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
  2-6.1.2017, No. 654  
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Xi congratulates Doris Leuthard on taking office as Swiss president (Xinhua)
Chinese President Xi Jinping sent a congratulatory message on Sunday to Doris Leuthard on her taking office as president of the Swiss Confederation for 2017. In the message, Xi said the development of China-Switzerland relations has gained a sound momentum. The two sides' mutual political trust has been constantly consolidated, pragmatic cooperation in various fields, such as economy, trade and finance has been continuously deepened, and people-to-people and cultural exchanges are increasingly brisk. Xi also said that he attaches great importance to the development of the China-Switzerland ties and is willing to work with Leuthard to enrich the innovative strategic partnership between China and Switzerland, and to lift the bilateral relations to a higher level. On Dec. 7, the Swiss parliament elected Doris Leuthard to take on the rotating one-year presidency for 2017. ^ top ^


Foreign Policy

Water conflicts in Central Asia 'pose threat to China's regional trade push' (SCMP)
Competition for dwindling water supplies from a mountain range in Central Asia could erupt into regional conflict, jeopardising Beijing's plans to revive trade along the ancient Silk Road, Chinese researchers have warned. Global warming and retreating glaciers in the Tianshan range, the “water tower” of the region, have raised the spectre of water shortages that will affect “the relationship between countries in Central Asia and the construction of the Silk Road economic belt”, the researchers warned in a report on the Chinese Academy of Sciences' website. The Silk Road economic belt is part of Beijing's “One Belt, One Road” trade initiative to increase connectivity and cooperation between China and countries on the ancient Silk Road from Central Asia to Europe. Central Asia is a dry, landlocked hinterland and Tianshan is the tallest and biggest mountain range in the region. About 2,500km long and up to 350km wide, the range winds through numerous countries including Uzbekistan, Kyrgyzstan, Kazakhstan and the Xinjiang region in China. Its seasonal snowmelt contributes most of the water for the majority of rivers in Central Asia. But over the past decade, the range has been losing its “total water storage” at a rate of about 223 million cubic metres per year, according to the research led by Professor Chen Yaning from the academy's Xinjiang Institute of Ecology and Geography in Urumqi. The culprit, the researchers say, is rising temperatures. Since 1960, annual average temperatures in the area have been rising at 0.3 degrees Celsius per decade, resulting in warm winters and less snow. In a paper last year detailing some of their findings, Chen and colleagues warned that the situation “may pose great danger for the water tower and influence the water supply for the oasis and desert regions”. “This may lead, within just a few decades, to some rivers running out of water in the dry season,” they said. Professor Hong Bing, from the academy's State Key Laboratory of Environmental Geochemistry, said he agreed with the political concerns raised by the new study. “Some rivers flow through many countries. If supply decreases, some countries might build dams and fights will break out,” said Hong, who was not involved in the research. “The [Chinese] government is very concerned and has commissioned many research teams to investigate the issue.” Rising temperatures, however, might also increase water vapour in the region and with it rainfall, Hong said. “The warmer, the wetter, that's what we found in ancient climate records in Xinjiang over the last 9,000 years. Whether the retreating glaciers and snow will result in an overall water shortage remains to be further investigated,” he said. Tianshan had more than 10,000 glaciers and nearly all of them are retreating. Total volumes shrank by 15 to 20 per cent between 1960 and 2000, according to Chen's study. Chen's team also found the area of snow cover in the middle of the mountains decreased significantly at up to 672 square kilometres per year. Their findings were based on satellite data and ground observations. “Decentralised” politics involving various nations and multi-ethnic populations in the region made precise estimates of Tianshan's actual water storage difficult, the researchers said in their paper. ^ top ^

Political differences will always divide China and US, analyst says (SCMP)
The differences in the political orders of China and the United States are “irreconcilable”, making it difficult to keep relations between the two countries on a stable track, a leading Chinese foreign affairs adviser said. And on top of these fundamental differences, Sino-US relations under the administration of Donald Trump would be more challenging for Beijing, as Washington is expected to enhance its “encirclement” of China, according to another leading Chinese adviser speaking at an international affairs forum in Beijing yesterday. Wang Jisi, dean of the school of international studies at Peking University, said a number of issues – including human rights, religion, Taiwan and Hong Kong – could potentially have more impact on Sino-US ties than the South China Sea disputes. Wang, who advises Chinese policymakers on foreign affairs and recently sent a report to the government evaluating the US “pivot to Asia”, said Washington had been leading an international order with an emphasis on democratic systems, and that Beijing saw that as interference in its domestic political order. “To us, the biggest threat posed by the US is a political one, instead of economic or military competition,” Wang said. “We see the US as always intending to overthrow the Communist Party's rule over China … and wanting to manipulate our domestic politics.” Officials and think tanks are seeking to assure stable ties between China and the US ahead of Trump's January 20 inauguration. In a phone conversation with US Secretary of State John Kerry yesterday, Chinese Foreign Minister Wang Yi said the two nations should develop their ties in the proper direction. The outgoing secretary of state said the US was committed to the one-China policy in relation to Taiwan, China's foreign ministry said in a statement. Trump's protocol-breaking phone conversation with Taiwanese President Tsai Ing-wen last month has already drawn ire from China, which has repeatedly called Taiwan one of its most sensitive issues. Tsai will make a stopover in the United States during an upcoming trip to Central America. Yan Xuetong, another international relations heavyweight with Tsinghua University, said Taiwan was likely to be one of the “pawns” for Trump in containing China. “Containing the rise of China will become the prime goal of Trump's China policy, with the focus shifting away from the Asia-Pacific and leaning over East Asia,” Yan said. Moving away from the focus on Southeast Asian countries that came with US President Barack Obama's “rebalance” to Asia, Trump was likely to move closer to Japan, South Korea, India, Singapore, Thailand, Vietnam and Russia to encircle China, Yan said. “The reason Trump is getting closer with Russia is not only because Putin helped him win the election, but also about the important role that Russia plays in East Asian politics,” he said. Russia in recent years has also rolled out its own version of a pivot to Asia policy, with its president, Vladimir Putin, actively courting cooperation with regional powers including China, Japan and South Korea. Amid uncertainty over the future of Sino-American ties, Wang called on Chinese leaders to take the lead in shaping the direction of policy. “Instead of focusing too much on every word said by Trump, it is better to think about what China wants in terms of future Sino-US relations, and how to shape a relationship that is beneficial to the long-term interests of China,” Wang said. ^ top ^

America will stay committed to one-China policy, John Kerry tells Beijing (SCMP)
The United States will stay committed to the one-China policy, outgoing US Secretary of State John Kerry told Chinese Foreign Minister Wang Yi in a phone call on Thursday. The call between the two powers' top diplomats came days ahead of a stopover in the US by Taiwanese President Tsai Ing-wen. Beijing has also in recent weeks expressed unease over US president-elect Donald Trump's earlier statement casting doubt on the one-China policy. The one-China policy, which maintains that Taiwan is part of China, has been the bedrock of Sino-US relations for four decades. During the phone call with Wang, Kerry also stressed the importance of Sino-US ties, state broadcaster China Central Television reported. Bilateral ties have been tested in recent months after Trump's hawkish remarks on a wide range of issues including Taiwan, the South China Sea and trade. Beijing has expressed concerns over the incoming US president's decision to pack his administration with many vocal veteran China critics, and has been seeking Washington's reassurance on the Taiwan issue, seen as the most sensitive issue in Sino-US ties. “The one-China policy based on the three Sino-American joint communiques remains the consensus of both [Democratic and Republican] parties,” Kerry was cited as saying. Wang also urged the incoming US administration to deal carefully with bilateral ties and to heed Beijing's concerns on a host of issues concerning its national interests and sovereignty. ^ top ^

China's cybersecurity chiefs pledge total loyalty to leadership under Xi (SCMP)
China's top cybersecurity officials have pledged loyalty to the Communist Party leadership headed by President Xi Jinping in the lead-up to a major party congress this year, a move pointing to tighter controls on the internet. At a national meeting of directors at the Cyberspace Administration of China (CAC) on Tuesday and Wednesday, the officials said one of their priorities was to cultivate an online environment that was “conducive to a successful 19th party congress”. In a statement, the directors agreed that the level of urgency and the frequency that Xi had spoken about cybersecurity last year were both “rare” in history. They also pledged their absolute loyalty to Xi. Other priorities were cleaning up cyberspace, strengthening cybersecurity and promoting information technologies across various sectors. The statement comes in a critical year of leadership reshuffles ahead of the 19th party congress in autumn, in which the new line-up of the next Politburo Standing Committee, the top decision-making body, will be unveiled. Zhan Jiang, an international news and communications professor at Beijing Foreign Studies University, said tighter internet controls were expected. “Any news that involves high-level politicians will be deemed to be sensitive news,” Zhan said. “Regulations over public opinion are inevitable.” Zunyou Zhou, a senior researcher at Germany's Max Planck Institute for Foreign and International Criminal Law, agreed that the government would tighten its grip on internet content this year. “China's internet regulation agencies have two missions,” he said. “The first one is to promote... the adoption of information technology. “The second is to ensure information security, which many interpret as internet control.” A study led by Harvard University scholar Gary King said that every year Beijing faked about 488 million social media comments that praised the central government's efforts. In June last year, the government vowed to crack down on online comment at news websites and social media, saying these disrupted information dissemination and harmed “a healthy environment for public opinion”. In December, the government tightened its grip over the live streaming industry by ordering stricter registration of the sector's websites. ^ top ^

China urges proper settlement with ROK on THAAD issue (Xinhua)
China on Thursday urged communication with the Republic of Korea (ROK) to find a proper solution to the ROK's deployment of an advanced U.S. missile defense system, the Terminal High Altitude Area Defense (THAAD). China hopes the solution can accommodate the concerns of both sides, said Chinese Foreign Ministry spokesperson Geng Shuang at a routine press briefing. "We urge parties concerned to stop THAAD deployment, and refrain from going too far on the wrong track," Geng said. China has repeatedly voiced its opposition to THAAD deployment. "THAAD deployment by the United States in the ROK would gravely undermine regional strategic balance and the strategic security interests of countries in the region, including China, and also harm the peace and stability of the Korean Peninsula," Geng said. Chinese Foreign Minister Wang Yi met with a delegation of the ROK's largest opposition Minjoo Party in Beijing on Wednesday, calling for both sides to find an appropriate solution through communication in order not to harm exchanges and cooperation between the two countries. However, on Thursday, the ROK's Foreign Ministry reaffirmed its position to deploy THAAD as planned. ^ top ^

China calls on all Syrian parties to implement UNSC cease-fire resolution (Xinhua)
China on Thursday called on all parties in Syria to implement the cease-fire resolution reached by the UN Security Council on the last day of 2016 in order to restart peace talks at an early date. "We hope all relevant parties, including the Syrian government and opposition groups, can cherish the hard-won results to work together to transform the resolution's text into concrete actions," Foreign Ministry spokesperson Geng Shuang said at a daily press briefing in response to the recent situation in Syria. The 15-member council last Saturday unanimously adopted a resolution supporting the Syria cease-fire arrangement brokered by Russia and Turkey, as well as new peace talks among conflicting parties set to be held in Astana, capital of Kazakhstan. However, several opposition groups announced on Monday that they were freezing talks on planned negotiations with the Syrian government in response to what they called "major violations" by the government forces in a four-day ceasefire. Geng said setbacks and difficulties in implementation are unavoidable, "yet the key is to have sincerity and goodwill" and exercising more self-restraint rather than accusing one another. China is willing to continue to hold a just and objective stance to work with all parties to push forward the political solution of the Syrian crisis, restore the region's peace and safeguard the interests of the Syrian people, said Geng. ^ top ^

Philippine lawmaker says joint exploration in S. China Sea legal, constitutional (Xinhua)
A Philippine lawmaker said on Thursday that the potential joint exploration of the South China Sea between the Philippines and China is allowed under the Philippine constitution. "The idea of coming to mutual agreement over natural resources is constitutional and has been beneficial in the past," Rep. Harry Roque said in a statement. He added, "Article XII, Sec. 2 of the 1987 constitution provides that the President may enter into agreements with foreign-owned cooperations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country." "Under these agreements, foreign corporations may act as contractors, providing capital, technology, and technical know-how and managerial expertise, while the government exercises control and supervision over the operation," Roque said. Moreover, Roque said one of the fundamental principles and purposes of the United Nations Charter itself is to develop friendly relations among states and achieve international cooperation in solving international problems. "As a matter of principle, it is important to consider that international cooperation and resource sharing is a common practice, and even encouraged to avoid tension among states," Roque said. He added, "Under the rules provided by the U.N. Convention on the Law of the Sea, states have repeatedly signed maritime boundary treaties to negotiate maritime boundaries with their neighbors to prevent future disputes from arising." "An independent foreign policy demands that we ask ourselves a very simple question: Is it in the interest of the state to pursue such a action? At the moment, my answer would be yes. While some of us can wait for another 10, 20, or 50 years to resolve a territorial dispute that has existed for decades, many Filipinos still suffer in poverty because of the lack of resources and opportunities in our country," he said. Philippine Ambassador to China Jose Sta. Romana previously said that the Philippines government is "seriously studying" the possibility of conducting joint exploration of natural resources in the South China Sea with China. Roque's position is also shared by House of Representative Speaker Pantaleon Alvarez, saying he also supports efforts to study the possibility of conducting joint exploration in the South China Sea. ^ top ^

China refutes Indian officials' criticism on terror related issues (Xinhua)
China on Thursday refuted the allegations by some Indian officials that China has double standards when it comes to adding people to a UN Security Council blacklist of groups linked to al Qaeda. Chinese Foreign Ministry spokesman Geng Shuang expressed China's stance at a daily press briefing when commenting on reports that two Indian ministers Wednesday called for China to review its technical hold on India's application to list Massod Azhar, the head of the militant group Jaish-e-Mohammed, as a designated terrorist under the 1267 Sanctions Committee of the UN Security Council. Geng said the voices alleging China had double standards on the issue did not hold water, and China has always held that people should make decisions on listing matters based on solid evidence. He added that China has long been holding an objective, just and professional attitude on the issue. Geng noted that as various parties were divided on India's application to list Azhar, it had proposed the technical hold to the listing application in order to give more time for the committee to deliberate and for further negotiations among the relevant parties. "However, all related parties have not reached consensus so far," Geng said, adding that China's moves were aimed at ensuring the authority and effectiveness of the committee. China will maintain dialogue and coordination on the issue with all related parties, including India, on the basis of the the mandate of relevant UN Security Council resolutions and the committee's rules of procedure, Geng said. Both China and India are victims of terrorism, and the two sides share the same goal on the issues, Geng said, adding that China and India must maintain cooperation in fighting terrorism, and China will enhance the cooperation to contribute to regional peace. As the two biggest developing countries, forging a closer relationship between India and China conforms to the interests of the two peoples. Therefore, China maintains the stance that it would like to develop the partnership of strategic cooperation with India, Geng said. ^ top ^

China set to strengthen global role (China Daily)
Experts predict that this will be the year the nation gains greater influence in world affairs. Sweet potato is not only President Xi Jinping's favorite food, but he also sees it as a symbol of China's determination to make a contribution to global economic growth. "The vines of the sweet potato may stretch in all directions, but they all grow out of its roots. Similarly, no matter what level of development it may reach, China, with its roots in the Asia-Pacific, will continue to contribute to the region's development and prosperity," Xi said in a speech in Lima, the capital of Peru, in November. The president's remarks came as the global economy continued to struggle as a result of sluggish growth and as many Western countries embraced protectionist economic policies. Making China's mark in global economic governance and shouldering greater responsibility were the defining characteristics of Chinese diplomacy under Xi last year, according to observers. The experts noted that contributing to world economic growth and offering solutions for global governance will be the guiding principles behind Chinese diplomacy this year. That will be especially true in May, when the country will host a grand summit to boost interconnectivity between potential partners in the Silk Road Economic Belt and the 21st Century Maritime Silk Road, known collectively as the Belt and Road Initiative. In December, the Financial Times highlighted China's role in global governance, saying: "President-elect Donald Trump wants the US to shrug off its global responsibilities. China may grab the opening to move centre stage." The article also pointed out that Xi has championed the Paris Agreement on climate change, defended the international community's nuclear deal with Iran and expanded trade liberalization within Asia. International influence Su Ge, president of the China Institute of International Studies, said the world economy is recovering slowly and with great difficulty, so better global governance is required. "The deficit of global governance is growing. Western countries' abilities in terms of innovation and the provision of public services have been undermined," he said, adding that China's international influence became more pronounced last year. Noting that China will hold two diplomatic events this year - the first International Cooperation Summit Forum on the Belt and Road Initiative and the ninth BRICS summit - Su said the country will remain a positive force in the maintenance of world peace, stability and development. China's continuing efforts to press for sustainable growth and to improve global governance won the support of world leaders when they met for the G20 Summit in the lakeside city of Hangzhou, the capital of Zhejiang province, in September. At the summit, Ban Kimoon, then-UN secretary-general, praised the efforts of China and the United States in the ratification of the landmark Paris Agreement. The progress that had been made was a major success, according to Ban who praised the "outstanding leadership" demonstrated by Xi and US President Barack Obama, who handed over legal documents to him on Sept 3 as an indication of their resolve to jointly tackle the global challenge. "In the past, it was often said that China was a major economic power, but unable to play a global leadership role commensurate with its new status," Paolo Garonna, professor of political economy at the LUISS University in Rome, told Xinhua News Agency during the summit. "Well, all of us in Hangzhou have seen the Chinese leadership in action, in terms of strength and quality, and its ability to deliver results." ^ top ^

State media criticism of Trump's 'addiction to Twitter diplomacy' signals China's frustration (SCMP)
China's state media has lambasted Donald Trump for conducting foreign policy through Twitter, in a commentary reflecting Beijing's frustration with the US president-elect's unorthodox style of diplomacy after his tweets broached sensitive issues in Sino-US relations. State-run news agency Xinhua published the article, headlined “Addiction to Twitter diplomacy is unwise”, late on Tuesday night, hours after Trump's tweet accusing China of refusing to help the United States contain North Korea's nuclear ambitions. The signed commentary cited American politicians and academics, including former US secretary of state Madeleine Albright, in making its point that Trump was not wise in tweeting so much about foreign policy. “[Trump] said something like 'the UN is just a club for people to have a good time'. These tweets have broken decades-old diplomatic protocols held by the US, including some anti-China comments,” the article stated. “Diplomacy is not child's play and you can't run it like a business.” The commentary came after Trump's latest Twitter attack against Beijing, in which he said: “China has been taking out massive amounts of money & wealth from the US in totally one-sided trade, but won't help with North Korea. Nice!” China's foreign ministry spokesman responded to the tweet at a regular press conference on Tuesday, saying Beijing had always been doing its part to denuclearise the Korean Peninsula. Over the past few months, Trump has repeatedly infuriated Beijing by criticising Chinese policy on Twitter, which is banned in China. The US president-elect has previously taken to the social media site to accuse Beijing of being a currency manipulator, defend his protocol-breaking phone call with Taiwanese President Tsai Ing-wen, as well as to criticise China over its massive military build-up in the South China Sea. Analysts say Trump's behaviour on social media has proven a headache for Beijing. Zhang Zhexin, a US foreign affairs expert from the Shanghai Institutes for International Studies, said that in Beijing's eyes, tweeting about foreign policy was not “a viable or rational way” to conduct diplomacy. “[China] is unhappy about Trump's public approach to diplomacy, because they think it will not help solve diplomatic disputes and – even worse – will aggravate the negative public sentiments in both countries against each other,” Zhang said. Chinese diplomats hoped to see the incoming American leader address diplomatic disputes “using a more rational and institutional approach through established and tested channels, and in a more constructive manner”, the analyst said. Trump will be sworn in as the 45th president of the United States on January 20. Since the property tycoon won the fiercely contested election in November, Beijing has refrained from directly criticising him as an individual, despite his outspoken comments about China. “[The Xinhua commentary] shows that Beijing has yet to adapt to Trump's unorthodox style in dealing with diplomacy,” said Liu Weidong, a US foreign affairs observer from the Chinese Academy of Social Sciences. “Trump may think he is just making casual comments [on Twitter], but Beijing takes it very seriously, since this disrupts Beijing's calculations,” Liu said. Chinese leaders prefer to conduct diplomacy behind closed doors. President Xi Jinping has only once ever posted on social media – through PLA Daily's weibo account – when he visited the People's Liberation Army mouthpiece's office last year. Xi has never opened his own account on Weibo, which is China's version of Twitter. In contrast, Trump, who has no civil service experience, has regularly used social media to woo voters and express his views on both domestic and foreign policies. Last month, Trump slammed Beijing in a tweet after the Chinese navy seized a US underwater drone in the disputed South China Sea. “China steals United States Navy research drone in international waters - rips it out of water and takes it to China in unpresidented act,” he tweeted, misspelling unprecedented. He later sent another tweet saying: “We should tell China that we don't want the drone they stole back. Let them keep it!” ^ top ^

Chinese foreign minister to visit five African countries (SCMP)
Chinese Foreign Minister Wang Yi will follow a two-decade-long diplomatic tradition to make Africa his first overseas destination in 2017, a spokesperson said Tuesday. Wang will pay an official visit to Madagascar, Zambia, Tanzania, Republic of Congo and Nigeria from Jan. 7 to 12, Foreign Ministry spokesperson Geng Shuang announced at a news briefing. "Relations with developing countries, including in Africa, is the bedrock of Chinese diplomacy," Geng said. "Chinese foreign ministers have visited Africa during their first foreign trips each year over the past two decades. The practice has become a much treasured diplomatic tradition for China." Wang will discuss the implementation of President Xi Jinping's consensus with African leaders and the outcome of the 2015 Forum on China-Africa Cooperation in Johannesburg, to help the revival of Africa and enhance solidarity and common development among developing countries, Geng said. "China hopes to comprehensively upgrade cooperation with Africa in 2017," the spokesperson said. At the 2015 summit, China announced 10 major plans for China-Africa cooperation over three years, backed with a 60 billion U.S. dollar package. As of last July, China and Africa had signed 245 various cooperation agreements worth a total of 50 billion U.S. dollars. A batch of early successes related to the summit were achieved in 2016, including the opening of the Addis Ababa-Djibouti railway and progress on the Mombasa-Nairobi line, as well as development of industrial parks and special economic zones, Geng said. ^ top ^

China unperturbed by potential thaw in US-Russia ties (Global Times)
A potential thaw in the US-Russian relationship under President-elect Donald Trump does not necessarily mean China will be put aside by President Vladimir Putin, Chinese experts assured. Just before the New Year, the US State Department announced the expulsion of 35 Russian diplomats from the US, saying they were "acting in a manner inconsistent with their diplomatic status." Two Russian government-owned compounds, one in the state of Maryland and one in New York, will also soon be shuttered. Putin said that he regretted Obama was finishing his term by imposing new sanctions against Moscow, saying that the Kremlin considered the new unfriendly steps of the outgoing US administration a "provocation aimed at further undermining Russia-US relations." But Putin declared Friday that Russia would not expel anyone in response to the latest US sanctions. "Moscow will determine further steps in mending ties with US based on President-elect Donald Trump's future policy," Putin said. "They [Putin and Trump] haven't fallen into the trap laid by Obama," Yang Jin, an associate research fellow with the Department of Russia-Eastern Europe-Central Asia Studies of the Chinese Academy of Social Sciences (CASS), told the Global Times. Can't choose your neighbor "It's certain that the US-Russia relationship will recover, at least Russia will face less strategic pressure from the US [with Trump as president]," Yang said. However, it will not directly mean the worsening of Sino-Russian relations, because the current relationship that has been built by China and Russia together is also highly important for Russia, he added. Diao Daming, a research fellow at the Institute of American Studies of CASS, said "Putin understands that Russia may choose its ally but not its neighbor, not to mention a neighbor like China." According to a report by Moscow-based news network Sputnik on December 14, during Putin's recent address to parliament, he put China at the top of the list of Russia's' partners in the world. When asked by Japanese journalists whether China really was Russia's No.1 partner in the world, Putin replied "Absolutely." Putin added that China is Russia's biggest trading partner and mentioned a list of major joint projects in energy, logistics, machine-building, helicopter and plane design and construction. However, it's possible that Russia's motivation to cooperate with China will decline, because Trump will pick one rival at a time, rather than pressuring China and Russia at the same time like Obama did, and it is very possible that the rival will be China. When Russia faces less pressure than before, it's possible that Russia will be less-motivated to support China in every area, Yang said. But eventually, Yang stressed "We should not use the Cold War mentality and zero-sum game theory to understand a triangular relationship between China, the US and Russia. We would like to see the US and Russia fix the problem between themselves. It is entirely possible for the three great powers to maintain friendly ties." Public opinion pressure It's unwise for Obama to give trouble to his successor in less than 20 days before he leaves office, said Chu Yin, an associate professor at the International Relations University. "Your successor has at least four years to pay you back," Chu said. If Putin had decided to respond by expelling US diplomats, it would be difficult for Trump to fix the mess. Both Putin and Trump will welcome a warming of ties between the two countries, Yang said. However, "If Obama keeps telling American people the result of the presidential election was manipulated by Russia, and that Putin and Trump support each other, Trump will be under pressure from public opinion when he tries to fix ties," Diao said. Diao said the two countries are rivals in many areas which can't be fixed easily. Trump has indicated he would like to expand US nuclear capability, and Putin will not like it; on the Ukraine issue, will Trump betray Ukraine and NATO? These are all questions between them, Diao said. In addition, the US' Terminal High Altitude Area Defense (THAAD) anti-missile system, which will be deployed in South Korea, will not only anger China but also undermine Russia's nuclear deterrence, but Trump is not likely to withdraw the deployment, Yang said. Counter-terrorism efforts in the Middle East, especially in Syria and Iraq, is the only area where the US and Russia will start cooperation, Diao predicts. When Dimitry Medvedev became Russian president in 2008, Obama and then secretary of state Hillary Clinton also wanted to "reset" the US-Russia relationship, but things did not go well. Their relations are too complicated to be fixed just because their leaders desire it, Diao said. ^ top ^

Top China issues to watch in 2017 (SCMP)
A lot has happened in 2016. In January, Taiwan's independence-leaning Tsai Ing-wen won the island's presidential election by a landslide; in July, an international court handed down a landmark ruling against Beijing's claims in the South China Sea, and in November, Donald Trump beat Hillary Clinton to become the United States' next leader. As we usher in 2017, our team of reporters have put together a list of key China issues to watch out for in the new year.
1. Can China's slowing economy keep up with its growth targets? China has held growth steady at 6.7 per cent throughout the first three quarters of 2016, but it is still facing big challenges as the economy continues to slow. Beijing is trying to keep the country's gross domestic product growth above 6.5 per cent, a floor set to double its economic size by 2020. The US Federal Reserve's interest rate rise in December and two or three more expected increases in 2017 have forced China to reintroduce capital outflow restrictions to defend the yuan. It has also squeezed room for credit easing, with the government now tightening controls on liquidity as preventing financial risks moves up its agenda. More proactive fiscal policy, especially infrastructure construction, will be the main tool supporting growth. In 2017, the government may also raise the fiscal deficit ratio, issue more municipal and special construction bonds, and leverage private capital inflow through public-private partnership projects. China will stay on high alert against asset bubbles, especially in property. It will likely take measures such as increasing the down payment ratio and property taxes to cool speculation in the big cities. One worrying sign on the horizon is that recent property restrictions have slowed sales and may hit property investment – an old economic driver – in the first half of 2017.
2. How will Beijing handle Hong Kong's chief executive election? Beijing is expected to help its preferred choice for Hong Kong's next chief executive garner as many votes as possible in the election on March 26, according to political analyst Lau Siu-kai, emeritus professor of sociology at the Chinese University of Hong Kong. Beijing would do so to avoid a repeat of the scenario in the previous election in 2012, when Leung Chun-ying won the chief executive race with a record low number of votes – 689 – from the 1,200-strong election committee, Lau said. Financial Secretary John Tsang Chun-wah and Chief Secretary Carrie Lam Cheng Yuet-ngor would hence not both be allowed to stand for election, according to Lau, as each additional candidate meant the winner would get fewer votes. Candidates' popularity mattered as well, Lau said, which meant New People's Party lawmaker Regina Ip Lau Suk-yee and Judge Woo Kwok-hing had almost no chance of landing the city's top job even if they managed to secure the 150 votes required to run. One focal point for the upcoming election is whether Beijing will adjust its hardline stance towards Hong Kong. Some analysts expect Beijing's stance to remain the same even after Leung relinquishes his role as the city's leader. Other believe Beijing will soften its stance, pointing to the olive branch it has extended to prominent pan-democratic figures when it promised this month to grant them all permanent home-return permits for the first time in decades.
3. Can Taiwan's President Tsai Ing-wen be squeezed into submission? Cross-strait relations is set to be affected by a range of factors in the new year, among them US president-elect Donald Trump's China policy, Beijing's resolve to punish Taiwanese pro-independence forces and the independence-leaning ruling Democratic Progressive Party's performance. Even before taking office, Trump has already created huge waves in relations among Beijing, Washington and Taipei by receiving a congratulatory call from the self-ruled island's President Tsai Ing-wen in early December. Days later, he went on to question whether the United States should continue its “one China” principle. Trump's freewheeling and unorthodox style of diplomacy threatens to make Taiwan more of a victim than a beneficiary as further backlash is expected from Beijing. Beijing has shut all official communication channels with Taipei since Tsai became president in May, after she refused to acknowledge the “1992 consensus” on which cross-strait ties are based. The consensus is an understanding between Beijing and Taiwan that there is only “one China” but that each side could have its own interpretation of what constitutes “China”. Taipei says Beijing has also limited the number of mainland tourists to the island, hitting its already-struggling economy. In December, small West African nation Sao Tome and Principe severed ties with Taipei in a move Tsai has described as Beijing's diplomatic suppression aimed at Taiwan. Last March, Beijing resumed relations with Gambia, another former Taiwan ally in Africa. Taipei has diplomatic ties with just 21 countries now, mostly small states. Taiwan's economic outlook appears dim and its international space is also narrowing as Beijing looks set to continue its hardline stance towards the island. In 2017, if Beijing refuses to budge on cross-strait relations, we will see if Tsai will soften her stance instead and adopt a more flexible approach in dealing with the mainland.
4. How will Sino-US relations play out after Donald Trump takes office come January 20? It looks like a bumpy road ahead for Sino-US relations in 2017 after Donald Trump's inauguration as President of the United States on January 20, given his provocative remarks on China and his choice of hawkish China policy advisers so far. No date has been set for bilateral visits involving either Trump or China's President Xi Jinping, but the two heads of state are bound to meet at multilateral gatherings in the coming year, such as July's G20 summit in Hamburg, Germany, or the Asia-Pacific Economic Conference (Apec) summit in Da Nang, Vietnam, in October. How the two leaders greet and interact with each other and whether they hold bilateral talks on the sidelines of these summits will be an indicator of the health of Sino-US ties. Trump has repeatedly blamed China for the trade imbalance and loss of American jobs, and vowed to declare China a currency manipulator on his first day in office. He has also threatened to impose up to 45 per cent taxes on Chinese imports and asked American firms like Apple to move their manufacturing bases back to the US. If Trump does penalise China in trade, some observers say Beijing may retaliate by similarly cutting US imports or sanctioning US firms, thereby starting a “trade war”. The incoming US president sees the “one China” principle as a bargaining chip to pressure Beijing into trade concessions, but Beijing has warned that the principle is a bottom line not open for compromise and also the basis of Sino-US relations. The new year may see tensions across the Taiwan Strait build up further, with more American arms sales to Taipei, more controversial comments from Trump about the self-ruled island in relation to Beijing, or even meetings between American and Taiwanese leaders. Such moves might up Trump's ante in negotiations with China, but could also provoke strong reactions from Beijing – even retaking the island by force in a worst-case scenario. Beijing still views Taiwan as a renegade province to be retaken by force if necessary. Other buttons Trump might seek to push with Beijing upon taking office include meeting Tibet's exiled Dalai Lama, raising China's human rights record or commenting on Hong Kong's democratisation process. If the two global powers hope to manage their differences and work well under the Trump administration, they will have to seek new areas for cooperation and common ground on which they can build trust. During US President Barack Obama's administration, he and Xi both agreed on climate change and cooperated well in advancing related policies. Trump can consider working with Beijing to counter terrorism and on coming to resolutions in the Middle East peace process.
5. Is the US-led TPP well and truly dead and will China's RCEP emerge the winner? Prospects for international trade have taken a hit with the victory of Donald Trump, who has vowed during his US presidential campaign to pull out of the Trans-Pacific Partnership and end a free-trade agreement with Canada and Mexico. The TPP, which is led by the US and has been signed by its 12 member countries in the Asia-Pacific, has yet to be ratified. Many analysts believe the 12-member trade pact will fall apart without American participation, and now the focus has turned to the Regional Comprehensive Economic Partnership (RCEP), widely dubbed China's answer to the TPP. RCEP negotiations among the 10 Asean (Association of Southeast Asian Nations) governments and six FTA partners – Australia, China, India, Japan, South Korea and New Zealand – are expected to conclude by the end of 2017, according to Malaysia's trade minister Mustapa Mohamed. Other nations, including Peru and Chile in Latin America, have also said they are ready to begin talks to join the Chind-led pact. The pact is also likely to be discussed during the Apec summit in Vietnam in October.
6. How and when exactly will Brexit happen and what will be the implications for China? In June 2016, Britain voted to leave the European Union. The question now is when “Brexit” will actually happen, as the British government will first have to trigger Article 50 of the Treaty of Lisbon to kickstart the process. British Prime Minister Theresa May has said this will take place before the end of March, but an exact date was yet to be set. News of Britain's intention to leave the EU has already made some impact in China, with a lower pound-yuan exchange rate, more tourists and students planning to visit or study in the UK, and more investors injecting cash into British property. With the country splitting from the EU, May's administration will have to negotiate trade deals with individual states. Among them, China will likely be one of their top priorities, given the size of the Chinese market, among other factors. Leaving the union may give London more flexibility to strike more mutually beneficial deals with Beijing.
7. How will China conduct diplomacy over the South China Sea and with its Asian neighbours? With an increasingly assertive China jostling for regional leadership, much remains to be seen if Beijing will mend ties with its Asian neighbours in the new year. Beijing's territorial claims and brusque diplomacy have strained historically friendly relations with many key neighbours, forcing them to pick sides in the rivalry between China and the US. Doubts over China's peaceful intentions culminated in the landmark ruling in July by the Permanent Court of Arbitration in the Hague, which rejected Beijing's claims over much of the disputed South China Sea. Beijing has insisted it will not accept the international court's ruling, but the decision is still seen as too important to ignore as it set a legal benchmark for any future settlement of the long-standing disputes. It is worth noting that China has so far refrained from taking further provocative steps such as large-scale island-building activities in the contested waters. It has also improved ties with the Philippines, which initiated the arbitral ruling. With Manila assuming Asean chairmanship in 2017, how China continues to mend its fractured ties with rival claimants of the South China Sea – especially its Communist neighbour Vietnam – will remain a focal issue to watch. Tensions with the US over the disputed waters have also been on the rise. In 2017, the US navy will likely increase its freedom of navigation operations to challenge China's claims in the region. Trump has announced he will build up the US navy, increasing its current 272-ship fleet to 350. Also this year, the People's Liberation Army will launch its second aircraft carrier and new Type 055 guided missile destroyers. Analysts believe Beijing will likely speed up its constructions and military deployments on its South China Sea reefs. The sensitive and volatile Korean peninsula is another headache for Beijing. While China hopes impeached South Korean President Park Geun-hye's successor – who will be elected this year – will drop the controversial Terminal High-Altitude Area Defence (THAAD) anti-missile system, it is unlikely to thaw relations with Seoul immediately. Beijing's dilemma in reining in the unruly North Korean leader Kim Jong-un, whose nuclear ambitions has rendered him a “troublemaker on China's doorstep”, will only exacerbate the uncertainty over the THAAD deployment and the fragile equilibrium in East Asia.
8. How will China's massive “One Belt, One Road” summit play out in May? China has put into play its big plans to lure countries across the eastern hemisphere into its orbit with its massive “One Belt, One Road” summit in May. The summit, which will at least match the scale of the Hangzhou G20 meeting in September 2016, is Beijing's chance to extend its influence in the region at a time when the world is coping with uncertainty as Donald Trump takes office as the next US president. James Woolsey, one of Trump's policy advisers, has previously signalled potential change in America's attitude towards the “One Belt, One Road” initiative, saying there was a consensus in Washington that the Obama administration's opposition to the China-led Asian Infrastructure Investment Bank – part of the belt and road plan – was a strategic mistake. The recent Central Economic Work Conference, which set the tone for China's economic priorities in 2017, underscored the belt and road initiatives as one of Beijing's three key development strategies. The initiative involves 65 countries, stretching through southeast, south, central and west Asia to the Middle East, Africa and eastern and central Europe.
9. What changes are in store in the run-up to the 19th party congress in November? The 19th party congress, which will see the five-yearly transition of power within the Communist Party, is expected to take place around November. The gathering will see more than 300 full and alternative Central Committee members elected by delegates of the party congress, as well as a new Politburo and a Standing Committee. President Xi Jinping – who was in October anointed as the party's “core” – will face a power transition bound only loosely by non-official conventions on retirement and succession. It remains to be seen what Xi's new title as “core of the party” really means, as it is not an official title whose rights and jurisdiction are regulated by the party and law. Largely free from influence of party elders – which is rare in Chinese politics – the current leadership has the flexibility to introduce change in many areas within the party. As Xi seeks to further consolidate his power and keep his allies close, the size of the Politburo may change, retirement rules may be made even more vague, and the new leader-in-waiting may not appear as they have done in the past.
10. On the environmental front, will China meet its clean-air targets? This year is the mid-term deadline for China's three major urban clusters – Beijing-Tianjin-Hebei, Yangtze and Pearl river deltas – to meet their clean air targets as stated in a 2013 State Council document. Dubbed the “10-point air clean-up action plan”, the document set air quality improvement targets for the three city clusters – a specified percentage drop in PM2.5 levels – as well as a quantified goal for Beijing to lower its average concentrations of the tiny particulate pollutants to 60 micrograms per cubic metre. While there appear to have been improvements in the Yangtze and Pearl river deltas, the frequent bouts of smog in northern China over the past several months have raised doubts about whether the Beijing-Tianjin-Hebei region will meet their targets and the implications if it doesn't. 2017 is also set to be a difficult year for green NGOs, particularly those headquartered in foreign countries, as many will struggle to find a government department – either a cabinet ministry or their local agencies – to supervise their daily work, under new laws laid down by the Ministry of Public Security. Some staff at these foreign organisations have already voiced their concerns. The worst-case scenario might be an exodus of foreign NGOs who fail to find proper supervisors, but this is unlikely as it would spark a global backlash. A more likely scenario is such groups, even those traditionally known for their aggression in pursuing their causes, would be tamed and think twice before acting on matters that risk provoking Beijing. ^ top ^


Domestic Policy

Government needs better understanding of health (China Daily)
Links found between air pollution and heart, respiratory and kidney problems As China wages a long-term war against air pollution, the government is being urged to seriously study how air pollution, and smog in particular, impacts human health over the long term and deliver targeted interventions as soon as possible. Real-time air monitoring by the Ministry of Environmental Protection showed that more than 60 percent of the 338 Chinese cities under surveillance experienced air pollution on Wednesday. Nearly 25 percent of the cities, including Beijing, saw heavy smog, with AQI readings between 201 and 300. The World Health Organization said air pollution continues to pose a threat to human health worldwide. About 2 million premature deaths annually can be attributed to its effects. Wang Hufeng, head of the healthcare reform center of Renmin University of China, said China lacks surveillance, research and evidence-based evaluations of the health impact of the smog hitting increasing parts of China. "It will be a long and tough war against air pollution, especially particulate matter, in the country and potential related health effects have to be monitored and studied scientifically and constantly," Wang said. International studies on environmental health have found links between exposure to air pollution and heart, respiratory and kidney problems. Xu Dongqun, deputy director of the institute of environmental health and related product safety at the Chinese Center for Disease Control and Prevention, said the specific health impacts are also highly related to the varieties of the major pollutants. Monitoring and research for smog-related health effects in the country are necessary to devise effective countermeasures to protect public health on smoggy days, she said. And that requires cooperation among government agencies of health, environmental protection and meteorology, she added. Globally, the WHO in 2015 for the first time urged members to develop air quality monitoring systems and health registries to improve surveillance for all illnesses related to air pollution. In response, China's top health authority pledged in late 2016 to set up 126 monitoring sites nationwide to study the effects of air pollution on health. The National Health and Family Planning Commission has been researching correlations between health and smog, Ma Xiaowei, deputy head of the commission, told a news conference in December. "This work is still in its primary stage, but we are losing no time," Ma said. China has started smog risk assessments and a program on smog warning technology to identify typical pollutants that harm people's health and establish an evaluation system, he added. ^ top ^

CPC flagship newspaper warns against fraud in 19th national congress delegate election (SCMP)
The People's Daily, the flagship newspaper of the Communist Party of China (CPC), will run a commentary Friday warning against fraud during the ongoing election of delegates to the Party's 19th National Congress. Party cadres should learn lessons from the election fraud cases in Liaoning Province, Hengyang in Hunan Province, and Nanchong in Sichuan Province, according to the commentary seen by Xinhua Thursday. The election should feature a strong emphasis on discipline and rules, with a zero-tolerance attitude adopted against any breaches, and increased penalties for each violation, it said. Leading officials should be held responsible for bad electoral ethics, ineffective investigation into violations, and cases having a disastrous impact, the commentary said. The CPC has lowered the quota of delegates taken from leading CPC officials. As a result an increasing number of officials will not get the chance to be nominated, while some will be nominated but fail the election, it said. Intensified ideological and political work should be carried out to educate and guide officials to respect the election results, prioritize the Party and the people's interests, and encourage them to work well, the commentary said. Election procedures and standards should be strictly observed to ensure excellent, politically sound Party members are elected, it said. The 19th CPC National Congress, a major event in the political life of the Party and the state, will be held in Beijing in the second half of 2017. A total of 2,300 delegates will be elected by 40 electoral units across the country. ^ top ^

Vice Premier urges improved work of central and state organs (Xinhua)
Chinese Vice Premier Zhang Gaoli on Thursday called for more efforts to reform and develop work on central and state organs. Zhang, also a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, made the remarks while addressing a meeting honoring role models from the central and state organs for their outstanding service. Zhang lauded their contributions to ensure efficient operation of organs affiliated with the Party and the state, as well as in promoting reform, development and stability. Zhang asked authorities to learn from the spirit of the sixth plenary session of the 18th CPC Central Committee held in late October last year, ensuring the central and state organs are clean, pragmatic and efficient. He asked central and state organs to promote reform and innovation, strengthen scientific management, practice frugality and fight extravagance. Zhang said more efforts should be made to contribute to realizing the country's "two centenary goals" and the Chinese dream of great national renewal. The two centenary goals are completing the building of a moderately prosperous society in all respects by the CPC's centenary in 2021, and building a prosperous, strong, democratic, culturally advanced and harmonious country by the centenary of the People's Republic of China in 2049. ^ top ^

China issues five-year plan on saving energy, cutting emissions (Xinhua)
The State Council, China's cabinet, issued on Thursday a comprehensive plan on energy conservation and emission reductions for the 2016-2020 period. The plan listed 11 detailed measures to push forward China's energy-saving and emission-reduction work, including reducing the coal consumption rate, promoting energy consumption in key areas, intensifying pollutant emission control, developing the circular economy, improving technological support, increasing financial policy support and enhancing management. According to the plan, China's total energy consumption will be capped at 5 billion tonnes of coal equivalent by 2020. This will translate into a 15-percent reduction of energy use per unit of GDP by 2020. China's GDP grew 6.7 percent in the first three quarters of 2016, on track to achieve the government's goal, but the country is also confronted by challenges, including environmental degradation. Nearly 62 percent of 338 Chinese cities monitored by the Ministry of Environmental Protection suffered from air pollution on Wednesday. Coal is the main energy source in China, accounting for 64 percent of total energy consumption in 2015. Many Chinese cities have suffered from frequent winter smog in recent years, triggering widespread public concern. Emissions from coal are cited as a cause of the high concentration of breathable toxic particulate matter, known as PM 2.5, which causes smog. ^ top ^

Senior official calls for reforms in intellectual property rights (Xinhua)
State Councilor Wang Yong said Thursday China should still deepen reforms in intellectual property rights, despite the fact it has shown great improvement in the area in recent years. China should pilot comprehensive management reform, ease control on patent agencies and improve relevant public services, Wang said when inspecting the State Intellectual Property Office. The country should create a fast channel for patent applications in emerging strategic industries and foster a vast number of high-value patents, Wang said. The country had over 3.47 million patent applications in 2016, up 23.8 percent year on year, said State Intellectual Property Office head Shen Changyu at a national meeting Thursday. Among them, patent applications for inventions increased by 21.5 percent year on year to 1.34 million, Shen said. The number of Chinese international patent applications filed under the World Intellectual Property Organization's Patent Cooperation Treaty hit 40,000 last year, Shen added. ^ top ^

China's top graft buster turns camera on rot in own ranks (SCMP)
Another year, and another prime-time documentary series from the Communist Party's top anti-graft watchdog is hitting mainland TV screens – this time detailing how the agency dealt with rot within its own ranks. The three-part series, aired on CCTV nightly from Tuesday, reveals how discipline officers exploited their power over other officials – including those of higher rank – in exchange for cash and discounts on property purchases, among other bribes. The watchdog, the Central Commission for Discipline Inspection, has become more powerful than ever since President Xi Jinping came to office and key ally Wang Qishan became the CCDI's head four years ago. Discipline officials were so powerful they could intimidate higher officials, the series said. Zhu Mingguo, Guangdong's former top graft buster who was given a suspended death sentence for corruption last year, said in the documentary that officials were afraid of the watchdog. “A discipline commission chief's views on an official or party member can decide his whole life,” Zhu said. As the anti-graft campaign has gained pace, officials have become more fearful of taking bribes, prompting many bribers to offer favours to disciplinary officials – who are considered immune from investigation – to advance their causes. Wei Jian, a disgraced graft buster who oversaw the high-profile investigation into former Chongqing party boss Bo Xilai, said all he needed to do to get a project approved for a Sichuan businessman was make a call to the province's party boss, Li Chuncheng. Li has since been jailed for corruption. Graft busters were also sought out by officials such as former Tianjin mayor Huang Xingguo, who wanted to know about investigations against them. Huang was expelled from the party yesterday and will face prosecution for graft. The documentary comes ahead of a major leadership reshuffle late this year. Under the party's unwritten rules, CCDI chief Wang, who will be 69, is due to step down from the Politburo Standing Committee. But there is speculation that Xi might defy the rule to keep his key ally on for another term. Chen Daoyin, from Shanghai University of Political Science and Law, said the CCDI's high-profile “house-cleaning” was meant to bolster its authority and pave the way for Wang to stay in office. Chen said Wang inherited his team from the previous leadership, with many of them elected at previous party congresses. “The 19th party congress will surely witness a reshuffle that strictly follows Xi's will. The CCDI will also go through a reshuffle according to Wang's will,” he said. Veteran China watcher Johnny Lau Yui-siu said the move was part of a bigger push to “purify” the leadership team at all levels of the party ahead of its congress. ^ top ^

Chinese official shoots city Communist Party boss and mayor (SCMP)
A senior Sichuan official shot two of his supervisors on Wednesday morning in the middle of a high-level meeting before killing himself, Chinese media report. Panzhihua land and resources bureau chief Chen Zhongshu fired at the city's Communist Party chief, Zhang Yan, and mayor Li Jianqin before fleeing the scene, according to Shanghai-based news outlet Zhang and Li sustained minor wounds and Chen was later found dead in the hotel building where the meeting was being held, the report said. Chen rushed in and fired at the two men while the meeting was under way, the report said. Both Li and Zhang were sent to hospital, where their wounds were described as not life-threatening. No motive was given for the attack and it was not clear how Chen obtained the firearm. Chinese civilians are prohibited from having guns under national law. The shooting took place just six months after Li, 53, arrived in the city and five after he became mayor. Li was reassigned to Panzhihua after spending more than 20 years working in the resources sector, including eight years in charge of the internal watchdog office of the Ministry of Land and Resources. A source told the South China Morning Post that Li was an expert in Chen's professional area and Chen had become a target of investigation before the shooting. The Southern Metropolis News quoted an unnamed government source as saying Chen had complained to his friends that Zhang and Li were “ratting on him”. Zhang's official resume includes four years in various corruption-fighting departments. Chen had worked in the city's anti-corruption department for more than 10 years and received national praise in 2015 for keeping cadres under his watch in line, according to earlier Chinese media reports. Wednesday's shooting comes as President Xi Jinping's anti-graft campaign continues its sweep across the country, with officials felled at a rate not seen in decades. It also comes ahead of a major meeting of the party's top anti-corruption watchdog, the Central Commission for Discipline Inspection, which starts on Friday and Xi will chair, according to state media. Resources-rich Sichuan has been among the worst-hit provinces in the anti-graft campaign. Zhou Yongkang, once the party's security tsar, had badly influenced the political environment of the province, a senior Sichuan official said earlier. Zhou was sentenced to life imprisonment on corruption charges and abuse of power in 2015. There have been many cases of cadres committing suicide while under corruption investigations but it is very rare for officials to shoot their supervisors. Panzhihua, located in the mountainous area of southwest Sichuan, is a centre for iron ore, vanadium and titanium mining. ^ top ^

Chinese activist 'Super Vulgar Butcher' faces subversion trial (SCMP)
Wu Gan, a Chinese dissident blogger known as “Super Vulgar Butcher”, will stand trial for subversion of state power after taking part in a protest over forced confessions in 2015, according to his lawyer. After more than a year in detention, Wu would face trial in Tianjin, his lawyer Ge Yongxi said in an online statement on Tuesday. “Around 1.30pm as I arrived at Tianjin's No 2 detention centre, I was told that the case has been accepted by the court and I was not able to meet [Wu] until my identity as a defence lawyer was confirmed by the court,” Ge said. Ge said he had filed a suit against the detention centre for denying him access to his client, saying he had previously submitted all the required documents to the Tianjin No 2 Intermediate People's Court. Wu was initially detained for 10 days after he and four lawyers protested in Nanchang in Jiangxi province in May 2015 over a rape and murder case. They claimed four innocent people were tortured into making confessions. Wu was formally arrested in August 2016 for alleged subversion of state power and “picking quarrels”, but Tianjin prosecutors twice sent the case back for further police investigation. Wu was denied access to a lawyer until December last year when he told his other defence attorney Yan Xin that he had been tortured, including being forced to spend long stints in solitary confinement. Police had also threatened him and his family in a bid to force him to confess, he said. Wu also released a statement last month saying he would never commit suicide, never accept any government appointed lawyer, never plead guilty and never confess on state media. Before he was detained, Wu had 60,900 followers on social media. Wu made his name in 2009 when he met Deng Yujiao, a pedicurist who was arrested for murder for stabbing to death a government official in Hubei province who was trying to molest her. The outrage generated online turned her case into a national cause celebre. ^ top ^

Chinese lawyers to help foreign NGOs navigate controversial new law (SCMP)
Thirty-six Chinese lawyers have offered to advise foreign non-governmental organisations after a controversial law came into effect on January 1. The lawyers, mostly from Beijing, Shanghai and Guangdong, said they would form a foreign NGO legal services group to advise the foreign organisations, their local units or individuals who operate on their behalf in more 20 sectors. The new Law on Domestic Activities of Overseas Non-governmental Organisations gives police huge powers, including financial scrutiny, over nearly 10,000 foreign NGOs. “The lawyers' consultation body was not set up to fight the authorities but to provide legal assistance to foreign NGOs so that they will not become targets of crackdowns,” said Guangxi-based lawyer Yu Pinjian. The law stipulates that, unlike their local counterparts, all foreign NGOs must register with and obtain approvals from the police rather than with the Ministry of Civil Affairs. Foreign NGOs involved in temporary projects must seek approval from and register with police as well. The law bans foreign NGOs from “supporting or orchestrating illegal activities in China”, including activities harming national and ethnic unity, security and the “national, social and public interests”. ^ top ^

Shots fired' in stand-off between police forces in western China (SCMP)
Police officers from two Chinese cities drew their guns on each other in a stand-off thought to be over the seizure of mining equipment, according to a newspaper report. Witnesses said on social media they heard at least three shots fired in the air during the dispute between officers from Chongqing and Xingping in Shaanxi province, the Chongqing Morning News reported. The newspaper said the officers from Shaanxi were stopped by Chongqing police on New Year's Eve after they had seized illegal mining vehicles the previous day, although it was not clear why the situation escalated. Photographs of the stand-off were published online. The Xingping police department told the newspaper the matter was now under investigation. ^ top ^

CPC sharpens teeth against discipline violations (Xinhua)
The discipline watchdog of the Communist Party of China (CPC) has made more efforts for discipline violation reviews. More emphasis has been given to reviewing breaches of political and organizational discipline by officials to enhance political awareness and ensure officials' thoughts, politics and acts remain in line with the CPC Central Committee, said an official in charge of handling discipline violation cases with the CPC Central Commission for Discipline Inspection (CCDI). According to the CCDI, 33 of 77 cases closed in 2016 involving centrally administered officials involved breaches of political discipline, including disloyalty and dishonesty to the Party, failing to report personal matters as required, and concealing facts during inquiries. Other violations, such as wavering Party ideals and beliefs, political conspiracies through forming cliques to pursue selfish interests, and superstition have also been seen in discipline checks nationwide. In the first half of 2016, 29,000 Chinese officials confessed their discipline violations to the authorities, more than five times the figure in 2015. From January to November last year, the CCDI made over 1,300 inquiries through interviews or letters after being tipped off about breaches of discipline by centrally administered officials, a year-on-year increase of 96.5 percent. During the same period, discipline agencies at all levels made 111,000 inquiries, more than triple that in 2015. Among the 77 cases of centrally administered officials, 20 were investigated for suspected illegal activity, while officials involved in the other cases were subjected to disciplinary penalties or demoted. ^ top ^

China Focus: China's top leadership urges more efforts to ensure food safety (Xinhua)
China's top leadership has called for more efforts to ensure food safety, noting there are still many problems despite an improving food safety situation. More efforts should be made to ensure food safety for the public, said President Xi Jinping in his latest instructions on the country's food safety work. The president called for the most rigorous standards, the most stringent regulation, the most severe punishment and the most serious accountability for improving food safety control. He stressed administration under the law, enhancement of work at the grassroots level and the professionalism of food safety inspectors, and demanded a comprehensive food safety system from farm to table. Premier Li Keqiang said in recent instructions that food safety is an important hallmark for building an all-round moderately prosperous society and should be given a more prominent position this year. Vice Premier Zhang Gaoli presided over a meeting of the State Council's food safety commission on Tuesday, which laid out measures to ensure food safety this year. The vice premier said deeper problems affecting food safety have not been fundamentally solved and called for stricter management of food safety. Zhang demanded quick improvement of the food safety standard system, which will be integrated with international standards, and the most stringent regulation to ensure no systemic or regional food safety risks. Zhang also demanded relevant authorities move quickly to screen for risks and work to ensure food safety during the coming Spring Festival and "two sessions" -- the plenary meetings of national lawmakers and political advisors. Vice Premier Wang Yang also addressed Tuesday's meeting, which was attended by officials from relevant departments and experts with the State Council's food safety commission. ^ top ^

Chinese vice premier stresses community health care (Xinhua)
Vice Premier Liu Yandong stressed that community health care institutions and family doctors are the first-line guardians of people's health during an inspection visit on Tuesday. When visiting a community health service center in Beijing's Xicheng District, Liu said the multi-tiered medical system is a significant institutional design, and the system needs to be improved, with greater priority placed on and more resources channeled to lower-level medical providers. Liu also called for breaking regional barriers and establishing multi-tiered medical groups. The objective is to form a system in which major diseases are treated in large hospitals, small ailments are treated in community health centers and people return to community clinics for rehabilitation, Liu added. Liu also encouraged combining online medical services and family doctors as a way to protect people's health. ^ top ^

Death and corruption take big toll on China's top legislature (SCMP)
Death, corruption and voterigging scandals have thinned the ranks of China's legislature by more than 100 lawmakers over the past four years, resulting in a sharp increase in vacancies. According to a statement from the Standing Committee of the National People's Congress, there are now 2,879 qualified delegates, leaving 108 vacancies to be filled. That compared to just nine seats vacant when former president Hu Jintao handed over the reins to Xi Jinping in 2012. The total number of legislators left now is well down on the 2,987 in the NPC in 2013. The number of disqualified delegates in this congress was previously much higher as some empty seats were filled immediately after becoming vacant. During the 12 months from March 2015 to March last year, for example, 27 new lawmakers were appointed to fill some of the posts. Fraud and corruption within the legislature, one of the most powerful mainland political institutions on paper but often seen as a rubber stamp in practice, were exposed under Xi's anti-corruption campaign, the hallmark project of the president's rule. Analysts said the downfall of lawmakers and the exposure of money-for-power deals had further undermined the credibility of the NPC, which in theory oversees legislation, the work of the government, and the choice of state leaders. The NPC also endorsed an interpretation of Hong Kong's Basic Law in November that led to two localist legislators losing their seats for failing to take their oaths properly. One of the biggest blows to the NPC was the fallout from a huge vote-rigging scandal in Liaoning (遼寧) province last year that led to the dismissal of 45 delegates in the national legislature. The authorities found that 523 provincial lawmakers in Liaoning had helped rig elections that sent the 45 to the NPC. The Liaoning delegates made up most of the nearly 70 delegates deprived of lawmaker status since the annual NPC session last year. Among the delegates who died, leaving their seats vacant, was Major General Chen Jie, a former deputy political commissar of ground forces in the PLA Southern Theatre Command, according to the Standing Committee statement. It was the first official announcement of his death, but gave no further details. Zhan Jing, a politics expert at the Chinese University of Hong Kong, said the NPC was a club where the rich and powerful could forge ties with government officials and other elites. The legislature “provides the opportunity for business and political circles to have contact or even collude”, Zhan said. Peking University governance professor Zhuang Deshui said the legislature was unlikely to clash with the Communist Party as the great majority of delegates were members. NPC delegates are “elected” every five years, although most are simply handpicked by the party. Qiao Mu, a communications professor at Beijing Foreign Studies University, said the legislature did not have any credibility. “It only presents the interests of the party,” Qiao said. The national gathering of the legislature takes place every spring and lasts for about two weeks, with nearly 3,000 deputies discussing government work reports and state policies. ^ top ^



PLA veterans stage another protest in Beijing over unpaid benefits (SCMP)
Two months after thousands of army veterans from across China besieged the military headquarters in the heart of Beijing to demand unpaid benefits, about 500 angry veterans converged on the capital again last week. A veteran from Hebei who attended the October protest confirmed the latest protest, which was held outside the state petition office. But he told the South China Morning Post that unlike the one in October, which saw some veterans taken away by the authorities, with their whereabouts unknown, the latest protest, on December 28, was much smaller and protesters were only briefly detained for questioning. The October 11 protest outside the August 1st (Bayi) Building took many people by surprise. Thousands of veterans, most aged in their 40s to 60s, gathered outside the building, which houses the headquarters of the Central Military Commission – the People's Liberation Army's top decision-making body – and the Ministry of Defence, to petition the central authorities for benefits they say they were promised in lieu of jobs, such as pension payments and social security. There have been previous protests and petitions by veterans from China's brief 1979 border war with Vietnam and the Korean war (1950-1953) to demand pensions, social security, jobs and other welfare promised when they enlisted. But October's protest was the first time such a large number of former servicemen and women had converged to put pressure on the Communist regime. Clad in camouflage military uniforms, the veterans sang army songs and waved banners beside the military headquarters, watched by hundreds of police officers. “Thousands of retired soldiers from across the country were there to beleaguer the PLA headquarters that afternoon, with 37 coming from my home county of Qinghe [in Xingtai, Hebei province],” said Huang Huagui, a former PLA officer who retired 18 years ago. It was the biggest protest by former military personnel since the founding of the People's Republic in 1949 and the biggest protest at a sensitive location in Beijing since thousands of Falun Gong practitioners besieged the party leadership's Zhongnanhai compound in 1999. The central government banned the sect soon afterwards, branding it an “evil cult”. October's largely peaceful protest was a slap of the face for the authorities. A source from the northwestern province of Shaanxi who helped organise it said the line of demonstrators stretched for about 3km and must have incensed an embarrassed party leadership. “Representatives of the veterans had three rounds of on-the-spot talks with the authorities that day,” he said. The first to meet them was Meng Jianzhu, a member of the party's decision-making Politburo and the party's top law enforcer, who arrived in the afternoon with some courteous words but little else. After a second round of talks also proved fruitless, the source said a vice minister of civil affairs arrived at around 9.30pm and met six representatives from the protesters. “But this official appeared to be in no mood to talk the representatives down and refused to budge an inch during the course of the negotiation,” he said, adding that the meeting ended with the stand-off unresolved. “After 3am the next morning they made an announcement through a loud speaker that President Xi [Jinping] had ordered the deputy chiefs of governments or party committees in the provinces involved to come and 'settle your issues specifically'.” He added that vice-governors from Henan, Hebei and Zhejiang were among the first to arrive, making promises in an attempt to lure the protesters back to their home towns. The police began a clearance operation when the announcement came to an end, he said, adding that veterans from Anhui province were the first to be taken away. The authorities dispersed the October protesters, loading the veterans onto buses and sending them out of Beijing with promises that their grievances would be heeded. Huang said he was among the last few batches of veterans loaded onto buses at about 6am. They were driven to Jiujingzhuang, on the outskirts of the capital. “We were told in Beijing that everything would be sorted out when we got back to our home town,” he said, adding that a leading Qinghe county official had pledged their problems would be fixed before November 25. But some desperate veterans had decided to take action again in December after seeing no progress on their claims. He did not join them, despite claiming he was still owed 480,000 yuan. Huang said he joined the air force in the former Beijing Military Command as a conscript in October 1987 and then, five years later, volunteered to remain in the army. He retired from the PLA in late 1999. PLA regulations require local governments to find jobs for volunteer soldiers, who are told to hand in their farmland at home in return. But Huang's retirement coincided with then premier Zhu Rongji's campaign to trim the state-owned industrial sector, which resulted in the loss of 40 million jobs and made re-employment difficult. Today, in the face of an economic downturn and tight job market, securing work for tens of thousands of demobilised soldiers across the country remains a tall order for regional and local officials, especially when Xi has pledged to find jobs for 300,000 military personnel due to be made redundant in years to come and more than 7.5 million university graduates become jobseekers each year. Huang, in his late 50s, said he had only wanted the job he had been promised but was now seeking a pension as compensation. He said he had joined fellow veterans in meetings with the head of the county government every Tuesday since returning from Beijing. At least he made it home unscathed. Some veterans went missing after October's protest. Wang Guorong, a veteran from Yiyang of Hunan province who did not take part in the demonstration in October said a fellow townsman Teng Xingqiu, 59, and several other veterans he knew had disappeared afterwards. ^ top ^

Smog levels in Beijing off the charts (SCMP)
Residents in Beijing kicked off the first day of the new year with smog that was off the charts. The air quality index released by the municipal environmental protection bureau on Sunday hit 482, almost touching the 500 mark where the scale tops out, and far beyond the point deemed hazardous to health. The US embassy gives its own reading for air pollution in the capital, and said levels were well beyond 500. More than a dozen other cities including Tianjin and others in neighbouring Hebei and Shandong provinces also saw smog return to dangerous levels. The poor visibility led to the cancellation of hundreds of flights throughout the region. Smog levels above 300 are deemed hazardous to health and could led to serious illness, according to the Beijing-based World Air Quality Index project. Stations in Qinhuangdao and Shijiangzhuang in Hebei, and Taiyuan in Shanxi saw readings rise above 500. A few other cities in Shandong and Hebei saw levels climb past 400. Beijing issued an orange alert for air pollution on Thursday that was extended to Wednesday. Heavy polluting vehicles and trucks carrying construction waste are banned from roads and some manufacturing firms have cut production. An orange alert means heavy pollution – PM2.5 higher than 150 – is expected to last for three consecutive days. PM2.5 refers to particles smaller than a human hair which can enter the lungs, and are deemed the most harmful to health. When the alert is in force, outdoor activities at schools are cancelled and construction work suspended. The return of heavy smog disrupted travellers hoping to take advantage of the three-day New Year holiday that started on Saturday. Tianjin airport cancelled more than 300 flights, while in Beijing 50 flights had been cancelled up to last night. All long distance shuttle buses departing from the airport had been suspended. Affected travellers will have to cover their own costs while they wait. Under an aviation regulation that came into force on Sunday, passengers must pay for their own accommodation and food, if their flight delays are caused by weather or traffic control, two major reasons for most disruptions. “My thoughts are as heavy as the smog, I have no idea what the environmental protection departments are doing,” said a woman surnamed Zhang in her 30s in Beijing. “It's impossible for our children to avoid the outdoors under heavy smog. I don't think suspending school is a real solution,” Zhang said, pointing to her toddler son, who was also wearing a mask. Another woman, surnamed Zhao, who was in her 20s, said: “I feel powerless and helpless – there seems to be no quick solution. It's having a tremendous impact on our lives. Even the indoor air is not breathable if we don't turn on the air purifiers.” Smog is related to nearly one-third of deaths on the mainland, putting it on a par with smoking as a threat to health, according to an academic paper based on the study of air pollution and mortality data in 74 cities. The findings by Nanjing University's School of the Environment were published in the November edition of the journal Science of the Total Environment. ^ top ^



Shanghai court accepts detained rights lawyer's defamation case against state-backed media (SCMP)
A Shanghai court has agreed to hear a defamation suit brought by the father of a human rights activist against a state-backed media outlet. Jiang Lianghou, father of activist Jiang Tianyong, received a notice from the Jingan District People's Court on Wednesday saying it had accepted his case against Shanghai Dongfang Newspaper, which owns news portal Jiang Lianghou claims the online news service published a report in December that damaged his son's reputation. The report was republished in various other government-backed outlets, including Legal Daily and Procuratorate Daily. “Jiang Lianghou is of view that the report in about Jiang Tianyong is not based on facts, judged him guilty before the court process and damaged his reputation,” according to a statement from Chen Jinxue, the son's defence lawyer. Jiang Lianghou filed similar suits in Beijing and Guangzhou against media outlets but they were rejected, according to Chen's statement. The Chaoyang District People's Court in Beijing and Guangzhou's Yuexiu District People's Court refused to accept or process the applications filed, the statement said. The courts also refused to explain why the applications were rejected. Jiang Tianyong, a lawyer until he was disbarred in 2009, went missing on November 21 in Changsha, Hunan province. He was later confirmed to be under heavy guard at a residential location in Zhengzhou, Henan province, on suspicion of subversion. His disappearance drew international concern with numerous parties expressing fears for his welfare. He had most recently helped to publicise the plight of nearly two dozen lawyers arrested in a broad crackdown that began in July last year and resulted in hundreds of rights campaigners being rounded up. Jiang Tianyong was also detained for 15 days in 2014 with Tang Jitian and two other lawyers investigating the illegal detention of several Falun Gong members in Heilongjiang province. Jiang Lianghou claims a report by on December 16 alleged his son committed identity fraud, and illegally processed documents containing state secrets before giving them to overseas agencies. The report said Jiang Tianyong had seven mobile phones, 11 phone cards and seven bank cards when he was detained by Changsha police in November. The report claimed Jiang “incited petitioners” and people with grievances to “resist government agencies and interrupt judicial procedures”, “severely violating social order” and creating a “negative social impact”. ^ top ^



Dream has been killed in China's democracy village (SCMP)
Five years ago, Wukan went from a remote fishing village to an inspirational model for grass-roots democracy, but that hope has since withered in the face of iron-fisted repression. Analysts said the latest development in the saga, which saw nine Wukan protestors sentenced to up to 10 years in prison each, has marked the end for the village as a symbol of hope. “I've never seen anyone being sentenced to 10 years just for illegal gathering or protesting. This is the most severe sentence I have heard in my entire legal career,” said veteran Guangzhou-based lawyer Sui Muqing. His comments came after the Haifeng county court in eastern Guangdong handed down sentences to nine Wukan residents who have been jailed from between two and 10 years for disturbing public order, staging illegal demonstrations, disturbing traffic and intentionally spreading false information. Sources close to the family of former village chief Lin Zuluan say police cars are still guarding Lin's house in Wukan, and that the verdicts for the nine have set blood boiling among local residents. “The atmosphere in the village is very tense. Villagers are ready to proceed with an appeal,” said the source, who refused to be named. But any attempt to appeal, like other appeals by dissidents, is likely to go nowhere. Lin has reportedly already been sent to Yangjiang prison to serve his 37-month sentence for graft, which he had previously sought to appeal to no avail. Unrest began to simmer in Wukan in June, when Lin announced he would give a speech addressing the villagers' plan to start a petition over land problems that had remained unresolved since 2011. Instead, Lin was secretly taken away from his house the night before his speech and jailed. Angry villagers unleashed a new wave of unrest that saw police use tear gas and rubber bullets in September. Five years ago, Wukan gained international attention after months of defiant riots had dissolved the village government and led to transparent elections to name their own village management committee and chief. However, what looked like a victory in 2011 and 2012 to the villagers in Wukan was only the beginning of a slow-cooked strategy of retaliation, which Sui described as a classic example of how the Communist Party handles unrest. “The retaliation had already begun in 2014, two years before Lin was jailed, when elected village committee members like Hong Ruichao were being locked up one by one,” Sui said. The harsh handling of Wukan also reflected an urgent need to maintain social stability amid a party power shuffle that could have affected the career of Guangdong party boss Hu Chunhua, said Beijing-based political analyst Zhang Lifan. “The party boss of Guangdong has been trained as the next leader so he needs to deliver a good performance or at least remain relevant in order to qualify for promotion,” Zhang said. “Much like [former president] Hu Jintao during his time in Tibet, when he displayed a hardliner image to impress Deng Xiaoping, Hu [Chunhua] is going a similar route here,” Zhang said. However, Guangxi-based lawyer Yu Pinjian said an iron-fisted approach could not prevent another Wukan from happening. “A harsh political clampdown is temporary, as it can't stop social advancement and people's desire to live in a lawful and just society.” ^ top ^



Dalai Lama ritual a 'political tool' (Global Times)
Dismissing a Buddhist ritual held by the Dalai Lama as a political tool, Chinese officials denied that thousands of Tibetan pilgrims were pressured to return to China. "Taking advantage of the presence of the Dalai Lama, the Kalachakra (wheel of time) teachings have inveigled Tibetans into illegally going abroad over the last decade," Zhu Weiqun, chairman of the Ethnic and Religious Committee of the Chinese People's Political Consultative Conference, told the Global Times on Thursday. The Dalai Lama will this month preside over the 34th Kalachakra initiation at Bodhgaya in eastern India, where the Buddha is said to have attained enlightenment more than 2,000 years ago, AFP reported on Wednesday. Tens of thousands of pilgrims from all over the world are expected to attend the event. But as preparations got under way on Wednesday, the chairman of the organizing committee Karma Gelek Yuthok said almost 7,000 pilgrims had returned to China, citing pressure from authorities there. Yuthok, who is a member of the Tibetan "government-in-exile," said some pilgrims had reported receiving threats to relatives in China if they did not return. Denying the number of pilgrims from China is far less than "thousands," Xu Zhitao, deputy director of the bureau of the Tibet question at the United Front Work Department of the Communist Party of China Central Committee, said there are pilgrims from China attending the ceremony who hold Chinese passports. "Therefore, the government by no means threatened them to return, although the government does not encourage them to attend the ritual," Xu told the Global Times on Thursday. Xu pointed out that the ritual, organized by the Tibetan "government-in-exile," certainly involves politics. "Considering that the large-scale ritual needs years of preparation, the India-based ceremony frequently degenerates into a political tool," Zhu said, explaining that the organizing committee has made use of the occasion and the opportunity to meet the Dalai Lama to propagate ideas of "hating the Chinese government." The organizing committee also attempted to establish relations with the Tibetans from China through the ceremony, he said. AFP said the Dalai Lama had held a special audience for the Tibetan pilgrims from China in Dharamsala in December 2016. "The number of Tibetans attending the ritual decreased dramatically in recent years after the local governments clarified to local Tibetans that the ritual is about separatism, and also due to tightened border control," Zhu said. The first Kalachakra ritual given by the 11th Panchen Lama Bainqen Erdini Qoigyijabu concluded in July 2016. It was the first large-scale Kalachakra ritual held in Tibet for 60 years. More than 100,000 believers attended the ritual each day. Cumulative attendance for the four days reached 426,000, the Xinhua News Agency reported. ^ top ^



China probes senior Xinjiang party officials days after deadly bomb attack (SCMP)
Two Communist Party officials in Xinjiang have been placed under investigation for corruption and dereliction of duty, just days after a deadly attack occurred on their watch, according to mainland media reports. The Xinjiang Discipline Inspection Commission said Zhang Jinbiao, 53, the party secretary of Hotan prefecture in southern Xinjiang, was under investigation for “serious disciplinary breaches” – a common euphemism for corruption. Zhang was also implicated in “dereliction”, a rare charge for officials under initial investigation. In another online statement, the commission said He Jun, party chief of Karakax county under Hotan prefecture, had also been placed under investigation for suspected “disciplinary breaches” and “dereliction”. The investigation came just days after a suicide attack rocked an office building in Karakax county. During the attack, which occurred on Wednesday last week, police shot and killed the three assailants, who were wielding knives and managed to detonate a home-made explosive, Xinhua reported. An official and a security worker were also killed and three other people wounded. While it is not clear what triggered the officials' downfall, the two are likely to become the third and fourth officials in the region to be sacked after attacks in their jurisdiction since September. Official reports had earlier said that both Pishan county's party boss and county chief were replaced in September. The reshuffle came immediately after an attack in the county, according to two sources familiar with the matter. Pishan county is also part of Hotan prefecture, one of the districts in the region that have experienced the most attacks. The practice of sacking officials immediately after attacks had been adopted by the region's new party chief since August, Chen Quanguo, the sources said. Chen, 61, is considered a front runner for the new Politburo to be formed later this year. His two predecessors both entered the top decision-making body after being named party chief of the region. “Chen is looking to enter the Politburo and had told cadres that no accidents were allowed,” a source close to Xinjiang authorities said. “But he had never visited southern Xinjiang himself.” Unlike the north, the south of the region has seen a very limited influx of ethnic Han residents, and had been the area most targeted for attacks. Southern Xinjiang has remained underdeveloped and is also where most attackers are originally from. The practice of replacing officials after attacks could undermine the ability to govern Xinjiang, a long-time observer of the region in Beijing said. “It's not that anyone from the outside knows how to govern those counties. A lot of the officials are already undergoing tremendous pressure fighting terrorism,” said the analyst, who requested anonymity because the matter is sensitive. Unlike most parts of China, Xinjiang is predominantly populated by ethnic Uygurs, who are primarily Muslim. Tensions in the region have been high in recent years, during which deadly attacks were launched against civilians, police and office buildings. Beijing blames the unrest on the East Turkestan Islamic Movement, which seeks independence for the region, but many analysts doubt whether the group even exists as a cohesive militant unit. Militants from Xinjiang have also joined Islamic State, according to officials. ^ top ^

Xinjiang to run 400 westbound cross-border trains in 2017 (Xinhua)
Northwest China's Xinjiang Uygur Autonomous Region will run more westbound trains on China-Europe routes in 2017 to boost exports. A total of 223 westbound trains carrying construction materials, agricultural produce, garments and other merchandise traveled via nine cross-border routes linking Xinjiang to Central Asian countries in 2016, said Hu Kaijiang, director of the Xinjiang Economic and Information Commission. Xinjiang also partnered with eight provinces and municipalities last year to broaden its logistics network to better serve China's Belt and Road Initiative. This year, Xinjiang strives to expand operations to run 400 westbound cross-border trains to facilitate exports of technology and equipment and seek new growth opportunities, Hu said. Efforts will be made to strengthen cross-sector cooperation and clearance efficiency to cater to growing logistics needs, Hu said. Xinjiang is at the center of the Silk Road Economic Belt. Its border stretches 5,600 kilometers, separating China from eight other countries and making it a transport hub connecting the country to Europe. ^ top ^

Show of force in Xinjiang sends hardline message (SCMP)
Authorities in Xinjiang staged a massive show of force in an antiterror exercise and rallied police for a public oath-taking ceremony to ensure stability in the region just days after attackers ran a car into a county government compound. Presiding over the events on Saturday was the region's Communist Party chief, Chen Quanguo, who was transferred to the region in recent months and was well known for his hardline policies during his previous posting in Tibet. The rally was attended by senior party and government officials and security forces, according to state-run Xinjiang Daily. The drill involved armoured vehicles and exercises such as rescuing hostages. It also showed how 24-hour police booths defend themselves if they come under attack. Xinjiang has set up a vast police presence, including surveillance in cities and towns, in recent months. The 24-hour booths are of three sizes, ranging from 40 square metres to 120 square metres, and monitor local communities around the clock. They are part of an expanded security network being built by the government, according to an earlier report by Xinjiang news portal The Xinjiang government reported on its website that a car carrying several terrorists crashed into the yard of an office building of the Communist Party committee in Karakax county on Wednesday last week. Police shot and killed the three knife-wielding attackers and detonated a home-made explosive, Xinhua reported, quoting the Ministry of Public Security. An official and a security worker were also killed and three others wounded, it said. During Saturday's ceremony, Zhu Changjie, the region's public security chief, said Xinjiang would be in a state of combat readiness, always prepared to lead the fight against terrorists and to safeguard social stability. Other new security measures introduced since Chen took up his post include asking residents to hand over their passports to local police. He introduced the same policy in Tibet to increase government control. In his new role in Xinjiang, Chen replaced Zhang Chunxian, who was known for his media savviness and more flexible approach to handling conflicts and tension with local Muslim Ugyurs. Chen's appointment is seen as a signal that the central government wants to adopt an iron-fisted approach in the region. Critics have cast doubt on the method, saying it will only stoke more hatred among the Uygur population. The vast region in the far west has seen rising violence in recent years. Authorities blame separatist groups, while minorities say their freedoms and rights are being curtailed. ^ top ^



Radical Hong Kong group Civic Passion to become 'moderate' political party (SCMP)
The radical group Civic Passion that was closely linked with the pro-independence movement is to quit social activism to turn itself into a “moderate” political party aiming to push district work. A meeting will be held in February for its 300 members to formally endorse the change. The new party is to be chaired by the group's current leader and localist lawmaker Cheng Chung-tai, with Alvin Cheng Kam-mun as his deputy. Cheng Chung-tai, a lawmaker for New Territories West, is a lecturer at Polytechnic University. Alvin Cheng was defeated in the Hong Kong Island constituency in the Legislative Council elections in September. Alvin Cheng said: “We did not come up with such a plan overnight. We have been planning our next move after the Legco elections.” “We are not saying that we do not care about social issues or will not take part in social movements any more. We will be low-profile for a while and spare more time to build up our party.” Cheng Chung-tai said he would focus more on education and cultural issues in the legislature. “We will also start developing our district work to serve the community,” he said. Civic Passion was founded by activist Wong Yeung-tat in 2012. It holds strong “localist” views and adopts a “militant” style of protest, opposing the involvement of the Beijing government in Hong Kong affairs. It has also called for the downfall of the Communist Party. The group has been partly financed by its sister group, Passion Times, an online news site. With Civic Passion becoming a party, Passion Times will be hived off to be run as an independent online media organisation. Wong, who quit Civic Passion after his defeat in the Legco elections, denied there had been a split. “There is no question of any internal power struggle or rift among members of Civic Passion,” Wong said. “The move is to make the roles of the two bodies clearer. In the past, I headed Civic Passion and I also managed Passion Times, so some people got confused that we were a two-in-one group. That is not very good for the development of the group.” Wong said he would not play any role in the future party. Cheng Chung-tai faces the possibility of being deprived of his Legco seat. Pro-Beijing legislator Paul Tse Wai-chun initiated a censure motion against him in November after Cheng turned several Chinese and Hong Kong flags upside down on the desks of pro-Beijing members during a council meeting in October. According to Legco rules, the chamber must set up an inquiry to look into the lawmaker in question after a censure motion is tabled. After the probe is concluded, the lawmaker will be disqualified if a motion is approved by a two-thirds majority. The Legco House Committee is expected to discuss the setting up of the inquiry on Friday. ^ top ^

Hong Kong government to subsidise firms scrapping MPF offsetting mechanism for a decade (SCMP)
Hong Kong employers will be subsidised for 10 years with taxpayers' money – although the government's yearly contribution will be lower than expected – after the scrapping of a controversial pension fund payment system. Chief Executive Leung Chun-ying will unveil in his swansong policy address on January 18 the proposal to ditch the mechanism that allows companies to use the money they put into workers' retirement funds to offset severance and long-service payments. The government subsidy in the first year of the transitional period will be less than half the amount used for the offsetting purpose, and progressively reduced over a decade. The government will launch a three-month consultation on the plan, and table legislation to amend the Mandatory Provident Fund (MPF) Schemes Ordinance and the Employment Ordinance if there is enough public support. The plan, which will cost the government billions, is one of the major initiatives to be announced by Leung in his last policy blueprint before his tenure ends in June. While rejecting popular demands for a universal pension scheme, he will instead hand out a monthly subsidy of HK$3,400 to elderly residents whose individual assets are capped at HK$140,000. A source familiar with the matter said the amendment bills would specify a cut-off date, after which employers would no longer be allowed to offset staff severance and long-service payments with their MPF contributions. However, the source said it was unlikely that the mechanism, a source of constant friction between companies and labour unions since the MPF system was implemented in 2000, would be scrapped this year because of time needed for public consultation and drafting of amendments. “It's also highly unlikely the amendment bills will be tabled to the Legislative Council before the tenure of the current administration expires in June,” the source said. In Hong Kong, companies and employees are both required by law to contribute an amount equal to 5 per cent of workers' monthly wages – capped at HK$1,500 – to their MPF accounts. In 2015, the total amount of employers' contributions used to offset long-service and severance payments was HK$3.35 billion, up 11.5 per cent from 2014. The chief executive is running out of time to fulfil his pledge in his 2012 election manifesto to “progressively reduce” the proportion of MPF contributions that can be used for offsetting payments. The source said the government would offer subsidies for a decade after the ending of the mechanism. “The subsidy offered in the first year of the transitional period will account for lower than half of the amount used for the offsetting purpose. It will decrease as time goes on,” the source said. At present, severance and long-service payments are both calculated by taking two-thirds of an employee's last monthly salary and multiplying it by years of service. The government will propose reducing the two-thirds base to half of the monthly salary. Tang Ka-piu, of the Federation of Trade Unions, said the subsidy would be acceptable as long as it helped achieve the goal of scrapping the unpopular mechanism. However, Federation of Hong Kong Industries deputy chairman Jimmy Kwok Chun-wah countered that owners of many small and medium-sized enterprises would object as it would increase their operating costs. Irons Sze Wing-wai, an honorary president of the Chinese Manufacturers' Association, also said the proposal was unacceptable. ^ top ^

Why the angst over hi-tech park on border with Shenzhen? (SCMP)
Build it and they may come, fingers crossed. One supposes that's the idea behind the joint Hong Kong and Shenzhen innovation and technology park in faraway Lok Ma Chau. This huge site – an 87-hectare loop – has been lying idle for the past two decades. It was created by water works in the area. I, for one, am glad they have found a use for it. For critics who are ready to blast the plan as another white elephant like Cyberport or Science Park, or another instance of unaccountable government decisions, consider the alternatives. We could have sold it to developers, built a university, turned it into a centralised storage and cargo transit point, built schools for cross-border pupils, or public housing units. Each option has problems but you can be certain that no matter which one was picked, the usual critics would still be jumping up and down. A tech park does not seem to be the worse option for Hong Kong. After the planned Palace Museum at the arts hub in West Kowloon, it's another one of Chief Secretary Carrie Lam Cheng Yuet-ngor's babies. She has managed to get Shenzhen authorities to acknowledge that Hong Kong owns the land. While Hong Kong has little to show when it comes to innovation and technology over the past 20 years – Octopus cards? – Shenzhen has been growing by leaps and bounds. I know, it's hard to imagine such a thing for our pan-democrats and localist youths who think Hong Kong is superior in every way. Huawei has its headquarters and international training centre in Shenzhen. Tencent is also headquartered in the city's Nanshan hi-tech park. BGI, one of the world's largest genomics companies, has its main office at the Beishan industrial zone in Shenzhen. The National Supercomputing Centre, which carries out some of China's most advanced computer science research, is located – you guessed it – across the border. Thanks to this hi-tech concentration, Shenzhen has a steady supply of highly skilled workers. So while we have the sorry excuse of a Science Park and Cyberport, Shenzhen has at least two functioning technology and industrial parks. If Hong Kong can leverage some of Shenzhen's hi-tech offers via the Lok Ma Chau Loop, it will not be a bad deal. Or we can leave the muddy fields to the birds. ^ top ^

Hong Kong critics slam government move to seek public views on controversial Palace Museum (SCMP)
Hong Kong's No 2 official offered on Thursday to consult the public on the design and operation of a museum to be built in Hong Kong under a controversial deal with Beijing, but critics complained it was still unacceptable that the project itself was already a done deal. Ahead of an expected grilling by lawmakers in a special meeting today, Chief Secretary Carrie Lam Cheng Yuet-ngor wrote to the Legislative Council, telling them it was an official “judgment call” that Hongkongers would welcome their own version of Beijing's famed Palace Museum. She promised a six-week public engagement exercise starting next week, as well as focus group discussions with arts and culture experts. Lam raised eyebrows two weeks ago with her surprise announcement of the museum deal, which will see a 15,000 square metre facility being built on prime harbourfront land in the West Kowloon Cultural District. Critics complained that it was a legal requirement to consult the public first, and that the government had already picked a designer without inviting any competitive bids. According to the Legco paper, jointly prepared by Lam's office and the authority that runs the arts hub, Hong Kong “commenced exploratory discussions” with the Beijing museum in late 2015. She said it would have been impossible to consult the public before or during the year-long discussions due to“special circumstances of the project and the need to maintain confidentiality”. “The Palace Museum's collections are national treasures, the loan of which to other museums... is subject to stringent state regulations or restrictions,” the paper stated. “We have taken a judgment call that the development of the [museum] should be welcomed [by Hongkongers].” According to the memorandum of understanding, the plan can be revoked by either party “with any reason”. The Beijing museum has agreed to the “unprecedented lifting” of restrictions on the number of invaluable artefacts that can be loaned from 120 to over 900 at any one time. But Civic Party lawmaker Tanya Chan dismissed Lam's public engagement vow as “a sham”. “The real question for the public is whether a Palace Museum should be included in West Kowloon.” Oscar Ho Hing-kay, an expert in cultural studies at Chinese University, said: “Whether the move will provide the government with a way out depends on whether the unanswered questions are addressed, such as why put it in West Kowloon and not any other sites, and why the selection of Rocco Yim Sen-kee as chief architect.” The document named Yim – an award-winning professional commissioned to lead the architectural team – as the “design consultant”, rather than “architect” as used in a previous statement by the authority, whose board is chaired by Lam. Indy Lee Chun-leung, a drama adviser to the Hong Kong Arts Development Council, said he was concerned whether participation in the public engagement would imply endorsement of the plan. On the discussions between the government and the Jockey Club's charities trust, the sole financier of the HK$3.5 billion project, the paper said the administration had held several undated meetings with the club's bosses before the sum was pledged last October. “Understandably, such discussions... had to be kept confidential,” it said. The museum project is also facing a court challenge. A law student applied for a judicial review on Thursday, seeking to overturn the government plan, and asking the court to order the authority to hold a formal public consultation. ^ top ^

Occupy leaders Nathan Law and Joshua Wong appeal against conviction for storming government HQ (SCMP)
The appeal by legislator Nathan Law Kwun-chung and two student activist leaders, including Joshua Wong Chi-fung, against their conviction over the storming of the government headquarters just before the 2014 Occupy protests will centre on legal grounds concerning Hong Kong's public order law. Law, Wong and former Federation of Students secretary general Alex Chow Yong-kang were convicted last year at Eastern Court of either taking part or inciting others to take part in an illegal assembly. The trio subsequently lodged an appeal against the conviction, with a brief pre-appeal hearing being held on Thursday morning at the High Court. Law said: “We have some legal grounds on the public order ordinance.” But the lawmaker, who was elected to the Legislative Council after the conviction, added he would not reveal the full details at this stage due to the ongoing legal process. Wong also attended the Thursday hearing, which set out a timeline for both the prosecutors and the trio to file their detailed grounds of appeal before the case is to be heard on May 22. Chow, who is currently pursuing further studies in the United Kingdom, was absent. He and Law – both key figures in the pro-democracy movement two years ago – were sentenced last year to 80 and 120 hours of community service respectively. Chow was given a three-week jail term, suspended for one year. Their case centred on the three's attempt in 2014, along with others, to storm the east wing forecourt at government headquarters in Admiralty – popularly dubbed Civic Square – setting off wider protests in the name of democracy that lasted 79 days. The result of the appeal will determine whether the prosecutors can press ahead with a separate bid to have the trio imprisoned. They are seeking an immediate jail sentence for the legislator and student activists after Magistrate June Cheung Tin-ngan sentenced to them to community service and a suspended jail sentence. Cheung was reluctant to impose a deterrent sentence, saying the three had expressed their demands based on genuinely held political ideals or concern for society. The prosecutors made an earlier appeal to Cheung following her sentencing in an attempt to change her decision, but were unsuccessful. They subsequently lodged an appeal against the sentence, which is expected to be dealt with after the trio's appeal. ^ top ^

Beijing worried no candidate can win strong mandate in chief executive race, Hong Kong politician says (SCMP)
Beijing estimates that none of the potential candidates for chief executive can secure a clear majority to become Hong Kong's next leader in March, according to a local politician, and that is a factor for why it has been holding back on approving John Tsang Chun-wah's resignation as financial secretary. Tsang tendered his resignation on December 12 and hinted that he would seek to succeed his boss, Chief Executive Leung Chun-ying, who made a shock announcement that he would not seek re-election. Tsang's move came days after the city's No 2 official, Chief Secretary Carrie Lam Cheng Yuet-ngor, said she would “reconsider” whether to run so that the administration's current policies could be sustained. Beijing has remained silent over Tsang's resignation, leaving his expected bid in limbo. New People's Party lawmaker Regina Ip Lau Suk-yee and retired judge Woo Kwok-hing are the only people to have announced their bids. The Election Committee's 1,194 members, a quarter of whom are from the democratic camp, will decide who will govern Hong Kong in the next five years on March 26. A local politician who is well-connected with mainland officials handling Hong Kong affairs said Beijing's initial assessment was that its “iron-clad votes” in the committee – those who will strictly follow its preference in the chief executive race – were fewer than 500. “The central government wants the winner to secure an overwhelming majority to ensure a stronger mandate,” the politician said. “It hopes the winner can muster more than 700 votes.” But at this stage, Beijing was worried that none of the potential candidate was able to clinch more than the 601 votes required to win in the first round of voting, let alone 700, the politician said. According to the electoral rules, if no one wins in the first round of the election, the top two candidates will enter a second round of voting on the same day. A source, who spoke on condition of anonymity, told the Post that Lam was “proactively considering” a bid for the top job, in which she would prefer to win through her own efforts rather than relying on Beijing's endorsement or blessing. However, veteran China watcher Johnny Lau Yui-siu warned that could be wishful thinking on Lam's part. “I understand that Beijing knows that in a free competition, Lam might not have as many votes as Tsang... so the central government will want to play a part behind the scenes,” Lau said. Lau Siu-kai, vice-chairman of the mainland's top think tank on Hong Kong affairs, said these uncertainties explained why the central government “needs time to assess the situation more clearly” before approving Tsang's resignation. “Beijing could not stop him from quitting or running... but if it wants a competitive race, it needs to create a level playing field for other aspirants too,” he said. Lam said she would only make a decision on the race after she finished helping Leung finalise his final policy address, which will be unveiled on January 18. Lau dismissed the suggestion that Beijing would wait for Lam's decision before approving Tsang's departure, as it would be seen as endorsing Lam. It is understood that Shen Chong, who heads the coordination department in Beijing's liaison office in Hong Kong, told a recent discussion with Hong Kong delegates to the Chinese People's Political Consultative Conference that the central government's approval of Tsang's resignation was “only a matter of time”. With none of the potential candidates seemingly able to win by a comfortable margin, a second source, who has good connections with the mainland authorities, revealed that some Beijing officials were pondering the possibility of finding a candidate who is acceptable to all sides. MTRC chairman Frederick Ma Si-hang and executive councillor Bernard Chan are names that have been floated recently within the pro-establishment camp as alternative candidates. After Leung announced he would not seek re-election, Ma said he “does not have the heart, the intention nor any plan to” to run for chief executive, adding that his family would not support him taking up any government post. In October, Bernard Chan also reiterated that he had no plan to give up his business and run for the top job. ^ top ^

Dissatisfaction at Hong Kong's political situation hits record high, survey finds (SCMP)
People are more disgruntled with the city's political situation than ever, according to a University of Hong Kong survey, with the young and more educated most unhappy. In the latest study by the university's public opinion programme between December 19 and December 22, the overall dissatisfaction rate hit 69 per cent, up one point from June, and the highest since the survey was first conducted in 1992. Only one in 10 people said they were satisfied. The dissatisfaction rating hit 80 per cent among respondents aged 18 to 29, compared with 65 per cent for those aged 50 or above. Up to 86 per cent of those who had reached tertiary education or above were unhappy with political developments, dropping to 49 per cent for people at primary level or below. The findings followed the political storm surrounding Beijing's decision to effectively disqualify two pro-independence lawmakers, Yau Wai-ching and Sixtus Baggio Leung Chung-hang, for their improper oath-taking, which some critics regarded as a violation of the “one country, two systems” principle. The government has launched a legal bid to disqualify four more pro-democracy lawmakers: Nathan Law Kwun-chung, “Long Hair” Leung Kwok-hung, Lau Siu-lai and Edward Yiu Chung-yim. The survey found that Hongkongers' net satisfaction – the difference between the satisfaction rate and dissatisfaction rate – on livelihood, economic and political conditions all continued to be negative. They were most unhappy with the political atmosphere as the survey recorded a minus 59 per cent net satisfaction rate. Democratic Party chairman Wu Chi-wai said people's sense of helplessness had been fuelled by the unseating of lawmakers popularly returned by the public. “It is a very natural finding as the current political structure has failed to resolve social conflicts and has also highlighted the importance of improving the system. Simply changing the leader is not enough,” he said, referring to Chief Executive Leung Chun-ying's abrupt announcement last month that he would not seek a second term for family reasons. The net satisfaction rate with livelihood conditions and economic conditions stood at minus 25 per cent and minus five per cent respectively. People were most concerned about livelihood issues, followed by economic and political issues, which the pollsters said had been “the pattern for many years”. The study, which polled 1,009 Hongkongers by random telephone survey, had a response rate of 71 per cent and a margin of error of plus or minus three percentage points. ^ top ^

Singapore military vehicles still detained, says Hong Kong customs (SCMP)
Hong Kong's Customs and Excise Department has moved to quash speculation that nine military vehicles from Singapore detained in the city since November have been returned. The department made the rebuttal after Apple Daily said in a report that the vehicles, which had been detained in the outdoor storage yard of a Tuen Mun storage facility for weeks, were missing since Monday. The department stressed that the vehicles were still being kept in Hong Kong. “As the case is still under investigation, no further information is available. The suspected controlled items are still kept at a customs storage place in Tuen Mun. They have been stored indoors since December 6,” a spokesman said. At a daily press briefing, Chinese foreign ministry spokesman Geng Shuang would only say that the Hong Kong government is handling the incident in accordance with relevant laws. The nine armoured vehicles were uncovered by Hong Kong customs on November 23 in containers without the required permits. The cargo was bound for Singapore from the Taiwanese port of Kaohsiung. The vehicles, which were not “specifically” declared in the cargo manifest, had been used in a military exercise in Taiwan. It was Hong Kong's biggest seizure of “strategic commodities” in two decades. Last week, Singapore's defence minister Ng Eng Hen said the Lion City's military had learned a lesson from the saga. In a Facebook post, titled “2016 – A Look Back”, Ng described it as “a low point from the defence perspective”. “The [Singapore armed forces] will learn from this episode and has already changed its practices to better protect our assets,” Ng said in the post, without revealing details. “But all of us are of course upset that the (vehicles), our property, have not been returned to Singapore.” In November, Singapore reassured China that it “will not deviate” from the one-China principle while making it clear the city state hopes to exercise its “full rights of recovery” available. The remarks by Singapore's foreign affairs minister Dr Vivian Balakrishnan and defence minister Ng came a day after China's foreign ministry said it had lodged a diplomatic protest to Singapore over the incident, demanding the Lion City to strictly abide by the one-China principle. Observers said the protest was a warning to both Singapore and Taiwan, as Singapore had been carrying out military exercises on the self-ruled island – a practice that long angered Beijing. ^ top ^

Beijing official sets anti-independence limits for Hong Kong as thousands march against government push to disqualify lawmakers (SCMP)
Thousands of Hongkongers marked the first day of 2017 with a street protest against the government's push to disqualify four pro-democracy lawmakers, while Beijing's top man in the city spelled out the limits as he warned against independence advocacy. The Civil Human Rights Front, which organised the New Year's Day rally, put the turnout at more than 9,000, and apologised for the relatively low number. Police put the turnout at 4,800 at the peak. The organiser attributed the low turnout to the lack of a central figure to draw opposing crowds after Chief Executive Leung Chun-ying announced last month that he would not seek a second term because of family reasons. “Many citizens thought all problems would be resolved after Leung's withdrawal and were relieved,” Front convenor Au Nok-hin said. The annual rally went ahead as Zhang Xiaoming, director of Beijing's liaison office, who had skipped a number of public events and not spoken publicly since Leung's stunning announcement, broke his silence in an exclusive interview with state broadcaster CCTV. He said the “one country, two systems” policy had achieved “universally acknowledged success” in the 20 years since its implementation, but the rise of radical separatism in Hong Kong should be faced squarely. He spelled out three bottom lines that should not be breached: harming national security; challenging the authority of the central government and Basic Law; and using the city as a base to infiltrate and subvert the mainland. The theme of this year's march was to oppose the government's court campaign to unseat four pro-democracy legislators – Nathan Law Kwun-chung, Edward Yiu Chung-yim, Lau Siu-lai and “Long Hair” Leung Kwok-hung – over improper oath-taking. “We are here to oppose political suppression,” Sarah Chen Sin-yu, a University of Hong Kong student, said. “It is very unfair of the government to use taxpayers' money to disqualify lawmakers popularly returned by voters.” Some said Leung's decision to retire had not dampened their enthusiasm to join the procession as they were still worried his successor would continue his hardline style of governance. “All the chief executive aspirants now are undesirable,” Albert So, 53, said, referring to Chief Secretary Carrie Lam Cheng Yuet-ngor, Financial Secretary John Tsang Chun-wah, executive councillor and lawmaker Regina Ip Lau Suk-yee, and retired judge Woo Kwok-hing. The recent controversy surrounding the deal to create a Hong Kong version of the Palace Museum at the West Kowloon Cultural District had revealed Lam's disregard for public opinion, he added. With donation booths set up along the rally's route from Causeway Bay to Central, the Justice Defence Fund announced it had raised HK$1.42 million yesterday, taking the total to HK$1.83 million. The money will be used to pay legal costs for the four lawmakers in their court battle. The government issued a statement saying while it respected their electoral mandates and Hongkongers' right to protest, it was equally important for lawmakers to take their oath in keeping with the legal requirements. ^ top ^

Don't let Hong Kong become haven for corrupt, mainland graft-buster urges (SCMP)
Hong Kong and the mainland should team up in the fight against fugitive officials and stop the city becoming a refuge for fleeing cadres, according to a senior mainland anti-corruption official. Hong Kong-based pro-establishment magazine Bauhinia quoted Liu Jianchao, head of the Central Commission for Discipline Inspection's international cooperation department, as saying Beijing was determined to crack down on corruption. Liu vowed to stop Hong Kong from becoming a “haven for the corrupt and their illegal income”, but said repatriation operations faced big challenges. “Some of the mainland's corrupt officials exploit the differences in the... systems between the mainland and Hong Kong to flee. They try to hide in Hong Kong or use Hong Kong as a springboard to a third country,” he said. The former diplomat said the authorities on the mainland and in Hong Kong should step up cooperation on sharing evidence, countering money laundering, tracing illicit assets, and joint law enforcement actions. Liu said that between January and November, 908 fugitives had been repatriated to the mainland as part of “Sky Net”, one of the country's overseas operations against graft. Among those sent back were 122 former government employees who fled with a total of 2.3 billion yuan (HK$2.6 billion). Since 2014, 2,442 suspects, including 397 government officials, had been returned in cases that involved a collective 8.5 billion yuan in ill-gotten gains. “We'll never stop chasing the fugitives no matter how far they go or how long they have fled,” Liu said. In another article in the magazine, Simon Peh Yun-lu, head of Hong Kong's Independent Commission Against Corruption, wrote that the city had been working with mainland authorities on graft-related crimes. Mainland procuratorate officials made 26 trips to Hong Kong in 2015, questioning 18 witnesses, Peh wrote. ICAC officers also made 21 trips to the mainland, questioning 35 witnesses. Peh said Hong Kong implemented anti-corruption regulations to a high standard, pointing to the city's fourth placing in a corruption risk assessment survey of 199 countries and regions. ^ top ^

Career scientist and cybersecurity expert appointed deputy chief of Beijing's liaison office in Hong Kong (SCMP)
Beijing has appointed a computer scientist and cybersecurity expert as a deputy chief of its liaison office in Hong Kong, in a move seen as part of the central government's efforts to reach out to academia and professional elites. Xinhua announced on Friday that 52-year-old Dr Tan Tieniu, formerly vice-president of the Chinese Academy of Sciences, would become the office's seventh and youngest deputy director. The move came three days after Song Zhe, the foreign ministry's commissioner in the city since 2012, was named a deputy director of the State Council's Hong Kong and Macau Affairs Office in Beijing as part of a management reshuffle. Tan is the first academic to be parachuted into the liaison office since Beijing appointed Tsinghua University law dean Wang Zhenmin to head the office's legal department in January. Tan has spent his career as a scientist after receiving his bachelor's degree in electronic engineering from Xian Jiaotong University in 1984. After receiving his master's degree in the same field from Imperial College London in 1986, he spent 13 more years in Britain. During that period, he obtain his PhD from Imperial in 1989, and worked as a research fellow and lecturer at the University of Reading's computer science department. In 1998, Tan returned to China under the Chinese Academy of Sciences' Hundred Talents Programme, a sponsorship scheme launched in 1994 to attract at least 100 Chinese scientists to return to their country. On his return, he became head and professor of a laboratory at the academy. He also served as deputy secretary general for the academy's cyber-infrastructure and international affairs. Tan's experience in Britain and academia was viewed by analysts as a key consideration for his latest posting in Hong Kong, where professors and university students have long played a leading role in social movements, including the 2014 Occupy protests. Lau Siu-kai, a leading Beijing adviser on Hong Kong affairs, said Tan's background made him more qualified to communicate with local scholars. “They share the same academic language... and he should also have some understanding of Western values,” Lau said. On Thursday, Tan met a delegation from Fujian's Huaqiao University at the liaison office. Yin Xiaojing, the deputy director in charge of liaising with local academics, reached the retirement age of 60 in August, but Lau said it remained unclear whether Tan would be taking over from the deputy chief. Veteran China watcher Johnny Lau Yui-siu believed Tan would play a role in exchanges with local academics. Open University president Wong Yuk-shan said he could help foster innovation and technology cooperation between Hong Kong and the mainland. ^ top ^



Taiwanese independence must be fought on all fronts, says former Chinese official (SCMP)
Beijing must be prepared to suppress pro-independence forces in Taiwan on all fronts ranging from political to diplomatic, according to the former president of the Association for Relations Across the Taiwan Strait. Wang Zaixi, who once led the mainland's semi-governmental organisation for managing ties with Taiwan, said Beijing expected cross-strait relations to get more complicated once Donald Trump became the US president on January 20. Wang said only the mainland had the capacity and resolve to contain Taiwanese pro-independence forces, but that Beijing would also consider public sentiment of the self-ruled island. “With the help of the US, Taiwan's pro-independence forces will play more de-sinicisation tricks without fear,” Wang was quoted as saying by the Global Times, a newspaper published by People's Daily. “The only force that can contain Taiwan independence is the Chinese mainland... To solve the Taiwan issue, it is necessary to comprehensively make use of politics, the economy, the military, the media, diplomacy and so on, ” Wang said. In a commentary published in the same newspaper, Douglas Paal, former director of the American Institute in Taiwan, also predicted that Sino-US relations would see complications. Paal said Washington was increasingly sceptical about Beijing on matters like regional disputes, trade and investment frictions and the Taiwan issue. Other analysts agreed that given the forseeable complexities in the trilateral relationship between Beijing, Washington and Taipei, Beijing was worried about the independence-leaning trend on the island and wanted to pressure the government of its president, Tsai Ing-wen. Chang Yachung, an observer from National Taiwan University, said the Tsai administration refused to recognise the 1992 consensus, leaving Beijing and Taipei with no political basis for talks. The 1992 consensus refers to an understanding between Beijing and Taipei that there is only one China, but that both sides are free to interpret what “China” means. “And Tsai is continuing her de-sinicisation action, which worsens the identity crisis among Taiwanese youngsters, a situation Beijing is not willing to see,” Chang added. He said that Beijing was likely to pressure Taiwan mainly through diplomatic and military means. Beijing re-established diplomatic ties with former Taiwanese ally Sao Tome and Principe last month, signalling the recurrence of a diplomatic war between Beijing and Taipei. ^ top ^

Taiwan's military may be first casualty in pensions crisis (SCMP)
Taiwan's military pension fund may be in default by 2020 after years of widening deficits, raising alarm about the island's defence stability when tensions are heating up with mainland China. The island's government said an urgent overhaul of the pension system was needed as large payouts were no longer sustainable for the export-reliant economy, with contributions crimped by slower economic growth since the 1990s and a rapidly ageing population. About 120,000 people on military pension benefits and another 200,000 in the civil service are nervous about pension reform, a priority of President Tsai Ing-wen. A restructured scheme could result in having to wait longer to retire as well as smaller pension payments, among other changes. “The biggest problem we are facing with the reform is fear. It is making everyone anxious and uneasy,” said Hu Chu-sheng, a retired former lieutenant general who served in the army for 40 years. “When soldiers cannot focus on their duty, it weakens the effectiveness of Taiwan's military forces,” Hu said. “It would then be easy for China to take Taiwan without even getting blood on their knives.” Beijing regards Taiwan as a breakaway province that should be reunited with the mainland, by force if necessary. The unease over pension reforms cuts across other sectors. Under-funded liabilities of public and labour sector pensions were expected to hit a record NT$18 trillion (US$570 billion) in 2016, nine times the government's annual budget expenditure and a big jump from NT$12 trillion a decade ago. “If we cannot have stability over the next 20 or 30 years, it is unavoidable that it will trigger a financial crisis for the government,” said director Lu Ming-tai of the retirement and survivor relief department of the Civil Service Ministry, which manages more than NT$560 billion in one of the government's public sector pensions. The surge in the under-funded liabilities since 2008 has raised the urgency of pension reform. “Taiwan and the other 'Little Dragon' economies are the fastest ageing Asian economies after Japan,” said S&P Global Ratings analyst Kim Eng Tan. “Taiwan's demographic profile means that contributions to the public servants' pension funds are already below benefits paid to retired members.” Successfully reforming the pension system will be crucial for Tsai, whose popularity has hit an all-time low since taking office last May. She has said reforms are “urgent” given the limited national and social resources and wants to see pension reform bills passed by the legislature this spring. As doubts arise over the government's ability to fund pension and health insurance, Taiwan's youth feel increasingly demoralised. “If the pension system is not reformed soon, young people see no hope for their future,” said Chu ying-ju, 23, a graduate student and member of an advocacy group on pension reform. Military staff draw monthly pensions of NT$49,379 on average, and civil servants NT$56,383 – around 75-85 per cent of last-drawn salaries and about twice the starting pay of new graduates. Tsai's determination to push on with reforms, where former President Ma Ying-jeou had failed, has angered hundreds of thousands of public sector employees who demonstrated in Taipei in September, demanding the government protect their interests. “Pension reform is the toughest job on the domestic agenda,” said Lin Wan-yi, deputy chief of the National Pension Reform Committee. Government debt has surged tenfold to NT$5.67 trillion over the past 23 years while the working population has shrunk. And time is not on the government's side. Pensions for civil servants could default by 2030, teachers in 2031 and other workers in 2048, government data shows. “We expect the burden of an ageing society to intensify over the next two years in Taiwan and Korea as their working populations shrink for the first time in modern history,” said Ronald Man, of the Bank of America Merrill Lynch in Hong Kong. There were 13 working people per retiree in 1985, declining to six in 2015, and there will be less than two by 2050. Taiwan's ageing demographic and a low birth rate have resulted in higher debt for these funds – at 53 per cent of gross domestic product. That figure will likely climb as funds hunt for yield overseas because domestic rates are low. “Officials could tackle this problem for pension funds and insurance companies in Taiwan by raising the overseas investment limit from 45 per cent or allowing more exemptions when calculating the limit,” Man said. S&P Global Rating's ageing studies show most sovereign ratings will go down if governments do not enact reforms to pension and health care financing schemes. “In the near future, the sum of new contributions plus existing fund assets will not be able to meet benefit payments,” said S&P's Tan, adding that Taiwan's National Health Insurance was potentially a bigger concern. “Like pensions, its burden will grow as Taiwanese age. And it covers a much bigger part of the population, including some who live abroad.” ^ top ^

Taiwan protests after Vietnam deports fraud suspects to China (SCMP)
Taiwan on Tuesday strongly objected to the deportation of four Taiwanese nationals suspected of telecommunications fraud from Vietnam to mainland China, saying the move was carried out under pressure from Beijing. The latest deportation followed a series of similar cases this year where Taiwanese nationals in Kenya, Malaysia, Armenia and Cambodia have been arrested for alleged involvement in cross-border telecom scam groups and sent to the mainland. The deportations arose from the “one-China” policy of most countries under which they maintain formal relations only with the People's Republic of China rather than Taiwan, a self-ruled island that Beijing regards as a Chinese renegade province. The four suspects, along with one Chinese citizen, were arrested in the northern Vietnamese city of Haiphong in December. Despite repeated requests from Taiwan envoys in Vietnam to have the four deported to Taiwan, they were “forcibly” sent to the mainland, Taiwan's foreign ministry said. “China said that in this case the victims were mostly in China and demanded Vietnam to repatriate all of the suspects to China (based on a bilateral legal treaty), obstructing our efforts to understand the case and visit the Taiwanese suspects,” it said in a statement. Taiwan's China policymaker, the Mainland Affairs Council, urged Beijing on Tuesday to open dialogue as soon as possible, saying its actions were unhelpful in tracing the source of the cross-border fraud groups and affected mutual trust in joint Chinese-Taiwanese crime fighting efforts. Beijing has suspended dialogue with Taipei since June, a month after independence-leaning Tsai Ing-wen took office. Tsai has refused to accept Beijing's “one China” principle that deems Taiwan a part of mainland China. According to Mainland Affairs Council officials, there are over 200 Taiwanese suspected of telecom fraud who have been deported from third countries to mainland China this year. Chinese authorities have sought to contain an explosion of telecom crime it says has led to huge financial losses, with callers often impersonating officials and preying on the elderly, students or the unemployed. The fraud has spread overseas, with Chinese speakers recruited in neighbouring self-ruled Taiwan increasingly setting up operations in East Africa or Southeast Asia. ^ top ^

Japan representative to Taiwan says ties 'at their best' (SCMP)
Ties between Japan and Taiwan are at their best, Japan's representative on the island said on Tuesday, at the unveiling of a new name for Japan's representative office that has riled Beijing. Japan and Taiwan have extensive business ties and also share concern about an increasingly assertive mainland China. But Japan, like most of the world's countries, maintains only informal relations with Taiwan, which Beijing regards as a renegade province. Japan has diplomatic ties with Beijing – recognising China's position that there is only “one China” and Taiwan is part of it. “Currently Japan-Taiwan relations are at their best, but we should take further steps to develop a good relationship,” Mikio Numata, Japan's chief representative, said at a ceremony with Taiwan's vice-foreign minister, Leo Lee. The ceremony was to officially change the name of Japan's office on the island – its de facto embassy – to the Japan-Taiwan Exchange Association. It had been called the “Interchange Association, Japan” since it was set up in the 1970s. Since then, Japan has grown to become Taiwan's third largest trading partner and second largest source of foreign tourists. Beijing has criticised the name change because it includes the word “Taiwan”. Its foreign ministry spokesman Geng Shuang repeated opposition on Tuesday, saying China had lodged representations with Japan about it. Japan should “not send any wrong messages to the Taiwan authorities or the international community and not cause new interference in Sino-Japan ties”, Geng told reporters in Beijing. Numata said the name change was to make it clear who the parties were. “The goal was to put 'Japan' and 'Taiwan' in the name to clearly point out the counterparts of the exchange,” he said. Many major countries, including the United States and Britain, operate representative offices in Taiwan under various names. The US mission is the American Institute in Taiwan. Business relations between the mainland and Taiwan have grown significantly over the past decade, but tension has increased since the island elected a president from the independence-leaning Democratic Progressive Party last year. Beijing distrusts President Tsai Ing-wen and has stepped up pressure on her following a protocol-breaking phone call between her and US President-elect Donald Trump. Trump later cast doubt on the US commitment to the “one China” policy and over the weekend did not rule out meeting Tsai in future. Geng said there should be no official contact between the US and Taiwan. “The Taiwan issue has always been the most important and sensitive one in relations between China and the United States. We urge the US to fully recognise the sensitivity of the Taiwan issue,” Geng said “I think that on the relevant issue Trump's team is very clear.” ^ top ^



China should let yuan fall, says the latest economist to join call for central bank to change tack (SCMP)
China should stop its heavy intervention in the yuan exchange rate and allow a one-off devaluation of the yuan, according to the finance professor at the prestigious Tsinghua University and author of China's Guaranteed Bubble. Zhu Ning has joined a small but growing group of economists in Beijing who believe the central bank should change its tactics with regard to the yuan. In an interview with the South China Morning Post, Zhu, deputy director of the university's National Institute of Financial Research, said the current approach adopted by the People's Bank of China – namely using up foreign exchange reserves to prevent the yuan from falling sharply – was unsustainable. “The yuan has lost more than 10 per cent [against the dollar] from its peak, but China's foreign exchange reserves have lost almost 25 per cent,” Zhu said. “What can China do if the reserves keep shrinking... if its reserves can't meet current account payment requirements?” Zhu said a more feasible approach was to let the yuan fall as much as the marketpermitted. “There may be overshooting, but the market will gradually correct itself,” Zhu said. By letting market forces determine the exchange rate, China “can avoid the loss of forex reserves and send a signal that it is a market-oriented operation,” he said. Zhu, whose book provides a systemic analysis of the country's financial risks stemming from an implicit government guarantee of the banking system, state enterprises and local government debts, is the latest big-name economist to question Beijing's ongoing exchange rate policy. He joined Yu Yongding, a former monetary policy committee member, who has argued for years that the central bank should stop intervening in the foreign exchange market. Zhu Baoliang, a government researcher at the State Information Centre, a think-tank affiliated with China's economic planing agency, was quoted by Bloomberg as saying on Tuesday that China should allow a big yuan revaluation. To be fair, their views are more academic arguments, and it is not known whether their comments will be accepted by China's policymakers and lead to a change in stance over the yuan. China's central bank, meanwhile, is showing a reluctance to permit any dramatic fall in the value of the yuan. The yuan exchange rate posted its biggest percentage gains in about a year in offshore trading on Wednesday over speculation that Beijing wanted a stable currency ahead of US President-elect Donald Trump's inauguration. Over the longer term, the Chinese currency weakened 7 per cent against the US dollar last year – the largest decline since it reversed a 10-year appreciation in 2014, despite the fact that Beijing had used nearly 1 trillion dollars of foreign exchange reserves to bolster the currency since 2014. Zhu said China would face grim challenges from capital outflows in 2017. “Yuan depreciation and capital outflows will greatly hinder China's efforts to keep financial stability and carry on with economic reforms,” Zhu said. Meanwhile, China's moves to strengthen capital flow control run the risk of turning foreign investors away and “leading to more trade friction with the United States” under the new Trump administration, he said. A trade war is looming between China and the US as Peter Navarro, the author of Death by China, had been named by Trump to head the White House National Trade Council. Such external challenges had come at a time when China's financial risks at home were increasing, Zhu warned. The country's economic growth was decelerating, its inflation rate was edging up, and the country's overall debt, including public and private sector, had reached a dangerously high level of about 250 per cent of China's gross domestic product, he said. A lot of short-term debt had been borrowed to finance long-term investments, and the situation could turn ugly if the liquidity supply dried up, Zhu warned. The bond market sell off at the end of 2016, caused by the Federal Reserve's rate rise and exposed grey-area bond market operations, had shed light on the risks in China's financial system, he said. All this required a comprehensive reform or overhaul of the financial system, but Zhu said there would be no big changes until China's top leadership reshuffle was completed at the end of 2017. ^ top ^

Shaanxi one of first Chinese provinces permitted to invest pensions in stocks (SCMP)
Shaanxi is set to be one of the first Chinese provinces to participate in a pension investment scheme that allows them to invest in financial markets for the first time, Shaanxi Daily, a newspaper in the northwestern province, reported on Wednesday. With many provinces under severe pressure to meet pension repayments, Beijing has promised to push forward an investment plan for idle local pension funds, holding an estimated $290 billion, that will seek higher returns through alternative investment channels for higher returns. Shaanxi was among six Chinese provinces that had an annual pension deficit in 2015, with funds estimated to be only sufficient for repayments for up to 10 months, a report by the Ministry of Human Resources and Social Security showed. In August last year China said it would, for the first time, allow pension funds, whose investments has hitherto been limited to low-yielding bank deposits and treasuries, to invest in stocks and other assets. Since then, China has selected four banks as custodians of its pension insurance fund, and 21 investment management institutions for the fund. In an announcement on December 29, the National Council for Social Security Fund said it had received written confirmation from the first batch of provincial governments that had opted to participate in the new investment plan. ^ top ^

Premier Li: More dynamic market cornerstone for development (Xinhua)
China will make more efforts to streamline administration through more power delegation and fewer certification and evaluation requirements, and will soon issue its first guideline for market supervision and regulation to make its business environment more inviting. The decision was announced during the State Council's executive meeting on Wednesday chaired by Premier Li Keqiang. Local government will take over approval of 53 administrative items, mainly covering business activities such as qualification certificates for private schools and business permits for cotton processing to make business registration more convenient. Delegation of 14 items will require further approval by the National People's Congress Standing Committee as law amendments are needed. Since 2013, a total of 230 administration items have been delegated to local governments. Another 20 agency-provided evaluation and certificate requirements will also be dropped, including areas such as railway facility construction and qualifications for legal professionals. "Our reform in streamlining administration for leaner and more effective government is stepping into a crucial stage," Li stressed. "All departments should seriously implement (the decisions), and make sure to drop institutional costs for enterprises." "The key in transforming government function is striking a balance between the government and the market, and our goal is to effectively unleash and grow productivity potential," he added. "There is no end to it, and we shall grasp the key link of reform to deliver results." It was also decided during Wednesday's meeting that China will soon issue its first guideline for market supervision for a more open, better regulated and attractive business environment. The guideline will be effective through China's 13th Five-Year Plan period (2016-2020). The new guideline is geared toward a market environment offering easier market access, a platform for fair competition, and greater consumer safety. The measures to be adopted include: further streamlining of business registration; negative list-based market access with a focus on compliance oversight; a level playing field for non-local businesses with fair competition and bans on discretionary charges or subsidiaries; and highlighting regulation and enforcement of food and drug safety as well as other fields that are crucial to public safety and security. The government also needs to improve regulatory innovation through the Internet Plus Mode and big data, among other means. "Supervision must be carried out in a lawful and well-regulated manner so that companies will not be subjected to extra burdens," Li stressed. He pointed out that while the country is working hard to phase out excess industrial capacity, institutional hurdles should be reduced to allow room for new economic driving forces. "We should work hard to advance in transforming the role of the government. A more dynamic market is the cornerstone for development," Li said. ^ top ^

Trump's top trade pick 'set to strain economic ties with China' (SCMP)
Donald Trump's top pick as his US trade representative – a veteran supporter of “get tough on China” trade talks – will cast a further shadow over bilateral trade and investment ties, according to senior Chinese government advisers. Robert Lighthizer, a trade lawyer who served as deputy US trade representative under president Ronald Reagan in the 1980s, is tipped to head Trump's top trade-negotiating agency. Analysts said Lighthizer's expected nomination was just another example of Trump packing his economic team with conservative veterans of US steel interests and vocal critics of China's trade barriers such as export subsidies and market access restrictions. Trump's trade team, including his nominee for commerce secretary, billionaire investor Wilbur Ross, and Peter Navarro, director of the newly established National Trade Council, would inevitably make economic and trade ties between China and the US more difficult, according to former vice-commerce minister Wei Jianguo. Wei, now a deputy director of the China Centre for International Economic Exchanges, said the nomination of Lighthizer, one of Trump's top trade advisers and a supporter of the president-elect's tough approach to trade with China since at least 2011, was not surprising. “I am not optimistic about bilateral trade relations under Trump as we look set to see more disagreements and frictions on various import and export sectors, which is definitely not good news for China-US ties,” he said. “But considering the increasingly intertwined trade ties between Beijing and Washington in recent years, I don't think we are going to see the possibility of a full-fledged trade war between the world's top two economies.” Wang Huiyao, president of the Centre for China and Globalisation and an adviser to the State Council, said that while Beijing should be prepared for trade disputes under Trump, it was too early to say if he would translate his aggressive anti-free trade campaign rhetoric into policy. “Trump is a businessman and I think he is just talking tough to get better deals vis-à-vis China,” Wang said. Trade had been a central issue throughout Trump's election campaign. “He has to talk tough on trade to China partly because that's how he got elected,” Wang said. Analysts also noted Trump and many of his trade advisers, such as Navarro and Dan DiMicco, former chief executive of North Carolina-based steelmaker Nucor, vigorously opposed the 12-nation Trans-Pacific Partnership pact and promised to levy hefty tariffs on Chinese imports. Trump criticised China on Twitter on Monday for “taking out massive amounts of money & wealth from the US in totally one-sided trade” while refusing to rein in nuclear-armed North Korea. “We should take Trump's tough talk seriously but not literally. I'd rather think he intends to test Beijing's bottom line instead of provoking China,” Wei said. Under Trump, the US trade representative – who traditionally has had authority over trade negotiations – will not serve as the main architect of US trade policy, according to Reuters. Instead, the commerce secretary and Navarro's new office are expected to play more important roles in setting the trade agenda. ^ top ^



NK stresses self-reliance to carry out 5-year economic development plan (The Korea Herald)
North Korea on Wednesday called for efforts to fully implement the country's five-year economic development plan based on self-reliance principles in the face of tough international sanctions. The year 2017 is a meaningful year which should be devoted to carrying out the economic development strategy laid out by the North's leader Kim Jong-un, the Rodong Sinmun, the North's main newspaper, said in its commentary. At a party congress held in May 2016, Kim presented the five-year strategy for economic growth, stressing the need to improve the people's livelihood and ease an electric power shortage. But his vision largely lacked details and specific targets. Kim Jong-un delivers his New Year`s address at the Workers` Party Office (Yonhap) The North's leader stressed in his New Year message that it is needed to actively push for attaining the goal of the economic strategy "by dint of the self-reliance and self-development." North Korea's economy is estimated to have contracted 1.1 percent on-year in 2015, marking the worst performance since a 1.2-percent decline in 2007, according to South Korea's central bank. The economic contraction came after the North's moribund economy grew for the fourth consecutive year in 2014. The repressive regime's economy may have contracted again last year as it was slapped by stronger UN sanctions for its nuclear and missile tests. "For the North's leader, his top policy priority would be placed on overcoming the international sanctions regime," said Lim Eul-chul, a professor at the Institute for Far East Studies of Kyungnam University. "Pyongyang is likely to mobilize all available resources and labor to implement its economic strategy." In his New Year speech, Kim made it clear that his country has no intent to give up its nuclear and missile programs. He said his country is close to test-firing an intercontinental ballistic missile. Pyongyang is widely seen as seeking to develop a nuclear-tipped ICBM capable of reaching the US mainland. ^ top ^

N. Korea trying to improve trade structure to circumvent UN sanctions (The Korea Herald)
North Korea has emphasized the need to improve its trade structure by expanding the exports of processed goods and services in an apparent bid to circumvent UN sanctions on its mineral resources exports. "The export ratio of processed goods, technology and services to total exports should be raised, a departure from the existing trade structure centered on exports of raw materials and resources to the one focused on exports of processed and finished goods," said a thesis, carried on the 2016 fourth edition of the newspaper of Kimilsung University in Pyongyang, issued on Dec. 10. Yonhap obtained the paper on Wednesday. Agricultural products, livestocks and mineral resources like lead, zinc, magnesite, silica, graphite and rare earth, which are abundant in North Korea, need to be shipped abroad after processing, said the paper, titled "To Expand External Economy Is a Critical Demand for the Construction of a Socialist Economic Power." The paper also stressed that the North's exports now center on technology and services instead of goods. It's unusual that the North has stressed on the need for the improvement of its trade structure, reflecting that it is trying hard to find other export items that can replace its major exports of mineral resources. In November, the UN Security Council adopted the Resolution 2321 to punish the North for its fifth nuclear test, imposing a cap on the UN member nations' imports of the North's mineral resources, which is a source of hard currency for the North's nuclear program. "The paper is a reflection of the effectiveness of the UN's economic sanctions on North Korea, although the communist country claims they are not," Cho Bong-hyon, a researcher at the Seoul-based IBK Economic Research Institute, said. ^ top ^

Donald Trump slams China for not helping contain North Korea's nuclear ambitions (SCMP)
US president-elect Donald Trump has fired yet another salvo at China through Twitter, this time accusing Beijing of refusing to help contain North Korea's nuclear ambitions. After North Korean leader Kim Jong-un said in a New Year's Day address that Pyongyang had reached the “final stages” of testing its first intercontinental ballistic missile that could reach American soil, Trump tweeted on Monday: “It won't happen!” And the president-in-waiting didn't miss his chance to direct blame at China. In a second tweet later in the day, he criticised Beijing for not helping to control Pyongyang's development of its nuclear weapons. “China has been taking out massive amounts of money & wealth from the US in totally one-sided trade, but won't help with North Korea. Nice!” he wrote. Trump, who spent Monday with advisers at Trump Tower in New York after a holiday in Florida, did not specify what, if anything, the United States might do under his command to stop North Korea from developing the missile. The president-elect's tweets came after defected senior North Korean diplomat Thae Yong-ho gave intelligence to the South Korean authorities about Kim Jong-un's determination to develop nuclear weapons and how close Pyongyang was to success. Foreign Ministry spokesman Geng Shuang called for all parties to avoid escalating tensions and return to negotiations as soon as possible. “China's stance is clear, we insist on denuclearisation in the [Korean] Peninsular, peace and stability, dialogue and negotiation. China's efforts are evident,” Geng said. The state-run Chinese tabloid the Global Times said Donald Trump's comments showed he was “pandering to irresponsible attitudes”. It said Pyongyang's nuclear programme “stokes the anxieties of some Americans” who blame China rather than looking inwards. Ruan Zongze, an international relations expert at the China Institute of International Studies, said Trump's attacks were aimed at stepping up pressure on China. “Donald Trump definitely wants to send a signal to Beijing that the US wants to push more responsibility for dealing with the DPRK situation to China.” Ruan said. He added, however, that sanctions alone would not be enough to solve the issue. “The US and South Korea need to return to the negotiating table with the DPRK because clearly the pressure from sanctions is not enough to push Kim Jong-un to give up on nuclear development.” Matthias Maass, an associate professor of international relations at Yonsei University in Seoul, said it was only a matter of time before North Korea fully developed its nuclear capability and China was in a difficult position handling Pyongyang. “China sits between a rock and a hard place,” he said. “China has been hoping to get a controllable North Korea that serves as a buffer state and accepts Beijing's leadership. “This hope seems getting more and more naive by the day or, to be accurate, with each step of an independent, meaningful North Korean nuclear force because it frees Pyongyang from its dependence on China for ultimate security from any threats from the South.” Trump's latest attack against China comes after the Chinese navy seized a US underwater drone in the contested South China Sea last month. Misspelling “unprecedented”, he tweeted after the seizure: “China steals United States Navy research drone in international waters - rips it out of water and takes it to China in unpresidented act.” He later reissued the tweet, correcting the spelling He later tweeted: “We should tell China that we don't want the drone they stole back. Let them keep it!” ^ top ^

China's efforts on Korean Peninsula denuclearization "obvious to all": FM spokesperson (Xinhua)
China said Tuesday its efforts to realize denuclearization of the Korean Peninsula is obvious to all. Foreign Ministry spokesperson Geng Shuang made the remarks, at a daily press briefing, in response to U.S. President-elect Donald Trump's statement that Beijing was not helping on the Korean Peninsular issue. "China's policy on the issue of the Korean Peninsula is clear and consistent, " Geng said. China sticks to denuclearization of the peninsula and insists on maintaining peace and stability there, and solving the issue through dialogue and negotiation, he said. "China's efforts on the issue is obvious to all," Geng said. "We hope that all parties related can avoid words and acts that may cause escalation of the tension, and come back to the track of dialogue at an early date," he added. In response to Trump's remarks on China-U.S. trade, Geng said Sino-U.S. economic and trade cooperation is mutually beneficially in nature, which has been proved by facts. Problems in China-U.S. economic and trade relations should be solved on the basis of mutual respect, equality and mutual benefit, Geng said. It is in the interests of both countries for China and the United States to work together to maintain the stable and healthy development of bilateral economic and trade ties," Geng added. ^ top ^



General plan on population distribution and settlement to be developed (Montsame)
On January 4, the Cabinet established a national committee in charge of organizing works to develop a “General plan on population distribution and settlement of Mongolia' and prepare for approval. The committee will be headed by the Prime Minister of Mongolia. The development of the project will be funded with state budget and through the projects and programs to be implemented by foreign countries and international organizations. Due to population growth, economic and social development and activation of industry, significant changes have occurred in population settlement and density, changing lifestyle of residents and leading to ecological deterioration. Therefore, it is needed to carry-out actions with a regard to proper human settlement that is compatible with the geographical situation and other relevant problems. Within the framework of the project, a number of works are planned to be done, as follows; - To study and analysis on the current situation of population settlement and identify the pros and cons; - To define suitable areas and regions for human settlement in the countryside as well as define the location and role of cities and settlement areas to be newly established considering the social and economic development, livelihood profile of population, climate and weather conditions as well as natural resources; - To plan measures in favor of the complex development of the main infrastructure fields, including road, transportation, communication and energy, in compliance with a policy on territorial organization; - To perform a comprehensive evaluation on urbanization and define their development trends; - To recognize issues related to tourism industry, natural protection, history and culture in accordance with the population distribution and urban development policy; - To develop feasibility on the transition from one centered system to multi-centered and define the future perspective of development. ^ top ^

260 laws and regulations to be amended next four years (Montsame)
Today, Plenary session of the parliament held the first discussion of a parliamentary resolution draft on “Approval of Guidelines to improve laws and regulations of Mongolia till 2020”. Prior to this, guidelines to improve laws and regulations were adopted four times. “- During the development of the resolution draft, there were proposals to make amendments to 430 laws. We focused on not to amend many laws and left over 260 laws and regulations to be amended” explained Minister of Justice and Interior affairs S.Byambatsogt. ^ top ^

Authorities of provinces and capital city gathered for seminar (Montsame)
Today, Chairmen of Citizens representative meetings and Governors of provinces and the capital city gathered in Government House for two-day seminar. During the seminar, they will define means and methods to realize Government action plan and Basic guidelines on economic and social development in 2017 and exchange views on cooperation between the Cabinet members and authorities of provinces and the capital. Chairman of Government Secretariat J.Munkhbat said “- The first whole year of Government's authority term has started. All ministers, chairmen of Citizens representative meetings and Governors of provinces and the capital city and Government agencies authorities and government employees must work effectively within the budget limit, avoiding from luxury uses and removing wasteful expenses”. At the end of the seminar, a cooperation agreement will be established. ^ top ^

Parliament Speaker to visit Japan in February (Montsame)
Parliament Speaker of Mongolia M.Enkhbold will pay a working visit to Japan in February 2017. During the visit, he is planning to exchange views with the Japanese side on the completion of the next medium-term development program of strategic partnership between Mongolia and Japan. Also, it is expected that an issue of having financial assistance from Japan will be discussed during the visit. Last December, Parliament Speaker M.Enkhbold paid official visits to the Russian Federation and three Arab states of the Persian Gulf to hold negotiations concerning the foreign investment in Mongolia. ^ top ^

Parents redemonstrate against air pollution on Jan 28 (Gogo Mongolia)
Parents to redemonstrate against air pollution, demanding officials to take immediate and efficient actions and for the well-being of children. The second demonstration will hold on Jan 28th, 2017 (Saturday) at 12 pm at the Sukhbaatar square. On Dec 26th, 2016, Over 4000 Mongolian parents gathered at the Sukhbaatar Square to raise their voices against air pollution and collected more than 2700 applications. Irate parents submitted their applications to the Head of Application Standind Committee D.Sarangerel. They demanded the government to hold their next meeting in Bayankhoshuu, the most heavily polluted area in Ulaanbaatar, where levels of PM2.5 particulates ranging between 1000-2000 micrograms per cubic meter daily. Moreover, parents demanded the government to find a way to increase accessibility to hospitals within Jan 10th, report the budget expenditure on air pollution within Jan 15th and to reduce air pollution of the city by 80 percent by 2018. However, the cabinet meeting have not held in Bayankhoshuu and many children, suffering from diseases caused by air pollution are still lying on hospital floor. Thus parents have decided to demonstrate again under the slogan "We are mad as hell". ^ top ^

Mongolia to offer visa concession for group tourists (Gogo Mongolia)
The Government of Mongolia has approved a decree to offer visa concession for group of tourists coming to Mongolia through travel agencies, aiming to increase the flow of tourists. Moreover, the Cabinet has established a policy of 72-hour visa-free entry for foreigners in transit. Also, Minister of Road and Transport has obliged to organize activities on providing tariff reduction to foreign tourists on direct flights of Mongolian airline companies annually from October to May. ^ top ^

2017 Economic and Political Events (Gogo Mongolia)
Everyone agrees that Mongolian economy will get worse in 2017. The country is now facing many challenges including soaring budget deficit and stopped foreign investment. However the situation can be changed, if authorities make the right decisions on following projects. MONGOLIA WILL CREATE NEW LEGAL ENVIRONMENT FOR FOREIGN BANKS Unofficial talks about opening local branches of foreign banks have spread since July, 2016 as new Government has begun to form. Sooner some MPs said that the Government should create a new legal environment for foreign banks allowing investment activities only. Cabinet discussed the issue on Dec 21st, 2016 and obliged Minister of Justice and Minister of Finance to develop a draft law on amendments to the Banking Law. Foreign bank branches in Mongolia are required only to grant loans, invest, make domestic and foreign payments, provide loan guarantees, sell and purchase bonds, while not being allowed to provide saving accounts. This will lower interest rate and create real competition in the banking sector. WILL GATSUURT DEPOSIT START ITS OPERATION? Gatsuurt gold deposit is one of the halted projects of the country. Gatsuurt deposit proven reserves are at 50 tons of gold and profitable effect reserves are calculated to be 25 tons, which fully complies to requirements for Strategic Deposit. Mining license holder Centerra Gold LLC have got Gatsuurt Deposit Reserve Report approved in 2013 and Feasibility Study in 2014 by the Mineral Resources Council and the site is ready for the mining. However previous Government has tried to start the mining operations of the deposit, but faced with civil protests as Gatsuurt deposit locates in Noyon Mountain that stores in itself the tombs of Mongol nobles and other cultural findings dating back to the Hun Empire period. While the graves and findings of ancient Huns are located just at 5.8 km South West of the exploration site. Protesters took Centerra Gold LLC to the court and the Capital City Court made a decision on protester`s side. ​ Newly formed Government led by Prime Minister J.Erdenebat claimed to start Gatsuurt project, but the dates are still uncertain. Current authorities are implementing a "Gold" program in order to maintain foreign exchange reserves and started following policy to raise gold delivery. OPERATION OF THE NEW ULAANBAATAR INTERNATIONAL AIRPORT TO COMMENCE The New Ulaanbaatar International Airport, locates 52 km south from the city center, will be commissioned this year. In May 2008, a ¥49 billion (US$385 million) 40-year soft loan agreement at 0.2% interest was signed between the Government of Mongolia and the Japan Bank for International Cooperation to build a new international airport. During the construction process, additional cost of ¥5.9 billion were required. The Government of Mongolia requested additional loan from Japan International Cooperation Agency. 33.5 km roads from Ulaanbaatar city to new airport has started to be constructed with Chinese soft loan, planning to finish within the second quarter of 2016. However the road project has been falling behind the schedule. The New Ulaanbaatar International Airport, a construction with the biggest foundation in Mongolia is designed with the capacity of up to 3 million passengers per year and have capacity to receive 1500 passengers per hour. The airport is able to launch 6 planes from its passenger boarding bridges and 13 planes from its field. 5 planes with up to 300 passengers are able to take off at once. MONGOLIA FACES $580 MILLION BOND REPAYMENT The Development Bank of Mongolia faces a $580 million repayment on Mar, 2017. However, the country is not able to meet the debt obligation. The state-owned Development Bank of Mongolia, which finances social development and commercial projects, and grants subsidised mortgage credits, has raised a $580 million bond from Singapore Stock Exchange on Mar 4, 2012 with an annual 5.75 percent interest rate that is due in Mar 21, 2017. Government is seeking ways to delay the payment or more cost-effective and long-term loans. Although the country has started negotiations with Internationl Monetary Fund, projects and the amount of loan are still unclear. $580 million bond financed Khutul cement plant, Amgalan power plant, Tavantolgoi-Gashuun Sukhait railway, Geology Central Laboratory, 33.4 km railway from Tumurtei deposit to Khandgai, extension of III and IV power stations, expansion of mining capacity of Baganuur coal deposit, development of Erdenes Tavan Tolgoi, apartments for 1152 households near Yarmag bridge, Sainshand industrial complex and project​s for small and medium enterprises. TAVAN TOLGOI DEAL TO BE CONTINUED Tavan Tolgoi, which contains 7.4 billion ton of coking and thermal coal deposits deal to be continued. Mining and Heavy Industry Ministry officials received delegations from China Shenhua Energy Company Limited on Dec, 2016. During the meeting, China Shenhua proposed to commence Tavantolgoi`s power station, railway construction and mining projects at the same time. Previously, China Shenhua has expressed incentives to invest in Tavantolgoi coal deposit. The company has won the bid, announced by the previous government, establishing a consortium agreement jointly with the Energy Resource LLC and Japanese Sumitomo Corporation. Prime Minister J.Erdenebat obliged working group to move the project as soon as possible. However, consortium agreement, winner of the bid might have new competitor due to domestic entities having expressed interest in investing Tavan Tolgoi jointly. Government refers to the following conditions on Tavan Tolgoi deposit: •Mongolia will own 51% while China Shenhua will own 49% of a company to build a railway from Tavan Tolgoi mine site to Gashuunsukhait •Investment and cooperation agreement period shall be 22 years, consistent with the operating license period •The operations to be 51% owned by Mongolian company •Target market of the project shall be China and the third country •Subcontractors shall be Mongolian entities and the contract term shall be not less than 5 years. CONSTRUCTION OF ERDENET TO OVOOT RAILWAY TO START The Presidents of China, Russia and Mongolia have signed off on a Trilateral Program for the development of an Economic Corridor between the three countries. This program includes the establishment of a new Northern Rail Corridor connecting China with Russia through Mongolia. The Northern Rail Corridor is a continuous railway stretching from Tianjin Port on China's east coast through Beijing, Erlian, Ulaanbaatar, Erdenet to Ovoot, Arts Suuri to Kyzyl, connecting to the Trans Siberian Railway at Kuragino. Aspire Mining LTD developed the first stage of feasibility study of the project. Also, environmental study of the project has been completed. Northern Railways LLC, 90% owned by Aspire and 10% by the Noble Group will build a 547 kilometre section of the Northern Rail Corridor from Erdenet to Aspire' s Ovoot Coking Coal Project. The establishment of this Northern Rail Corridor confirms that the Erdenet to Ovoot Railway has developed from being a rail connection to a large coking coal project, to now being part of an important new trade infrastructure route. It is also the Company's understanding that Aspire is the only listed public company with a significant interest in this new rail corridor. The Ovoot project development is dependent on the construction of the Erdenet to Ovoot railway. Ovoot Coking Coal Project (Ovoot) is the second largest coking coal project by its reserves in Mongolia. The railway construction is planned to finish by 2019. 8th PRESIDENTIAL ELECTION The president is elected for a four-year term by the people, using the two-round system. 8th Presidential elections to be held in Mongolia in June 2017. As Presidential Election is to be organized this year, the bill on Presidential Elections was submitted just a few days ago. The previous parliament approved Law on Elections, which regulated all elections including Parliamentary, Presidential and Citizen's Representative Meetings of provinces, soums and districts. However General Elections Commission put a request to organize elections under separate independent laws, as it was difficult to organize the previous parliamentary elections, adhering one combined law. The Commission proposed to follow main contents, criteria and regulations of the 2013 Presidential Election law and to change organizational matters. Currently, former Prime Minister N.Altankhuyag announced to stand for presidential election and former MP R.Amarjargal is on the list from the Democratic Party. Meanwhile, Mongolian People`s Party has not announced yet their presidential candidate. ^ top ^

MNT 132 billion spent to reduce air pollution in 2011-2015 (Montsame)
The Parliamentary Standing Committee on Petitions called a meeting on Wednesday on reducing air pollution. Answering to a question of MP Sh.Radnaased on how much has been spent over the past year for fight against air pollution, the working group on reducing air pollution informed that some MNT 132 billion was spent on actions directed at curbing air pollution between 2011 and 2015. About 90 percent of the spending was dedicated to the distribution of low-emission stoves and alternative fuels, said the official. Yo.Baatarbileg MP put forward a criticism that the air pollution issue has been on the table for too long with no evident results, and underlined that it is important to set short, medium and long term objectives in details. He also wanted to clarify on whether it is possible to implement the nighttime electricity tariff discount in provincial centers, which the working group answered that they had been studying the possibilities. ^ top ^

Commercial banks financed mortgage loans with their own sources (Montsame)
Bank of Mongolia has reported that mortgage issuance continues normally, adhering to 'Regulation on financing apartment mortgage loan'. The regulation was renewed last October with 8 per cent interest loan for up to 30 year term and one can get mortgage loan for purchasing apartment with less than 80 sq.m, in condition paying less than 30 per cent of the apartment cost in advance. By November, a total of MNT64.7 billion mortgage loan has been granted to 1072 borrowers. Commercial banks also issued mortgage loan worth MNT14 billion with their own sources. ^ top ^

Emeelt park plans to use recycled water (Montsame)
Emeelt Light industry and Technology Park plans to use recycled water. Under the planned area of the park, there is a channel system for engineering network and a new line for recycled water is planned to be installed there. Blueprint for the new line for recycled water is being developed by 'Elsta' company. Though Mongolia has recycled water standard, standard of its usage is not yet defined. Therefore, the Emeelt Park requested the Agency for Standardization and Metrology to develop standard for the usage of recycled water. The Emeelt Light Industry and Technology Park was established in September 2014. The Municipal Government of Ulaanbaatar city is planning to build Emeelt Light industry, and Technology Park in the southeast of the city and move all leather processing tanneries to outside of the city center with a view to reduce their discharge of untreated effluents either to the Central Sewage Treatment Plant or directly into the Tuul River. The park is planned to have a capacity of end production of 10 million hides and skins. The Park will feature power plant, water treatment plant, leather and wool processing industrial complex, housing zone, warehousing facilities and access to new railway. ^ top ^

Organic food production to be ruled by specified law (Montsame)
The Law on Organic Foods, Law on Legislation and the new version of the Law Against Domestic Violence, all of which were adopted in 2016, entered into force on January 1, 2017. The Law on Organic Foods will regulate the relations regarding the production of agricultural products, organic foods, animal fodder and fertilizers as well as their certifications, commercialization and advertisements. The new law covers matters connected to unprocessed food, nutritional products for humans and animals, organic fertilizers and plant seeding. The Law on Legislation, adopted on May 29 of 2015, was supposed to take effect in February of 2016. The law sets out the criteria for draft laws and amendments to legal documents and control over the implementation of laws and regulations. The plenary session of the State Great Khural (Parliament) passed the new wording of the Law Against Domestic Violence on December 22. The bill outlines that the first offence for domestic violence will be inflicted administrative responsibility and further offences are subject to criminal punishments. The scope of the Law Against Domestic Violence has been widened, to concern not only the relations between husband and wife, but also those between siblings and unmarried partners. ^ top ^

Free nighttime electricity to cause MNT 25.8 billion deficit (Gogo Mongolia)
The Government has approved a regulation to cut electricity night tariff for ger district households to zero, especially from 9pm to 6am, aiming at reducing air pollution of the Ulaanbaatar city. The discount has come into effect from Jan 1st, 2017 and projected to finish on Mar 1, 2017. Over 146 thousand residents, living in ger district will benefit the electricity tariff discount. Every winter, the amount of particles in air has been rising, particularly in ger-areas of Ulaanbaatar city where two third of population live in houses and traditional dwellings that have no connection to the central heating system. From November to March, the citizens of Ulaanbaatar city face the worst air pollution caused by heavy coal burning. The Government has faced MNT 3.2 billion deficit since 2015, when began providing a 50 percent night tariff discount on electricity to ger district households. However this year, providing free electricity to ger district households at night is expected to cause MNT 25.8 billion deficit. "Nighttime electricity tariff discount for ger district households may bring negative impact on the energy system.​ Residents should control and limit their energy consumption. Also residents should notice that there are limited resources and capacity of energy for production", reports Minister of Energy P.Gankhuu. The Government has approved MNT 3.2 billion for 2017 City Budget​ to reduce air pollution.​ Of which 80 percent will be spent on night tariff discount. Further, the country is planning to use technology to produce heat with electricty and gas. ^ top ^

Ms. Annina Burri
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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