus trip with some 50 other Germans along the ancient silk road towards China. The journey across the entire Euro-Asian continent lasts for nearly two months, and brings the tourists through Germany, Poland, Belarus, Russia, Kazakhstan, Uzbekistan and Kyrgyzstan. The group will then enter China from the country's western border. "It will be a very special, unforgettable experience to travel from the Atlantic to the Pacific," said Liu Guosheng, chief of China Tours which co-organized the trip, in Berlin. According to him, nearly half of the 13,000-kilometer-long trip will be inside China. From Xinjiang at the western border to Shanghai at the eastern coast, tourists will visit over 20 Chinese cities. "We have been running the route for 10 years. More and more people, not only from the German speaking countries, are joining us," Liu said. Nearly 26 million foreigners traveled to China in 2015. Some 5 million among them were from Europe. Beijing, Xi'an, Shanghai and the Yangtze River are traditional Chinese travel destinations for European tourists. "Compared with modern cities, western China is more attractive for me," said Schultz, "the culture, ethic minorities, their lives...all these are very interesting." China National Tourism Administration (CNTA) regards "Silk Road Tourism" as a new brand to attract foreign visitors, setting it as the leading theme of tourism promotion in recent two years. "It helps people to know more about China, especially the north-western part of the country," said Shi Xiang, head of CNTA office in Frankfurt. ^ top ^

EU should admit China's market economy status (Global Times)
Denying China market economy status (MES) is meaningless and irresponsible, experts said on Thursday after members of the European Parliament (MEPs) discussed whether the world's second-largest economy qualifies as one. Most MEPs pointed out that China subsidizes its firms, is not open about its enterprises and offers low export prices that are "clearly" not determined by the forces of supply and demand, according to an announcement published on the parliament's website on Tuesday. In particular, steel overcapacity has put hundreds of thousands of workers in the EU at risk, the statement says. China is not a market economy based on the EU's criteria, argued MEPs, and the debate was focused on any unfair competition from China after December 11, when China's access protocol of the World Trade Organization (WTO) foresees changes in its treatment in trade defense investigations, the announcement noted. The first thing is to distinguish between MES and market economy conditions mentioned in the WTO protocol, Chen Weidong, a professor at the law school of the Beijing-based University of International Business and Economics, told the Global Times. Recognizing China's MES is more a diplomatic gesture, whereas market economy conditions are terms under the WTO protocol. "Some terms in the protocol related to China's market economy conditions are discriminative in nature and will be ended regardless of whether the EU grants China MES," he said. The protocol issued by the WTO the year China joined in 2001 states a member country could launch an anti-dumping investigation against China, and use a method not based on a strict comparison with domestic prices or costs in China if the producer under investigation cannot prove that market economy conditions prevail in the industry. "In other words, the 'analogue country method' will be used in anti-dumping investigations," he said. However, this method will no longer be effective starting December 11, according to the document. But the EU may not follow the document by pressuring China since it has yet to be granted MES, which is a political gesture rather than a legal one, Chen noted. Several countries have granted China MES recognition, some made through political declaration, according to an analysis on China's MES published by the European Parliament in November 2015. The US, Canada, Japan, Mexico, India and the EU still consider China a non-market economy (NME). "Besides the MES issue, the EU has to fulfill its responsibility by canceling the surrogate price mechanism in anti-dumping cases, no matter what," Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation (CAITEC) of the Ministry of Commerce, told the Global Times on Thursday. 'Unfair' accusations MEPs were set to vote Thursday in favor of a resolution calling on the Commission and Council not to grant MES to China, considering the dumping of cheap steel products from China have jeopardized local steelmakers' interests, Brussels-based political publication The Parliament Magazine reported on Wednesday. "It's unfair to blame Chinese steel exporters, as the global glut in steel is caused by sluggish overall demand," said Xu Hongcai, director of the Economic Research Department of the China Center for International Economic Exchanges. He noted that China has been stepping up efforts to tackle the overcapacity issue by setting targets for slashing the output in the near future. The country pledged to cut 200 million tons in steel output over the next five years, and domestic demand is expected to remain between 640 and 700 million tons, an unnamed official at the Ministry of Industry and Information Technology was quoted as saying in media reports on April 9. And the country will not resolve the issue by increasing its steel export quota, the official noted. Steel firms in the EU should be more rational about the current changes in supply and demand in the steel industry, and also admit that steel products from China are much more competitive than those produced in the EU, Li Xinchuang, president of the China Metallurgical Industry Planning and Research Institute, told the Global Times. In February, EU regulators opened three anti-dumping investigations into Chinese steel products and imposed new duties on imports, following calls for action from the EU steel industry, Reuters reported in March. The EU imported 5.38 billion euros ($6.1 billion) worth of iron and steel products from China in 2015, up 17.9 percent compared to 2014, according to data from the European Commission Directorate General for Trade. Those imports accounted for 1.5 percent of total imported goods from China, the data showed. Instead of accusing China of dumping products into the region, EU policymakers should improve the dialogue mechanism with Chinese representatives to figure out more feasible solutions to overcapacity issues, "and don't let protectionism hurt trade between China and the EU," Xu said. ^ top ^

Mixed signals on Chinese economy from the 'authoritative' figures at the top (SCMP)
Just hours after an “authoritative” figure quoted in People's Daily criticised debt-fuelled growth in China's economy, a statement appeared on the cabinet's website in which Premier Li Keqiang said his government had refrained from “strong stimulus”. Li said his government had been focused on structural reforms in recent years to address the slowdown in growth. A day after Li's statement on Monday, a transcription of a speech by President Xi Jinping, made in January, emerged in People's Daily, presenting Xi's vision of how supply-side structural reforms were key to the nation's future. “There are so many policy signals flying around these days,” Li Weisen, an economics professor at Fudan University in Shanghai, said. “One big voice is criticising stimulus … and then another big voice is denying any stimulus – it's all quite puzzling and we have to wait and see.” While policies by Beijing and market movements in Shanghai can send ripples across the world, some critics say analysing how China's big economic decisions are made, and by whom, can be like “reading tea leaves”. “It sounds nice to just rely on consensus, but at the end of the day … you want to know who the guys in charge are, you want to know what they think and how they are weighing up those views and opinions, and where they want to take this,” Louis Kuijs, chief Asia economist at Oxford Economics in Hong Kong, said. “At the moment, perhaps, there's more uncertainty about where the leadership really stands.” Shi Jianxun, a finance professor with Tongji University, criticised the delivery of recent policy messages, as “abnormal” and even “irresponsible”. Shi said hiding behind the guise of an “authoritative figure” was reminiscent of the media strategy during the civil war – Mao Zedong used the name for articles attacking his opponent Chiang Kai-shek, who fled to Taiwan in 1949. Such a method was not appropriate for the internet age, he said. “A modern society values transparency and clear definition of power and responsibilities – meaning comments [attributed to an] 'authoritative figure' can easily lead to misunderstanding as well as market chaos and fluctuations,” Shi wrote on his blog. The first article criticising debt-fuelled growth is thought to have been written by Xi's aide. “My interpretation is that President Xi is in charge … the State Council is not going to buck that,” Tim Condon, the head of Asia research at ING Financial Markets in Singapore, said. “They are not going to set themselves to go left when President Xi says, 'We need to go right'.” The State Council statement said Li had told cabinet officials – in a reference to deregulation – that they should “show forbearance for sake of the nation” – employing a 2,000-year-old Chinese idiom rarely used in official documents. Mao used the phrase in 1943 to describe the Communist Party's tolerance of the Kuomintang: “[KMT newspapers] are ­persistently humiliating our Communist Party …but we still show forbearance for the sake of the nation.” ^ top ^

How Shenzhen helps Royole shine at the global level (China Daily)
Shenzhen-based Royole Corp made a splash during its first appearance at the Consumer Electronics Show in Las Vegas in January. It demonstrated a thin, rollable and transparent keyboard that is concealed within a speaker and charging station when not in use. Another star was a sleek, smooth and curved electronics-enabled car dashboard free of buttons. Bill Liu, 33, founder of Royole Corp, believes his ultra-thin, transparent and flexible electronics, including displays and sensors, will help reshape the future of smart home, automotive, consumer electronics and wearable products. The four-year-old company has completed four rounds of financing from investors including IDG Capital Partners and is valued at more than $1 billion. Royole was one of the 1,300 Chinese technology vendors that stole the limelight at the CES, which is regarded as a weather vane for the consumer electronics industry. More than half of the Chinese companies at the show were from Shenzhen, which borders Hong Kong and has been the mainland's technology startup hub and largest electronics manufacturing base. The stand-out product of Royole, however, is the world's thinnest full-color flexible display that was unveiled in July 2014. The display can be easily bended or rolled. The thickness of the display is only about 0.01mm, which is as thin as an onion skin or less than one fifth the diameter of the human hair. Entrepreneur Liu, a Stanford graduate, founded the technology startup in 2012 to realize his simple wish of his early days as a university student: having a phone with large screen that can be folded to fit in a pocket. "Smartphones that bend and fold may sound futuristic. With a flexible screen, you may fold it when you want to use it as a phone and open it to a flat screen when it is in tablet mode," he said. ^ top ^

China airs plan to help close multibillion-dollar corporate tax loophole (SCMP)
China is mulling plans to tighten tax reporting requirements on multinationals operating in the country to help close a ­massive global loophole. If the plan goes ahead, multinationals would have to file extensive reports on internal pricing and costs between overseas branches and headquarters, sources said. The plan is China's contribution to a global effort to stamp out the common practice of multi­nationals altering the price put on labour, services or intangible asset transfers within global ­operations to allow firms to divert profits to low-tax countries. The Organisation for Economic Cooperation and Development estimated that these kinds of profit-shifting practices amounted to about US$100 ­billion-US$240 billion in lost tax revenue each year, equivalent to up to 10 per cent of global corporate income tax revenue. A source at a law firm told the South China Morning Post that the State Administration of Taxation issued a consultation draft on the proposal at the end of last year, specifying that multi­nationals would have to disclose affiliated businesses and how intangible assets, labour and other ­internal cost transfers were made. “[Internal transfer pricing] is a grey area to utilise loopholes in tax rules between different countries, but now the governments [of those countries] are acting to close the hole,” the source said. The OECD has been pushing for countries to set universal ­reporting standards to close the loophole since 2012. The source said the draft by China's tax authorities was an attempt to bring domestic rules into line with OECD standards. Tax partners from Ernst & Young and PricewaterhouseCoopers said the new rules were expected to take effect retrospectively from January 1, 2016. Jeff Yuan, PwC China and Hong Kong transfer pricing services leader The source at the law firm said the draft had provoked much debate because of the magnitude and detail of the documents multinational companies – both Chinese and foreign – would have to submit to tax authorities. “We suggested it be more specific on implementation and more feasible otherwise it would lower the incentive for multi­nationals to invest in China,” the source said. But Jeff Yuan, a PwC China and Hong Kong transfer pricing services leader, said multinationals faced similar changes elsewhere. “The extra documentation work is not only happening on the mainland but in major economies as well. It is the first time that major economies have taken joint ­action to address the tax avoidance issue amid growing globali­sation,” he said. Mainland companies heading offshore could find the requirements onerous because they lack experience in the area, according to EY tax partner Travis Qiu. According to tax partners at PwC and EYwith knowledge of the consultation, the proposal would require multinationals to submit three sets of tax filings: one revealing transactions with affiliated companies, a second on how these transfers occurred within the group's global operations, and a third detailing shared financial or manufacturing costs. PwC tax partner Paul Tang said Beijing had stepped up its ­efforts to counter tax avoidance in recent years. “The focus has been shifting from tangible assets to intangible assets,” Tang said, adding that parts of the proposal went beyond the OECD's requirement by targeting overseas payments like service fees and royalties. Vice-premier Zhang Gaoli said at a taxation forum in Beijing on Wednesday that China had called for greater international ­cooperation to clamp down on tax avoidance and evasion. ^ top ^

China scores back-to-back exports growth (Global Times)
China's exports in yuan-denominated terms rose for a second consecutive month in April, mainly driven by rising domestic demand, but a substantial level of growth seems unlikely in the future due to sluggish global trade, experts noted. Exports in yuan-denominated terms grew 4.1 percent in April from the same period last year to 1.13 trillion yuan ($173.9 billion), data released by the General Administration of Customs (GAC) showed on Sunday. Imports hit 827.5 billion yuan in April, dipping 5.7 percent on a yearly basis, according to GAC data. That led to a monthly trade surplus of 298 billion yuan, up from March's 194.6 billion yuan. "Increased investments in domestic infrastructure projects during this period boosted domestic demand, which in turn strengthened trade," Xu Hongcai, director of the Economic Research Department of the China Center for International Economic Exchanges, told the Global Times Sunday. Overseas investments exceeded 40 billion yuan in the first quarter this year, which helped April exports, Xu noted. The momentum in China's trade will probably continue in the next two months, but extended growth seems unlikely due to the country's current industrial structure as well as sluggish global demand, he said. Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, said that April trade figures were strong due to a comparatively low base number in 2015. "The rising momentum has not firmed up, and I expect a slight drop in the future," Bai told the Global Times Sunday. Though April figures point to a rebound, challenges still remain since trade declined in the first four months, according to experts. Exports dipped 2.1 percent on a yearly basis, and imports declined 7.5 percent, data shows.Though the price for bulk commodities declined in the global markets, some imports continued to drop as well, he noted. Imports of coal, steel and refined oil declined in the first four months, down 2.5 percent, 4.6 percent and 1.2 percent from the previous year, respectively, the GAC data shows. Also, the domestic market is trying to adapt to the new policy on cross-border e-commerce business, which also put short-term pressure on imports, according to Bai. In early April, the central government imposed a new tax on overseas purchases to clamp down on them and encourage domestic spending. Other external factors also affected China's exports - protectionism persists and the momentum appears to be growing, especially toward steel and photovoltaic products, noted Xu. The government is trying to create a sound environment for trade by rolling out more proactive fiscal and trade measures," Lian Ping, chief economist at the Bank of Communications, was quoted as saying in a note sent to the Global Times on Sunday. Given that China's economic growth slowed to 6.7 percent in the first quarter, the weakest since the global financial crisis, Lian said that the recent pick-up in industrial output will promote trade to some extent in the near future. China's trade structure needs to be further optimized in a bid to deal with challenges facing exports, Xu said, noting that "focus should be shifted from exporting low-end goods to mid-to-high end goods, such as providing more services and technology trading." Overseas investments should also be promoted, increasing exports in countries and regions along the Belt and Road initiative thanks to ample investment opportunities there, Xu said. China is expected to be more open to the global investors through continuous free trade agreement discussions to establish a free trade zone network, noted Xu. ^ top ^

Trade data show China's economy holding steady but pressure remains (Global Times)
China recorded weaker growth momentum in exports and an accelerated decrease in imports in April, showing persistent pressure on the economy due to feeble domestic and external demand. China's exports in yuan-denominated terms rose 4.1 percent year on year in April, while imports dipped 5.7 percent, the General Administration of Customs (GAC) said Sunday. Export growth in April was milder than the 18.7-percent increase in March, while imports fell at a faster pace compared with the 1.7-percent drop in the previous month. China's exports remained positive but continued to be affected by weak global demand, said Bloomberg chief Asia economist Tom Orlik. Another drop in imports was a surprise, as firmer commodity prices and a weaker yuan should have buoyed the figure, Orlik wrote in an analysis note. HSBC chief China economist Qu Hongbin said the import drop in April was steeper than expected. Qu viewed it as evidence of a shaky recovery in domestic demand. Meanwhile, slower export growth showed external demand will remain subdued in the short term, he said. In the January-April period, exports dropped 2.1 percent year on year while imports went down 7.5 percent, leading to a trade surplus of 1.11 trillion yuan, widening 16.5 percent from a year earlier. Foreign trade edged down 0.3 percent year on year to 1.95 trillion yuan last month, while foreign trade for the first four months combined slipped 4.4 percent to 7.17 trillion yuan. "A run of lackluster data shows the economy holding steady at the start of the second quarter, but failing to maintain the momentum evident at the end of the first quarter," Orlik said. The tepid trade data were in line with a drop in the country's manufacturing activity indicator. China's purchasing managers' index came in at 50.1 in April, down slightly from 50.2 in March, an official survey showed earlier this month. China's economy expanded 6.7 percent year on year in the first quarter of 2016, the slowest growth since the global financial crisis hit in early 2009. But a slew of upbeat economic data in March raised hopes for a stronger turnaround than expected. Orlik said policy makers will likely remain in wait-and-see mode before deciding on further stimulus. One option for China to bolster export growth is to let the yuan depreciate more significantly, but that would likely trigger competitive devaluations by trade rivals and risk more capital flight, Orlik said. "China will have to wait for a combination of stronger global demand and the slow process of upgrading its manufacturing base to restore vitality to exports," he noted. The Chinese yuan is now down about 8 percent against a basket of currencies from its peak in August last year, according to a Bloomberg estimate. On a brighter note, the GAC said a leading index for the country's exports rose 2.2 points to 33.8 in April, with sub-indices for new export orders and managers' confidence both up from March, signaling smaller pressure on export growth in the second quarter. Exports to the European Union, China's largest trade partner, climbed 1.3 percent year on year in the first four months, the GAC data showed. In the same period, exports to the United States and the Association for Southeast Asian Nations, China's second- and third-largest trade partners respectively, both declined 3.5 percent. Imports of iron ore, crude oil and copper posted strong increases in the four months, up 6.1 percent, 11.8 percent and 23.1 percent respectively. But imports of coal, steel and refined oil fell. ^ top ^

Double-barrelled dip in China trade points to fragility of recovery(SCMP)
China's powerful export machine lost steam again last month after a surprisingly robust rebound in March, reflecting fragility in a debt-fuelled recovery in the world's second-biggest economy. Imports also continued to fall, despite noticeable price rises in commodities such as iron ore. In US dollar terms, China's overseas shipments fell 1.8 per cent in April from a year earlier, a sharp reversal from the 11.5 per cent yearly growth recorded in March. Imports fell 10.9 per cent, against a 7.6 per cent decline in March, according to data released by the customs administration on Sunday. As a result, China's trade surplus in April surged to US$45.6 billion. The double-barrelled dip showed “there's no real improvement” in Chinese trade, Liu Dongliang, an analyst with China Merchants Bank, wrote in a research note. The extended decline in imports is an especially worrying sign of the nation's economic health. SSChina's domestic demand is still weak Liu Dongliang, China Merchants Bank “It showed China's domestic demand is still weak, and it's anything but a good sign for China's economic stabilisation,” Liu wrote. The large trade surplus may help explain the increases in China's foreign exchange ­reserves. The People's Bank of China released data on Saturday showing the reserves added US$7 billion in April, the second monthly increase in a row. The trade data came after the official purchasing managers index pointed to slightly weaker manufacturing activity than in March. China manufacturing slows further in April despite stimulus: survey( The government is fine-tuning its macroeconomic policies after unleashing an all-time-high injection of bank credit to bolster growth in the first quarter. “Financial stability may be regaining more weight in the policy agenda” of Chinese authorities, Nomura Securities economists led by Zhao Yang wrote in a research note last week. The central bank said in its report on first-quarter monetary policy, released on Friday, that it would pay more attention to inflation, citing expected rises in housing prices and recent increases in commodities prices. “The debt leverage ratio is rising at a relatively fast rate, and there are growing risks in the financial sector,” the central bank said. As such, China has to “unswervingly” push ahead with supply-side reform. Yuan weakens after People's Bank of China cuts fixing by the most in eight months( Measured in yuan terms, however, China's exports rose 4.1 per cent in April from a year earlier, while imports fell 5.7 per cent, the customs administration said. The agency added that China's trade outlook might brighten in the second quarter, citing its own survey of Chinese trade managers. ^ top ^

Central bank pledges to keep prudent monetary policy (China Daily)
"China's transition from manufacturing and investment to services and consumption, though it may point to a slower pace of growth in the short run, is really what we want to see," said Alfred Schipke, IMF's senior resident representative in China, adding that over time the region is likely to benefit as the rebalancing makes China's growth model more sustainable. China's growth is forecast to moderate to 6.5 percent this year and 6.2 percent in 2017, according to the IMF's latest regional economic outlook for Asia and Pacific released on Tuesday. As the largest economy in Asia, China's pace of rebalancing imposes different spillovers on neighboring countries in Asia that contribute two-thirds of global economic growth, according to Schipke. "Those more dependent on investment and manufacturing could lose, and those that rely on China's consumers, such as labor-intensive products and technology industries, can be winners," said Schipke, referring to the fact that consumer expenditure has become a more important growth engine for the world's second-largest economy. Raphael Lam, deputy resident representative of the IMF in China, said that efforts to cut overcapacity and to develop appropriate fiscal policies have gradually paid off in the rebalancing process. Meanwhile, there are some key challenges that China needs to tackle to sustain growth. "China should place more emphasis on tackling credit issues, as China's debt-to-GDP ratio remains high," said Lam. "Credit has grown at a quickened pace while fundamentals of the businesses are in decline, which has deteriorated since 2015," said Lam. Official data show that new lending hit a record in the first three months after it topped 4.6 trillion yuan ($707 billion), driving the country's GDP to expand by 6.7 percent year-on-year. In response to concerns over the sustainability of China's recovery, Lam said that the government should not rely too much on government-led infrastructure projects and instead should make good use of policy instruments to encourage private investment. Total fixed-asset investment rose 10.7 percent year-on-year in the first quarter, up by 0.5 percentage points compared with the first two months, but that of private investors grew by only 5.7 percent, down 7.9 percentage points from the same period last year. Chinese policymakers have taken heed of the predicament facing private entrepreneurs and vowed to take targeted measures to facilitate their business operations. ^ top ^



Constituencies and number of mandates for 2016 parliamentary elections fixed (Montsame)
Electoral constituencies, their territories, numbers and number of mandates for the upcoming parliamentary elections have been set up after plenary meeting of the parliamentary session had adopted the resolution on Thursday. The resolution was backed by 61.9% votes or 39 parliamentarians out of 63 MPs, so it came into force on the day of its adoption. Pursuant to the resolution, the 2016 parliamentary elections will run in 76 constituencies. 48 mandates are distributed to local constituencies, while 28 mandates--to constituencies of the capital city, thereby single-mandated are Bulgan, Gobi-Altai, Gobisumber, Dornogobi, Dundgobi and Sukhbaatar aimags each; two-mandated are Dornod, Zavkhan and Omnogobi aimags each; three- mandated are Arkhangai, Bayan-Olgii, Bayankhongor, Ovorkhangai, Selenge, Tov, Uvs, Khovd, Khovsgol, Khentii, Darkhan-Uul and Orkhon aimags each. Ulaanbaatar city's Bayangol district constituency will have four mandates, Bayanzurkh and Songinokhairkhan districts-six mandates each. Meanwhile, constituencies of Baganuur and Sukhbaatar districts merged, obtaining four mandates. Constituency of Bagakhangai district merged with Khan-Uul district, and the Nalaikh district's constituency--with Chingeltei district. All these constituencies will have four mandates each. ^ top ^

“Hour for solutions” meeting gathers IT and communications officials (Montsame)
At the “Hour for solutions” weekly meeting held Wednesday, the Prime Minister Ch.Saikhanbileg summoned Ts.Jadambaa, head of the Authority of Information Technology and Communications; and B.Balgansuren, head of the Regulatory Committee of Communication (RCC). The Prime Minister said he convened the officials to give certain tasks, emphasizing that IT and communications are vital for the national economic development, and 2016 is a very responsible year for us to make important decisions on technology and development. Ts.Jadambaa reported that a legal environment has been created to introduce the 4G service in mobile phone industry, and subsequently four companies have received licenses to carry out the services. One of the biggest Internet and cell phone service providers, the Unitel company already has launched 4G service in an exprimental manner, he said. “Additional settings will be adjusted in Iphone smartphones this June, while the Mobicom corporation is expected to introduce the 4G this month, and other providers will do in the second quarter of this year,” he said. Head of the Regulatory Committee of Communication B.Balgansuren reported on the implementation course for the law which enables cell phone user to choose mobile providers they like without changing mobile phone numbers. He said a working group has been set up to stimulate implementation of the law which was amended in 2014. In accordance with the ordinance of the Prime Minister on reducing the Internet service costs in rural areas, the Internet consumption has gone up, and the number of users doubled in aimags. Minimizing the price in countryside to the level of Ulaanbaatar city will be resolved this month, said Ts.Jadambaa. He added feasibilities are being done to install the infrastructure in ger areas to provide them with the Internet access. The officials were charged to fulfill the planned works and to report on the implementation to the cabinet in near future. ^ top ^

Mongolia and Netherlands hold Foreign Ministries consultative meeting (Montsame)
Ministries of Foreign Affairs of Mongolia and the Netherlands held Wednesday their 2nd consultative meeting in Ulaanbaatar. It was co-chaired by Mr D.Gankhuyag, State Secretary of the Mongolian Ministry of Foreign Affairs; and Mr Peter Potman, Director of Asia and Oceania Division at the Netherlands Ministry of Foreign Affairs. The parties exchanged information about present political and socio-economic situations in both countries, international and regional issues, making focus on issues concerning bilateral relations and cooperation in trade, investment and economic spheres. Expressing their aspiration to fortify the bilateral ties, the sides agreed to intensify the cooperation in agriculture through mobilizing the best practices of bilateral cooperation and to combine efforts for augmenting bilateral trade turnover and investments. The sides also concurred to focus attention to the people-to-people ties and to seek opportunities for boosting the cooperation in all possible sectors including education and culture. In this respect, the countries agreed to concentrate on certain proposals for further proceedings. One of the western European countries to initially support Mongolian socio-economic reforms, the Netherlands implemented a number of projects with non-refundable aid in Mongolia between 1990 and 2011 which targeted the environmental protection and tourism industry. For example, a project has been carried out to acclimatize takhi (Przewalski's horse), one of the endangered species, in Khustain Nuruu National Park of Mongolia, Tov aimag. Mongolia and the Netherlands are set to mark the 45th anniversary of their diplomatic relations in 2017. ^ top ^


Mr. Tiziano Flavio Lavizzari
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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