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
  31.7-4.8.2017, No. 681  
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Foreign Policy

Chinese defense ministry demands immediate withdrawal of Indian troops (Xinhua)
Chinese defense ministry has urged India to immediately pull back the trespassing troops to the Indian side of the boundary. Ren Guoqiang, a spokesperson of the ministry, made the remarks in a statement released by the ministry's website late Thursday night. Ren called on the Indian side to swiftly address the situation in a proper manner to restore peace and tranquility in the border region. Since the incident occurred, China has shown utmost goodwill and sought to communicate with India through diplomatic channels to resolve the incident. Chinese armed forces have also shown a high level of restraint with an eye to the general bilateral relations and the regional peace and stability, said Ren. However, goodwill has its principles and restraint has its bottom line, said Ren. Ren urged the Indian side to give up the illusion of its delaying tactic, as no country should underestimate the Chinese forces' confidence and capability to safeguard peace and their resolve and willpower to defend national sovereignty, security and development interests. Chinese armed forces will resolutely protect the country's territorial sovereignty and security interests, said Ren. Indian border troops illegally crossed the border into Chinese territory on June 18, and obstructed China's road construction work on the Chinese side. As of Thursday, there are still Indian border troops illegally staying in the Chinese territory. On Wednesday, China's Ministry of Foreign Affairs issued a document titled "The Facts and China's Position Concerning the Indian Border Troops' Crossing of the China-India Boundary in the Sikkim Sector into the Chinese Territory." ^ top ^

Trump trade action could hinder ties (China Daily)
China has put a strong emphasis on intellectual property rights protections and urged all WTO members to respect the rules of the organization, the Ministry of Commerce said on Thursday as US President Donald Trump prepares to launch a broad investigation into China's trade policies. "China and US trade cooperation is the 'ballast and propeller' of bilateral relations and is mutually beneficial. We hope the two countries will continue on a path of cooperation," Commerce Ministry spokesman Gao Feng said at a news conference. Trump is expected to make a speech and sign a memorandum at the White House on Friday targeting China's intellectual property and trade practices, the CNBC news channel reported. The Trump administration is considering initiating an investigation into Chinese trade practices under Section 301 of the Trade Act of 1974. It allows the head of state to unilaterally impose tariffs or other trade restrictions to protect US industries from unfair trade practices of foreign countries. Since the World Trade Organization was established in 1995, US Section 301 investigations have not led to trade sanctions. It was adopted to levy tariffs against Japanese motorcycles, steel and other products in the 1980s. If the US initiates an investigation under Section 301, that would indicate that it wants to replace international law with its domestic law, said Zhao Ping, director of the department of international trade research at the China Council for the Promotion of International Trade. "The move would be unreasonable and violate international practice," she said. "A US attempt to use unilateralism to override multilateral rules would be an abuse of its status as a superpower on the world stage. It would show disrespect for other countries." The Trump administration might do so partly because it is looking to "divert attention from his (Trump's) domestic economic weakness," she added. China and the US agreed to initiate a comprehensive 100-day action plan to address the trade imbalance in April. Under the plan, China will resume US beef imports and allow rice imports for the first time. China-US trade volume reached 1.85 trillion yuan ($272 billion) in the first half of this year, up 21.3 percent year-on-year, according to the General Administration of Customs. Such a policy against China could "definitely harm workers and entrepreneurs in both countries", said Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation. Wei Jianguo, vice-president of the China Center for International Economic Exchanges, said China's imports from the US will increase faster than its exports in the second half of 2017, so the US trade deficit with China is likely to be narrowed. Wei said that the US is expected to overtake the European Union as China's largest trade partner this year with such growth. "The world economy is currently on track to recover, but uncertain and unstable factors still exist," said Gao. "We are willing to work together with the US to jointly promote China-US economic and trade relations, as well as to inject fresh vitality into the world economy." ^ top ^

Abe's China policy may change: expert (Global Times)
Japanese Prime Minister Shinzo Abe's Cabinet reshuffle signals a "slight adjustment" of policy on China, an expert said on Thursday. Abe, recently hit by scandals and weakening support, appointed new ministers such as Foreign Minister Taro Kono and Defense Minister Itsunori Onodera in Cabinet reshuffle on Thursday. With the Cabinet reshuffle, Abe appears to be seeking a balance between the right and left wings. And appointing a new foreign minister, who is believed to hold a moderate view on China, would lead to a slight adjustment in Japan's policy toward China, Hu Lingyuan, a professor at the Center for Japanese Studies at Fudan University in Shanghai, told the Global Times. "Since Abe is struggling with scandals and failing public support, he needs to find a way to stabilize his government, and the choice of Kono, who is considered a dove, (compared to Abe, who is on the hawkish side) surprises me, and shows Abe's willingness to balance the Cabinet," Hu said. Kono, 54, is the son of former chief cabinet secretary Yohei Kono, who wrote a landmark 1993 apology to "comfort women" forced to work in Japanese wartime military brothels. Kono headed the National Public Safety Commission for 10 months, and was responsible for G7 summit security in Ise-Shima while working as administrative reform minister. Latest opinion polls show support for Abe has plunged to its lowest since he took power in December 2012 with a promise to revive Japan's economy and bolster its defenses, endangering his goal of revising the pacifist constitution. Abe had until recently also been seen as likely to win a third term as head of the ruling Liberal Democratic Party (LDP), putting him on track to be Japan's longest-serving prime minister. But support has fallen below 30 percent, with the opposition fanning suspicions of Abe's favoritism to a friend and voters believing that he and his aides have grown arrogant in office. He was also hurt by the LDP's defeat by a novice political party in a July assembly election, Reuters reported on Thursday. New LDP policy chief Fumio Kishida, the former foreign minister, emphasized the Cabinet's intention to return to fundamentals after taking up his new post. "We need to fulfill economic policies under Abenomics so that the public can better feel the benefits of Japan's economic revival," Kishida told a news conference, referring to Abe's signature plan to reboot Japan's economy. ^ top ^

China coordinates with US in South China Sea in search for missing sailor (Global Times)
The Chinese Ministry of National Defense on Thursday said that the Chinese navy had coordinated with the US search for a missing US sailor in the South China Sea. The Chinese navy's Liuzhou frigate, which was conducting combat readiness duties in nearby waters, carried out operational coordination with the US navy "in the spirit of humanitarianism" and in accordance with the code for unplanned encounters at sea, the ministry said in a statement. The sailor fell into water when a US warship was navigating 100 nautical miles southwest of Huangyan Island in the South China Sea recently, the statement said. ^ top ^

China, Kazakhstan feel port's benefits (China Daily)
The logistics terminal in Jiangsu province's Lianyungang Port, built by China and Kazakhstan, has served as an important platform to improve economic cooperation, according to officials. The first project between China and the countries involved in the Belt and Road Initiative, the Lianyungang logistics terminal has imported and exported 7.77 million metric tons of goods since it went into operation in 2014. Goods imported and exported from January to July this year increased by 49 percent over the same period last year, according to the center. Wang Qinmin, vice-chairman of the Chinese People's Political Consultative Conference and president of the All China Federation of Industry and Commerce, said China and Kazakhstan have paid great attention to bilateral relations, deepened political trust and expanded cooperation in many areas since they forged diplomatic ties 25 years ago. Wang made the speech at the fifth China-Central Asia Cooperation Forum, which was held on Wednesday and Thursday in Lianyungang. More than 200 officials from China and Central Asia, including Uzbekistan, Tajikistan and Kyrgyzstan, attended the forum. President Xi Jinping first proposed the Belt and Road Initiative in 2013. It comprises the Silk Road Economic Belt and the 21st Century Maritime Silk Road, with the aim of building a trade and infrastructure network that connects Asia with Europe and Africa along ancient trade routes. The Lianyungang logistics terminal started construction soon after the proposal emerged, with investment in the first phase reaching 606 million yuan ($90.2 million). "The Kazakhstan partners didn't expect that the construction could be finished in eight months," said Liu Bin, general manager of the logistics terminal. "They thought at least two to three years were needed, considering the mountainous environment. "The logistics terminal started to make a profit the same year it started operations. It serves companies of the two countries well." Su Yang, manager of the terminal's production business department, said freight trains running from Khorgos, a city in the Xinjiang Uygur autonomous region near the border with Kazakhstan, to Almaty now take just six days. "It used to take 12 days to transport good between the two cities. With the joint effort of the two countries, the transportation time and costs have been greatly reduced," he said. "The freight trains between Lianyungang, Khorgos and Asian and European countries will benefit the economy, especially companies along the route." Last year, more than 1,200 trains transited through Kazakhstan, with rail freight for the two countries reaching 8.2 million tons. China and Kazakhstan have agreed to develop more international freight train services, starting from China and going via Kazakhstan to Central Asia, Europe and Gulf countries, making rail freight a major solution to trade between Asia and Europe by 2025. ^ top ^

China, Turkey underscore security, counter-terrorism cooperation (Xinhua)
China on Thursday voiced appreciation of Turkey's decision to list the East Turkistan Islamic Movement (ETIM) as a terrorist organization. During a meeting between Chinese Foreign Minister Wang Yi and Turkish Foreign Minister Mevlut Cavusoglu, the two sides agreed that anti-terrorism cooperation and common security are in their fundamental interests and the core of political mutual trust. China firmly supports Turkey's defence of its national sovereignty, security and stability, said Wang. Cavusoglu said Turkey regards China's security as its own and will never allow any activities in Turkish territory that jeopardize China's sovereignty and security. The two sides agreed to improve cooperation and alignment between the Belt and Road Initiative and Turkey's Middle Corridor plan, according to Wang. Stressing Turkey's geographic importance to the Belt and Road initiative, Wang said China will work with Turkey to expand areas of cooperation in the process of promoting the Belt and Road construction. The two sides also discussed the Palestine-Israel issue, with Wang saying the only way out is peace talks. During Palestinian President Mahmoud Abbas' visit to China in July, President Xi Jinping made a four-point proposal on the issue and China has taken measures to implement Xi's ideas, said Wang. He said China would like to work with Turkey, which has a unique role to play, and other parties to make unremitting efforts to fundamentally solve the issue. Cavusoglu is paying an official visit to China from Wednesday to Thursday. During the visit, he and Wang co-hosted the second meeting of the China-Turkey foreign ministers' consultation mechanism. ^ top ^

South China Sea, North Korea likely to top agenda for diplomats at Asean forum (SCMP)
Disputes over the South China Sea and North Korea's nuclear threats are expected to be the key areas of conflict when top Southeast Asian diplomats meet their counterparts from China and the US in Manila on the weekend. US Secretary of State Rex Tillerson and China's Foreign Minister Wang Yi are expected to hold bilateral and multilateral talks with top diplomats at the Asean gathering, which runs from Saturday until August 8. The foreign ministers are meeting amid heightened tensions after North Korea test-launched two intercontinental ballistic missiles last month. “The South China Sea and the Korean peninsula will be major theatres of contest among the major powers, with Asean stuck in the middle,” said Thitinan Pongsudhirak, an international relations scholar at Bangkok-based Chulalongkorn University. High-level meetings of the Association of Southeast Asian Nations, which marks its 50th anniversary this year, have long been a key multilateral platform to discuss regional issues. But Pongsudhirak said rivalry between China and the United States presented a major challenge to the bloc in maintaining its independence in policy direction. Southeast Asian foreign ministers are expected to present a united front to formally endorse a code of conduct to manage the South China Sea disputes at the Manila gathering, as they hold back on criticism of China's assertiveness in the contested waters. But regional analysts said the framework would be a repackaged version of previously agreed principles and that they had failed to reach an agreement over a binding mechanism to tackle sovereignty disputes. “It's really only a repackaged version of [the declaration of conduct] without anything substantial,” said Richard Javad Heydarian, a political scientist at Manila-based De La Salle University. “The code of conduct only serves as an important diplomatic weapon for China to push the US out of the picture and portray itself as open to negotiating with Asean,” he said. China has long maintained that the disputes should be resolved between the claimants without “outside influence” from the US. The Philippines, which is chairing the bloc this year, has sought to downplay its territorial disputes with China. Philippine President Rodrigo Duterte set aside the dispute – after Manila won a landmark case in The Hague against Beijing last year that invalidated China's claim to sovereignty over most of the South China Sea – in exchange for billions of dollars of trade and investment. That leaves Vietnam as the most vocal claimant in the dispute. But Heydarian said Duterte's rapprochement with China had caused murmurings of discontent among Asean nations, with Malaysia, Brunei and Indonesia privately expressing disappointment over his soft handling of the issue. North Korean Foreign Minister Ri Yong-ho will be among the region's top diplomats to attend the Asean Regional Forum in Manila, where concerns over Pyongyang's nuclear weapons programme are expected to be high on agenda, according to Philippine officials and regional experts. “On the surface, Asean looks irrelevant to the North Korea crisis,” said Heydarian. “But North Korea actually sees Asean as an important neutral power it could seek help from when it's under pressure.” He added that North Korea's close trade links with the Southeast Asian countries also meant Asean's support was crucial in implementing international sanctions against Pyongyang. Asean foreign ministers are expected to express “grave concern” over North Korea's ICBM test-launches on July 4 and last Friday in a joint statement after their meeting on Saturday, Reuters has reported. North Korea appealed to Southeast Asian countries for support in March when Ri sent a letter to Asean's secretary general warning that the Korean peninsula was “reaching the brink of war” amid a series of missile tests by Pyongyang and tough rhetoric from Washington. But Sarah Teo, a regional security analyst with Nanyang Technological University in Singapore, said Asean's role remained limited. “Asean's role in this issue would most likely be as a neutral platform to facilitate dialogue and engagement among the key players in the issue. After all, the countries that comprise the six-party talks will all be represented at the [regional forum],” she said. But Teo added that “Asean can only play a supporting role, and how this issue will ultimately play out at the [regional forum] depends a lot on factors beyond Asean's control.” ^ top ^

China, Zambia root for closer cooperation in agriculture (Xinhua)
Zambia's favorable natural conditions for agricultural development and China's cutting edge in capital, technology and experience present a great opportunity for the two countries to increase cooperation in the agricultural sector, a top Chinese official said on Thursday. Yang Youming, Chinese Ambassador to Zambia said there was a great possibility for the two countries to complement each other to cement cooperation in agricultural sector. "I believe that, with the joint efforts of China and Zambia, the agricultural cooperation between our two countries will yield more extensive and fruitful results," Yang said at the official opening of the China-African Agriculture Cooperation and Development Summit, organized by the China Agriculture Film and Television Center and Global Max Media Group in collaboration with the Agricultural and Commercial Society of Zambia. China, he said, will continue to encourage its enterprises to invest in Zambia's agricultural sector and urged the enterprises to seize the opportunities to exploit the southern African nation's vast potential in the sector. The Chinese envoy explained that a lot has been done between the two countries in the development of the agriculture sector in the southern African nation. He cited the establishment of the China Aid-Zambia Agricultural Technical Demonstration Center in 2012, which is one of the 14 demonstration centers in Africa, has one of the best cooperation areas in the sector. Since its establishment, over 1,000 Zambian agricultural technicians have been trained at the center by Chinese experts while the center has also carried out fruitful cooperation with the country's institutes such as the University of Zambia (UNZA) as well as other agricultural research institutions. He further revealed that China has provided concessional loans for the development of Zambia's agricultural infrastructure projects such as helping the government build nine large-scale silos, which have alleviated the storage shortage, a project to sink over 1,000 boreholes in rural areas while discussions for the investment in three China-aided large-scale milling have been concluded and actual construction is expected to start soon. The Chinese envoy further noted that his government has helped in building the capacity of human resource in Zambia's agriculture sector and that China currently provides about 100 opportunities for trainings in the sector. About 500 Zambians specialized in agricultural sector have so far received training in China, he added. According to him, about 20 Chinese firms have invested in Zambia's agriculture sector and were involved in the cultivation of over 10,000 hectares of land. Dora Siliya, Minister of Agriculture in Zambia said the southern African nation will remain indebted to China over its unparalleled support to development. She said China has helped the country in various sectors, including agriculture and that currently discussions were underway for the development of a modern farming block in the northern part of the country. Zambia, she said, was keen to learn from China's vast experience in the agriculture sector as the country plans to diversify agricultural production which has mainly concentrated on maize growing. ^ top ^

Nation opens logistical base in Africa (China Daily)
China's first overseas logistical base began operations on Tuesday, the same day as the 90th birthday of the People's Liberation Army. More than 300 people attended the flag raising ceremony that marked the opening of the Djibouti base, on the Horn of Africa. Representatives from both countries attended, including Vice-Admiral Tian Zhong, deputy commander of the PLA Navy; Chinese Ambassador to Djibouti Fu Huaqiang; and Djibouti Defense Minister Ali Hasan Bahdon. The base, near the southern entrance to the Red Sea and the Gulf of Aden, is China's only permanent overseas logistical base. It was established to support the Chinese military's escort and peacekeeping missions in Africa and West Asia. It can support some 10,000 people, according to PLA Daily, but official figures for the number of personnel to be stationed there have not been released. On July 11, the Navy dispatched two ships, CNS Jinggangshan and CNS Donghaidao, to bring in personnel and put on the finishing touches. The Jinggangshan is an amphibious warfare landing platform dock that carried marines, engineers and vehicles to the base. The Donghaidao is a heavy-lift, semisubmersible logistics ship for oversized cargo like equipment. The base is near Camp Lemonnier, a US naval base used for staging aerial, drone and Special Forces missions in East Africa, the Arabian Peninsula and the Persian Gulf. France and Japan also have bases in the country. This year, Saudi Arabia is finalizing deals to build a base there. Liu Hongwu, the president of the Institute of African Studies at Zhejiang Normal University, said Djibouti, with a population of 960,000, is strategically significant both economically and militarily, hence many nations are "scrambling to get a footing" there. "It is situated at the juncture of Europe, Asia and Africa; in a sense, it is the crossroads of the world. Djibouti is also a relatively stable and safe country. Its leaders are open to international cooperation, thus making the country an ideal logistics hub and door to Africa." A 750-kilometer railway, financed and built by China, links the port capital of Djibouti with landlocked Ethiopia's capital, Addis Ababa. ^ top ^

Chinese naval fleet arrives in Helsinki after joint drill with Russia (Global Times)
A Chinese naval flottila arrived in Helsinki, Finland early Tuesday after finishing its mission in the joint maneuvor with the Russian military in the Baltic Sea last week. The formation, comprising missile destroyer Hefei, missile frigate Yuncheng and supply vessel Luomahu, was the first Chinese fleet that ever sailed to the region for a military exercise. The Russia-China joint drill aimed to carry out rescue missions and safeguard maritime economic activities. It was the first phase of "Joint Sea 2017", which will also witness similar exercises in the Sea of Japan and Okhotsk later this year. More than 500 Chinese living in Finland gathered at the harbor to greet the warships. Commander of the fleet Rear Admiral Yu Manjiang delivered a short speech to the audience. He said he hoped the three-day visit will broaden the exchanges and enhance the cooperation with the Finnish army. After the speech, the greeting people had a chance to get on board missile frigate Yuncheng and communicate with the officers and sailors. The ship will be open to the Finnish public on Wednesday. Finnish Defense Minister Jussi Niinisto said the Chinese navy is welcome to Finland. "We have friendly relations with China, and we do this kind of cooperation," he told Xinhua at a reception celebrating the 90th birthday of the Chinese Liberation Army. Commenting on the Chinese effort to continue reducing the size of military staff, Niinisto said it is a good and friendly gesture to the world. He said Chinese army is still an impressive power, and "we want to have good relationship with the Chinese army." Niinisto visited China in 2016, and hosted a visit by Chinese Defense Minister Chang Wanquan in 2015. "It is very useful for both of us to visit regulary because in that we learned more about each other," Niinisto said. ^ top ^

Gunman opens fire on Chinese consulate in Los Angeles before killing himself (SCMP)
A man opened fire on the Chinese consulate in Los Angeles on Tuesday morning before turning the gun on himself and taking his own life, police said. The man, a Chinese national, fired “multiple rounds” at the consulate building in the Koreatown neighbourhood, said Officer Mike Lopez, a Los Angeles Police Department spokesman. The man, whose name was not immediately released, then fatally shot himself in his car outside of the building, Lopez said. Investigators said no one else was injured in the shooting. Police could not immediately provide any additional information about the shooting or the man's possible motive. Lopez said homicide detectives were conducting an investigation. A call to the consulate rang unanswered Tuesday afternoon. In 2011, a man was arrested after police said he fired nine shots at a security guard outside the same consulate, but only hit the building. Police said at the time that the man was protesting China's human rights record. ^ top ^

Hostile border dispute with India could damage China's global trade plan, experts warn (SCMP)
The protracted border row between China and India has not only raised tensions between the two Asian giants but could also threaten Beijing's ambitious trade and infrastructure outreach plan, the “Belt and Road Initiative”, experts have warned. Chinese and Indian troops have been locked in an eyeball-to-eyeball stand-off for over 40 days in a desolate region of the Himalayas that is also claimed by India's ally Bhutan. Both sides blame each other for escalating the dispute by deploying troops in the area. Macau-based military expert Antony Wong Dong warned that Beijing's hardball politics are pushing New Delhi further away and could end up making it an enemy. “China is playing psychological warfare... but it should realise that even if it defeated India in a war on land, it would be impossible for the PLA navy to break India's maritime containment,” he said, pointing to the importance of the Indian Ocean as a commercial lifeline. China is heavily reliant on imported fuel and, according to figures published by state media, more than 80 per cent of its oil imports travel via the Indian Ocean or Strait of Malacca. “Unlike Southeast Asian countries, India has never succumbed to China's 'carrot and stick' strategies,” Wong said. “India is strategically located at the heart of China's energy lifeline and the 'Belt and Road Initiative', and offending India will only push it into the rival camp, which [Beijing believes] is scheming to contain China by blocking the Malacca Strait and the Indian Ocean.” Sun Shihai, an adviser to the Chinese Association for South Asian Studies, echoed Wong's views. He said he was concerned that the worst military stand-off in more than three decades would fuel anti-Chinese sentiment in India, as mistrust and hostility between the two countries run deep. If not properly handled, the border row could have a long-term impact on China's efforts to expand its diplomatic and economic influence beyond the Asia-Pacific region with its “Belt and Road Initiative”, he said. “India is one of the most important strategic partners for China's 'Belt and Road Initiative' because of its geographic location,” Sun said. “Beijing has been trying to lure India to join 'Belt and Road' projects because both countries stand to benefit from them strategically and economically. [But] The latest tensions have soured bilateral ties and the growing mistrust will only make New Delhi more reluctant to make a decision,” he said. The latest border dispute on the remote Doklam Plateau, also known as the Donglang region in Chinese, came as the world's two most populous nations continued to jostle for dominance in the region. In July, India, the United States and Japan completed their 10-day Malabar 2017 naval exercise in the Bay of Bengal, while around the same time the US approved the US$365-million sale of military transport aircraft to India and a US$2-billion deal for surveillance drones. All three should be “warnings” to China, Wong said. According to the Business Insider website, India's interest in enhancing its naval capabilities, especially its fleet of submarines, is thought to have been prompted by China's military modernisation and its increased activity in the Indian Ocean and the narrow Malacca Strait, which connects it to the waters of East Asia. India's growing focus on submarine warfare was underscored after it was included as part of the joint naval drills in Malabar, the website said. After several weeks of stand-off in Doklam, China's defence ministry on Monday issued its strongest warning yet to India regarding the border dispute, saying it would protect its sovereignty “at all costs”. Dr Rajeev Ranjan Chaturvedy, a research associate at the Institute of South Asian Studies at the National University of Singapore, said Beijing's assertiveness had deepened the political trust deficit between China and its Asian neighbours. “There are other inherent problems in China's 'Belt and Road Initiative', which have resulted, for example, in the abandonment or postponement of several of China's high-speed rail projects,” Chaturvedy said. “China's 'my way or the highway' approach has complicated problems further,” he said. India refused to join China's 'Belt and Road Initiative' and affiliated infrastructure projects due to sovereignty concerns over the US$50 billion “China-Pakistan Economic Corridor”, which runs through Pakistan-occupied Kashmir and Gilgit-Baltistan, both of which New Delhi considers Indian territories. In India, China is widely blamed for the stand-off in Doklam after it attempted to build a motorway in the area. Beijing, meanwhile, has insisted that the road construction project was on its side of the border and accused Indian troops of crossing into its territory. “China's behaviour is only likely to make India even less willing to reconsider its objection to the 'Belt and Road Initiative', said Rajeswari Rajagopalan, a senior fellow at the Observer Research Foundation in New Delhi. “Even the few voices in India that have suggested India should reconsider its position are unlikely to support it [China].” Regardless of exactly who did what in Doklam, experts on both sides of the argument agree that the odds of the two countries going to war are slim. Alka Acharya, a professor of Chinese studies at the Centre for East Asian Studies in New Delhi, said that although the Indian public wasn't well informed and could be influenced by hawkish talk online, “nobody has come out in favour of war – they support a resolution by diplomatic means”. Beijing-based Zhou Chenming added that China was well aware of the futility of an all-out war for a desolate border area that is “frozen for up to eight months of the year”. “Besides the [human] casualties, the logistical cost of a border conflict between China and India would be inestimable,” he said. Meanwhile, the dispute between China and India has had the knock-on effect of slowing down discussions at the ongoing Regional Comprehensive Economic Partnership in the southern Indian city of Hyderabad. China has zealously promoted the trade pact in the hope it could replace the United States-led Trans-Pacific Partnership, a free-trade agreement that was abandoned by US President Donald Trump in January. However, the talks, which got under way on July 18 have been hampered by India's reluctance to compromise on its demands for greater market access for its skilled workers. The partnership was initiated by members of the Association of Southeast Asian Nations, which also invited China, Japan, South Korea, Australia, New Zealand and India. ^ top ^


Domestic Policy

China tightens pollution control with discharge permits (Xinhua)
China released a list of industries that need to obtain licenses before discharging pollutants Thursday. The list specified the deadlines for stationary sources of pollution in 82 industries to get licenses and named sectors to be focal points of management in a statement by the Ministry of Environmental Protection. Thermal power stations and paper-making enterprises were among the first required to operate with the permits, with more than 5,100 licenses already issued. From the second half of this year, 13 industries including the steel and chemical sectors must apply for the permits. All 82 industries should have licenses by 2020. By issuing the licenses, environmental authorities will specify the location and number of pollutant discharge outlets for companies, the method and direction of discharge, as well as set ceilings on the variety, concentration and amount of pollutants. Companies in breach of the policy may face fines up to 1 million yuan (about 150,000 U.S. dollars) or the suspension of operations. Actions that hamper supervision, such as the damaging of monitoring devices and failing to keep original monitoring records, will also be punished. China is fighting pollution and environmental degradation after decades of growth left the country with problems such as smog and contaminated soil. The central government has been stepping up supervision of environmental violations while setting detailed tasks to clean up polluted air, water and soil. ^ top ^

China's elderly population exceeds 230 mln (Global Times)
China had more than 230.8 million people aged 60 or above at the end of 2016, 16.7 percent of the total population, the Ministry of Civil Affairs said Thursday. Of the 230.8 million, 150.03 million were 65 or above, or 10.8 percent of the total population, according to a report released by the ministry. By international standards, a country or region is considered to be an "aging society" when the number of people aged 60 or above reaches 10 percent or more.H The country had 140,000 nursing homes holding a total of more than 7.3 million beds at the end of 2016, with a year-on-year increase of 20.7 percent and 8.6 percent respectively. However, there are only 31.6 beds for every 1,000 senior citizens. According to the report, China had about 460,000 orphans at the end of 2016, with 88,000 living in government-funded agencies, with the rest being cared for by relatives or private orphanages. Some 19,000 Chinese orphans were adopted by domestic or overseas families in 2016, the ministry said. ^ top ^

Bike sharing gets national guideline (China Daily)
The central government released a guideline on Thursday to encourage and regulate the booming bike-sharing industry, such as requiring real-name registration and barring services to children under 12. The guideline was issued by 10 government departments including the Ministry of Transport, Publicity Department of the Communist Party of China and the Ministry of Public Security. Shared bikes play a positive role in meeting the public's need for "last mile" transportation, lessening urban transportation pressure and establishing a low-carbon transport network, according to the guideline. Problems include improper parking and poor operations. It aims to improve service as part of regulating the market, the guideline said. A draft was issued in May to solicit public input, and 780 opinions were collected. Shared bicycles, from companies like Mobike, Ofo and Bluegogo, have popped up in cities since last year. Users can rent a bike at low cost, usually 1 yuan (15 US cents) an hour. The services target mostly short-distance travel, such as between a subway station and work, or from home to the grocery store. They usually require a deposit for registration. By July, China had nearly 70 companies running shared bike businesses, with a total of more than 160 million shared bikes on the street. Users' bike registrations surpassed 130 million, the Ministry of Transport said on Thursday. A rainbow of shared bikes distinguished by company colors line many city streets, but in some cases, a lack of proper regulation has caused problems. An 11-year-old boy riding a shared bike in Shanghai was killed in a traffic accident in March, prompting discussions on how to keep children from using the bikes. Companies should take more responsibility for managing the industry in many ways, including being responsible for riders' safety and for the safety of users' personal information and deposits, said Yang Xinzheng, director of the China Urban Sustainable Transport Research Center under the China Academy of Transportation Sciences. According to the Ministry of Transport, traffic safety regulations ban children under 12 from riding bikes on the street. Most of the companies' newly released bikes have a notice affixed about the age limit. To solve the parking problem, municipal governments are required to improve the bike network, setting up parking areas for bikes and carrying out severe punishment. Mobike, a leading company, has set up more than 4,000 smart parking areas. Xia Yiping, the company's chief technology officer, said users who park the company's bikes in those areas will receive coupons to encourage proper parking. ^ top ^

Chinese leaders head to the beach for secretive summer gathering (SCMP)
After the pomp and ceremony of China's big military milestone this week, the sudden absence of President Xi Jinping and other key leaders from state television news bulletins on Wednesday was a familiar sign for China watchers – Beijing's summer conclave has begun. The secretive annual gathering at Beidaihe beach resort, 280km east of Beijing on the Bohai Sea, is particularly sensitive this year, with the Communist Party's national congress around the corner and coming just weeks after a Politburo member was taken away for investigation. It also follows an important consensus-building meeting last week among ministers, provincial chiefs and senior military officers in Beijing. For decades, senior incumbent and retired Communist Party members have gathered at the resort town every summer to discuss the direction of key policies and leadership changes. Held at exclusive hotels or villas, it's a closed gathering with no formal agenda – and it's never announced to the public. In fact, usually the only way to tell that the conclave is under way is the absence of senior leadership from the evening news bulletins. Although in recent years, state media reported on senior leaders greeting academics and experts invited to Beidaihe. Heightened security around the popular beach resort and occasional sightings of black sedans are usually a giveaway for locals that the country's most powerful figures are in town. The timing – this year's gathering is taking place just months before a key party plenum, when a number of top officials will be replaced and Xi is expected to consolidate his status and power. Party elders and current leaders will be discussing, horse-trading and finalising lists of candidates for the top jobs. Chen Daoyin, a political scientist at Shanghai University of Political Science and Law, said that at Beidaihe, Xi's selections for the 25-member Politburo would not be open to much debate. “No one in the party can challenge the authority of Xi,” Chen said. “They need to think about the consequences. “The Beidaihe meeting is more like a ritual now – presenting a harmonious party by getting people from different factions together.” The Beidaihe gathering dates back to 1953, when the Communist Party decided to set up a “summer office” in the resort town for officials to escape the heat of Beijing. Over the years, it's been the setting for some historic decisions, including the launch of the Great Leap Forward by Mao Zedong. Although the “summer office” was abolished during former president Hu Jintao's term, the closed-door gatherings – officially described as “vacations” – were kept. Many state leaders enjoy swimming at the resort, but when they're in the water they are surrounded by security guards – with speedboats on standby for when they want to take a rest. That's according to a 2012 report by state-run magazine Global People, which said a special “swimming platoon” had been set up to protect leaders when they were in the sea. Members of the platoon begin training in the spring, swimming 10km every day so that they're ready for the task. The governing bodies have their own villa complexes at Beidaihe, the report said. Officials with Communist Party departments stay in villas on the western side of an exclusive beach, while State Council cadres stay on the eastern side. The summer gathering provides a once-a-year opportunity for retired state leaders to get together and exert their political influence – though the extent of that influence in recent years is a matter for debate. Analysts say the significance of the gathering has diminished under the rule of Xi, who has dominated the party leadership. Xi has been elevated as the “core” of the Communist Party, a status his predecessor Hu did not have. At a military parade this week, the president broke a long-time tradition by inspecting the People's Liberation Army without the company of previous presidents. Wang Zhengxu, an expert in top-level Chinese politics at the University of Nottingham, said in the 1980s, the Beidaihe gathering provided a channel for retired leaders to wield some influence, but Xi appeared determined to exclude them from the decision-making. However, Wang said Xi would still follow the convention of obtaining “understanding” from the retired leaders, especially when he wanted to change rules made by them. “At Beidaihe, they discuss the issues in a relaxed way,” Wang said. “The gathering is still a way for the party to seek internal consensus.” ^ top ^

China invites overseas journalists to cover CPC congress (Xinhua)
A Chinese official has invited overseas media to cover the upcoming 19th Communist Party of China (CPC) National Congress. Jiang Jianguo, head of the State Council Information Office, made the announcement Thursday during an informal meeting with representatives of overseas media outlets in Beijing. The national congresses, normally held every five years, are major events for the CPC and China with increasing international influence, said Jiang. The 70th anniversary of the CPC as the ruling party is in 2019 and the CPC's centenary is just four years away. Jiang spoke about CPC Central Committee General Secretary Xi Jinping's speech at a workshop for provincial and ministerial officials last Wednesday. The workshop was held to lay the ideological, theoretical and political foundations for the 19th CPC National Congress, said Jiang. "Xi has earned the utmost trust and respect from Party members and the Chinese people," said Jiang. This year's congress is expected to seek solutions to a series of issues concerning the short-term and long-term development of the country, according to Jiang. Attendees of the meeting include representatives of AFP, AP, Asahi Shimbun, Bloomberg, Kyodo, Reuters, TASS and the Wall Street Journal. ^ top ^

Ex-aide to China's personnel chief sacked for 'corrupt political morals' (SCMP)
The former right-hand man of China's top personnel official was sacked for having “corrupt political morals” and being “politically opportunistic” on Thursday. Wei Minzhou, a senior official in the Shaanxi provincial legislature, was also found to have taken huge bribes and engaged in superstitious activities, the Communist Party's anti-graft agency said in a statement after an investigation. He was expelled from the party, sacked from all of his public duties and faces prosecution. Wei, 60, was the secretary general of the northwest province's party committee between 2007 and 2012 – a time when Zhao Leji was the Shaanxi party boss. Zhao is now a member of the 25-strong Politburo and heads the party's Central Organisation Department, a key agency overseeing the promotions and performance appraisals of senior officials. The agency plays an important role in party reshuffles during the twice-a-decade national congress, including the one coming up this autumn. Wei was placed under investigation in May, only four months after he was made deputy head of the Shaanxi people's congress in January. The Central Commission for Discipline Inspection said Wei refused to cooperate in its investigation, attended lavish banquets, failed to report personal information and was engaged in for-profit activities. It also said Wei took advantage of his posts to seek profits for others and accepted property. Coinciding with the graft-buster's statement on Wei, party journal Qiushi, or Seeking Truth, ran a lengthy article by Zhao on Thursday, praising tougher disciplinary inspection arrangements announced earlier by the CCDI. ^ top ^

Xi issues call to action in building modern socialist country (Xinhua)
President Xi Jinping's speech, delivered at a high-level workshop in late July, issued a call to action to achieve the country's two centennial goals and build a modern socialist country. The speech contains new requirements and new arrangements on realizing the country's first centennial goal -- building a moderately prosperous society in all respects by 2020 to celebrate the CPC's centenary. In the speech, Xi also offered ideas for realizing the country's second centennial goal -- building a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious by the middle of the 21st century in time for the centenary of the People's Republic of China. Since ancient times, building a moderately prosperous society, or Xiaokang, has been an ideal for the Chinese people. In the beginning of the reform and opening up in the late 1970s, late leader Deng Xiaoping first used the term moderate prosperity to describe a modern society with Chinese characteristics. Since the 18th CPC National Congress, the CPC Central Committee with Xi at its core has adopted an overall approach for economic, political, cultural, social and ecological progress, and pushed the "Four Comprehensives," a four-pronged strategy to create a moderately prosperous society in all respects, deepen reform, advance rule of law and strengthen Party governance. The CPC has firmly implemented the development concept and pushed the country to proceed in a fairer and more sustainable way with better quality and more efficiency. In the past five years, the CPC has deepened reforms, enhanced rule of law, advanced the building of an environmentally friendly society and modernized national defense. The Party has also strengthened discipline, and the fight against corruption has gained crushing momentum. With the Party's efforts in fighting poverty and improving people's living standards, the national cause has been boosted and Chinese people are more confident of achieving a moderately prosperous society. However, the task is difficult and risks and challenges still exist. To realize its goal, China must make all-out efforts, especially in preventing and defusing major risks, relieving poverty, as well as preventing and controlling pollution. China will keep deepening supply-side structural reform to push forward sustained and healthy economic and social development, and the success in building a moderately prosperous society should be recognized by the people and stand the test of history. After completing the building of a moderately prosperous society in all respects by 2020, China will usher in the second phase of its two centennial goals, setting out on the journey of building a modern socialist country. At this critical moment, when China is about to realize the first centennial goal and march towards the second centennial goal, the Chinese people will never forget Xi's remark, "People's desire for a better life will always be our goal." ^ top ^

Widow of late dissident Liu Xiaobo back in Beijing, relative says (SCMP)
The widow of late Chinese Nobel laureate Liu Xiaobo has returned to Beijing but it's unclear where she is, a family member said on Tuesday, about three weeks after her husband's death. Liu Xia was permitted to be with her husband at a hospital in the northeastern city of Shenyang in his final days. But her whereabouts were unknown until now as she was placed under surveillance by Chinese authorities and has remained largely out of contact with the outside world since his death on July 13. The family member told Kyodo News that Liu Xia had returned to Beijing, as supporters and foreign countries continued to urge the Chinese government to grant her freedom of movement. The Hong Kong-based Information Centre for Human Rights and Democracy also quoted relatives of Liu Xia as saying that she was in Beijing on Tuesday but they were unable to speak to her directly. “Liu Xia's family members confirmed at 10am that both Liu Xia and Liu Hui [her brother] are in Beijing today,” the centre said in a statement, although it was unable to confirm whether she was at home. But some of Liu Xia's close contacts – including her lawyer, Mo Shaoping, and friends Ye Du, a dissident poet, and activist Hu Jia – said they had not heard any news of her whereabouts. Hu said there was no sign to suggest that Liu was back home as of Monday evening, citing other activists who had checked on her apartment. “Her being back in Beijing and back in her apartment are two different things,” Hu said. “She might still be locked up or she's been placed with relatives in Beijing upon returning to the city.” Liu Xiaobo, an outspoken critic of China's Communist Party, was in June transferred to hospital after being diagnosed with terminal liver cancer while he served an 11-year jail sentence for his part in drafting a manifesto calling for peaceful democratic reform, known as “Charter 08”. The dissident was sentenced in 2009 and his wife, an artist and poet, was put under house arrest the following year after he won the Nobel Peace Prize “for his long and non-violent struggle for fundamental human rights in China”. ^ top ^

"Be ready to win wars," China's Xi orders reshaped PLA (Xinhua)
China must step up transforming its armed forces into a world-class military that is ready to fight and win wars as the country will never compromise on defending sovereignty, President Xi Jinping said Tuesday at an Army Day celebration. "No one should expect us to swallow bitter fruit that is harmful to our sovereignty, security or development interests," said Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission (CMC), during a speech at a ceremony to mark the 90th anniversary of the People's Liberation Army (PLA). While hailing the PLA's great achievements over the nine decades, Xi said the Chinese military has reshaped its political environment, organizational form, system of military strength and work style over the past five years. The PLA should firmly safeguard the CPC's leadership and the socialist system, protect national sovereignty, security and development interests as well as regional and world peace, Xi told senior officials and military personnel gathered at the Great Hall of the People in Beijing. "The Chinese people love peace. We will never seek aggression or expansion, but we have the confidence to defeat all invasions. We will never allow any people, organization or political party to split any part of Chinese territory from the country at any time, in any form," Xi said. The ceremony was presided over by Premier Li Keqiang and also attended by Zhang Dejiang, Yu Zhengsheng, Liu Yunshan, Wang Qishan and Zhang Gaoli, all members of the Standing Committee of the Political Bureau of the CPC Central Committee. Xi's speech came two days after China held a massive military parade involving more than 12,000 service personnel at the Zhurihe military training base in north China's Inner Mongolia Autonomous Region. "Today, we are closer to the goal of the great rejuvenation of the Chinese nation than any other time in history, and we need to build a strong people's military now more than any other time in history," Xi said in Sunday's speech. The PLA has come a long way since its birth at the Nanchang Uprising on August 1, 1927. Today, the PLA commands about two million service personnel. Xi told Tuesday's gathering that the armed forces had transformed from a "millet plus rifles" single-service force, one with only the most basic of supplies and equipment required to survive, into one that has fully-fledged services. The PLA has basically completed mechanization and is moving rapidly toward "strong" informationized armed forces, he said. Xi attributed the PLA's success to its glorious traditions and fine conduct under the leadership of the CPC. "The armed forces must follow the banner, the direction and the will of the Party at all times and under any circumstances." Xi noted, saying that the principle is an irreversible truth that the CPC has attained in struggles of blood and fire. Behind the PLA's glorious victories are also ideals and beliefs, as well as the reform determination, Xi said. "Only by continuous reform and innovation, can the people's army constantly gain development vitality and put itself in an impregnable position," Xi said. The PLA must be bold in reform and adept in innovation while staying away from rigidity and stagnation, he said. The president also stressed the role of fighting spirit, revolutionary discipline and civilian-military unity in claiming victories. As long as the armed forces stand with and win the support of the people, a "wall of iron" can be fortified, Xi said. Since the 18th CPC National Congress in 2012, the Party has put forward the goal of building a strong military that follows the Party, fights to win and forges exemplary conduct, Xi said. The Party has strengthened political work within the armed forces and made firm efforts to ensure a clean environment and fight corruption in the military, according to Xi. A series of major structural reforms have been made in recent years, including the establishment of the PLA Army General Command, the PLA Rocket Force and the PLA Strategic Support Force. The four general departments were reorganized into 15 agencies of the CMC, and five theater commands have replaced the seven military area commands. The CMC has taken charge of the overall military administration, while theater commands focus on operations and different services on troop developments. "The system, structure, pattern and image of the people's military have all been renewed," Xi said. Moreover, Xi said the fundamental changes have taken place in the governance of the military. Putting combat effectiveness as the "sole and fundamental" standard for the military, the PLA remains resolved in safeguarding the country's territorial sovereignty and maritime rights and interests. Xi reaffirmed the CPC's absolute leadership over the PLA. which is a "fundamental guarantee" for the army to maintain its great cohesion, creativity and combat capabilities. Quoting Mao Zedong, the founder of the People's Republic of China, Xi said: "Our principle is the Party commands the guns, and we will never allow the guns to command the Party." He ordered the PLA to always follow the command of the CPC Central Committee and the CMC."There shall be no wavering, no hesitation, and no ambiguity." The CPC has put forward a series of new ideas and requirements concerning national defense and military building in the past five years.These theories should be constantly enriched and developed to cope with new challenges and solve new problems, he said. Xi urged the PLA to focus on war preparedness to forge an elite and powerful force that is always "ready for the fight, capable of combat and sure to win." "All thoughts must be put on combat, and all work should focus on combat so the military can assemble, charge forward and win wars any time the Party and the people need them to," he said. Xi called for a new generation of "capable, brave and virtuous" service personnel "with soul." The PLA must have ironclad faith, beliefs, discipline and responsibility, and retain its nature and goal as the people's army, he said. The PLA must step up efforts to build a modern military force system capable of winning information-based warfare, he said. China must build a national strategic system and capacity in military-civilian integration, he said. Upgrading integrated military and civilian development as a national strategy is a major decision made in consideration of national development and overall security, and a major measure to deal with complicated security threats and gain national strategic advantages, Xi said. He urged efforts to create the "coordinated, balanced and inclusive development" of economic and national defense construction. Calling the modernization of national defense and military "a common cause of the Party and the people," Xi urged central and state organs, Party committees and governments at local levels to create a favorable environment and offer strong support for building a strong military. Xi also urged the armed forces to bear in mind the sacred duty of fighting for the people. The PLA is deeply rooted in the people and its strength comes from the people. It must maintain a close relationship with the people and "go through thick and thin" with them, he said. China has always been a builder of world peace, a contributor to global development, and an upholder of international order, Xi said. His words echoed his speech during Sunday's parade where he said: "The world is not all at peace, and peace must be safeguarded." "Enjoying peace is a bliss for the people while protecting peace is the responsibility of the people's army," he told the troops in field. The PLA will continue international military exchanges and cooperation to cope with global security challenges, Xi said in his Tuesday's speech. It will implement the responsibilities and duties commensurate with the country's international status and contribute to fostering a community of shared future for mankind, he said. ^ top ^

State work safety chief demoted for 'serious violations' (China Daily)
The former head of the State Administration of Work Safety, Yang Huanning, has been demoted from his administrative post for "serious violation of Party disciplines", the Communist Party of China's Central Commission for Discipline Inspection said on Monday. Yang, 60, was demoted to a vice-bureau level and nonleading position, and was placed on probation within the Party for two years, the CCDI said in a statement on its website. Yang was found to have seriously violated political discipline and rules and deviated from the Party's principles on major issues, according to the CCDI. He also took advantage of his job to seek personal benefits, it said. The CCDI said Yang was dismissed as a member of the 18th CPC National Congress and his illegal gains will be confiscated. From May 2008 to October 2015, Yang served as vice-minister of the Ministry of Public Security. He was in charge of the overall work of the public security organs and in 2009, he also held a concurrent post as head of the office under the central leading work group for maintaining stability. In October 2015, Yang was transferred to a job as head of China's work safety watchdog, replacing Yang Dongliang, who had been investigated by the CCDI over graft accusations. Since November 2012, when the new leadership was elected, the country has conducted a sweeping drive to fight against both "tigers and flies", referring to corrupt high-and low-ranking officials. More than 140 high-ranking officials, at ministerial level or above, have been investigated over graft allegations. They included Zhou Yongkang, a former member of the Standing Committee of the Political Bureau of the CPC Central Committee, who was sentenced to life in prison in June 2015. ^ top ^

Officials caught protecting polluters (China Daily)
Central environmental inspectors revealed severe pollution problems in Fujian, Liaoning and Hunan provinces, showing that some cities failed to regulate pollution and even protected the polluting companies, the nation's top environmental authority said on Monday. This round of high-level inspections, launched by the State Council in April, have reviewed how governments implemented the rules in fighting the country's war on pollution in the three provinces. The performance of some cities was disappointing, leading to deterioration of the environment and large pollution risks, the inspectors said. They found some city governments protected polluting companies by providing falsified documents in the central region of Hunan and northeastern region of Liaoning, statements from the Ministry of Environmental Protection showed. In the core and buffer zones of Haitang Mountain National Natural Reserve, in Fuxin, a city in Liaoning, the management committee illegally approved a company's dumping of mineral waste, causing severe contamination. The committee issued a false document to prove the mining and waste were not within the reserve, inspectors said on Monday. Similar problems were found in Hunan. The Xiangtan city and Xiangxiang county governments issued false documents in December, saying that one of the leading companies discharged pollutants at a level lower than the national standards based on the online monitoring data. The documents were meant to allow the company to pass an environmental assessment. In fact, monitoring facilities at the Xiangtan Soda Co did not work, and emissions were excessive for a long time, the ministry said. Inspectors found some governments were neither willing nor able to regulate major polluters. Some nonferrous metal mining and smelting plants, branches of China Minmetals Corp, a Beijing-based corporate group with assets worth 1.6 trillion yuan ($238 billion), should have been punished for dozens of pollution problems since 2013 in Hunan, the central inspectors found. Instead, local environment bureaus did not do that, and the companies refused to correct the problems, the inspectors said. Inspectors found the leadership of the three provinces did not pay sufficient attention to environmental protection, poorly implementing their efforts, while many companies were found to have excessive and illegal emissions. After the monthlong inspection, 2,653 officials had been held accountable for their performance as of June, the statements said. Over 12,800 polluting companies were required to suspend production or shut down, a total of 185 million yuan in fines were collected and 237 people from the companies were detained by the end of June. Ma Yong, an environmental law researcher at the Supreme People's Court legal center, hailed the thorough inspection and severe punishment that followed, which has changed the behavior of some government officials and companies. "We have to admit that some governments did have severe problems, but it was a good opportunity for central inspection to correct their behaviors," Ma said. He added the central government should establish other ways to implement high-level inspections to keep the pressure on irresponsible officials and companies for longer than just a month. China has conducted four rounds of inspections since January 2015, and all 31 provincial regions will be covered by the end of 2017, officials said. ^ top ^

Chinese cities to receive World Bank grant to ease traffic jams (Xinhua)
The World Bank has decided to allocate a fund for seven Chinese major cities to help them ease traffic congestion by reducing the number of private cars on the road and improving public transport. A total of 32.73 million U.S. dollars will be granted to cities including Beijing, Tianjin, Ningbo, Nanchang and Shenzhen via the institution's trust-funded program on environmental protection, named the Global Environment Facility (GEF). The international lender said the fund would be used to pilot transit-oriented development (TOD), an urban planning concept that integrates land use and transport. "It focuses on compact, mixed-use, pedestrian and bicycle-friendly development around transit stations that can help reverse the trend of car-dependent city sprawl, improve air quality and reduce road congestion," said Fang Wanli, the bank's urban economist and project co-leader. The project will facilitate a national TOD platform to help cities strengthen their ability to develop policies, guidelines and strategies for integrated urban planning. China's new-type urbanization drive which features people-centered and integrated development will benefit, according to the World Bank. Chinese cities have experienced unprecedented growth, with urban residents accounting for 57.35 percent of the country's total population in 2016. The proportion is expected to increase to 70 percent by 2030. But side effects have emerged and improved planning has become essential for building livable, sustainable and inclusive cities. The World's Bank's pilot project comprises 27 participating cities in 11 countries. Established in 1991, the GEF trust fund aims to help tackle pressing environmental problems and has launched 790 investment projects and programs in 120 countries. ^ top ^



Beijing introduces homes jointly owned by government, owners (China Daily)
More homes with joint property rights between the government and occupiers will come on the market in Beijing to bring down prices and meet the needs of local people without a home, the municipal government said Thursday. According to a document issued by the city's housing, development and reform, finance and land planning departments, the new homes will be jointly owned by the government and their buyers, and the government will give its share of "the right of use" to the latter. Buyers and their families must have no homes under their names. Single people should be at least 30 years old. And one family should only apply for one home. Households living or working in a certain district will have priority for the new homes in the district over purchasers from other districts, the regulations said. Five years after the purchase, owners can sell their shares based on market price, but the government or its assigned management agencies shall have a preemptive right to buy-back. Officials from the city's housing department said the new policies are designed to fend off speculation and make the housing system fairer by helping more residents live in their own homes. ^ top ^

Beijing may drop growth target after Communist Party congress, research firm's chief says (SCMP)
The Chinese government likely will drop its annual gross domestic product target after the Communist Party of China's 19th Party Congress this autumn, a research agency's chief executive said on Tuesday. Louis-Vincent Gave, co-founder of Gavekal Research, told a Hong Kong briefing that Beijing is likely to abandon an annual economic growth target because it is increasingly costly for China to run after a headline growth rate at the cost of delaying much-needed structural reforms. Although the move could slow down short-term growth it could promote longer-term sustainable growth, he said. “The 6.5 per cent growth target, you can still achieve it, but at a higher and higher cost. So why would they want to keep doing that?” Cave said. Debate has ensued for years over whether China should keep its annual growth target. Many economists have said the yearly practice of setting a growth target is a legacy from the era of the planned economy and should be scrapped. Others have argued in favour of maintaining targets, pointing out that China must maintain annual average growth of 6.5 per cent through 2020 if it is to achieve its strategic goal of doubling per capita GDP over 10 years starting in 2010. Under current practice, the premier reads out a yearly growth rate in early March that receives rubber-stamp parliamentary approval. The 2017 rate was set at “about 6.5 per cent”, and China's actual economic growth in the first half was 6.9 per cent. China's economic momentum, however, came at a cost: rising debt and growing financial risk. President Xi Jinping has made risk control a priority of the government's economic policy. “The biggest surprise of 2016 … is that China [growth] re-accelerated,” Gave said. “And indeed the question is: is this re-acceleration for real and how long it will last?” By dropping a growth target, China can avoid “Wen Jiabao put”, a phrase named after China's former premier that refers to Beijing's insistence on generating a set annual economic growth figure whatever the implication – or, put another way, stepping in to bolster economic growth whenever the growth rate slows to a level below the government target. After the 2008 global financial crisis, then-premier Wen rolled out a massive Chinese stimulus package, through cheap bank loans, to propel expansion. The policy is similar to the “Greenspan put,” which refers to former US Federal Reserve chairman Alan Greenspan's monetary policy that encouraged risk-taking in the financial markets. By putting the growth target aside, Xi, who is expected to further consolidate his power at the upcoming party congress, can turn the country's attention to deep-rooted structural issues. “A lot of foreign investors don't invest in China because they are very worried about structural stability and wondering if there is a banking crisis and others,” Gave said. Gave also said that concerns about an immediate China financial crisis have largely been dispersed, citing his client meetings in the United States. “When China comes up at every one of my meetings, that's historically a sign that you shouldn't worry about China,” he said. ^ top ^



Tibet enters month of festivities (Xinhua)
August will be a month of celebration for southwest China's Tibet Autonomous Region, with a series of traditional festivals. On Aug. 8, a horse-racing festival will be held in Damxung county in Lhasa, the regional capital, featuring competitions such as horse racing and picking hada, a traditional Tibetan scarf, on horseback. During the horse racing, local residents wearing colorful long-sleeved clothes and hats race against each other on horses decorated with colorful ornaments. Picking hada is another challenging task. Competitors on horseback are required to pick up white scarves lying on the ground. In Xigaze city, a tourism festival centering on Mount Qomolangma will start on Aug. 26. During the festival, there will be 20 events, including a hiking competition and performances of Tibetan Opera. In Tibetan Opera, performers usually wear colorful masks to play characters from history or mythology. The traditional Shoton Festival, one of the most important festivals in Tibet, will begin on Aug. 21. This year's event will feature Tibetan opera performances, buddha exhibitions and a food exhibition. A huge Thangka, a Tibetan Buddhist painting on cotton or silk, will be demonstrated in front of crowds. The Shoton Festival, also known as the Yogurt Banquet Festival, is a week-long extravaganza that has been held since the 11th century. It was originally a religious occasion when locals would offer yogurt to monks who had finished meditation retreats. Local authorities expect many tourists during the festivals. In the first half of 2017, Lhasa received about 3.86 million domestic and foreign tourists, a year-on-year increase of 18.21 percent, generating tourism revenue of about 5.1 billion yuan (759 million U.S. dollars). ^ top ^



Xinjiang implements new uniform ethnic family planning policy (Global Times)
Northwest China's Xinjiang Uyghur Autonomous Region has started implementing a uniform family planning policy for all ethnic groups, a move which experts said will promote ethnic equality. According to a revised regulation on Xinjiang's family planning policy, regional ethnic minorities could no longer enjoy as lenient a family planning policy. It states that starting July 28, all urban couples in the region have been allowed to have two children, while rural couples can have three. The regional government had previously allowed urban Han couples to have one child while urban minority couples could have two. That meant rural minority couples could have three children, one more than rural Han couples. "The change reflects the country's respect for ethnic equality. This move should be expanded to other places, especially in minority areas, depending on local conditions," said Huang Wenzheng, an expert on demographics. La Disheng, a professor at the Party School of the Communist Party of China Xinjiang regional committee, added that this policy is consistent with China's ethnic policy of equality of all nationalities in the region. An article written by a former deputy director of State Ethnic Affairs Commission published in the Guangming Daily in 2015 said that China's system of ethnic regional autonomy is not the autonomy enjoyed by one minority, and that the autonomous region is not a place owned by one mino rity. In July 2014, Zhang Chunxian, then the region's Party chief, wrote an article in the semi-monthly State magazine Qiushi Journal that all ethnic groups in Xinjiang should be held to the same family planning policies as part of efforts to lower regional birth rates. Wang Peian, vice minister of the National Health and Family Planning Commission, said in Urumqi in July that the commission will invest about 35.5 billion yuan ($5.2 billion) to support Xinjiang's health development in the next five years. "Xinjiang's health care is facing many difficulties," Wang said, noting that four prefectures in South Xinjiang suffer from poverty, rapid population growth and serious public health deficiency. Xinjiang's population as of 2016 was 23.98 million, according to Xinjiang government data. Xinjiang's regional statistics bureau said the latest population census in 2010 showed that there were 8.7 million Han people in Xinjiang, accounting for 40.1 percent of the total, and an increase of 16.77 percent compared to the 2000 survey. Meanwhile, around 13 million minorities live in Xinjiang, an increase of 19.12 percent. ^ top ^



No plan to extend national education, Hong Kong leader says amid controversy over undersecretary pick (SCMP)
Hong Kong's chief executive Carrie Lam Cheng Yuet-ngor quashed talk on Wednesday that the government wants to introduce the teaching of national education as an independent subject, a move that was aborted in 2012 after widespread protests. She also defended the controversial appointment of an education undersecretary viewed as an appointee who would revive the plan, blaming the pan-democrats for fanning the flames. Speaking a day after the naming of 18 new politically appointed officials to her administration, Lam said the widely opposed choice of pro-Beijing school principal Christine Choi Yuk-lin as undersecretary for education was not related to reintroducing the patriotic curriculum. “National education has always been ongoing in our schools in one form or another,” Lam said. “I realised that five years ago, using a particular approach to implement national education in schools had stirred up some controversy.” She added that “at the moment”, the government had “no particular plan” to extend the teaching of national education in schools. “This has nothing to do with this particular appointment of Dr Choi,” Lam said. “In a city like Hong Kong, which has diverse opinions on almost every issue, it is very difficult to avoid controversy, and I'm not a person who would shy away from controversy. I just do the right things for the people of Hong Kong.” Choi, vice-chairwoman of the Beijing-friendly Federation of Education Workers, ran in the education functional constituency in the Legislative Council elections last September and lost heavily to Professional Teachers' Union vice-president and pan-democrat Ip Kin-yuen. More than 17,000 people have signed petitions against Choi's appointment. The concern is that Choi could spearhead a revived drive to introduce national education in schools, a bid the government failed in 2012, when plans to launch a curriculum to instil patriotism and strengthen Chinese identity were shelved after 10 days of protests. Lam said she did not understand why some people would escalate the issue of Choi's appointment into “picking a battle against the education sector” or “destroying the mutual trust” between the government and the sector. She said that she had received much support for Choi's appointment and that she believed Choi would be “fully qualified” with her academic credentials and rich experience in the field. The chief executive also denied speculation that she had followed Beijing's orders to appoint Choi, saying all candidates for the undersecretary posts were recommended by the secretaries. Lam added that she had invited the different political parties to recommend candidates but did not receive any recommendations from the pan-democrats. “Maybe you should ask [the pan-democrats] why they do not recommend their party members to join the government,” Lam said, adding that the bottom line was that the candidates should love the country and Hong Kong and support the Basic Law. Meeting the press on her first day of work, Choi admitted that her appointment had drawn a mixed reaction. But she said that her defeat in the Legco elections was not a reflection of her capability. “I think my participation in the Legco [elections] is not the only standard to measure my future professional work … it is worth questioning the logic if people mix these two things together in a democratic society,” Choi said. She also dismissed suggestions that she was a Communist Party member, stressing that she had no political affiliation and was simply a Christian loyal to her faith in religion and education. She said she hoped society would give her “space and time” to work. Choi also said her role was to assist the education minister in communicating with different stakeholders, and national education was not the priority in the bureau's work. She stressed that education policies would not be decided by her alone, but by the whole government team, which would listen to the public's views. Education minister Kevin Yeung Yun-hung said that he was the one who recommended Choi to the chief executive, adding that he did not have any discussions with Beijing's liaison office in the city about the appointment. Yeung said he had considered different views from the education sector, and Choi remained his first choice. He said her 20 years of frontline experience in education were in line with Lam's hopes that policy bureaus should be led by professionals. “I am confident that I can work with the undersecretary, and [we can] supplement each other to serve the education sector together,” he said. ^ top ^



Tide turns for Taiwan's Sunflower students (SCMP)
If Chang Yu-hua is right, several leaders of the so-called Sunflower student movement in Taiwan have now graduated from university and found work on the mainland. One of the island's most influential pundits, Chang said on a TV programme that the former student leaders should apologise for their past actions. His report has been widely circulated on both sides of the Taiwan Strait and solicited a sarcastic opinion piece from the state-run Global Times, saying even the spoiled children of Taiwan have had to hide their identities to find jobs on the mainland. Actually, I think those young people are being perfectly sensible. You can't live on ideology alone. Unlike many young diehard ideologues in Taiwan and Hong Kong, once they realised their errors, they changed course. That should be encouraged, not criticised. Chang claims at least four former student leaders are working on the mainland. One works for a computer game developer in Shenzhen, earning the equivalent of HK$12,390 a month. Chang is sometimes referred to as “the king of scoops” who was among the first journalists to expose the corrupt practices of jailed president Chen Shui-bian. So what's the big deal? Plenty of Taiwanese live and work on the mainland. The Sunflower protesters, who once occupied Taiwan's Legislative and Executive Yuan, were opposed to closer economic ties with the mainland. More specifically, they successfully fought in 2014 against the ratification of a key trade pact negotiated between the then ruling Kuomintang and Beijing. Led primarily by university students, it's the Taiwanese equivalent of Hong Kong's Occupy movement. Indeed, former leaders of both movements have established ongoing close ties, with controversial visits made by such localist figures as Joshua Wong Chi-fung, Alex Chow Yong-kang and disqualified lawmaker Nathan Law Kwun-chung. Independent economists have argued the trade pact was not unfavourable to Taiwan – quite the opposite. Many provisions had remained to be worked out if the Taiwanese had concerns. The public opposition was mostly ideological, which helped the independence-minded Democratic Progressive Party win in the subsequent legislative and presidential elections. It has exaggerated the political threats, and downplayed the economic benefits, from closer ties to the mainland. If Chang's report is correct, now that the former student protesters have to make a living, suddenly they see the light and become more realistic. If only more of our own student leaders were so sensible! ^ top ^



Chinese firms say profit margins 'squeezed to extreme' by rising costs (SCMP)
Chinese business owners say their profit margins have been “squeezed to the extreme” by rising rent and labour costs – and 80 per cent want taxes and levies cut to ease their burden. That's according to the results of a nationwide survey of 14,709 companies released on Tuesday, relating to the three years from 2014, by the Chinese Academy of Fiscal Sciences, a think tank affiliated with the Ministry of Finance. Their sentiments reflect limited progress in the push to “cut costs for business” – one of the biggest economic goals under President Xi Jinping, along with reducing excess capacity and cutting debt levels. As businesses complain about the tax burden in China – including 25 per cent income tax and 17 per cent value-added tax – the situation is changing elsewhere. In the United States, President Donald Trump is pressing ahead with corporate tax cut plans, while Indian Prime Minister Narendra Modi is pushing the country's biggest tax overhaul since independence. The average tax burden of respondents was 5.14 per cent of total business turnover in 2016, the academy said. That was slightly less than the average of 5.32 per cent in 2014. It found that the combined costs and expenses of the companies surveyed had exceeded their combined revenues in the three years from 2014. Respondents said rising costs were largely to blame, with raw materials up 7.8 per cent last year, labour costs rising 6.8 per cent, and rents up 9.7 per cent. Although Beijing has promised to reduce company taxes and charges with a taxation regime overhaul and preferential policies for small firms, the government collected an extra 9.8 per cent in revenues in the first half – compared to GDP growth of 6.9 per cent in the same period. Premier Li Keqiang said in March that his cabinet planned to cut the corporate burden by about 1 trillion yuan (US$148.72 billion) in 2017, partly through changes to value-added tax and by slashing administrative fees. Tang Dajie, secretary general of Beijing-based think tank the China Enterprise Institute, said the actual tax burden on mainland China was heavier than official numbers suggested. “These tax cuts aren't helping companies,” Tang said. “It's just a few government surcharges and administrative fees that have been removed.” He added that companies may even end up paying more tax this year as the authorities were getting tough on collection. The issue of whether Beijing is demanding too much tax from companies came under the spotlight at the end of 2016, when billionaire vehicle glass manufacturer Cao Dewang said production costs in China were higher than in the United States – mainly because of its tax regime. The country's macro tax burden, the broadest measure, has reached nearly 40 per cent of its gross domestic product, a “deadly rate” for businesses, according to an earlier report by Chinese think tank the Unirule Institute of Economics. ^ top ^

Foreign firms ride China's "new economy" (Xinhua)
As China's "new economy" goes from strength to strength, more and more foreign firms are jumping in for a slice of the pie. Shared bikes flood the city streets, diners pay for meals on their smartphones, electric cars whizz down the roads: in the rapidly shifting picture of China's new economy, foreign companies are not absent. Apple is betting big on this emerging market. Two weeks ago, its mobile payment service Apple Pay launched its largest-scale marketing campaign since entering China, offering perks including up to 50 percent discounts on purchases for a week. Despite a much smaller presence than its Chinese rivals Alipay and WeChat Pay, the country's massive mobile payment market is hard to ignore for the U.S. tech giant. The general merchandise volume of China's third-party mobile payments reached 38 trillion yuan (5.7 trillion U.S. dollars) in 2016, up more than 200 percent from 2015, according to estimates by consultancy iResearch. Apple's interest is not just in mobile payments. Last year, it made an investment of 1 billion dollars in Chinese on-demand mobility provider Didi Chuxing. This spring, Apple CEO Tim Cook visited bike-sharing start-up Ofo during his China tour. The sharing economy is taking off in China, so is its appeal to foreign investors. The country's top bike-sharing companies, Ofo and Mobike, have attracted investment from the United States, Japan, Singapore and elsewhere. Some foreign firms see business opportunities come in an indirect way. One example is the U.S.-funded Dow Chemical (China) Investment Company, which signed a memorandum of understanding with Mobike in May to help the latter develop lighter and more eco-friendly shared bikes. U.S. home-sharing company Airbnb has said it plans to more than triple the size of its China workforce this year and double its investment in the market to better serve Chinese travelers. E-commerce is another success story in China's new economy. Online retail sales reached 3.1 trillion yuan in the first half of this year, a surge of 33.4 percent from a year earlier. While Chinese firms Alibaba and grab the limelight, their U.S. rival Amazon is also doing well. On Black Friday last year, sales at Amazon China doubled from a year earlier, according to a company report. The number of active users of its cross-border shopping service soared 22 times by December 2016 from two years earlier. In a move to tap deeper into China's Internet economy, Amazon in June partnered with Migu, a China Mobile subsidiary with one of the country' s largest mobile reading platforms, to launch a new Kindle exclusively for Chinese readers. China's spectacular growth used to be built on cheap manufacturing, low-end exports and smokestack industries. Now, with a wealthier domestic consumer base as well as technological progress, it is reconfiguring the economy for more consumption, more innovation and less pollution. The sight of new energy vehicles (NEVs) on China's roads is increasingly common. About 510,000 NEVs were sold in China last year, up 53 percent year on year, and the number is expected to hit 800,000 this year, according to the China Association of Automobile Manufacturers. International brands are doubling down on the market. Tesla has Asia's largest supercharger station in Beijing and plans to add over 300 supercharger stalls in the country this year, more than the combined increment of the past two years. Denmark-based world-leading biotechnology company Novozymes sees long-term opportunities in China's industrial biotechnology sector as China transits to a greener, innovation-driven economy. "We believe China's efforts to build up an inclusive business environment, and the relentless efforts to drive supply-side reform with an emphasis on sustainable growth, will lead to more business opportunities," said Sara Dai, Novozymes regional president of Asia Pacific. Official data also showed growing foreign interest in China's new economy. In the first half of 2017, foreign direct investment (FDI) into China's high-tech manufacturing and services rose 11.1 percent and 20.4 percent year on year, respectively. During the same period, FDI in information technology services, a significant part of the new economy, jumped 35.6 percent year on year, said Gao Feng, spokesperson of the Ministry of Commerce. Singapore investment firm Temasek Holdings wants to increase investment in China's new economy, said Wu Yibing, Temasek's joint head of China. The transition of China's economy has brought about a number of very attractive sectors including high-tech, non-banking finance, life science and consumption, Wu said. ^ top ^

Distractions over, Beijing revives its global currency ambitions (SCMP)
Beijing is using Hong Kong as a beachhead to once again try to expand global use of the yuan, with the currency appearing to be holding its value and returning to market favour. The big moves in the last month include the Hong Kong stock exchange's launch of a gold futures product traded in yuan; an agreement between China and Russia for a joint US$10 billion fund to promote bilateral settlements in yuan and roubles; and Hungary's first sale of “Panda bonds” in China to raise 1 billion yuan (HK$1.16 billion). China is also close to launching crude oil futures in Shanghai, a plan that seemed just a few months ago to have been shelved. The developments all took place after Beijing managed – at least on the surface – to stabilise the yuan and end market panic about the threat of a yuan crash. The yuan's share of international payments also rose to 1.98 per cent in June, from 1.61 per cent in May and 1.6 per cent in April, according to the Society for Worldwide Interbank Financial Telecommunication (SWIFT). Gavekal Research chief executive Louis-Vincent Gave said Beijing's push to make the yuan a regional trading and reserve currency was potentially the single most important factor on the global market over the long run. “That's a profound change in the global monetary system,” Gave said. “It can happen much quicker than people expect.” China's ambition to make the yuan an anchor currency, or even replace the greenback, received a shot in the arm after the 2008 global financial crisis and the US Federal Reserve's quantitative mone­tary easing raised doubts about the US dollar. Beijing views the dollar's dominance as a sign of an outdated global system that fails to recognise China's importance. Central bank governor Zhou Xiaochuan argued publicly in 2009 that the world needed a new global monetary system to dethrone the dollar, with one solution to create a “super sovereign” currency based upon Special Drawing Rights, an accounting unit of the IMF. Since then, China has promoted the use of its currency in cross-border trade and investment, signed currency swap deals with dozens of central banks and created several offshore yuan markets, including in Hong Kong, Singapore and London. But the yuan's rise was halted by two shocks in summer 2015 – the stock market rout and the central bank's sudden 2 per cent devaluation of the currency. Confidence and trust in the currency were battered and the yuan weakened steadily against the US dollar until the end of last year. Concerns were deepened by Beijing's increased meddling in the yuan's value and scrutiny over currency outflows. Nevertheless, the IMF agreed in December 2015 to include the yuan in its SDR basket and made it a nominal currency on October 1, 2016, along with the dollar, the euro, the pound and the yen. Since then, the central government has put the yuan's internationalisation on the back-burner to focus more on the immediate need to maintain market stability and avoid financial turmoil. Howhow Zhang, a director of KPMG's China global strategy group, said the yuan's road to becoming a true global currency was a “multi-year, if not, a multi-decade project”, with Beijing not willing to sacrifice wider economic stability for the strategic goal. Along the way, China's Belt and Road Initiative could be one of five drivers of the yuan's long-term use offshore, with the others including the opening of the country's onshore financial markets to foreign investors, and the development of Hong Kong as a super “intermediator”, SWIFT said. Standard Chartered chief China economist Ding Shuang said one area where China was seeking to boost the yuan's use was in infrastructure deals. Ding said that instead of setting specific targets, Beijing was taking a pragmatic approach to expanding the yuan's presence. The yuan's global reach is still limited, with over three-quarters of its offshore activity occurring in Hong Kong, according to SWIFT. But the city could be vital for the yuan's future especially when the mainland's capital account is not open. Gave said that if, for example, a Russian company was paid in yuan for selling oil or gas to China, it could open a yuan account in Hong Kong and even buy gold contracts “without ever having to go through the US dollar”. “You don't need to bring [the yuan] into China... as long as your money won't be locked in Hong Kong, then you are in fine shape,” he said. ^ top ^

Airbus to set up innovation center in China (Xinhua)
France-based European planemaker Airbus on Monday said it would set up an innovation and research center in China in order to "support (its) future products and services". "The new Airbus innovation center, which is tasked with defining the future of flight by identifying the next big change to transform the aerospace sector, will serve to strengthen Airbus' extended innovation eco-system," Airbus said in a press release. "China's fast-paced start-up culture makes it an ideal place for Airbus to create a new innovation center. Growth has come to China from manufacturing, technology and finance nowadays," it added. A location will be announced at a later date, according to the statement. The European aircraft manufacturer also named Luo Gang as the center's Chief Executive Officer. He will be charged of establishing "the center to be fully operational when it officially opens later in 2017," it said. ^ top ^



China calls for calm tack on North Korea sanctions ahead of Asean summit (SCMP)
China's foreign minister called on all parties to avoid raising tensions on the Korean peninsula ahead of a regional meeting where US diplomats are set to pressure Beijing to back tougher UN sanctions on Pyongyang. US Secretary of State Rex Tillerson is expected to push his Chinese counterpart Wang Yi to help isolate and take tougher action against Pyongyang during an Asean regional meeting in Manila this weekend. A senior US official said in Washington on Wednesday that there were indications China was ready to take steps to address the situation in North Korea. “We would like to see more action faster and more obvious and quick results. But I think we're not giving up yet,” said Susan Thornton, acting assistant secretary of state for Asian affairs. “What we are trying to do is galvanise this pressure and isolate North Korea so it can see what the opportunity cost is over developing these weapons programmes.” In Beijing on Thursday, Wang underscored China's opposition to North Korea's launch of an intercontinental ballistic missile (ICBM) last Friday, saying it was in violation of UN Security Council resolutions. “At the same time, we also call on all parties not to take any actions that will lead to an escalation in tensions,” Wang said. Nikki Haley, the US ambassador to the UN, has been discussing a proposed sanctions resolution with Chinese officials since North Korea launched its first ICBM on July 4. But China, North Korea's main ally and trading partner, has not yet agreed on the new measures, despite renewed concerns from last week's missile test. Dr James Tang, an international relations expert at Singapore Management University, said there was room for China to accept sanctions as a part of the US push for more pressure on North Korea, since relevant parties were “dancing around” trying to avoid military action. “This is a delicate time,” Tang said. “China probably might come along a bit, but is probably not willing to push too far and threaten the collapse of the North Korean regime.” But China's ability to cooperate has been complicated by the inconsistency and ambiguity of the US' North Korean policy, according to Sun Xingjie, an expert in Chinese diplomacy at Jilin University. “The US government's attitudes towards denuclearisation on the Korean peninsula are many and varied, there is no unified voice on this issue,” he said. “China cannot cooperate with the US when it doesn't know what the US position is. It's hard to say if Tillerson is even representing [US President Donald] Trump.” Richard Hu, an international relations specialist at Hong Kong University, said North Korea was one of the most urgent regional security issues for parties at the Asean summit. “Most people are against North Korea's provocative actions, but the thing is the strategy and what kind of approach we should adopt,” Hu said. “I don't think it is solely China's responsibility to get Pyongyang under control or change their behaviour.” Thornton did say China had taken unprecedented steps to increase pressure on its neighbour but it could do a lot more to enforce existing sanctions and to impose more. Her remarks contrasted with those of Trump, who on Saturday accused Beijing of doing nothing to help on North Korea and pointed to the huge US trade deficit with China. Thornton said Tillerson, due in Manila on Saturday, had no plans to meet North Korea's foreign minister at the gathering, but he would press China on other issues relating to competing territorial claims in the South China Sea. ^ top ^

Trump signs what he calls "seriously flawed" sanctions bill on Russia, Iran, DPRK (Xinhua)
U.S. President Donald Trump on Wednesday signed into law a sanctions bill on Russia, Iran and the Democratic People's Republic of Korea (DPRK), while describing the bill as "seriously flawed." In a statement released by the White House, Trump said while he favoured tough measures to "punish and deter bad behavior" by Iran and the DPRK and supported making clear to Russia that "America will not to tolerate interference in our democratic process," he criticized the legislation for including "unconstitutional provisions" and being "seriously flawed." "Still, the bill remains seriously flawed -- particularly because it encroached on the executive branch's authority to negotiate," said Trump. Unlike previous sanctions bills, the new legislation grants U.S. lawmakers power to block Trump from unilaterally lifting sanctions on Russia. The bill was approved overwhelmingly early this month by the U.S. Congress despite the Trump administration calling on lawmakers to grant the White House "flexibility" in dealing with Russia. "By limiting the Executive's flexibility, this bill makes it harder for the United States to strike good deals for the American people," said Trump in the statement. Despite his objections, Trump said he signed the bill "for the sake of national unity." "It represents the will of the American people to see Russia take steps to improve relations with the United States," said Trump. In a rare bipartisan move, U.S. House of Representatives approved the sanctions bill by a vote of 419 to 3 with the Senate passing the bill by 98 to 2. The near-unanimous congressional approval indicated a bipartisan consensus to punish Russia for the Ukraine crisis and its alleged meddling in the 2016 presidential election, which Moscow had for long been strongly denied. The solid bipartisan push for the legislation also reflected lawmakers' concern about the Trump administration's posture toward Russia. On the campaign trail and after the election, Trump repeatedly raised the possibility that he would consider lifting sanctions on Russia to mend the bilateral relations. In retaliation for the new sanctions legislation, Moscow had already ordered the U.S. diplomatic mission in Russia to cut its staff by 755 people. The Russian Foreign Ministry said Wednesday that Moscow was reserving the right to take further retaliatory measures in response to a sanctions bill signed by U.S. President Trump. Russian President Vladimir Putin on Sunday announced Moscow's decision to reduce the U.S. diplomatic staff in Russia by 755 people, including U.S. and Russian nationals, by Sept. 1. In making the announcement, Putin said that Russia had run out of patience in waiting for relationship with the United States to improve. "We waited for quite a long time that, perhaps, something will change for the better," said Putin in an interview with a Russian TV station aired on Sunday. "But, judging by everything, if it (bilateral relationship) changes, it will not be soon," said Putin. ^ top ^



Mongolia: Business environment to stabilse despite election (GoGo Mongolia)
Despite the election of Democratic Party (DP) candidate Khaltmaa Battulga as president, the Mongolian People's Party (MPP) will continue to drive the legislative agenda, given its parliamentary dominance. This will ensure adherence to an International Monetary Fund (IMF) bailout package and efforts to stabilise the investment environment. On 9 July 2017 DP candidate Khaltmaa Battulga secured the presidency in a second round run-off election. Despite the electoral success of the DP in this election, the presidency is a largely ceremonial post and, facing a MPP dominated parliament, Battulga will struggle to materially influence policy during his tenure. Security risks in Mongolia are generally low, and there is a limited threat of terrorism or civil unrest. Where protests do occur, they are likely to be in connection with political issues and are not likely to turn violent. Mongolia's foreign policy aims to maintain sound relations with both China and Russia. However, Battulga's campaign promised to rebalance the trade relationship with China. China accounts for four-fifths of Mongolia's yearly exports, and Battulga has raised concerns over China's strategic interest in the country. Despite this, relations with China are unlikely to materially worsen. Any attempts by Battulga to limit Chinese investment in Mongolia will likely be blocked by parliament, although there will be concerted efforts by the DP and MPP to engage with other countries, including Japan and South Korea. Mongolia's economy is likely to experience an uptick in real GDP growth in 2017. A drop in foreign investment in 2016, driven by suppressed global commodity prices and resource nationalist policies, contributed to weak annual growth of 1.1%. In 2017, renewed investor interest in major natural resources projects, a result of business-friendly policies under the MPP, will drive growth of 2.2%. Sovereign credit risks remain elevated in Mongolia. Foreign exchange reserves stood at USD 1.2 billion in May 2017, yet USD 1.5 billion in foreign debt is due in 2017 and 2018. However, a three-year USD 434 million Extended Fund Facility (EFF), approved by the IMF in May 2017, will partly ease short-term liquidity risks. The agreement forms part of a broader USD 5.5 billion financing package, provided by the World Bank, the Asian Development Bank and the governments of Japan, Korea and China. Designed to support the government's Economic Recovery Plan, the package will support foreign exchange reserves and banking sector reform. The package is also expected to enable Mongolia to meet its upcoming debt obligations. However, stringent fiscal targets associated with the facility will weigh on economic growth. The IMF programme mandates that the budget deficit must be reduced to 1.5% of GDP by 2022, from 17% in 2016. As a result, the government has cut nonessential spending, which could slow growth in the short term. Battulga's election campaign focussed on resource nationalist policies. This included a proposal that all mining revenues should be deposited in Mongolian banks. However, foreign mining firms are unlikely to see a return to the hostile business environment seen under the previous DP government. In 2012, the DP government sought to limit foreign ownership by invoking the Strategic Entities Foreign Investments Law, to prevent Chinese firm Chalco from acquiring South Gobi Resource. The MPP has 85.5% of seats in parliament, and has pursued more investor-friendly policies since June 2016. Battulga's election is unlikely to materially change this. The MPP government announced plans to enhance the business environment for foreign investors in August 2016, creating a council to ensure legal certainty and resolve outstanding disputes. Attracting foreign investment is central to the government's economic stabilisation plans, particularly in maintaining the IMF programme and meeting foreign debt repayments. In October 2016, the government approved an intergovernmental agreement with Canada, which will offer additional protections for Canadian investors. In an indication of revived confidence in Mongolia, the second phase of the USD 5.3 billion Oyu Tolgoi copper and gold mine began in mid- 2016 and outstanding disputes over the development of Tavan Tolgoi coal mine are now likely to be resolved. ^ top ^

President calls for reform to bolster domestic production (Montsame)
The President on Wednesday received representatives of domestic manufacturers, and called for a reform movement to boost the domestic production sector. “I know the obstacles and challenges in the development of domestic production industry”, he said. “Commercial economy has been dominant for a long time in Mongolia, and it's time for domestic manufacturers to work together for the industrial economy”, the President said, highlighting the need for integrated policy on promotion of industry. He also noted the importance of manufacturing value-added products. President Kh.Battulga encouraged the domestic manufacturers to unite their efforts, and actively cooperate with the National Chamber of Commerce and Industry. ^ top ^


Mr. Giordano Felli and Mr. Aurèle Aquillon
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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