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
  3-7.7.2017, No. 677  
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Foreign Policy

Bring Sino-South Korean ties back on track: Xi (Global Times)
Chinese President Xi Jinping said Thursday that China would like to join South Korea in bringing bilateral ties back to the track of healthy development. Xi made the remarks during his meeting with his South Korean counterpart Moon Jae-in in Berlin before his journey to Hamburg for the G20 summit. This was the first meeting between the heads of the two countries since Moon took office in early May. China and South Korea, two geographically close nations, share interconnected cultures and notable complementary advantages, Xi said. He stressed that the two sides have seen great development in their relations since the establishment of diplomatic ties 25 years ago, which has benefited the two peoples greatly and contributed to regional peace, stability and prosperity. Bilateral ties between the two countries plunged in the past year due to the deployment of the US Terminal High Altitude Area Defense (THAAD) anti-missile system in South Korea. China is concerned that the system will undermine China's military deterrence, although South Korea insists the system is aimed at safeguarding the country from North Korean missiles. North Korea launched what it said was an intercontinental ballistic missile on Tuesday, which observers said further complicates the Korean Peninsula situation. Deployment of the anti-missile system in South Korea incurred the opposition of the Chinese public, resulting in a plunge in economic cooperation and cultural exchanges between the two countries. Moon had said that the hasty deployment of THAAD pushed by the US and the South Korean military failed to follow legitimate procedures. Since Moon took office as president, the deployment has slowed down, giving hope to the recovery of ties with China. China is committed to denuclearizing the Korean Peninsula, promoting peace and stability there, and settling the problem through dialogue and consultations, Xi said. Xi urged Seoul to address China's major concerns and work together to handle relevant issues properly so as to clear obstacles for the improvement of bilateral ties. China hopes both sides can use the 25th anniversary of the establishment of diplomatic ties as an opportunity to reflect on the historical lessons of the past and experiences with South Korea, and work to put bilateral relations back on the right track of healthy and stable development, Xi said during the meeting. Xi also expressed appreciation to Moon for his decision to send a delegation to join the Belt and Road Forum for International Cooperation in Beijing in May, and sent a special envoy to deliver a hand-written letter from Moon to express his positive wish to improve bilateral ties and deal with sensitive issues. Moon said South Korea attaches great importance to its relationship with China, and Seoul appreciates a Chinese company's assistance in salvaging the sunken South Korean ferry Sewol. Moon said he fully understands China's concerns and is willing to deepen communication with China. "The meeting lays a foundation for the recovery of the Sino-South Korean relationship, but it doesn't mean the problem has been solved, so we should remain cautious," Da Zhigang, director of the Heilongjiang Provincial Academy of Social Sciences' Institute of Northeast Asian Studies, told the Global Times on Thursday. "Currently, there are some signs of recovery in economic and cultural areas between China and South Korea, but this is just a positive response from China to Moon's positive will and attitude. Although Moon used an 'environmental impact assessment' to slow down the deployment of THAAD, China will not back down on its tough stance of demanding that Seoul completely withdraw THAAD. The problem still exists," Da said. Given that the uncertainty over North Korea might reactivate the deployment of THAAD, we can only be cautiously optimistic on China-South Korean ties in the future, Da said. In Hamburg, Xi is also expected to meet with US President Donald Trump on the sidelines, with the situation in the Korean Peninsula topping their discussions. ^ top ^

Xi urges mutual understanding with Singapore on core interests, major concerns (Xinhua)
Chinese President Xi Jinping said here Thursday that China and Singapore shall grasp the bilateral relations with strategic insight and vision, and keep mutual understanding and support on issues of each other's core interests and major concerns. Xi made the remarks while meeting with Singaporean Prime Minister Lee Hsien Loong. Xi noted that the China-Singapore traditional friendship, promoted by mutual learning and cooperation, has reaped rich fruits. China highly values its relations with Singapore, and is ready to work with the Southeast Asian country to enhance bilateral partnership step by step, said the Chinese leader. He encouraged the two sides to put new thinking into their cooperation, and tap cooperative potentials under the Belt and Road Initiative on such fronts as infrastructure construction, trade and investment, and financial collaboration. Xi urged the two nations to facilitate the major inter-governmental projects, and expand the cooperation in new-tech areas like the Internet and information communication. Efforts shall also be made to increase people-to-people exchanges, and boost coordination on global governance under multilateral frameworks like the United Nations, the Asia-Pacific Economic Cooperation and the Group of 20, he said. Xi also pointed out that China will stand with Singapore, which is to take over the presidency of the Association of Southeast Asian Nations (ASEAN) in 2018, to promote regional integration and a closer China-ASEAN community of shared future. For his part, Lee said it is very important to deepen his nation's cooperation with China faced with the current complicated international situation. Singapore is willing to continue its support for and participation in the Belt and Road construction, carry out major inter-governmental projects, and expand its cooperation with China in finance, high-speed railways and free trade area, he added. ^ top ^

Ahead of fractious G20, Germany and China pledge new cooperation (SCMP)
Ties between China and Germany are about to enter a new phase, the Chinese president said after meeting Germany's chancellor ahead of a G20 summit that is expected to highlight their differences with the United States on a host of issues. “Chinese-German relations are now about to have a new start where we need new breakthroughs,” said Xi Jinping at a news conference with Angela Merkel on Wednesday, adding that he hoped to make a “new blueprint, set our sights on new goals and plan new routes” for cooperation during his visit to Germany. The two countries, which are at odds with US President Donald Trump on climate policy, pledged to work more closely together on trade and aerospace, to progress towards a free-trade agreement and also cooperate on development in Africa and in Afghanistan. It came as Beijing said it would allow liver cancer experts from Germany, the US and other countries to join a medical team treating imprisoned Nobel Peace Prize Laureate Liu Xiaobo. Neither Merkel nor Xi mentioned Liu in their statements and they took no questions. Merkel did mention human rights in general terms, saying they discussed the importance of a “strong civil society” and that the two countries “must continue intensively” their existing dialogue on human rights. She also called for broader registration of research organisations under Chinese laws on non-governmental organisations. Merkel said she made clear Germany wanted to be treated equally in business and granted market access – “that is very important for our companies”. Xi's visit comes as China promotes its belt and road trade plan, as Beijing looks for global stature to match its economic success. Merkel said Germany had taken a positive view of the initiative. She said “we would gladly participate in such projects, and hope for a transparent tendering process”. The leaders were also due to go to the zoo to see pandas Meng Meng and Jiao Qing, who arrived on June 24. ^ top ^

Xi urges G20 to continue championing open world economy (Xinhua)
Chinese President Xi Jinping said his country hopes that the Group of 20 (G20) major economies will continue to champion the building of an open world economy. Xi made the appeal in a signed article published Tuesday on mainstream German media before he travels to the European country for a state visit and the upcoming G20 Hamburg summit. Recalling the achievements of last year's G20 summit in Hangzhou, China, Xi said the world economy still faces daunting challenges despite "further consolidation of growth momentum and the upbeat economic outlook in both the developed and emerging economies." He urged the group, the premier forum for international economic cooperation, to continue "to follow through on the consensus reached at Hangzhou and all its previous summits and lead the way forward for the world economy." "This serves the interest of all parties," he said in the piece, titled "To Make the World a Better Place." China has great expectations for the Hamburg summit and supports Germany in hosting a successful meeting, he added. In the signed article, the Chinese leader laid out his expectations for the G20, a group that gathers world's largest developed countries and leading emerging economies. "The G20 needs to stay committed to open development, support the multilateral trading regime with the WTO at its heart, and enable trade and investment to continue to drive global economic growth," he said. He stressed the need to uphold the spirit of partnership for win-win cooperation, which he said is G20's most critical asset. Xi also highlighted innovative growth and long-term governance. "To cement the growth momentum of the world economy, countries need to tap into new drivers of global growth through innovation, conduct fiscal and monetary policies and structural reforms in a coordinated manner, and promote strong, sustainable, balanced and inclusive growth of the world economy." The Chinese president noted that the Belt and Road Forum for International Cooperation held in May in Beijing actually chimes with the theme of the G20 Hamburg summit -- "Shaping an Interconnected World." "The Belt and Road Initiative and G20 cooperation could complement and reinforce each other. China hopes to work with all parties at the Hamburg Summit to jointly send out a clear message on international economic cooperation and global economic governance and contribute to improved global growth and economic governance," Xi said. ^ top ^

How a road on China and India's border led to the two powers' worst stand-off in decades (SCMP)
High in the Himalayas, Chinese and Indian troops are involved in a deepening military stand-off. It began at the end of June when Indian troops stopped Chinese workers from carrying out a road-building project in a disputed border area. Both countries have about 3,000 soldiers on each side of the border in the area, which is also close to the mountainous country of Bhutan. In retaliation for the Indian move, China cut off access to a group of Indian pilgrims trying to cross a Chinese pass on their way to Mount Kailash, a sacred site in Tibet for Hindus and Buddhists.
Which areas of the Chinese-Indian border are in dispute?
Two parts of the border are the main focus of long-running disputes. The larger section lies to the east in a border area stretching between Bhutan and Myanmar. India's side of the border covers Arunachal Pradesh, but China has claims in the area, which it calls South Tibet. India controls the Tawang monastery on its side of the border, a source of contention because it is one of the holy sites for Tibetan Buddhists. The other main flashpoint on the two countries' border is to the west on India's border with the Chinese region of Xinjiang. The Aksai Chin area is administered by Hotan county in Xinjiang, but areas are also claimed by India as parts of the Ladakh region of the state of Jammu and Kashmir. The current stand-off is over another area. It focuses on a remote pocket of land known in Chinese as Donglang which borders with the Indian state of Sikkim and Bhutan. The area is under Chinese control.
What is the historical background to the border disputes?
Disputes over the line of the border with Tibet are arguably a result of British colonialism. A deal was reached in 1914 to mark out the border between what was then British-controlled India and Tibet – the so-called McMahon Line. The agreement was never recognised by China, but it was open to a land swap deal in which India could keep what it claims on the eastern stretches of the two countries border, with China keeping Aksai Chin in the west. The western section of the border was non-negotiable for Beijing as it provided the best access into Tibet from the rest of China. New Delhi rejected any suggestion of giving up territory in contested areas, deeming them inviolable parts of the nation's territory. Chinese and Indian troops fought a war in 1962 after a series of skirmishes heightened tensions on the border, which largely ended in stalemate. Beijing argues the Convention of Calcutta, dated 1890, set out the Sikkim issue and that there should be no dispute about the territory on which China's troops were trying to build the road.
Have efforts been made to solve the border disputes?
India and China have held 15 rounds of border talks since the mid-1990s, but any gains have been limited. The border is normally peaceful, with not a shot fired in over 50 years, but the disputes are far from settled. Occasional flare-ups have occurred on the border in recent years, deepening the sometimes tense relations between China and India. India complained of a “deep incursion” into its territory four years ago in which a platoon of about 30 Chinese soldiers entered the Daulat Beg Oldi area in the Depsang Valley of eastern Ladakh in Indian-administered Kashmir. Chinese and Indian soldiers stood barely 100 metres apart at times at this easternmost point of the Karakoram tange on the western sector of the China-India border. Both sides eventually withdrew. ^ top ^

Surprise, relief as China's key satellite makes it to orbit despite rocket launch failure (SCMP)
Chinese space authorities say an important communication satellite is now where it should be after it veered off course during a failed rocket launch last month. The ChinaSat 9A probe was steered towards its target orbit on Wednesday, the China Aerospace Science and Technology Corporation said. It had ended up in the wrong orbit after the unsuccessful launch of the Long March 3B, or CZ-2B, on June 19. That was followed by another setback for the space programme on Sunday, when the Long March 5 Y2 rocket carrying the Shijian-18 – an experimental satellite and the heaviest built by China – plunged into the Pacific Ocean. The two failures have raised concerns about possible delays to Beijing's ambitious space missions, which include lunar exploration. The corporation, which carries out most of the country's space activities, said the satellite's small thrusters had been fired up 10 times via its flight control centre in Xian, Shaanxi province. On Thursday it reached and remained at a fixed point above the equator in Southeast Asia – its original destination. Hu Weiduo, a spacecraft navigation and control scientist at Beihang University's astronautics school, said the operation's success was a relief. He said the manoeuvre was not uncommon – it's been done by countries including Russia and the United States many times before – but it showed China was making progress on space technology and hardware. “The satellite can manoeuvre in space with small thrusters, but its mobility is limited. It requires precise planning and reliable instruments to get it on the right track. I'm glad they made it,” said Hu, who was not directly involved in the mission. But he said luck also played a part, and it would not have been possible to steer the satellite back if it had travelled too far off course. “The error might have been relatively small. If the [angle of the] initial orbit was more than 10 or 20 degrees off the equatorial plane, it would have ended up as space junk and there would be nothing we could do,” Hu said. But the rescue operation also used up precious fuel, which could mean a shorter lifespan for the satellite, Hu said. “The satellite might have had a lifespan of 15 years. It could have lost two or three years of that, depending on how much fuel was used,” he said. The satellite will be used to broadcast high-definition television signals across the country, including Hong Kong, Macau and Taiwan, according to Xinhua. It also has a special antenna aimed at the South China Sea to “secure China's sovereign right” in the disputed waters by allowing government staff, military personnel and civilians on remote islands to watch TV from home, it said. The satellite will undergo a series of tests before it begins operating, the corporation said. It was launched from a centre in Sichuan but the rocket started rolling after it entered space due to a technical glitch. ^ top ^

China's aircraft carrier conducts drills as it sails into Taiwan Strait, state media says (SCMP)
China's aircraft carrier strike group performed intensive drills as it sailed into the Taiwan Strait en route to Hong Kong, military media revealed on Monday. The vessels will arrive in the city on Friday on a visit eagerly awaited by many Hongkongers. Thousands lined up outside PLA barracks overnight on Sunday hoping to score tickets to tour the vessels this weekend. The Liaoning strike group entered “first combat readiness” and launched a series of drills when it crossed into a “certain sea area” on Saturday afternoon, PLA Daily reported, without specifying the exact location. Taiwan's defence ministry said the group sailed through the strait between Saturday afternoon and Sunday night. More than 100 combat units took part in the drills, including J-15 fighter jets, which took off from the flight deck, carried out air manoeuvres and landed on the carrier, according to PLA Daily. The training was overseen by Admiral Miao Hua, political commissar and the navy's No 2, the report said. J-15 pilots said they had become better able to carry out more complex tasks under different sea and weather conditions, while crew members said they had improved their proficiency and coordination. “Through this training, we further tempered our flying skills, psychological quality and combat morale,” pilot Xu Ying was quoted as saying. “The purpose of the training was to fix our weak points and highlight the requirements of real combat …to lay a solid ground for the carrier strike group to realise its combat and support capabilities,” fleet Chief of Staff Gao Zhaorui said. The Liaoning is scheduled to arrive in Hong Kong on Friday, accompanied by the Jinan and Yinchuan destroyers and the Yantai frigate. Some 2,000 tickets for tours of the vessels were handed out to the public outside the city's three People's Liberation barracks, but confusion broke out in the morning when military representatives started giving out collection numbers to people waiting in line, ahead of the 1pm schedule. By 9.40am, all spots were gone at the Gun Club Hill Barracks in Jordan, leaving many people disappointed. The carrier group left its home port of Qingdao in the eastern province of Shandong on June 25 and is scheduled to spend five days in the city, as part of the 20th anniversary celebrations of Hong Kong's return to Chinese sovereignty. ^ top ^

China condemns 'serious provocation' posed by US warship near South China Sea island (SCMP)
China has denounced a US warship sailing close to a disputed island in the South China Sea occupied by Beijing as a “serious political and military provocation”, a move that could further strain relations between the superpowers. Beijing dispatched military vessels and fighter planes in response to warn off the US vessel, foreign ministry spokesman Lu Kang said in a statement late Sunday night, state news agency Xinhua reported. The USS Stethem destroyer passed less than 12 nautical miles (22 kilometres) from tiny Triton Island in the Paracel Islands archipelago, which is also claimed by Taiwan and Vietnam, a US official said. US warship sails close to South China Sea island occupied by Beijing( The operation, meant to demonstrate freedom of navigation in disputed waters, came just hours before a previously scheduled phone call between President Donald Trump and his Chinese counterpart Xi Jinping. “The Chinese side strongly urges the US side to immediately stop such kind of provocative operations that violate China's sovereignty and threaten China's security,” Lu said, adding that Beijing would continue to take all necessary means to defend national sovereignty and security, according to Xinhua. ^ top ^

Chinese president says relations with Russia at "best time in history" (Xinhua)
Chinese President Xi Jinping reiterated on Monday that China-Russia relations are at their "best time in history," saying the two nations are each other's most trustworthy strategic partners. Xi made the remarks during an interview with Russian media ahead of his state visit to Russia. The two countries have built high-level political and strategic trust, the Chinese president said, noting that China and Russia have completely resolved their border issues left by history, turning the 4,300-km boundary line into a bond of friendship between the two peoples. China and Russia have also established healthy mechanisms both for high-level exchanges and for cooperation in various fields, Xi added. "President (Vladimir) Putin and I have built good working relations and a close personal friendship," Xi said. "I will start a state visit to Russia at the invitation of President Putin. I believe the visit will inject new impetus to the development of the China-Russia relations," Xi said. As for bilateral cooperation, Xi said that China-Russia cooperation in various fields, including energy, trade, investment, high technology, finance, infrastructure and agriculture has been growing rapidly since he and Putin reached an important consensus on aligning the Belt and Road Initiative with the Eurasian Economic Union. According to the Chinese president, the two countries are also working together to tap their cooperation potential and foster new growth areas in bilateral cooperation. "The fast-growing, pragmatic cooperation has become the locomotive in the continuous development of the China-Russia relations," Xi said. Meanwhile, Xi said that the two countries have also witnessed rapid development of people-to-people and cultural exchanges. They also maintained close strategic coordination on global and regional affairs, serving as a ballast stone in safeguarding global and regional peace, security and stability, Xi added. Looking into the future, Xi said he is confident about the development of the China-Russia comprehensive strategic partnership of coordination, and he is ready to work with President Putin to help guide and promote the continued and healthy development of China-Russia ties. ^ top ^

Beijing's new Silk Road may extend to Moscow-led Eurasian union (SCMP)
China and Russia are working to connect their flagship economic diplomacy projects, a move that could potentially reduce tensions between Beijing and Moscow as they jostle for regional influence. China's Ministry of Commerce said last Thursday that the two countries would sign an agreement for a study on the feasibility of linking China's “Belt and Road Initiative” to the Russia-backed Eurasian Economic Union. As President Xi Jinping visits Russia today, the link will be on his agenda during his talks with his counterpart, Vladimir Putin. While Xi and Putin have shown friendship, the Kremlin has always been wary about China's growing influence in Central Asian countries which are traditionally Russia's backyard, and the deep-rooted mistrust has hindered progress in cooperation. “The rhetoric... has not been matched by progress on the ground,” said Jonathan Hillman, a fellow at the Washington-based Centre for Strategic and International Studies. The feasibility study was “just the latest expression of interest in improving ties” and not any big breakthrough between Russia and China, Hillman added. The Eurasian Economic Union was proposed by Russia, Belarus and Kazakhstan in 2014, aiming to create a single market with a free flow of labour, capital and goods by 2025 in the former Soviet Union. Kyrgyzstan and Armenia joined the intercontinental union in later years. The Central Asian countries also happen to be on the map of China's new Silk Road scheme, a massive infrastructure and trade plan. Russia shares a common language and Soviet history with the region, but Beijing offers deeper pockets. At the same time, Western countries' sanctions against Russia over the conflict in Ukraine in 2014 pushed Moscow closer to Beijing. In 2015, the two countries issued a joint statement on linking the two economic strategies. Ahead of Xi 's visit, Beijing said it expected trade ties with Russia to grow deeper. “I believe the quality and quantity of economic and trade cooperation between the two countries will continue to rise,” Xinhua quoted ambassador to Russia Li Hui as saying. According to China's General Administration of Customs, China-Russia trade grew 33.7 per cent in the first five months of this year, to 223.1 billion yuan (US$33 billion). Cui Hongjian, head of European Union research at the China Institute of International Studies, said the connectivity statement released in 2015 indicated “a political consensus”. “This time, the two sides are expected to seek detailed cooperation in... policies and regulations,” Cui said. Hillman said the Shanghai Cooperation Organisation, of which both China and Russia are members, might serve as the platform through which the countries could link larger efforts. “China is not going to join the Eurasian Economic Union. Russia isn't a very attractive destination for China's excess capacity,” Hillman said. “Rhetoric is free, which is why it's important to track what's really happening - or in this case, not happening - on the ground.” Cui was more upbeat on the outlook. “China doesn't want the belt and road strategy to be seen as a tool of geopolitical competition, but a platform for regional economic cooperation. China does not rule out possible cooperation with countries with shared interests there,” he said. ^ top ^


Domestic Policy

Liu Xiaobo's health deteriorates: hospital (Global Times)
Liu Xiaobo is suffering from deteriorating hepatic function and being treated at the advice of a national medical team, the First Hospital of China Medical University said on Thursday. His level of bilirubin - a yellow compound that occurs in the normal catabolic pathway that breaks down heme in vertebrates - is rising. A suspicious thrombosis has formed on the intermuscular vein of his lower left limb. The hospital is treating Liu according to the advice of the national expert team, read the hospital's statement. The hospital also publicized a statement issued by Liu's relative denying rumors that the hospital has stopped applying medicine to Liu. The photo of a handwritten statement attributed to Liu Hui, brother of Liu Xiaobo's wife Liu Xia, was put on the hospital's website. It denies that the hospital has stopped treating Liu. As Liu's health worsens, cancer experts have adjusted medication with the consent of his family members, the statement said. "I'm angry with those who are distorting facts and spreading rumors," read the statement, adding that family members are grateful for the efforts of the medical team. Liu Xiaobo was sentenced to 11 years in jail on December 25, 2009, after a court in Beijing convicted him of trying to overthrow the government. According to personal information recorded at the Jinzhou Prison, where Liu Xiaobo had been serving his sentence, he had hepatitis B before he was imprisoned. The prison gave him a physical examination once a year and had a doctor visit him every 15 days. The prison started checking him for hepatitis and tumors in 2012. ^ top ^

Liu Xiaobo vigil: doctors tell Chinese Nobel laureate's family to prepare for his death (SCMP)
Family and friends of Nobel Peace Prize laureate Liu Xiaobo were keeping vigil on Thursday after doctors warned that the dissident's health had worsened. Close friends said the family was told Liu could no longer cope with the medication he was receiving to treat his late-stage liver cancer at a hospital in Shenyang, Liaoning province. The First Hospital of China Medical University in Shenyang said in a statement that Liu's liver condition was deteriorating. The hospital also released a statement purportedly from Liu Hui, the brother of Liu's wife Liu Xia, saying Liu Xiaobo's medication had been adjusted – but not stopped – because the tumours were spreading fast. Liu Xiaobo was granted medical parole last month after he was diagnosed with the cancer in May. Liu Xia has been with him but friends said they could not visit or communicate with the couple. “We might be losing Xiaobo soon,” poet and friend Ye Du said. “The notice informing family members to be prepared [for his death] over the next 24 hours came last night or this morning.” Ye said he had spoken to Liu's family and they had been told that his condition initially improved after doctors removed a build-up of abdominal fluid on Monday. But his health deteriorated quickly on Wednesday. Medical specialists told the family that Liu's liver function had declined, forcing them to stop administering both his Chinese and Western cancer medication, Ye said. Mo Zhixu, another friend, confirmed that Liu's family had been informed of the sharp decline in his health. “He can eat a little bit but not that much. Now he is just being given pain medication and drugs to calm him down, and being fed through an intravenous drip,” Mo said. Mo said he and friend Wen Kejian had spent several days unsuccessfully trying to find and contact Liu at the Shenyang hospital. The hospital said in an undated online statement that Liu's abdominal swelling had worsened. “The abdominal fluid building up in Liu Xiaobo's body has increased,” the hospital said, adding that the lead doctor in the case had informed the family of the situation. In a second statement released on Thursday afternoon, the hospital said: “Liu Xiaobo's liver function is worsening.” It said the level of bilirubin – a compound that is indicative of some diseases – was rising. “A suspicious venous thrombosis has formed on his lower left limb and our hospital is providing treatment based on the advice of an expert medical panel,” the statement said. The Shenyang Bureau of Justice said on Wednesday that top cancer specialists from the United States and Germany had been invited to consult on Liu's case. But US-based friend Yang Jianli tweeted on Thursday that Liu's kidney was also failing and time was running out. “He is still being closely watched, and there is not even a single second of freedom,” Yang tweeted. “The US government is still waiting for official confirmation from the Chinese government and is in the process of preparing a medical team. “Time is pressing; praying for Xiaobo. Every minute the Chinese government delays does tremendous damage to his health. This is an old score that needs to be settled some day.” Veteran activist Hu Jia also said there had been communication problems between the two authorities. “The Chinese government invited the US and German experts but there has not been active and smooth communication to realise the plan,” Hu said, refusing to elaborate. Video surfaces apparently showing terminally ill Nobel Prize laureate Liu Xiaobo's life in prison (Hu criticised the authorities for treating Liu in a remote part of the country rather than moving him to Beijing. “Even though he is in one of the best hospitals in northeastern China, most of the medical experts on his case are based in Beijing and cannot be at his side immediately,” he said. “Preventing Liu from returning to Beijing is in itself delaying his treatment. How shameless is that?” The US embassy in Beijing declined to comment on the case. Germany's foreign ministry said it continued to “support a humanitarian solution and hope that he will receive the medical treatment in which he is in need of”. Liu, China's most famous political prisoner, was sentenced to 11 years behind bars in 2009 for “inciting subversion of state power”. He had signed a petition known as “Charter 08” with other rights activists calling for sweeping political reforms in the country. ^ top ^

Beijing to let foreign doctors treat Nobel laureate Liu Xiaobo's cancer in China (SCMP)
The Chinese authorities have agreed to invite foreign medical experts, including from the United States and Germany, to help treat the jailed Nobel Peace Prize winner Liu Xiaobo, amid mounting pressure calling for his treatment abroad. The calls come as President Xi Jinping is preparing to take part in the G20 summit in Germany later this week. The hospital where Liu is receiving treatment in Shenyang in northeastern Liaoning province will “invite the most authoritative international therapists from the United States, Germany and other countries to China” to join a team of Chinese doctors treating Liu, a statement on the city's justice bureau website said on Wednesday. The invitation to foreign doctors was made at the request of his family and in consultation with his Chinese doctors, according to the statement. However, a friend of Liu's in contact with his family said they still insisted he should be treated abroad. Liu, China's most famous political prisoner, was sentenced to 11 years behind bars in 2009 for “inciting subversion of state power”. He had signed a petition known as “Charter 08” with other rights activists calling for sweeping political reforms on the mainland. The 61-year-old was granted medical parole after he was diagnosed with late-stage liver cancer in May. Liu's friend Mo Zhixu, a columnist and early signatory of the charter, said the invitation to foreign doctors was made by the authorities to ease mounting pressure at home and abroad by friends, rights groups and diplomats calling for Beijing to grant Liu the freedom to go overseas for treatment. “The timing of the announcement is definitely not a coincidence,” Mo said, referring to the G20 summit starting on Friday. Xi arrived in Germany on Tuesday. Mo said the invitation was a “convenient tool” for Xi to respond to any potential criticism at the summit over China's treatment of Liu. Liu's friends, relatives and rights groups have criticised the authorities, accusing them of providing him with insufficient care behind bars. Rights activist Hu Jia, another long-time friend of Liu, said the foreign doctors offer was a “compromise and concession” by Beijing in face of growing pressure. He added that it was a “U-turn” from the government's position last week, stating that foreign doctors were not allowed to practise in China. Allowing foreign medical experts to help in Liu's treatment would, however, make the kind of care he receives and his health condition more transparent, said Hu. “The authorities should have no right to restrict independent foreign medical experts from releasing information about Liu to foreign authorities, medical institutions and the public,” he said. Liu's friend Mo, who saw the jailed activist's family in Shenyang over the weekend, said they had not changed their minds on wanting Liu to receive care overseas. “They insisted he should go abroad because China's medical standards were not as high as those in the West, especially in the area of experimental therapies. “Moreover, if Liu can go abroad, he can break free of the current confinement and be in a better mood, which is also conducive to recovery,” he said. Mo travelled to Shenyang with another friend Wen Kejian to try to visit Liu in hospital, but failed on Tuesday afternoon and Wednesday morning. Mo said a nurse told them on Tuesday the hospital's staff had no knowledge of such a patient, despite people asking about Liu's ward everyday over the past week. The Chinese authorities told diplomats from Germany, the United States and the European Union on Friday that Liu could not be moved abroad due to his condition, sources briefed on the matter told the Reuters news agency. The United States and the European Union have called on Beijing to allow Liu to choose where he wants to be treated. China's foreign ministry has so far dismissed concerns from other countries about Liu, at least publicly, saying it was an internal matter for China. Salil Shetty, secretary general of Amnesty International, said inviting US and German doctors to consult on Liu's case appeared to be “an attempt to limit international criticism”. “Time is running out for Liu Xiaobo. It is not too late for the authorities to end this cruel farce. They must let Liu Xiaobo and his wife, Liu Xia, travel abroad to get the medical treatment he so desperately needs,” Shetty said. ^ top ^

Researcher warns against distorted historical dramas (China Daily)
A Chinese historian has said TV series aired in recent years that exaggerate or tamper with stories related to the War of Resistance Against Japanese Aggression (1931-45) for entertainment purposes have incurred wide spread condemnation from the public. Sun Liping from the Party History Research Office of the Communist Party of China Central Committee said the vulgar and falsified plots of such TV dramas are at odds with history. The Chinese people and soldiers endured great physical suffering and made huge sacrifices during the 14-year war, with the loss of more than 35 million lives, while the Japanese invaders committed untold crimes against humanity, making the period one of the darkest in history, Sun said. "China's victory in the war came at the expense of an extremely hard and bitter fight against the Japanese invasion," Sun said. "Any attempt to distort, tamper with or even falsify this history deeply offends Chinese people, pacifists all over the world, and those who helped China during this war," she said. "Telling the truth will benefit Chinese people and Chinese culture," she added. ^ top ^

Over 50 dead, hundreds of thousands evacuated as floods ravage southern China (SCMP)
More than 50 people have been killed and hundreds of thousands evacuated as floods swept through parts of central and southern China after days of heavy rain. Over 11 million people have been affected and total economic losses have exceeded 25 billion yuan (US$3.7 billion or HK$29 billion) in 11 provinces, including Hunan and Sichuan and Guangxi, according to state-run Xinhua. The death toll stands at 56 with more than 22 people missing as of Tuesday morning in those provinces, according to the report. More rain is expected from Wednesday until Sunday in seven provinces, including Hunan and Sichuan, which have already been badly hit, according to the water resources ministry. ' The central government has given more than 1.88 billion yuan to 20 provinces, including Zhejiang, Jiangxi, Hunan and Guizhou on Monday, to help them evacuate residents, recover houses and provide help to those who have lost their homes. Thousands of tents, quilts and camp beds have also been sent to the area, according to the civil affairs department. The central Hunan province was among the worst hit, with the water level of the Xiangjiang river, a tributary of the Yangtze River that flows through the capital Changsha, exceeding previous records set in a massive flood in 1998. Pictures and videos on social media showed flooded streets, shops closed and cars submerged in Changsha. Some parts of Orange Isle, one of the city's most well-known scenic spots, were under water with only the tops of trees visible. Flooding also affected cities in Guangxi. In the tourist city of Guilin, restaurants and shops were submerged. leaving only their upper floors and signs visible, and tourists and residents alike using rafts to get around. ^ top ^

Tencent sets limits for online gaming (China Daily)
All-night gaming marathons will soon end for some Chinese kids after internet giant Tencent began limiting daily playing times on its smartphone smash hit King of Glory on Tuesday to "ensure children's healthy development". Young players will be restricted to one or two hours on the mobile online multiplayer battle game, which boasts 80 million daily users, as concerns grow in China that long periods online are posing a serious threat to the health of the country's youth. Tencent, which ranks first in the world for gaming revenue, said in a statement that King of Glory was "supposed to bring joy... but excessive gaming brings joy to neither players nor their parents". State media reported in April that a 17-year-old gamer in southern Guangdong province suffered a type of stroke after spending 40 consecutive hours playing King of Glory. The game became the world's highest grossing game this year, with estimated first-quarter revenue of around 6 billion yuan ($882 million), according to Xinhua News Agency. Users under 12 years old are now limited to one hour of play a day, and will not be permitted to sign in after 9 pm, Tencent said in a statement over the weekend. The move went into effect on Tuesday. Users between 12 and 18 years old are limited to two hours per day. According to the company, which called its new controls the "three broad axes", those who play beyond the allotted time period will be "forced to go offline". Tencent will also place caps on the amount of money that underage users can spend on the platform, so as to rein in "minors' irrational consumption". Additional measures implemented earlier this year include a real-name authentication system and software that enables parents to place electronic locks on the game. China introduced draft legislation in February this year that would ban minors from playing online games between midnight and 8 am. But Tencent said that in the current absence of "clear regulations to guard against mobile gaming addiction, we have decided to take the lead... and dispel parents' concerns". "We also call on parents to spend more time with their children," it added. ^ top ^

Chinese gay man wins landmark lawsuit over forced 'conversion therapy' (SCMP)
A gay man in the central Chinese province of Henan has successfully sued a mental hospital over forced conversion therapy, in what activists are hailing as the first such victory in a country where the LGBT rights movement is gradually emerging from the fringes. The district court in Zhumadian ordered the hospital to make a public apology and pay the man 5,000 yuan (US$735) in compensation after he was forced to undergo treatment for “anxiety disorder”, according to court documents. The hospital had infringed on the right of 38-year-old Yu Quanhu, not his real name, to individual freedom, the court said in its June 26 judgment. But it did not weigh in on the practice of gay conversion therapy. Yu was sent to the hospital by his wife and relatives in October 2015 after he tried to get a divorce. He was kept there for 19 days, during which time he was forced to take medicine and given injections by staff, Yu told the court. The hospital released him after he called friends for help but he told China News Service last year that he was unable to lead a normal life afterwards. He said he left his family home because he was worried about being forced into hospital again. Yu's lawyer, Huang Rui, told the South China Morning Post that they were pleased with the ruling. “Winning this lawsuit can give all gay people confidence that they can safeguard their rights through the courts,” Huang said, adding that the verdict would also act as a deterrent to other hospitals carrying out such treatment. Gay rights activist Peng Yanhui said it was “the first case that homosexual people [have won] after being forced to undergo treatment for mental illness”. Peng said the ruling would send a message to parents who tried to send their gay children to hospital for treatment. Beijing removed homosexuality from its list of recognised mental illnesses more than 15 years ago but stories are rife of families admitting their relatives for so-called conversion therapy. Peng said he hoped the case would prompt the health department to pay more attention to the harm done to gay people forcibly admitted to hospitals and psychiatric clinics because of their sexual orientation. Peng himself checked into a private conversion clinic in 2014 to investigate its advertised electroshock treatments. He then sued the clinic and was awarded 3,500 yuan in compensation by a Beijing court for the suffering he had endured. While few mainland Chinese have religious objections to homosexuality and homophobic violence is rare, the authoritarian politics and conservative society's preference for marriage and childbearing create subtle barriers that keep most gays in the closet. Vibrant gay scenes do exist in large cities including Shanghai, which has an annual gay pride parade, and depictions of same-sex relationships are increasingly seen in film and television. ^ top ^

China's Great Firewall gets tougher to scale as popular VPN shut down (SCMP)
Getting around the Great Firewall, the system used by China to control internet access, just got harder with a popular virtual private network forced to cease operating on orders from the government. GreenVPN sent a notice to customers that it would halt its service from Saturday (July 1) after “receiving a notice from regulatory departments”, without elaborating on those demands. VPNs work by routing internet traffic to servers in other locations, such as the United States, that are beyond the reach of Chinese filters. They are popular in China because the government limits access to a raft of content, from news and video to politics and pornography that it deems to be undesirable. For many internet users, services that enable them to bypass the Great Firewall are the only way to access Facebook, Twitter and the websites of the New York Times. Long a legal grey area, VPNs are commonly used by businesses, universities and news organisations – including state-run newspapers – in China. On Saturday, some users of GreenVPN on iPhones reported that it failed to load, with the timing coming on the 20th anniversary of the handover of Hong Kong from Britain to China. President Xi Jinping was in Hong Kong over the weekend to commemorate the anniversary, which provoked heated discussion in media around the world of the future of democracy and rights in the former British colony. It's unclear whether the politically sensitive date was related to the timing of the VPN shutdown. A January proclamation from China's Ministry of Industry and Information Technology set out several priorities for the control of online content in China, including restricting VPNs. While icons for GreenVPN and SuperVPN were visible in Apple's App Store on Monday, users reported trouble downloading or turning them on. It wasn't clear if this was due to a technical glitch, or the apps being disabled. Calls to SuperVPN's foreign offices went unanswered outside of business hours. Apple didn't immediately respond to requests for comment. GreenVPN, whose China websites were in maintenance mode, did not display information for contacting the company. Over the past two years, VPNs have been disappearing from China's Android app stores, including those of Wandoujia, Baidu and OnePlus. While Google's Android powers most smartphones in China's mainland, there is limited access to the search company's services inside the country, including the Google Play app store. ^ top ^

Cinemas required to play video on core socialist values, Chinese dream (Global Times)
Beijing cinemas are required to play a short video that promotes the "Chinese dream" and "core socialist values" before the movies start, a decision that has drawn a mixed response from the audiences. The cast of the 3-minute video, which was produced by the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT), includes many famous Chinese actors such as Jackie Chan and Angelababy, in order to attract audiences and advocate the "Chinese dream." "No matter what you do, as long as you respect the country, our society, our nation and our family, you are helping us to realize the Chinese dream," said the video. It also promotes "core socialist values" which include "national goals of prosperity and democracy, as well as individual values of patriotism." Several Beijing cinemas said that they were asked to play the video ahead of every movie since July 1, but they didn't know the reason why they are required to do so, according to the staff from the cinemas contacted by the Global Times. The move has drawn a mixed response. "Many came late for the movie just to avoid the short video, and others complained about the video after watching the movie," said a cinema employee. "Now we have to spend much more time in the cinema to watch the video, and the topic is too serious," wrote Sina Weibo user lixuanzongfuren. But there are others who favor the idea. "The video is effective as I feel a sense of belonging when watching this video, because that's when I feel our Chinese people are like a family which shares the same dream, the Chinese dream," wrote another Sina Weibo user xingkongzoey. The SAPPRFT on June 14 issued a regulation saying that online literary platforms, such as, will be assessed annually on a 100-point scale, of which 30 points will be dedicated to "value guidance and style of thought." The regulation requires the literary works to possess a "correct understanding" of the Party and military history. "Distortion" or "desecration" of related history will cost the websites up to 5 points per work. ^ top ^



Bullet train service linking Beijing, Xiongan New Area commences (China Daily)
The first bullet train linking Beijing and the Xiongan New Area departed from the Beijing South Railway Station on Thursday. It was the first of four high-speed services scheduled to run daily. The journey takes 1 hour and 50 minutes. The D6655 left at 8:08 am and made its first stop after 80 minutes at the new area's Baiyangdian Railway Station. The train's terminal is Baoding Railway Station in Hebei province, where it arrived at 9:58 am. The return train departed Baoding at 10:26 am and arrived in Beijing at 12:29 pm. A passenger, surnamed Xiao, took the first train from Baiyangdian to Beijing. He said the service is convenient, saving time and energy. The service also stops at Bazhou West, Baigou and Xushui stations, which are all in Hebei. "Passengers no longer need to transfer trains to travel between the new area and Beijing," said Zhu Dianping, an official at the Beijing Railway Bureau's station management center. "Before the bullet train service existed, passengers traveling from Baigou or Baiyangdian to Beijing, had to transfer in Baoding or Tianjin, which cost 82 yuan or 97 yuan ($12 or $14) respectively," Zhu said, adding that the ticket fare for an economy seat on the bullet train from Baiyangdian to Beijing is 45 yuan. Since the establishment of the new area was announced in April, Baiyangdian has received more visitors. "Baiyangdian Railway Station handled 500 trips a day last year. The number has increased to 800 this year, and the daily peak reached 2,000 during the May Day holiday," said Lu Huijuan, deputy head of Baiyangdian Railway Station. "Most visitors from Beijing used to take the freeway to get to Baiyangdian, meaning traffic congestion was terrible during weekends or holidays," Lu said, adding that she expects rail passenger numbers to grow. A taxi driver in Xiongan New Area surnamed Liu said he believes the bullet train service will encourage more people to visit. Liu used to give rides to three or four customers a day, but since the establishment of the new area, he now has about a dozen clients each day. "They usually head to Baigou and Baiyangdian on business trips or to travel," he said. Located about 100 kilometers southwest of downtown Beijing, Xiongan New Area will mostly cover Xiongxian, Rongcheng and Anxin counties in Hebei. ^ top ^



'One country' carries more weight than Hong Kong's 'two systems', Basic Law Committee head says (SCMP)
“One country” and “two systems” do not carry equal weight in the formula governing Hong Kong, according to Basic Law Committee chairman Li Fei. The Basic Law Committee is a body under the National People's Congress Standing Committee comprising mainland Chinese and Hong Kong representatives who give advice on interpretations of the city's mini-constitution. Li echoed President Xi Jinping's speech last week at the inauguration of the new Hong Kong administration, when he said Hongkongers “must be guided by a strong sense of 'one country'” and uphold China's sovereignty, security and development interests. Their comments came amid a debate in recent years over whether the two parts of the governing formula are equal, with mainland scholars arguing that national interest comes first and mainstream Hong Kong pan-democrats stressing that the city's core values and rights and freedoms should not be compromised at the expense of national development. In a special edition of the pro-Beijing Bauhinia Magazine to mark the 20th anniversary of the city's handover to China, Li elaborated in an interview on how people should understand the political model and the status of the national constitution. “The two systems are composed of one main [system] and one subordinate one. As [late paramount leader] Deng Xiaoping pointed out... socialism is the main system of the country, under which we are allowed to have capitalism in one or two small places. The two are not equal in weight.” “But in Hong Kong, some people always wrongly think that the two systems are on an equal footing... using common law to twist the understanding of the Basic Law and reject the national constitution.” On July 1, Xi also highlighted the subordinate role of the Basic Law, describing the city's mini-constitution as “basic legislation enacted in accordance with the [national] constitution”. Li said Hong Kong's legal sector should clear up its “misunderstanding” that the national legislature would hurt the city's judicial independence if it interpreted the Basic Law. There have been suggestions from the legal community, including the Law Society, that the mainland should set up more formal channels of consultation to gauge Hongkongers' views before an interpretation of the Basic Law is made. The Law Society earlier said the interpretation over the oath-taking saga, in which the NPC Standing Committee pre-empted a Hong Kong court's judgment in a case involving two pro-independence lawmakers, was “too rushed”. The interpretation effectively disqualified the pair for their anti-China antics during the Legislative Council swearing-in ceremony. On the call for more consultation, Li said he “welcomed submissions of views so that they can do better”, but he did not elaborate. He only said the views of Hong Kong representatives on the Basic Law Committee had been adopted in drafting the oath-taking interpretation. ^ top ^

Xi draws "red line" for handling mainland-HK relations (Xinhua)
President Xi Jinping Saturday drew the "red line" for handling relations between the mainland and Hong Kong, warning against attempts to undermine national sovereignty or challenge the central government's power. "Any attempt to endanger national sovereignty and security, challenge the power of the central government and the authority of the Basic Law of the HKSAR or use Hong Kong to carry out infiltration and sabotage activities against the mainland is an act that crosses the red line, and is absolutely impermissible," he said. Xi made the remarks at a gathering celebrating the 20th anniversary of Hong Kong's return to the motherland and the inaugural ceremony of the fifth-term government of the Hong Kong Special Administrative Region (HKSAR). Hong Kong people enjoy more extensive democratic rights and freedom than at any other time in its history, he said. "The people of Hong Kong, now masters of their own house, run their local affairs within the purview of autonomy of the HKSAR," he said. The president stressed the importance of having a correct understanding of the relationship between "one country" and "two systems." The concept of "one country, two systems" was advanced, first and foremost, to realize and uphold national unity, according to Xi. "In conducting day-to-day affairs, we must be guided by a strong sense of 'one country,' firmly observe the principle of 'one country,' and thus correctly handle the relationship between the HKSAR and the central government," he said. On the other hand, Xi said, the "two systems" should and have every reason to stay in harmony and reinforce each other on the basis of "one country." "We must both adhere to the 'one country' principle and respect the differences of the 'two systems,'" he said. The central government will unswervingly implement the policy of "one country, two systems" and make sure that it is fully applied in Hong Kong without being bent or distorted, he said.
Hong Kong cannot afford to be torn apart by reckless moves or internal rift amid the intense global competition, Xi warned. Hong Kong is a plural society with "different views and even major differences on some specific issues," he acknowledged. However, "making everything political or deliberately creating differences and provoking confrontation will not resolve the problems," Xi said. "On the contrary, it can only severely hinder Hong Kong's economic and social development." "Hong Kong is an affluent society, but it also faces enormous challenges posed by profound changes in the global economic environment and the increasingly intense international competition," he said. "It is imperative to always maintain a harmonious and stable social environment," he said, noting that "harmony brings good fortune, while discord leads to misfortune." The concept of "one country, two systems" gives expression to the vision of peace and harmony in the Chinese culture, and it embodies a very important tenet, namely, seeking broad common ground while setting aside major differences, Xi said. "On the part of the central government, we are ready to talk to anyone who loves the country, loves Hong Kong and genuinely supports the principle of 'one country, two systems' and the Basic Law of the HKSAR, no matter what political views or position he or she may hold."
Xi urged Hong Kong to always focus on development as the top priority. "Development, an abiding pursuit, is crucial for Hong Kong's survival, and it holds the golden key to resolving various issues in Hong Kong," he said. The mainland's continuous and rapid development over the years provides an invaluable opportunity and an inexhaustible source of strengths and broad space for Hong Kong's development, Xi said. The central government will continue to support Hong Kong in growing its economy and in leveraging its strengths and role in advancing the Belt and Road Initiative, the Guangdong-Hong Kong-Macao Greater Bay Area, Reminbi internationalization and other strategies, Xi said. "It is important to put people first, help them overcome difficulties, especially address prominent economic and livelihood issues that people are concerned with," he said. The central government will continue to support the Chief Executive and the HKSAR government in exercising law-based governance, the president pledged. "I am convinced that the practice of 'one country, two systems' in Hong Kong will write a new chapter," he said. ^ top ^



Taipei charges grad student from mainland China with spying (SCMP)
A Chinese graduate from one of Taiwan's top universities was charged with espionage on Thursday as prosecutors accused him of attempting to recruit spies for Beijing. The indictment comes as officials warn of growing intelligence threats from Beijing at a time of increasingly frosty ties across the Taiwan Strait. Beijing still sees the island as part of its territory to be brought back into its fold even though Taiwan has been self-governing since the two sides split after a civil war in 1949. Relations have worsened since the island's Beijing-sceptic president, Tsai Ing-wen, came to power last year. The Taipei District Prosecutors office said on Thursday a man surnamed Zhou – who came to Taiwan to study in 2012 – violated the National Security Act. Local media identified the man as Zhou Hongxu from Liaoning province in northeast China, who graduated from the National Chengchi University in Taipei last year. Prosecutors said Zhou was recruited by a mainland Chinese official he met at an event promoting cross-strait exchanges in Shanghai in July 2014, who asked him to build a spy network in return for remuneration. Zhou was told to “introduce politicians, officials in the military, police, intelligence and diplomacy units and other influential people in society to Chinese local officials in destinations abroad”, they said. The Chinese government would pick up the tab for any meetings arranged with local mainland officials, to be held in locations abroad, Zhou was allegedly told. Zhou then unsuccessfully attempted to recruit a Taiwanese official on multiple occasions between August 2016 and March this year, the prosecutors said. The unidentified Taiwan official – who might have had access to diplomatic documents – was reportedly told he could be paid as much as US$10,000 a quarter if he agreed to work for the Chinese government. Zhou also said he could arrange for the official to meet mainland government representatives in Japan under the pretence of a holiday, according to the prosecutors. National Security Bureau director general Peng Sheng-chu said in parliament in March that Chinese espionage is “more serious than before”. Local media reports claim that up to 5,000 people may be spying for the mainland on the island. Taiwan's cabinet is seeking to tighten existing restrictions on travel to the mainland for former high-ranking Taipei officials to “protect national security and interest”. Cross-strait relations have rapidly deteriorated since Tsai's inauguration. She refuses to acknowledge both sides are part of one China. Beijing has cut all official communication with Taipei. ^ top ^



China and US said far apart on assessing the urgency of the North Korean threat (SCMP)
Top Chinese and US experts differ over how to defuse the North Korean nuclear threat, reflecting a gap between the two nations in assessing the issue's urgency after Pyongyang claimed a successful launch of an intercontinental ballistic missile capable of reaching Alaska. At the Washington-based Centre for Strategic and International Studies on Thursday, a US team of experts criticised China for not recognising “the new level of threat posed by the Kim Jong-un regime”. The US is “incredibly concerned about the launch of an ICBM,” said Bonnie Glaser, a senior adviser for Asia at the think tank. American intelligence has determined that North Korea's latest test-launch on Tuesday, a day before the US Independence Day holiday, was an ICBM capable of striking Alaska, according to various US reports. China has not yet reached the same conclusion. “We are trying to get more information, following the developments of the situation and making the assessment,” Chinese Foreign Ministry spokesman Geng Shuang said on Wednesday during a press briefing. “I do sense a real gap between the two countries in terms of the assessment of the urgency,” Glaser said. The two sides' expert teams jointly launched parallel reports on US-China relations to redefine their differences and commonalities to date in an event at the think tank. The Trump administration has accused China of not doing enough to press North Korea through its economic ties with the reclusive country. On that note, Glaser said China failed to act against certain Chinese banks that have allegedly given financial support to Pyongyang's missile and nuclear programme. Bank of Dandong, a Chinese bank sanctioned by the US last week, is just the “tip of an iceberg, there are more”, she said. The North Korea issue is expected to be on the table during the upcoming meeting between President Xi Jinping and US President Trump on the sidelines of the Group of 20 nations' summit in Hamburg, Germany this week. In contrast to the US side, Chinese experts played down the urgency of North Korea threat, insisting that the problem cannot be addressed by sanctions alone, and that diplomacy is necessary, according to the parallel report released on Thursday. Zhu Feng, a professor of international relations at Nanjing University in China, disputed his American peers' arguments at the event. “It's not easy for China to punch the table and cut all the trade relations with DPRK overnight,” he said, using the abbreviation for North Korea's formal name, the Democratic People's Republic of Korea. Zhu, who co-authored the Chinese side's report, said that notwithstanding the disputes, China benefits from having the US as a “regional security anchor”. The Asia Pacific area is the “biggest testing ground” for US-China relations, even though sometimes ideological and political collisions happen, he said. ^ top ^

China-N.Korea trade slows down: MOFCOM (Global Times)
China's trade with North Korea, especially imports, has been declining in recent years, official figures show. China-North Korea trade in 2016 dropped by 2.5 percent from the previous year, and investment in North Korea by Chinese enterprises by 14.3 percent, figures from China's Ministry of Commerce (MOFCOM) show. Bilateral trade in the first five months this year totaled $2.05 billion, up 13.7 percent from the same period last year, according to the MOFCOM. It was a dramatic slowdown from 37.4 percent in the first three months of the year, thanks to declining imports from North Korea. North Korean imports reached $720 million in the first five months of the year, down 9.3 percent from the previous year. China's General Administration of Customs said on June 23 that North Korean imports in May decreased 31 percent from a year earlier. Trade between China and North Korea has shown signs of slowdown in recent years due to a raft of factors, according to the MOFCOM. The ministry said that China engages in trade and economic cooperation when it is fulfilling its international obligations. The MOFCOM data was released one day after US President Donald Trump tweeted on Wednesday that "trade between China and North Korea grew 40 percent in the first quarter. So much for China working with us--but we had to give it a try!" Trump posted the tweet shortly before leaving for Warsaw, Poland on his way to the G20 summit in Germany on Friday and Saturday. Chinese experts said that instead of merely urging China to impose tougher sanctions on North Korea, it is time for the US to use more diplomatic methods and give up its selfish motives by strengthening its military presence in Northeast Asia over the Korean Peninsula issue. Despite Trump's accusations on China, CNBC News noted that the latest trade data suggest that Trump's tweet missed its mark, and that China's trade with North Korea has been shrinking in the past three years. China has banned imports of coal, iron ore, gold and rare earths, and several other raw minerals from North Korea, and had banned sales of jet fuel to North Korea. Following UN Security Council resolutions, the embargo immediately took effect, the Ministry of Commerce said in a statement on its website in June. "China has made efforts to fulfill the UN sanctions on North Korea, and the current imports from the country are for the livelihood of the North Korean people," Dong Xiangrong, a research fellow at the National Institute of International Strategy of the Chinese Academy of Social Sciences, told the Global Times. "The mining sector is a key part of North Korea's economy. The embargo will prevent foreign currency from getting into the country, so the money can't be funneled toward nuclear weapons and missiles," Dong said. Despite China's efforts on imposing UN sanctions, it still insists that sanctions are not the only method to push North Korea to return to the negotiating table, and they could not directly lead to North Korea's giving up of its nuclear tests as the US wants, Dong said. The Trump administration is studying new ways to starve North Korea of cash for its nuclear program, including sanctions on Chinese companies that have kept the North's economy afloat, AP reported on Thursday. "The US has unrealistic expectations on China to take tougher action against North Korea. As a rather reclusive country, North Korea could survive for quite a long time even if China severs all exchanges with it. And its people would be the first to suffer from poverty," Dong said. "The US has selfish motives in strengthening its alliance with Japan and South Korea as well as strengthening its military presence in Northeast Asia over the Korean Peninsula issue. But because the situation is beyond its control, it is time for the US to use more diplomatic methods, including talks with North Korea, instead of pressuring China," Dong said. ^ top ^

US ready to use military force against North Korea if diplomacy fails, Trump's UN ambassador says (SCMP)
The US will use military force to stop North Korea from developing the capability to strike another country with a nuclear weapon if diplomatic solutions fail, US Ambassador to the United Nations Nikki Haley said. Haley's delegation plans to introduce “in the coming days” a new UN Security Council resolution aimed at halting all violations of existing sanctions against North Korea. The ambassador also threatened that the US government will cut off trade with countries that continue to trade with the reclusive nation. The trade threat appeared to be a jab at China, which US President Donald Trump has accused of undermining efforts aimed at subduing Pyongyang's weapons programme by trading with the country. “There are countries that are allowing, even encouraging, trade with North Korea in violation of UN Security Council resolutions,” Haley said. “Such countries would also like to continue their trade with the United States. That's not going to happen. Our attitude on trade changes when countries do not take international security threats seriously. “ Haley made the comments during an emergency meeting that she and her South Korean and Japanese counterparts Cho Tae-yul and Koro Bassho called in response to North Korea's recent launch of what the US military determined was an intercontinental ballistic missile. Haley called the latest missile test “a new escalation of the threat”. Shortly after the launch, US Secretary of State Rex Tillerson called it a “new escalation of the threat” to the US. UN Secretary-General António Guterres called the launch “another brazen violation of UN Security Council resolutions” which “constitutes a dangerous escalation of the situation”. China's UN Ambassador Liu Jieyi, who presided over Wednesday's meeting in his capacity as Security Council president – a position that rotates monthly – didn't acknowledge Haley's trade threat. Instead, Liu backed Russia's Deputy UN Ambassador Vladimir Safronkov, who rejected Haley's threat to use military force. Liu also called for the US to cancel joint military exercises with South Korea's military and plans to deploy a missile defence system in South Korea. While calling North Korea's recent ICBM test launch “unacceptable” and “a flagrant violation”, Liu said the US missile defence system in South Korea “undermines the security interests of countries in the region, including China”. Safronkov's was the most forceful rejection of Haley's proposals among the Security Council members. “It's utterly clear to us that any attempt to justify a military solution is inadmissible,” said Safronkov, who warned the council to “leave behind the dangerous logic of confrontation”. In response, Haley challenged Russia to veto the new resolution she plans to put forward. “If you are happy with North Korea's actions, veto it,” said Haley, who urged Safronkov's delegation to “vote with the international community”. “If you choose not to, we will go our own path.” Throughout efforts by the US, South Korea and Japan to tighten Security Council sanctions and issue “secondary sanctions” or those that violate existing resolutions, North Korea has maintained that it is developing weapons in response to joint military exercises conducted by Washington and Seoul. Last month, North Korea's deputy permanent representative to the UN, Kim In-ryong, said Guterres had not responded to requests to convene an “international forum of legal experts” to discuss the legal justification for UN sanctions implemented and tightened in recent years – most recently in November 2016. Kim said his delegation had also sent several petitions to the UN Security Council seeking an emergency meeting to discuss the US-South Korea war games. ^ top ^

Xi Jinping and Putin join forces to halt North Korean crisis (SCMP)
The presidents of China and Russia called on North Korea to freeze its nuclear and missile programmes and also urged the US and South Korea to halt large-scale military drills, as they sought to quell rising tensions over the Korean peninsula. The joint call came as Chinese President Xi Jinping met his Russian counterpart Vladimir Putin in Moscow late on Tuesday, hours after Pyongyang said it had successfully launched for the first time an intercontinental ballistic missile, and ahead of the G20 summit in Hamburg, Germany on Friday. “We believe that the world is turbulent, local conflicts are emerging constantly, and issues such as the Korean peninsula problem and the Syrian question remain very complex,” Russia Today television reported Xi as saying after the meeting, the third between the two presidents this year. Putin added his voice to the call for calm, offering the two countries' own solution. “We have agreed to promote our joint initiative, based on Russian step-by-step Korean settlement plan and Chinese ideas to simultaneously freeze North Korean nuclear and missile activities, and US and South Korean joint military drills,” RT quoted him as saying. A separate joint statement by the foreign ministers of China and Russia criticised North Korea's test launch as “unacceptable” and a grave violation of UN Security Council resolutions. The missile, a Hwasong-14, has a minimum range of 5,600km and would be capable of hitting the US state of Alaska. US and Seoul launch retaliatory missiles into sea, as North Korea's Kim Jong-un laughs and calls ICBM his 'July 4 gift'( The statement said that military means to solve the issue should not become an option. Instead, the UN resolutions should be fully implemented, North Korea's reasonable concerns should be respected, and all countries should make efforts to make the resumption of dialogue possible. The UN Security Council, of which China holds the presidency this month, will hold an emergency meeting later on Wednesday. Beijing and Moscow also used their joint statement to call on Washington to immediately halt deployment of its THAAD anti-missile system in South Korea, a move Washington has said is necessary because of the North Korean missile threat. “It's discouraging that the Chinese (and Russians) are still calling for 'restraint by all sides', despite the fact that their client state, North Korea, has cast aside all restraint and is sprinting for the finish line in demonstrating a nuclear-armed ICBM capability,” said Daniel Russel, formerly Washington's top diplomat for East Asia, now diplomat in residence at the Asia Society Policy Institute. US President Donald Trump meanwhile responded to the latest North Korean missile launch in a Twitter post: “Hard to believe South Korea and Japan will put up with this much longer. Perhaps China will put a heavy move on North Korea and end this nonsense once and for all!” Trump is set to meet Xi, as well as Putin for the first time since he assumed office, on the sidelines of the G20 summit. The US has been pressing China to do more to rein in Pyongyang's nuclear ambition by leveraging its economic ties with the nation. “The most important and urgent issue [between US and China] is still North Korea, and I think the Chinese have misjudged what is necessary to satisfy Trump and keep US-China on a positive, co-operative trajectory,” said Bonnie Glaser, director of the China Power Project at Centre for Strategic and International Studies China will “have to address US concerns through deeds not just words,” she said. ^ top ^

US and South Korea launch retaliatory missiles into sea, after Washington confirms North Korea fired ICBM (SCMP)
The US Army and South Korean military have retaliated against North Korea's launch of an apparent intercontinental ballistic missile, launching their own volley of missiles into South Korean territorial waters along the country's eastern coastline, US Pacific Command said in a statement. The US-South-Korean launches on Wednesday were directly in response to “North Korea's destabilising and unlawful actions,” Pacific Command said. The US Army used its Army Tactical Missile System and South Korea used its Hyunmoo Missile II, which can be deployed rapidly and provide “deep strike precision capability, Pacific Command said. The South Korean-US military alliance “remains committed to peace and prosperity on the Korean Peninsula and throughout the Asia-Pacific,” Pacific Command said. “The US commitment to the defense of the [Republic of Korea] in the face of threats is ironclad.” On Tuesday, North Korea launched a missile that flew higher and remained in the air longer than previous attempts, enough to reach all of Alaska, experts said, in a milestone for North Korea's weapons program. ' ' The United States asserted Tuesday that North Korea's latest missile launch was indeed an intercontinental ballistic missile, as Pyongyang had boasted. US Secretary of State Rex Tillerson called the ICBM launch a “new escalation of the threat” to the US. At the request of the US, Japan and South Korea, the United Nations Security Council was to hold an emergency session on Wednesday afternoon. Tillerson said that was part of a US response that would include “stronger measures to hold the DPRK accountable,” using an acronym for the isolated nation's formal name, the Democratic People's Republic of Korea. “Global action is required to stop a global threat,” Tillerson said. “Any country that hosts North Korean guest workers, provides any economic or military benefits, or fails to fully implement UN Security Council resolutions is aiding and abetting a dangerous regime.” He said the US “will never accept a nuclear-armed North Korea.” The US Army describes the missiles it used on Tuesday as long-range, all-weather guided missiles. They are designed to be precise in nature, and can be used beyond the range of artillery and rockets. The US missile system can be used to take out ground combat units, surface-to-surface missile units, air-defense units, helicopter re-arming and refueling systems or communications sites, according to an Army fact sheet. Some of the missiles in the system are designed to deliver a single, 230kg warhead on a target through the use of satellite guidance, while others distribute hundreds of smaller bomblets over a larger distance, according to the Army. Dana White, a Pentagon spokesperson, confirmed in a statement Tuesday night that the missile North Korea used was an intercontinental ballistic, and described it as a “escalatory launch.” “The launch continues to demonstrate that North Korea poses a threat to the United States and our allies,” White said. “Together with the Republic of Korea, we conducted a combined exercise to show our precision fire capability.” White said that the United States remains prepared to defend itself and allies and to use “the full range of capabilities at our disposal against the growing threat from North Korea.” The United States seeks only the peaceful denuclearization of the Korea Peninsula, and its commitment to its allies is ironclad, she added. ^ top ^

North Korea heralds 'final step towards nuclear state able to strike anywhere' (SCMP)
North Korea on Tuesday said it had successfully tested its first intercontinental ballistic missile, catching military experts off-guard and ratcheting up pressure on its Asian neighbours to take a harder line against the hermit nation. China, Pyongyang's main ally, issued a joint statement with Russia that calls for a halt to missile tests in exchange for the US and South Korea suspending their large-scale military exercises. The launch comes at a sensitive time in global affairs. Chinese President Xi Jinping is due to meet US counterpart Donald Trump at a G20 summit in Germany in the coming days, and South Korean leader Moon Jae-in wrapped up a visit to the White House last week. The missile was launched at 9.40am and flew about 933km, reaching an altitude of 2,802km, before falling into the sea inside Japan's exclusive economic zone after a 39 minute flight, the North's official media reported. The launch was tracked by the US and Japan, which said the missile reached an altitude that “greatly exceeded” 2,500km. It appeared to be the most successful missile test yet by North Korea, flying higher than the 560km recorded by Seoul in the previous test carried out in May. Pyongyang said the success of the ICBM – which it calls the Hwasong-14 – marked the “final step” in creating a “confident and powerful nuclear state that can strike anywhere on Earth”. The Russian and Chinese foreign ministries made the proposal in a joint statement after talks between President Vladimir Putin and Chinese President Xi Jinping in Moscow on Tuesday. “The situation in the region affects the national interests of both countries,” the statement said. “Russia and China will work in close coordination to advance a solution to the complex problem of the Korean peninsula in every possible way.” Andrei Chang, founder of military affairs magazine Kanwa Asian Defence, said he was surprised by Pyongyang's progress in its missile programme. “Now there is only one question remaining – whether the missile will be equipped with a nuclear warhead one day. North Korea's missile experts are very smart, and it's possible based on the existing progress and capability,” Chang said. Based on the missile's similarity to China's own ICBMs with a range of more than 6,000km, he estimated it could strike Alaska, but the lower 48 states as well as Hawaii would be out of range. China's foreign ministry said it opposed the test and called for restraint by Pyongyang, as well as calm from all sides. “China urges the DPRK to refrain from acts that violate UN Security Council resolutions so as to create necessary conditions for resuming dialogue and negotiation,” ministry spokesman Geng Shuang said, using the North Korea's official name. One Chinese foreign affairs expert said North Korean leader Kim Jong-un might have intended the test as a reminder to China and the US of Pyongyang's presence ahead of Xi and Trump's meeting in Hamburg. Kim might also be trying to sow tension between Beijing and Washington over how to contain the North's weapons programme, according to Sun Xingjie, a professor at Jilin University. Disagreement between the two sides could see the US move closer to Japan and South Korea, which in turn would push China towards North Korea, he said. Trump has grown increasingly impatient over the deadlock in resolving the nuclear crisis, and blamed China. He discussed the issue with Xi by phone on Monday, but both sides failed to announce any progress beyond reiterating their commitment to a denuclearised Korean peninsula. Trump took to Twitter after the launch, writing: “Hard to believe that South Korea and Japan will put up with this much longer. Perhaps China will put a heavy move on North Korea and end this nonsense once and for all!” Alexander Gabuev, a senior associate and chair of the Russia in Asia-Pacific programme at the Carnegie Moscow Centre, said he expected Sino-Russian ties to continue to grow, but there were limits. “It increasingly appears the Trump administration will be tough on many issues which constitute China's core interests, and the US will be unable to improve relations with Russia... However, there are limits – Beijing and Moscow don't want to enter a military alliance relationship.” ^ top ^

China calls for calm after North Korea claims first successful launch of ICBM that can 'strike any place in the world' (SCMP)
China has called for calm and restraint after North Korea claimed to have test-launched its first intercontinental ballistic missile that is capable of hitting anywhere in the world. Foreign ministry spokesman Geng Shuang also defended China's “relentless efforts” to resolve the North Korean nuclear standoff after US President Donald Trump called on Beijing to “end this nonsense once and for all”. The United States on Tuesday requested an emergency meeting of the UN Security Council after North Korea declared that it had successfully tested its first intercontinental ballistic missile, the US mission said. The meeting is expected to take place on Wednesday. US Ambassador Nikki Haley on Tuesday spoke by phone with China's Ambassador Liu Jieyi, who holds the council presidency this month, to convey the US request for an urgent meeting. North Korea's announcement Tuesday came after the launch of a ballistic missile in the morning. It flew about 39 minutes and reached an altitude of 2,802 kilometres, before landing in waters within Japan's exclusive economic zone, according to the announcement. North Korea's claims the missile reached that altitude could not be verified. However Japan's Defence Ministry said it reached an altitude that “greatly exceeded” 2,500 kilometres. ' A test-launch of an intercontinental ballistic missile, if confirmed, would be considered a game-changer by countries looking to check North Korea's push for a nuclear-armed missile that can reach anywhere in the United States. The test still may be the North's most successful yet; a weapon analyst says missile could be powerful enough to reach Alaska. The “landmark” test of a Hwasong-14 missile was overseen by leader Kim Jong-un, an emotional female announcer said. It flew 933 kilometres, she added. The North was “a strong nuclear power state” and had “a very powerful ICBM that can strike any place in the world” she said. There are still doubts whether the North can miniaturise a nuclear weapon sufficiently to fit it onto a missile nose cone, or whether it has mastered the technology needed for it to survive the difficult re-entry into the Earth's atmosphere. In his New Year's address, Kim said his country had reached the final stage of preparing to test-launch the long-range missile. Officials from South Korea, Japan and the United States said the missile landed in Japan's Exclusive Economic Zone (EEZ) after being launched near an airfield in Panghyon, about 100 km northwest of the North's capital, Pyongyang. ' Japan said on Monday the United States, South Korea and Japan will have a trilateral summit on North Korea at the G20. China's leader Xi Jinping will also be at the July 7-8 meeting in Hamburg, Germany. Trump, responding to the latest launch, wrote on Twitter: “North Korea has just launched another missile. Does this guy have anything better to do with his life?” an apparent reference to North Korean leader Kim Jong-un. “Hard to believe South Korea and Japan will put up with this much longer. Perhaps China will put a heavy move on North Korea and end this nonsense once and for all!”, Trump said in a series of tweets. North Korea has conducted nuclear and missile tests to show defiance in the face of international pressure and to raise the stakes when Pyongyang sees regional powers getting ready for talks or sanctions, analysts say. White House officials said Trump was briefed on the latest launch, which took place hours before Independence Day celebrations in the United States. North Korea has previously fired missiles around this holiday. Pyongyang has conducted missile-related activities at an unprecedented pace since the start of last year, but analysts had thought it was years away from having a nuclear-tipped ICBM. capable of hitting the United States. ' North Korea is also trying to develop intermediate-range missiles capable of hitting US bases in the Pacific. The last North Korean launches before Tuesday were of land-to-sea cruise missiles on June 8. David Wright, co-director of the Global Security Programme at the US-based Union of Concerned Scientists, said the assessments of the flight time and distance suggest the missile might have been launched on a “very highly lofted” trajectory of more than 2,800 km. The same missile could reach a maximum range of roughly 6,700 km on a standard trajectory, Wright said in a blog post. “That range would not be enough to reach the lower 48 states or the large islands of Hawaii, but would allow it to reach all of Alaska,” he said. South Korea's President Moon said on Monday in a meeting with former US president Barack Obama that North Korea now faces its “last opportunity” to engage in talks with the outside world. North Korea has conducted four missile tests since Moon took office in May, vowing to use dialogue as well as pressure to bring Pyongyang's nuclear and missile programmes under control. Earlier this week, North Korea was a key topic in phone calls between Trump and the leaders of China and Japan. Leaders of both Asian countries reaffirmed their commitment to a denuclearised Korean Peninsula. Trump has recently suggested he was running out of patience with China's modest steps to pressure North Korea. ^ top ^



China, Mongolia renew currency swap deal (Xinhua)
China's central bank on Thursday renewed a currency swap agreement with the Bank of Mongolia. The agreement allows the two central banks to swap 15 billion yuan (2.2 billion U.S. dollars) for 5.4 trillion Mongolian togrog, the People's Bank of China (PBOC) said on its website. The deal aims to "facilitate bilateral trade and investment and promote the economic development of both countries," PBOC said. The agreement is valid for three years and is extendable by mutual consent. In 2011, Chinese and Mongolian central banks signed a currency swap deal for 5 billion yuan, making it possible for trade settlement and investment with their own currencies. In 2014, they expanded the deal to 15 billion yuan. ^ top ^

Hague Tribunal dismissed complaint against Mongolian Government (Montsame)
The Government of Mongolia won in the arbitration dispute with three Chinese investors to Tumurtein Khuder Company. The investors appealed to the permanent court of Arbitration at the Hague in February 2010, concerning the Government agency's decision on cancellation of Tumurtei khuder company's license of Tumurtei iron ore mine. On June 30, the arbitral tribunal made decision to dismiss the claimants' requests in full. Tumurtei mine located in Khuder soum of Selenge aimag has a reserve of 250 million tons of iron ore. The mine license was cancelled in 2006 as license holder 'Tumurtein Khuder' company had breached relevant laws and regulations by not repaying costs for the exploration of the deposit conducted with the state budget finance, having failed to develop plans on environmental protection and rehabilitation and take measures, making explosion on a field of 'Khustain Yeroo” company or unauthorized field and by having exported iron ore instead of concentrating it as stated in its Environmental Impact Assessment. The Chinese investors, including China Heilongjiang International Economic and Techinical Cooperative Corporation claimed investment of USD60 million, plus potential profits since the license revocation as well as all costs incurred arbitration dispute. ^ top ^

Mongolia calls for Northeast Asian countries to hold security dialogue (Montsame)
Under the theme “25 years of CICA: For Asian Security and Development”, the second non-governmental forum of Conference on Interaction and Conference-Building Measures in Asia (CICA) took place in Beijing, China on June 28-29. The forum was attended by over 300 delegates including CICA member states, observer states (organizations) and concerned countries in the region and discussed issues such as security situations in Asia, on how to achieve common, comprehensive, cooperative and sustainable security in Asia and jointly build the Belt and Road. Within the framework of the forum, eight roundtable panels focusing on the Asian security situation was held, such as the implementation of the United Nations 2030 Agenda for Sustainable Development, anti-terrorism cooperation, cyberspace security, addressing climate change, financial security, the role of the CICA Non-governmental Forum, and the role of the media. Also, Director of International Relations' Department of Mongolian Academy of Sciences PhD. J.Bayasakh held a discussion on “Northeast Asian Security and Mongolia's Contribution in the Region” during the roundtable panel on anti-terrorism cooperation. “Northeast Asia's security is still delicate. The issues are both bilateral (Japan-Russia, Japan-China, China-Vietnam) and multilateral (China-ASEAN). And this is only Mongolia in the region which faces no challenges in terms of security. Owing to its geographical location and foreign relationship potentials, Mongolia is pursuing soft power policy in the region, and in taking advantage of its neutrality position it calls other regional countries for holding security dialogues” said PhD. J.Bayasakh during his presentation. ^ top ^

T Prime Minister J.Erdenebat says recession has ended for Mongolia (UB Post)
On June 30, Prime Minister J.Erdenebat made an address to Parliament during its regular session, reporting that the economic recession had ended and that the basis for further development has been laid. The Prime Minister detailed how an economy that once had an annual GDP growth of 17 percent had been derailed, registering a 1.6 percent shrink in GDP in the third quarter of 2016. “By the end of 2016, GDP growth had reached 1.2 percent and further surged to a surprising 4.2 percent growth in the first quarter of 2017. We were able to revive a failing economy in only three quarters,” said J.Erdenebat. With the help of the IMF extended fund facility program, the foundation for economic growth has been set according to the Prime Minister J.Erdenebat. Although the statistics of economic growth are accurate, analysts question whether the unexpected growth is really attributed to the IMF program, as opposed to external forces such as coal prices. Rising value-added production has been credited as the reason for the 4.2 percent GDP growth. Sales revenue from value-added production and service was at 122 billion MNT in the first three months of 2017. In comparison, the first quarter of 2016 saw a GDP growth of 3.2 percent. The biggest contributors to growth were increases in production in agriculture, services, and construction. On the other hand, growth in the mining and manufacturing sectors had declined. “Our government was able to stop the depreciation of the MNT and protect the purchasing power of citizens by increasing foreign exchange reserves, improving fiscal discipline, stabilizing the macro economy and restoring investor confidence,” he said. Mongolia plans to cap the state debt at 60 percent of GDP by 2021 and even lower in the future, the Prime Minister added Mongol Bank received an initial fund of 38.6 million USD from the IMF under an enhanced financing program as part of its extended fund facility on May 25, 2017. After the implementation of the program, Mongolia will receive a soft loan of 434.3 million USD from the IMF to help stabilize the country's economy and support its economic reforms, the government reports. ^ top ^

Second round of tax increases come into effect on July 1 (UB Post)
In order to implement the Extended Fund Facility with the International Monetary Fund (IMF), the government ratified a budget amendment. In line with the amendment, seven taxes will be increased in an effort to increase budget revenue. The first round of tax increase came into effect on May 1 with the tax increase on savings interest, imported tobacco, and automobiles. Now the second round of increases sees tax increases on fuel, social insurance fee, and electric, hybrid, and low-emission vehicles.
With the Organization of the Petroleum Exporting Countries (OPEC) agreeing to cut their production along with the depreciation of the MNT in 2016, the Cabinet found itself in a predicament. With the threat of petroleum prices surging up to unsustainable levels, the Cabinet made the decision to cut the petroleum import tax. The tax on imported petroleum was cut from 160,000 MNT per ton to 30,000 to 50,000 MNT per ton. The diesel fuel tax rate was cut from 180,000 MNT to 70,000 MNT. However, due to the IMF's extended fund facility program agreement, these tax breaks will be reversed in stages. Starting July 1, the tax on petroleum imports will be raised to previous levels. The government forecasts that reversing the tax cuts will lower the state's 210 billion MNT fiscal deficit to 118.6 billion MNT.
The other increase is the pension payment of the social insurance premium. The Cabinet set the annual pension payment at seven percent in 2017, eight percent in 2018, 8.5 percent in 2019, and 9.5 percent in 2020. As the pension payment is part of the larger social insurance services, the overall premium will also increase. Meaning that in 2017, the overall social insurance premium will remain at its current level of 21 percent, but it will increase to 23 percent in 2018, 24 percent in 2019, and 26 percent in 2020. The changes will also affect voluntary insurance holders or people who are self-employed and those who work in an informal sector. Currently, voluntary social insurance holders pay a 12 percent premium, three quarters of which is the pension payment. Their pension payment premium will increase to 10 percent on July 1, with a stage-by-stage increase starting at 11 percent in 2019 all the way up to 12.5 percent in 2020. The overall premium of voluntary social insurance holders will become 14 percent this year, 15 percent in 2018, 15.5 percent in 2019, and 17 percent in 2020.
Parliament approved an amendment to the Excise Tax Law, agreeing to refund the collected vehicle import taxes paid for electric, hybrid, and low-emission vehicles between May 1 and June 9, including taxes on the most abundantly imported car, Toyota Prius. Back in April, Parliament passed an amendment to increase seven taxes to bolster budget revenue in relation to Mongolia's enrollment in the IMF's extended fund facility program. Among the taxes increased was the import tax on vehicles. The amendment raised the tax on electric, hybrid, and low-emission cars from zero to 50 percent of taxes on regular vehicles. After protests from vehicle importers, including one protest where a hybrid vehicle was set on fire, the Finance Minister recommended that the tax increase be postponed until July 1. Parliament then decided to refund taxes that were paid by vehicle importers from May 1 to June 9. “The government is refunding the excise taxes paid by electric, hybrid, and low-emission vehicle importers who had already imported or shipped their vehicles before the new vehicle excise tax increase became effective. However, starting July 1, the tax increase that was approved in April will come into effect. The Customs Office reported that there are 2,600 vehicles that were imported after May 1 that have not been processed,” said Head of Parliament's Budget Standing Committee Ch.Khurelbaatar. ^ top ^

UDS 42 Million loan to boost energy sector (gogo Mongolia)
During its regular meeting on June 28, Wednesday, the Cabinet authorized Finance Minister B.Choijilsuren to sign a financing agreement on 'Second Energy Sector Project'. The agreement is established between the World Bank's International Development Association and the Mongolian Government. The USD 42 million loan from the World Bank will be used on projects – 'Baganuur-Southeastern Region Electricity Distribution Network', 'Erdenet-Bulgan Electricity Distribution Network' and expansion of 'National Electricity Transmission Grid'. In addition, the government plans to set up a 10MW solar power plant in western region. ^ top ^

Mongolia: death penalty confined to history as new Criminal Code comes into effect (Montsame)
Amnesty International welcomes the coming into force of the new Criminal Code and Code of Criminal Procedure in Mongolia as an historic milestone in the country's journey towards full enjoyment and protection of human rights. The new Criminal Code, which abolishes the death penalty for all crimes, became effective on 1 July 2017 after it was adopted by the Mongolian Parliament on 3 December 2015. Today's development brings to completion a seven year process towards abolition which formally began in January 2010, when the country's President, Tsakhiagiin Elbegdorj, commuted all death sentences and announced an official moratorium on executions. The move was followed two years later by the ratification of an international treaty committing the country to the abolition of the death penalty. Amnesty International Mongolia has relentlessly campaigned for abolition since the national human rights group was first established in 1994. The new legal text also contains advances on other human rights issues. For example, it includes for the first time a definition of torture that broadly reflects the ones outlined in the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment. Regrettably however, Mongolia has failed to take the opportunity of the new legislation to put in place and implement protective mechanisms to prevent and punish torture, such as establishing an independent and effective mechanism to investigate torture allegations. The last execution in Mongolia was carried out in 2008 and death sentences imposed since the moratorium was established in 2010 have been routinely commuted. However, figures on the use of the death penalty in the country remained classified as a state secret. Today Mongolia becomes the 105th country to have freed itself from the ultimate cruel, inhuman and degrading punishment. It is the eighth country to have done so in the past five years, alongside Benin, Congo (Republic of), Fiji, Latvia, Madagascar, Nauru and Suriname. During the same period, Guinea also abolished the death penalty for ordinary crimes only. As other countries in the Asia Pacific region continue to execute or even contemplate reinstating the death penalty, in clear violation of their international law obligations, Mongolia's journey over the past decade is not only illustrative of the overwhelming global trend in favour of the abolition of the death penalty, but also of the critical importance that political leadership plays in driving human rights change. Amnesty International opposes the death penalty in all cases without exception, regardless of the nature or circumstances of the crime; guilt, innocence or other characteristics of the individual; or the method used by the state to carry out the execution. The organization renews its call on the authorities of countries that still retain this punishment to follow Mongolia's example and immediately abolish the death penalty once and for all. ^ top ^


Ms. Corinne Estermann
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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