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
  7.1-11.1.2019, No. 750  
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Foreign Policy

Foreign companies file record number of patent applications in China (SCMP)
Foreign companies filed a record number of patents applicants in China last year, which the government said reflected an improving business environment for overseas investment. A total of 148,000 patent applications were filed by foreign companies in 2018, according to figures from the National Intellectual Property Administration released on Thursday. This was 9.1 per cent higher than the previous year's total. Foreign companies also lodged 244,000 trademark applications last year, about 16.5 per cent more than the previous year's. In addition, intellectual property royalties, the fee paid for using IP rights, reached US$35 billion. "Usually the number of patent applications filed by foreigners is widely seen as an indicator or barometer of business environment for foreign investment," said Bi Nan, the administration's director for planning and development told a press conference in Beijing on Thursday. "The numbers mean that China's business environment is improving," Bi said, "and we are expecting growth to continue in the medium and long term." The latest figures by the administration were published hours after trade negotiators from China and the US wrapped up their three-day talks in Beijing as part of their efforts to strike a deal to end an all-out trade war. Intellectual property protection, along with forced technology transfers, is one of the main "needed structural changes" that the US has been pushing for in the talks. Beijing has repeatedly said that it had made great efforts on protecting intellectual property since it joined the World Trade Organisation in 2001. Last month, Beijing announced that a draft of a revised intellectual property law, which includes stiffer punishments for infringements of IP, has passed its first review by the country's legislature, the National People's Congress, and is now soliciting public opinions before February 3. Poor protection for intellectual property rights has long been a major concern for foreign investors in China, and the Trump administration has accused China of infringing US firms' intellectual property rights through theft and forced technology transfers, an allegation Beijing has denied. China has spent billions of dollars over the past year in funding local companies to obtain intellectual property in China and overseas as part of a long-term effort to upgrade the country's manufacturing capability with cutting-edge technology. Last year, Chinese inventors filed over 1.53 million applications on the mainland and 432,000 patents have been granted, the administration said. Huawei Technologies, the world's largest telecommunications equipment vendor, was granted more patents than any other Chinese company last year – about 3,369. Last year, inventors working for Chinese companies were granted a record 12,589 US patents in 2018, a 12 per cent jump on the year, according to the US Patent and Trademark Office. ^ top ^

China, France to launch joint projects under B&R Initiative: ambassador (Xinhua)
China and France are expected to jointly launch several projects on infrastructure and ecology in the coming years under the framework of the Belt and Road Initiative, China Ambassador to France Zhai Jun said on Thursday. The Belt and Road Initiative has become a cooperation platform widely appreciated on a global scale, Zhai said while attending the second Paris Forum on the Initiative. Proposed by China in 2013, the B&R Initiative aims to build a trade and infrastructure network connecting Asia with Europe and Africa based on ancient land and maritime trade routes. It comprises the Silk Road Economic Belt and the 21st Century Maritime Silk Road. The B&R Initiative is in favor of maintaining multilateralism and international cooperation, while France and Europe should participate in this initiative in a "more active" way, French former Prime Minister Jean-Pierre Raffarin said at the Forum. Philippe Dillmann, commercial director of a French insurance company, told Xinhua that the forum has given him a better understanding of the initiative. The Paris Forum on New Silk Roads was sponsored jointly by the French Institute for International and Strategic Affairs and Chinese Embassy in France. The first conference was held in November 2017. ^ top ^

Chinese president's special envoy attends inauguration of Venezuelan president (Xinhua)
Chinese President Xi Jinping's special envoy Han Changfu attended the inauguration ceremony of Venezuelan President Nicolas Maduro here Thursday. Han, also China's minister of agriculture and rural affairs, met with Maduro on Tuesday. He conveyed President Xi's sincere congratulations and good wishes to Maduro. Han said that China and Venezuela are good friends with mutual trust and assistance as well as good partners with win-win cooperation. This year marks the 45th anniversary of the establishment of diplomatic ties between China and Venezuela, said Han, calling on the two sides to take this opportunity to continue to implement the important consensus reached by the two heads of state, firmly enhance mutual support, strengthen pragmatic cooperation to further enrich the connotation of the comprehensive strategic partnership between the two countries and bring more benefits to the two peoples. For his part, Maduro thanked President Xi for sending a special envoy to attend his inauguration and asked Han to convey his warm greetings to President Xi. Maduro said the Venezuelan government and people cherish the friendship with China and admire China's development achievements during the past 40 years of reform and opening up. He said Venezuela is willing to maintain high-level exchanges with China, share experience in the governance of the country and promote pragmatic cooperation in various fields such as agriculture to jointly build a better future of bilateral relationship. ^ top ^

Proof needed before Malaysia investigates China-1MDB reports, Mahathir says (SCMP)
Malaysian Prime Minister Mahathir Mohamad has questioned a recent news report claiming China had offered to bail out the 1Malaysia Development Berhad (1MDB) sovereign wealth fund in 2016 in exchange for projects, saying proof was needed before his administration could look into the matter. "There are documents I suppose, but [they] must be in our hands before we can accept the statement made. So until then we cannot take action," the premier told reporters at a press conference earlier today. "We need to find this document and make use of the document as proof that this thing actually happened. At the moment it is just a story in the press, that's all. We have no documents." The Wall Street Journal earlier this week reported that Beijing had offered to help derail investigations into scandal-ridden 1MDB in exchange for the approval of infrastructure projects under its multibillion-dollar "Belt and Road Initiative", which involves the construction of roads, ports, railways and pipelines in more than 50 countries. The Journal – citing the scandal-tainted Najib Razak administration's summary of the minutes from private, undisclosed meetings between senior officials – claimed Beijing promised to influence the US and other countries into dropping 1MDB-related probes, and also offered to spy on reporters investigating rumours of mismanagement and money-laundering within the fund. Specifically, it reported that China's domestic security force had surveilled the paper's office in Hong Kong at Malaysia's request by way of wiretapping and data retrieval. When the story broke, Malaysian Finance Minister Lim Guan Eng said he "[did] not wish to say yes or no. I need to check the records to see if there were details explicitly mentioned." Meanwhile, fugitive financier Low Taek Jho, also known as Jho Low – believed to be the mastermind behind the looting of billions from the fund – has denied the report, which also claimed he had a major role to play in facilitating the China-Malaysia deal talks. Malaysian media reported that Low had, in a statement from his spokesperson, called the Journal piece "a selection of half-truths, mixed in with fiction, to create a misleading and oversimplified narrative that has been peddled by a morally bankrupt Mahathir regime to advance its failing political cause". Low, who is currently on the run from several governments who want him in connection with the 1MDB scandal, said no legitimate evidence to support these claims had been provided. Controversy surrounding the fund was a key factor in the loss of former ruling coalition Barisan Nasional when Malaysia went to the polls last May. The United States Department of Justice believes that US$4.5 billion was misappropriated from 1MDB, and some US$700 million of that found its way into disgraced former premier Najib Razak's accounts – funds he claimed were from Middle Eastern donors. The rest was pumped into star-studded parties that included the likes of Jamie Foxx and Paris Hilton, the purchase of a superyacht, artwork by Van Gogh and Monet, and funding the film The Wolf of Wall Street. The Chinese Embassy in Malaysia has also denied the report, describing the claims outlined as "groundless". "China never attaches political conditions on our cooperation with other countries," it said in a statement. This year marks 45 years of diplomatic ties between the two nations. ^ top ^

Tesla boss Elon Musk says he loves China, so Premier Li Keqiang offers him a green card (SCMP)
Chinese Premier Li Keqiang said he hopes American carmaker Tesla can help drive the country's continued opening up, and even offered its controversial chief executive Elon Musk Chinese permanent residency, according to the government's website. The pair met on Wednesday at Zhongnanhai – the former imperial garden in Beijing that is now home to the headquarters of the Communist Party and the government – two days after Tesla broke ground at its Gigafactory 3 project in Shanghai, its first production base outside the United States. "I love China and want to come here more often," Musk was quoted as saying in a report on "If you do, we can issue you a Chinese green card," the premier replied. Li congratulated Musk on the start of construction at the multibillion-dollar facility, which came just three months after America's bestselling electric carmaker secured the land at an industrial zone in Lingang. Once completed it will be the first car plant in China to be wholly owned by a foreign company, since Beijing relaxed its restrictions on compulsory joint venture partnerships in some sectors last year. "We hope you can get a firm foothold and expand the market," Li said, adding that Tesla could be a "participant in China's opening up and a promoter of stable China-US relations". Musk said he was impressed by the speed and efficiency of China's development, and that it was hard to imagine that a car factory could be completed and opened in such a short time. He said he would strive to make the new Shanghai factory one of the most advanced in the world while creating products to suit the needs of the Chinese market. On Monday he said production of the Tesla Model 3 was expected to start before the end of the year. Li said China would continue to be a hotspot for foreign investment and that he welcomed greater cooperation with companies from around the world. Musk's high-level meeting was not his first in China. In July, he met Vice-President Wang Qishan at Zhongnanhai and said on Twitter at the time that they discussed "history, philosophy and luck". His meeting with Li coincided with the end of the latest round of trade talks between Chinese and US officials in Beijing. The discussions ended on a positive note and set the scene for top-level talks between Wang and US President Donald Trump later this month on the sidelines of the annual meeting of the World Economic Forum in Davos, Switzerland. ^ top ^

Don't use WhatsApp or WeChat when you're in China, University of California, Davis tells students (SCMP)
The University of California, Davis has issued a China travel warning to its electrical and computer engineering students, advising them not to use messaging apps like WhatsApp or WeChat or make "unfavourable political statements or postings on social media" while there. It was delivered in an email sent by Gary Leonard, the university's director of liability and property programmes, on Monday that was forwarded to the Electrical and Computer Engineering Department, according to screenshots seen by the South China Morning Post. The email came days after the US State Department updated its travel advisory to China following last month's high-profile detentions of three Canadian citizens, warning US nationals of "arbitrary enforcement of local laws" and exit bans. Two graduate students from the department confirmed they had received the email but declined to comment on the travel warning. The email reads: "While the use of What'sApp [sic], WeChat and like messaging apps is legal in China, we have seen in the latest espionage charge of a US citizen in Russia where the use of What'sApp [sic] has been cited in his espionage charges. "Our concern here is the possibility China could use this condition similarly against Western travellers to levy charges or as an excuse to deny departure. We recommend not using these messaging apps at this time." It said the travel advice had been based on information from private risk management firm WorldAware. Leonard did not respond to a request for comment. While the university did not deny the email had been sent, the detailed list of China-specific warnings were not on its travel news and updates page, though the State Department's travel advisory was posted on Tuesday. University spokeswoman Melissa Lutz Blouin said links to official US travel and health advisories were posted "as a matter of routine for places where our faculty, staff and students travel". The China travel warning email was apparently not sent to all students. Caitlin Perkey, who studies international relations at the university, said she had not heard about the travel advisory for China. "If they are giving warnings … then it could be because the US State Department is also putting out warnings," she said. Cognitive science student Chaodan Luo, who is from Sichuan province in China, also said she had not received the email. US citizens currently prevented from leaving China include the estranged son and daughter of Liu Changming, a former Chinese bank executive wanted by the government for financial crimes. Their mother and Liu's former wife, US citizen Sandra Han, has been placed in secret detention since June. Meanwhile, the US has detained several Chinese citizens accused of espionage, as US-China relations sink to a historic low amid the trade war and the arrest of Huawei Technologies executive Sabrina Meng Wanzhou in December, highlighting issues over technology and security. Other global institutions have also issued China travel warnings in recent months. After Meng's arrest, US technology giant Cisco sent an internal email advising US-based staff to cut "non-essential" travel to China, but the company quickly backtracked, saying it was "sent in error to some employees". In October, Swiss bank UBS withdrew a warning to staff against travel to China after one of its employees was prevented from flying home to Singapore from Beijing by authorities. Chinese researchers working in sensitive hi-tech sectors have also been told not to take any unnecessary trips to the United States after it detained several Chinese nationals on espionage charges in recent weeks. But Ryan Mitchell, an expert in Chinese and international law at the Chinese University of Hong Kong, said most US travellers in China were "unlikely" to encounter genuine danger, though arbitrary detention was a problem. "The current tensions over the Meng Wanzhou case have resulted in high-profile detentions of prominent Canadians working in China, but it would be a major escalation to start detaining average students or others," Mitchell said. "On the other hand, arbitrary detention is a real and persisting problem in China, and it is true that anyone who does end up targeted on vague 'security'-related charges will likely not have easy or immediate access to a lawyer or embassy staff." Mitchell added that some of the advice in the university's travel advisory, such as not taking unauthorised photos of government facilities, were "simply common sense". "But again, there is no sign that Chinese authorities will initiate mass detentions of US citizens on these or other grounds," he said. ^ top ^

US-China trade war talks end on a positive note, as American delegate says they went 'just fine' (SCMP)
The extended trade talks between China and the United States in Beijing ended on Wednesday with a member of the American delegation describing the negotiations as "fine". "It's been a good one for us," Ted McKinney, US undersecretary for trade and foreign agricultural affairs, said at the end of the vice-ministerial level talks. The discussions had been "just fine", he said, without elaborating. The meetings were the first since Chinese President Xi Jinping and his US counterpart Donald Trump agreed to a 90-day truce to the trade war at the G20 summit in Buenos Aires in December. While signals from the latest round of talks were upbeat, if a deal is not reached by March 1, the US side may follow through on raising tariffs on US$200 billion in Chinese goods from 10 per cent to 25 per cent. The two delegations were led by US deputy trade representative Jeffrey Gerrish and China's vice-minister of commerce, Wang Shouwen. The talks were originally planned for Monday and Tuesday but were extended into Wednesday. Lu Kang, China's foreign ministry spokesman, confirmed at a press briefing that the talks had ended and said that more details would be released soon. "The extension of the talks indicates that both sides are serious about this consultation," he said. "If the results of the talks are positive, it would be beneficial for both China and the US and good news for the global economy." While the talks were mostly between mid-level officials, a photograph leaked on Monday showed they were also attended by China's Vice-Premier Liu He, the chief trade negotiator for the Chinese side. The US delegation included representatives from the departments of energy, agriculture, treasury and commerce. Since the start of the trade war in July, both sides have levied billions of dollars worth of tariffs that have shaken business sentiment, in a conflict many see an extension of a technology battle between the world's two largest economies. At the heart of US concerns is the "Made in China 2025" industrial policy, a strategy Beijing hopes will allow it to supersede US technology supremacy, which it has since played down without indicating it will fully abandon the plan. While there were indications that China would be open to buying more US agricultural and energy products and allowing market access, demands for Chinese structural reforms to halt forced technology transfers and intellectual property theft were greater hurdles in the discussions, people familiar with the talks said. Analysts said the positive momentum from the working talks will need to be followed up by more senior officials, such as Liu and US trade representative Robert Lighthizer, who is in charge of overall negotiations on the US side. While the 90-day tariff ceasefire may be extended to allow for more manoeuvring room on prickly trade issues, it is unclear if there will soon be a substantive deal or if existing tariffs are on the negotiation table, they said. "I am looking for Liu He to go to Washington after this round of talks – the timing is actually very critical for the markets," said Iris Pang, China economist from ING Bank. "If it is immediately after these talks, it really means that something executable is going to happen; if it is next month or so, then you have a feeling that things are not really that executable for the moment." It was possible, she said, that either the truce would be extended or a lower than threatened tariff rate would be implemented on the US$200 billion worth of Chinese goods. While Beijing could take "easy steps" like importing soybeans, cotton and liquefied natural gas from the US, there would be greater difficulties on the technology front, including China proving its commitment to intellectual property rights with penalties on violators and addressing US restrictions on China's electronic components, Pang said. Jon Cowley, a senior lawyer at Baker McKenzie's international commercial and trade practice group, said he expected that negotiators may have put together a framework for an agreement, but that existing tariffs would not be fully eliminated unless China met the US "all the way". "It's possible to reach an agreement that would further extend this truce with respect to the roll-out of new tariffs but it might not necessarily address those that have taken effect," he said. "We've been hearing reports that there's been a narrowing of a gap between the two sides, but a narrowing of a gap is not a bridging of a gap, and it's a pretty wide gap." ^ top ^

Canadian diplomats in China meet detained citizen, Michael Spavor (SCMP)
Canadian diplomats in China on Tuesday met the second of two citizens who were detained last month after the arrest of a senior Chinese executive in Vancouver, the Canadian foreign ministry said. "Today, Canadian consular officials in China visited with Michael Spavor," the ministry said in a statement that provided no further details. It was Spavor's second visit by Canadian officials. Officials met Michael Kovrig on December 17. Canadian authorities arrested Huawei Technologies chief financial officer Meng Wanzhou on December 1 on a US extradition warrant. Beijing denounced the move and threatened reprisals unless the case against Meng was dropped. "The Canadian government remains deeply concerned by the arbitrary detention by Chinese authorities of these two Canadians since last month and continues to call for their immediate release," the foreign ministry said in the statement. The spat is threatening to increase global tensions at a time when Washington and Beijing are already locked in a trade war. Canadian Prime Minister Justin Trudeau spoke to US President Donald Trump on Monday and the two leaders agreed to continue pressing Beijing to free Spavor and Kovrig, Trudeau's office said in a statement. Although Canada says China has made no specific link between the detentions and Meng's arrest, experts and former diplomats say they have no doubt Beijing is using the cases of the two men to pressure Ottawa. ^ top ^

New documents link Huawei to suspected front companies in Iran and Syria, and may bolster US case against Meng Wanzhou (SCMP)
The US case against the chief financial officer of China's Huawei Technologies, who was arrested in Canada last month, centres on the company's suspected ties to two obscure companies. One is a telecom equipment seller that operated in Tehran; the other is that firm's owner, a holding company registered in Mauritius. US authorities allege CFO Meng Wanzhou deceived international banks into clearing transactions with Iran – violating America's sanctions on the country – by claiming the two companies were independent of Huawei, when in fact Huawei controlled them. Huawei has maintained the two are independent: equipment seller Skycom Tech Co Ltd and shell company Canicula Holdings Ltd. But corporate filings and other documents found by Reuters in Iran and Syria show that Huawei, the world's largest supplier of telecommunications network equipment, is more closely linked to both firms than previously known. The documents reveal that a high-level Huawei executive appears to have been appointed Skycom's Iran manager. They also show that at least three Chinese-named individuals had signing rights for both Huawei and Skycom bank accounts in Iran. Reuters also discovered that a Middle Eastern lawyer said Huawei conducted operations in Syria through Canicula. The previously unreported ties between Huawei and the two companies could bear on the US case against Meng, who is the daughter of Huawei founder Ren Zhengfei, by further undermining Huawei's claims that Skycom was merely an arms-length business partner. Huawei, US authorities assert, retained control of Skycom, using it to sell telecom equipment to Iran and move money out via the international banking system. As a result of the deception, US authorities say, banks unwittingly cleared hundreds of millions of dollars of transactions that potentially violated economic sanctions Washington had in place at the time against doing business with Iran. Meng did not respond to a request for comment, and Huawei declined to answer questions for this story. Canicula's offices could not be reached. A Justice Department spokesman in Washington declined to comment. Meng was released on C$10 million (US$7.5 million) bail on December 11 and remains in Vancouver while Washington tries to extradite her. In the United States, Meng would face charges in connection with an alleged conspiracy to defraud multiple financial institutions, with a maximum sentence of 30 years for each charge. The exact charges have not been made public. Huawei said last month it has been given little information about the US allegations "and is not aware of any wrongdoing by Ms Meng." The company has described its relationship with Skycom as "a normal business partnership". It has said it has fully complied with all laws and regulations and required Skycom to do the same. Meng's arrest on a US warrant has caused an uproar in China. It comes at a time of growing trade and military tensions between Washington and Beijing, and amid worries by US intelligence that Huawei's telecommunications equipment could contain "back doors" for Chinese espionage. The firm has repeatedly denied such claims. Nevertheless, Australia and New Zealand recently banned Huawei from building their next generation of mobile phone networks, and British authorities have also expressed concerns. Articles published by Reuters in 2012 and 2013 about Huawei, Skycom and Meng figure prominently in the US case against her. Reuters reported that Skycom had offered to sell at least 1.3 million euros (US$1.5 million) worth of embargoed Hewlett-Packard computer equipment to Iran's largest mobile-phone operator in 2010. At least 13 pages of the proposal were marked "Huawei confidential" and carried Huawei's logo. Huawei has said neither it nor Skycom ultimately provided the US equipment. Reuters also reported numerous financial and personnel links between Huawei and Skycom, including that Meng had served on Skycom's board of directors between February 2008 and April 2009. Several banks questioned Huawei about the articles, according to court documents filed by Canadian authorities at the request of the US for Meng's bail hearing in Vancouver last month. According to the documents, US investigators allege that in responding to the banks, which weren't named, Meng and other Huawei employees "repeatedly lied" about the company's relationship with Skycom and failed to disclose that "Skycom was entirely controlled by Huawei". US authorities also allege that at a private meeting with a bank executive, in or about August 2013, Meng said Huawei had sold its shares in Skycom, but didn't disclose that the buyer was "a company also controlled by Huawei". The court documents allege that Huawei told the executive's bank that the Chinese company had sold its shares in Skycom in 2009 – the same year Meng stepped down from Skycom's board. Skycom's buyer wasn't identified in the documents. But Skycom records filed in Hong Kong, where the company was registered, show that its shares were transferred in November 2007 to Canicula. Canicula, which was registered in Mauritius in 2006, continued to hold Skycom shares for about a decade, Skycom records show. A "Summary of Facts" filed by US authorities for Meng's Canadian bail hearing states: "Documents and email records show that persons listed as 'Managing Directors' for Skycom were Huawei employees." None of those individuals were named. A company record filed by Skycom in Iran that was entered in the Iranian registry in December 2011 states that a "Shi Yaohong" had been elected as manager of Skycom's Iran branch for two years. Huawei employs an executive named Shi Yaohong. According to his LinkedIn profile, Shi was named Huawei's "President Middle East Region" in June 2012. An Emirates News Agency press release identified him in November 2010 as "President of Huawei Etisalat Key Account." Etisalat is a major Middle Eastern telecommunications group and a Huawei partner. Shi, now president of Huawei's software business unit, hung up the phone when Reuters asked him about his relationship with Skycom. Many corporate records filed by Skycom in Iran list signatories for its bank accounts in the country. Most of the names are Chinese; at least three of the individuals had signing rights for both Skycom and Huawei bank accounts (one of the names is listed in the Iranian registry with two slightly different spellings but has the same passport number). US authorities allege in the court documents filed in Canada that Huawei employees were signatories on Skycom bank accounts between 2007 and 2013. Records in Hong Kong show that Skycom was voluntarily liquidated in June 2017 and that Canicula was paid about US$132,000 as part of the resolution. The liquidator, Chan Leung Lee, of BDO Ltd in Hong Kong, declined to comment. The Financial Services Commission in Mauritius, where Canicula remains registered, declined to release any of its records, saying they were confidential. Until two years ago, Canicula had an office in Syria, another country that has been subject to US and European Union sanctions. In May 2014, a Middle Eastern business website called published a brief article about the dissolution of a Huawei company in Syria that specialised in automated teller machine (ATM) equipment. Osama Karawani, an attorney who was identified as the appointed liquidator, wrote a letter asking for a correction, stating that the article had caused "serious damage" to Huawei. Karawani said the article suggested that Huawei itself had been dissolved, not just the ATM company. In his letter, which was linked to on the Aliqtisadi website, he said Huawei was still in business. "Huawei was never dissolved," he wrote; he added that it "has been and is still operating in Syria through several companies which are Huawei Technologies Ltd and Canicula Holdings Ltd." Huawei Technologies is one of Huawei's main operating companies. Karawani didn't respond to emailed questions about Canicula. US investigators are aware of Canicula's connection to Syria, according to a person familiar with the probe. Canicula had an office in Damascus and operated in Syria on behalf of Huawei, another person said. That person said Canicula's customers there included three major telecommunications companies. One is MTN Syria, controlled by South Africa's MTN Group Ltd, which has mobile-phone operations in both Syria and Iran. MTN has a joint venture in Iran – MTN Irancell – that is also a Huawei customer. MTN advised Huawei on setting up the structure of Skycom's office in Iran, according to another source familiar with the matter. "Skycom was just a front" for Huawei, the person said. An official with MTN said no one at the company was available to comment. In December 2017, a notice was placed in a Syrian newspaper by "the General Director of the branch of the company Canicula Ltd". He was not named. It announced that Canicula had "totally stopped operating" in Syria two months before. No explanation was given. ^ top ^

Donald Trump set to hold talks with China's Vice-President Wang Qishan in Davos (SCMP)
China's Vice-President Wang Qishan is likely to hold talks with US President Donald Trump at the World Economic Forum's annual meeting later this month, according to a person familiar with the matter. The talks, on the sidelines of the Davos forum in Switzerland, which runs from January 22 to 25, would be the second high-level meeting between China and the United States in two months as they continue to seek to reduce trade tensions. China's President Xi Jinping and Trump agreed to a 90-day truce in their trade war on December 1 when they met at the G20 summit in Buenos Aires, Argentina. However, the US has threatened to increase its tariffs on Chinese imports on March 1 if Beijing does not meet its demands to resolve issues such as cyber intrusion and intellectual property theft. Meanwhile, US deputy trade representative Jeffrey Gerrish will lead a delegation of American trade, agriculture and energy officials for talks with their Chinese counterparts in Beijing on Monday. Observers said that if those talks went well, more discussions between senior leaders would follow. Trump said on Friday that China's weakening economic growth put the US in a strong position ahead of any negotiations. "I think we will make a deal with China. I really think they want to. I think they sort of have to," he told reporters at the White House. "China's not doing well now. And it puts us in a very strong position. We are doing very well. "I hope we're going to make a deal with China. And if we don't, they're paying us tens of billions of dollars worth of tariffs – not the worst thing in the world." The South China Morning Post reported on Thursday that Wang would lead the Chinese delegation at the Davos meeting. Trump will be making his second appearance at the annual gathering. At last year's meeting, Chinese Vice-Premier Liu He promised that China would open its markets wider to foreign investors, while a year earlier Xi voiced his support for globalisation. At a forum in the south China city of Guangzhou last month, Wang, who has a reputation as a firefighter for tackling Beijing's thorniest problems, launched a veiled attack on Trump's trade policies, criticising the adoption of a "zero-sum" mindset. In November, he was similarly critical of unilateralism when speaking at an economic forum in Singapore. Tao Wenzhao, an international relations expert at the Chinese Academy of Social Sciences, said the talks led by Gerrish would be crucial in setting the agenda for the meeting between Wang and Trump. "The conclusions that come out of next week's trade talks are expected to be confirmed by Wang and Trump in Davos at the end of January, and they will also explore new problems together," he said. "It is a process of gradually narrowing the discrepancies and building consensus before the end of February." Tao said he was not concerned that Wang, rather than Xi, would be attending the high level talks as he had the president's full authority and was capable of delivering concrete results. ^ top ^

Japan protests Chinese survey ship operating near Okinotorishima atoll, a small but vital piece in Tokyo's maritime territory claims (SCMP)
Japan has lodged an official protest with Beijing after a Chinese government survey ship was identified operating in Japan's exclusive economic zone (EEZ) around Okinotorishima, an atoll some 1,740km south of Tokyo that is the most southerly point of Japan. The protest may fall on deaf ears, however, as Beijing has in the past carried out similar surveys and insisted Okinotorishima is merely a few rocks that would not be above the waves without reinforcement. Beijing has maintained Okinotorishima is not able to sustain human life and cannot be recognised as an island. And if it is not an island, Tokyo cannot lay claim to the surrounding 400,000 sq km of the Pacific as part of its EEZ. The Chinese vessel was seen in the EEZ around the island on December 18, government officials said. Under the UN Convention of the Law of the Sea, conducting a maritime survey in another nation's EEZ requires the agreement of that country in advance and Tokyo has said no permission was granted. "The vessel was carrying out marine scientific research activities in the waters near Okinawa," said China's Ministry of Foreign Affairs spokesman Lu Hao at his regular press conference on January 2. He emphasised that China is party to the United Nations Convention on the Law of the Sea (UNCLOS) and carries out its marine scientific research activities in accordance with the convention. Lu added that under the UNCLOS definitions, Okinawa Reef does not constitute an island, so the ship was not in any exclusive economic zone. "The Japanese side arbitrarily called it an island... which the Chinese side never recognised," he said. "China very much wants to know what is in that area, whether it's natural resources like oil and gas or fish – but Japan is more worried about the vast deposits of methane hydrates that they have located in this area," said Garren Mulloy, an associate professor of international relations at Japan's Daito Bunka University. Methane hydrate is a solid compound containing high levels of methane trapped in a crystal structure. Japan has sought to prevent other countries exploiting the resource. According to Mulloy, the ship may also have had a military mission: China is eager to locate deep water passages that will enable its growing fleet of submarines to exit relatively shallow coastal waters between mainland China and the Philippines, Taiwan, the Okinawa Islands and mainland Japan. "They are also measuring the depth of the ocean and looking for specific features, including channels for submarines," he said. "They will also try to plot areas of the seabed that have a high ferrous content as it is more difficult to detect and track submarines against a ferrous background." The expedition is also likely to have had a political component, Mulloy said. "Japan keeps emphasising that it supports a rules-based international order and uses that to criticise Beijing when it comes to the islands in the South China Sea, for example," he said. "But under the UN rules, Okinotorishima cannot be considered an island because it would not stand clear of the high tide if it had not been artificially built up. So it fails the criteria test and Japan should not be able to claim an EEZ of 200 nautical miles in any direction. "If China in the future tries to claim an EEZ around the disputed islands in the South China Sea that they have been busy building up and militarising, then they will be able to point to the example of Japan and Okinotorishima as a precedent. Tokyo is obviously keen to avoid that. "Okinotorishima is a massive multiplier of Japan's sea territory but if they went to court on the issue they would lose, so I see Tokyo as trying to rapidly de-escalate this situation with China very quickly." ^ top ^


Domestic Policy

China's top AI scientist drives development of ethical guidelines (SCMP)
China is playing catch-up in the development of ethical guidelines in the field of artificial intelligence, with the establishment of an ethics committee. Chen Xiaoping – inventor of Jia Jia, the realistic humanoid "Robot Goddess", and KeJia, an intelligent home service robot – is leading the committee, which held its first conference last year and is due to meet again in May. Chen, professor and director of the Robotics Laboratory at the University of Science and Technology of China, said AI in China had developed to a point where ethical guidelines were now necessary to address potential risks in large-scale applications. "If the technology was far off being applied there would be no need to talk about ethics research, but there is value in this research into technologies that might be applied on a large scale in the next 10 or 20 years," he said. Chen was appointed to establish the ethics committee by the Chinese Association for Artificial Intelligence, the country's only state-level AI body. The complexity of the subject means the committee's discussions include experts from AI research and industry, as well as sociology and the law. "Furthermore, we need to discuss what risks these technologies might bring, as well as what preventive measures we can take," Chen said. The committee was looking into sectors such as data privacy, AI in medicine, self-driving vehicles, and – of particular urgency, Chen said – AI in senior care. Privacy is another area of high public concern in China, where AI and facial recognition technology are already deployed at subways, pedestrian crossings and some supermarkets. The technology has even helped police catch criminals on the run at concerts. AI ethics have long been discussed in other countries. In Europe, for example, the European Union's High-Level Expert Group on AI released the first draft of its ethics guidelines last December. The EU draft discusses the concept of "human-centric AI", which "strives to ensure that human values are always the primary consideration", as well as "trustworthy AI", meaning that "its development, deployment and use should comply with fundamental rights and applicable regulation, as well as respecting core principles and values, and it should be technically robust and reliable". The draft is open for comment until January 18 and the expert group will present its final guidelines to the European Commission in March. Chen said that in China there was not yet much emphasis on AI ethics, but he was hopeful that, as more discussions took place, he could rouse people's attention in academia and industry. He pointed to the surge in interest in ethics for biomedical engineering at the end of last year, prompted by news of the world's first gene-edited twins. Since Shenzhen-based scientist He Jiankui stunned the world with his announcement of the controversial breakthrough, Shenzhen authorities have tightened the ethical review process for biomedical research involving humans with its own set of local regulations. "But AI is different from gene-editing in the way that the risks of AI are mostly in the applications, not in the technology itself," Chen said. "We can take preventive measures to avoid going in a certain direction or take measures to control the risks." ^ top ^

China introduces harsher punishment for acts hindering public transport safety (Xinhua)
Dangerous acts hindering the safe driving of public transport will be treated as a crime of "endangering public security with dangerous methods," according to a new guideline issued by authorities. Acts include "wresting navigation equipment such as a steering wheel or gear lever and attacking and pulling drivers," the official document notes, vowing heavy penalties for acts like "assaulting a public transport driver with a weapon." If a public transport driver has a dispute with a passenger, and the driver fails to adhere to safe driving rules or engages to fight the passenger, he or she will also be punished for committing a crime of "endangering public security," the guideline adds. The document was jointly issued by the Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public Security. During a meeting on ensuring the safety of public buses held in Beijing from Wednesday to Thursday, the Ministry of Public Security vowed to investigate any violent acts that hinder the safe driving of buses in China. A fight between a driver and a passenger caused a bus to plunge into the Yangtze River and killed more than a dozen on board in southwest China's Chongqing Municipality on Oct. 28, 2018. ^ top ^

China Focus: China's anti-graft campaign keeps crushing the corrupt (Xinhua)
The list of "tigers" (senior officials taken down on corruption charges) grew by 51 last year, fulfilling the vow by Chinese graft fighters that "the battle will not end." "We will continue to see that there are no no-go zones, no stone is left unturned and no tolerance is shown for corruption," said a communique adopted at the second plenary session of the 19th Communist Party of China (CPC) Central Commission for Discipline Inspection (CCDI) last January. The 51 officials at or above the provincial/ministerial level were among a total of 621,000 people punished by CCDI and the National Supervisory Commission (NSC) in 2018. Another plenary session of the CCDI will be held from Friday to Sunday, and is expected to set the agenda for this year's anti-graft campaign. "Although China's campaign against corruption has made sweeping victory, now is not the time to lie back," said Xin Ming, a professor at the Party School of the CPC Central Committee. "We need to deal with not only some officials who have yet been investigated and punished for past misconduct, but also a few officials who dared to try in recent years even facing such a fierce campaign." A TV documentary, broadcast by the China Central Television Wednesday, revealed a case showing the challenges in rooting out corruption at the local level. The documentary featured villas illegally built in northwest China's Qinling Mountains, which undermined local environment. Despite repeated instructions from the central authorities, the governments in Shaanxi Province had acted slowly to curb the unlawful construction in the past four years. Due to persistent follow-up from the central level and disciplinary inspection agencies, the 1,000 villas have been demolished and a number of local officials investigated since July last year, under the supervision of a special team from the CPC Central Committee headed by a deputy chief of CCDI. A year ago the CCDI communique said the fight against corruption remained "grave and complex." "The tough stance against corruption should not and will not ease," Xin said. Last year's communique listed several priorities in the fight, including officials who show no restraint and continue their wrongdoing, corruption in selection and appointment of officials, government approval and supervision, resource exploitation, finance, and other key areas. A series of heavyweight officials were investigated, ranging from senior officials of the central government, such as former deputy director of the National Energy Administration Wang Xiaolin and former vice minister of Public Security Meng Hongwei, to executives of state-owned enterprises such as Lai Xiaomin, former board chairman of China Huarong Asset Management Co. Ltd. Corruption on the people's doorsteps, especially in poverty relief, as well as corruption linked to criminal gangs, was also closely addressed. About 180,100 people were disciplined for corruption and violations of the code of conduct in poverty alleviation projects since late 2017. And in the first 11 months of 2018, 8,288 officials received disciplinary and administrative punishment and 1,649 were prosecuted for harboring criminal gangs. Operations to improve conduct of officials made major progress. About 55,800 officials were punished for violating rules against undesirable conduct, such as bureaucratism and extravagance, in the first 11 months of 2018. "One outstanding feature of the anti-graft campaign last year was more resources were used and efforts made to prevent corruption," Xin said. Increasing attention was paid to minor offenses of officials. About 1.1 million officials were interviewed and cautioned for slight violations, about 63.6 percent of the total cases disciplinary inspectors handled in 2018. It was important to detect minor misconduct as early as possible to prevent it from developing to serious corruption, Xin said. Last year witnessed notable institutional improvements in supervision. With the Supervision Law taking effect in March, a more sophisticated and efficient anti-graft network was formed to oversee everyone working in the public sector who exercises public power. The country pools supervisory powers that used to be divided and form a centralized, unified and efficient state supervisory system, said Ma Huaide, vice president of the China University of Political Science and Law. The CCDI and NSC introduced over 30 new regulations in fulfilling their duties, including on NSC jurisdiction and on handling duty-related crimes. Two rounds of disciplinary inspections were launched by the 19th CPC Central Committee in 2018, including a special inspection on poverty alleviation covering 13 provincial-level regions and 13 central units. Disciplinary inspections were also carried out at provincial, municipal and county-level Party committees, as well as in 140 central and state organs and centrally-administered state-owned enterprises. Among 1,335 fugitives sent back to China in 2018, 307 were former Party members and officials, mostly involved in graft cases. Xu Chaofan, former chief of Bank of China Kaiping branch in south China's Guangdong Province and suspect of a 485 million U.S. dollar bank embezzlement case, was repatriated in July, 17 years after he fled to the United States. Yao Jinqi, a former deputy head of Xinchang County in east China's Zhejiang Province who fled abroad in December 2005, was extradited from Bulgaria in November, the first time China had extradited a former official suspected of duty crimes from the European Union. ^ top ^

CPC releases 74 regulations to strengthen Party governance (Global Times)
The Communist Party of China (CPC) released 74 regulations in 2018 to accelerate the construction of intra-Party governance, which Chinese experts said shows the Party's determination to strengthen self-discipline and regulate exercise of power from grassroots level amid an anti-corruption campaign. The CPC has made historical achievements in the construction of intra-Party regulation system since the 18th National Congress of the CPC in 2012, said a People's Daily report on Tuesday. The Party, with General Secretary Xi Jinping as the core, has focused on promoting a Four-Pronged Comprehensive Strategy and views regulation as a major element of strict governance of the CPC, said the report. Cai Zhiqiang, a professor at the Party School of the CPC Central Committee in Beijing, told the Global Times on Thursday that strengthening the construction of intra-Party regulatory system is a necessary requirement of comprehensive strict governance of the Party to provide a basis and set a limit for the actions of Party members. "The move shows that the CPC is strengthening self-discipline and regulating the exercise of power from the lower level after a massive campaign against corruption," Cai said, noting that the move also accords with the country's policy of rule by law. One distinct characteristic of the construction of intra-Party system in 2018 was that political construction runs through every aspect of the development of regulation within the Party, which aims to establish a high degree of uniformity in political standpoint, political direction, political principle and political path, the report noted. Su Wei, a professor at the Party School of the CPC Chongqing Committee, told the Global Times on Thursday that political construction is important to guarantee the central authority and the CPC's unity. Su noted that the CPC has been more stressing political discipline after the 19th National Congress of the CPC in order to tackle problems with new rules in new era. In August 2018, the CPC released penalty clauses for Party members to enhance political consciousness and supervision, according to the People's Daily. To make more achievements in 2019, the CPC will step up efforts to improve intra-Party regulation system, centering around the target of its second five-year plan, said the report. The CPC in February 2018 issued its second five-year plan (2018-22) on the formulation of intra-Party regulations, aimed at creating a complete system of intra-Party regulation by the time the Party marks its centenary in 2021, and ensuring the Party's core status in the great cause of socialism with Chinese characteristics in the new era. The CPC will start revising some basic intra-Party regulations in 2019, including the rules for the formulation of intra-Party regulations to make them more suitable for the requirements in the new era. The Party has already started reorganizing existing intra-Party regulations, according to the People's Daily report.  ^ top ^

China to release birth figures for 2018, vowing to strengthen population studies (Global Times)
China will soon release its nationwide birth figures for 2018, and the country has vowed to expand studies on family planning policy and strengthen surveillance and analysis of the population situation in 2019. Song Shuli, spokesperson of the National Health Commission, made the remarks at a press conference on Thursday, after some demographers predicted that the number of newborns in 2018, the third year after the country fully implemented the two-child policy, may have dropped by more than 2 million. Song said that child-birth is affected by several factors including the number of woman of childbearing age, as well as personal choices in giving birth to children. "But about 50 percent of all children born in the past two years are second children, which shows that the two-child policy still has a positive effect," Song said. Tao Tao, an assistant professor from the Renmin University of China, said at the press conference that the number of newborns in China may witness a declining trend as the number of women of childbearing age peaked in 2011. The new-born population every year since 2000 fluctuated between 15 million and 18 million. The number of new births in 2017 was 17.23 million, according to Tao. Besides, a drop in marriage rate and the older age at which women had their first child also contributed to the decline in China's new-born population, Tao said. About 10 million people nationwide registered their marriage in 2017, a 7 percent decrease year-on-year. China should strengthen demographic surveillance and come up with favorable policies in housing, taxation and maternity leave for families with children, Tao said. ^ top ^

Chinese leaders take 'unprecedented' steps to clean up mystery of vanished supreme court documents (SCMP)
The Chinese authorities have taken the rare step of setting up a top-level investigation team to look into the mysterious disappearance of legal documents from the country's highest court. The Central Political and Legal Affairs Commission, the Communist Party's top body on legal affairs, announced Tuesday night that it would lead a joint task force with representatives from the anti-corruption watchdog, prosecutors and police to investigate the case, which has rocked the legal profession. "A joint panel has been set up to investigate in accordance with the law and [party] discipline," a statement posted on the commission's website said. "The relevant facts will be made public as soon as they have been confirmed." Legal experts said that the move was an "unprecedented" signal of the leadership's determination to get to the bottom of the case. Last month it emerged that documents relating to a long-running contract dispute concerning the ownership of a mine in Shaanxi province had vanished from the Supreme People's Court office of judge Wang Linqing in 2016. The following year Wang ruled in favour of private businessman Zhao Faqi against the state-owned Xian Institute of Geological and Mineral Exploration, awarding him 13.7 million yuan (US$2 million) compensation. But the disappearance of the documents has delayed the implementation of the verdict. The establishment of the new task force means it will effectively supersede an ongoing internal investigation by the Supreme People's Court, which had initially denied there was anything amiss until Cui Yongyuan, a well-known television host, broke the news via social media. Cui also released a video of a man, believed to be Wang, suggesting that the closed circuit television in the office had been sabotaged. The scandal generated a heated online debate about how the documents could have gone missing within the tightly guarded compound of the supreme court, and whether it was a deliberate act of sabotage. Wang Jiangyu, an associate law professor at the National University of Singapore, said the unusual move underlined the desire of the top leadership to clean up the mess. "Such a move is definitely unprecedented," he said. "Only the Party Central or Politburo Standing Committee can make such decision to set up the task force and you should know who is calling the shots there." The Supreme People's Court has been subject to scrutiny in the past but previous investigations were more focused on corruption cases and were solely conducted by anti-graft watchdogs. Two of these investigations ended with Huang Songyou and Xi Xiaoming, both vice-presidents of the court, being jailed for life for corruption in 2010 and 2017 respectively. The new task force is made up of all state and party law enforcement bodies except for the Supreme People's Court itself. The announcement also included a telephone number to encourage whistle-blowers and tip-offs that could help the investigation. Zhuang Deshui, deputy director of Peking University's Clean Government Centre, believed the involvement of police and prosecutors would broaden the investigation. "The new panel will have greater authority and is able to investigate matters related to senior officials including top judges," said Zhuang. "It can look into a wide range of issues, including legal ones like breach of duty and corruption." The Supreme People's Court last month reluctantly nudged its internal disciplinary branch to look into the matter, but only after the huge public outcry following its initial denial that the documents had disappeared. A statement issued by the court late last month suggested its internal investigation would focus on "discipline violations" and did not mention other legal problems. After the Commission published its announcement on Tuesday, the Supreme People Court almost immediately followed with its own statement pledging "absolute support". Zhuang said the decision to announce the investigation at this stage was "rare and it seems to be a result of public pressure". The authorities usually prefer to keep the news that senior figures are under investigation secret for as long as possible to avoid embarrassment and public scrutiny. "The investigation now is more about giving a satisfactory answer to the public," Zhuang added. The scandal coincides with efforts to shore up confidence in China's hard-hit private sector. As the country's economic growth decelerated in the past year, President Xi Jinping and other senior leaders have repeatedly pledged to step up legal protections for private businesses and find new ways to help them. ^ top ^

Inside China's unofficial churches faith defies persecution (SCMP)
Tucked away in a narrow alley off the Dezheng Bei Road in Guangzhou's Yuexiu district, the Rongguili Church was eerily quiet over Christmas. The well-known house church was closed down on December 15 for allegedly breaking China's religious affairs regulations, and worshippers were told to attend official churches elsewhere in the southern Chinese city. Rongguili, formerly known as the Damazhan Church, was established in 1950 but forced to shut down in the turbulent years of the Cultural Revolution when all religious activities were deemed "counter-revolutionary". It was among the first group of Protestant churches to reopen in 1978 when China resumed contact with the outside world. Its pastor, Samuel Lamb Xiangao, a legendary Protestant Christian leader and one of the leading figures in China's independent house church movement, spent more than 20 years in prisons and labour camps for refusing to register the Damazhan Church with the authorities. Before Lamb died in 2013, the church moved to Rongguili to make way for urban redevelopment. His work continues to inspire the members of the church, like long-term staff member Paul, whose real name has not been disclosed to protect his safety. "We did not resist, for our struggle is not against flesh and blood. This is a battle against the spiritual forces of evil in the heavenly realms," Paul said, when asked why the Rongguili congregation did not resist the shutdown. As a student of Lamb's since 1983, Paul is determined to follow a similar path to his teacher's to defend his faith. "Anyone who set up a house church in China must be fully prepared from day one of what is to come," he said. "The Bible teaches us that those who live the life of Christ will face persecution." Paul is by no means a lone voice among the millions of faithful in China today who would rather see their independently operated churches close than comply with official regulations to register with the Three-Self Patriotic Movement and China Christian Council – together known as "lianghui" or "two organisations" – which govern Chinese Protestant churches. For decades, house church leaders and their followers have cited "irreconcilable differences" with official churches over issues such as biblical teachings, church autonomy, appointment of clergymen, and their history in refusing to register with the authorities. House church leaders are adamant that their allegiance to Christ is a spiritual matter as they stand firm on the principle of separation of church and state. "Uncle [Samuel] Lamb taught us that Jesus Christ is the head of our church and we will not exalt anyone higher, or be led by any person or entity besides Jesus Christ," Paul said. The house church leaders are also convinced that registration would mean losing their autonomy over their ministry. They see the Three-Self Patriotic Movement and China Christian Council, colloquially referred to as Three-Self, as political organisations in which they have refused to play any part. While they refuse to register with Three-Self, house church leaders agree that they should submit to the state and be law-abiding citizens. "We are patriots but we submit to God before humans. If these two clash, we will gladly take the path of the cross at any costs," Paul said referring to the biblical teaching of following the footsteps of Christ. The Three-Self Patriotic Movement, initiated in 1951, promotes the so-called Three-Self Principles, of self-governance, self-support and self propagation. The movement was born as an attempt by the authorities to remove foreign influences from Chinese Protestant churches. The China Christian Council was founded in 1980 as an umbrella group responsible for the governance of Protestant churches in accordance with China's religious policies. Churches registered with the "Three-Self" are supposed to pledge their loyalty to the Communist Party and are subject to comprehensive controls, such as the sanctioning of worship venues, sermons, appointment of clergy, and supervision over their finances and ministry. Unregistered house churches first made their appearances as small home gatherings in the early 1980s, when religion gradually made its way back into people's lives after the Cultural Revolution. Despite the hardships associated with remaining outside government control, house churches experienced explosive growth in urban China throughout the 1980s and 1990s. Official statistics put the number of Protestant Christians in China at more than 38 million last year. However, academics researching religion in the country estimated a Protestant population of between 60 million to 90 million, with more than two-thirds attending unregistered house churches. Harassment of house churches and their followers has been almost constant over the years but there have been periods when authorities in places like the eastern province of Zhejiang have taken a more tolerant attitude. However, the intensity of control multiplied about three years ago when President Xi Jinping raised a call to "sinocise" religions, which basically means to "reconstruct theological thinking of churches in China" by assimilating Christianity with traditional Chinese culture and socialist values through officially endorsed churches. In a recent interview with the South China Morning Post, a missionary with a rural official church in Henan, central China, spoke up about the changes that had "turned local churches upside down". "We were asked to put pictures of Xi and Mao Zedong next to the cross of Jesus and Sunday classes are not allowed," said the missionary, who declined to be named. He said local pastors were ordered to raise the Chinese national flag at church buildings, sing the national anthem before worship, and prominently display Communist Party slogans and the portraits of Xi and Mao. He was also required to memorise core socialist values before passing his annual qualifying tests which are administered by local authorities. "We are not allowed to go to hospitals to pray for the sick or to baptise converts who are about to die," the missionary said. In February last year, the amended Religious Affairs Regulation further tightened the government's grip and made "unregistered religious activities" virtually impossible. Since then, officials have stepped up their crackdowns and imposed heavy fines on house churches when they have been located and closed down. The more stringent regulations also empower grass-roots officials to take aggressive control measures in targeting house churches. As a result, a number of mega-sized house churches have been closed down in the past year, including Rongguili, the 1,500-member Zion Church in Beijing and the Early Rain Covenant Church in Chengdu, capital of southwest China's Sichuan province. Christian sources said most massive crackdowns across the country against smaller house churches last year were little known to the outside world. But the situation was at its worst in provinces such as Henan, Anhui, Shandong and Zhejiang, where the local Protestant Christian population is higher than in other areas. "From what I understood, almost all unregistered churches have been wiped out in Guiyang [the provincial capital of Guizhou in southwestern China] in the past few years," said Pastor Su Tianfu of the Living Stone Church, which was fined 7 million yuan (US$1 million) when it was shut down three years ago. In 2014, a massive campaign to remove the crosses from official church buildings in Zhejiang stunned the world. Despite the hardships, Chinese house church leaders pledged to continue their missionary work and fellowship, refusing to let their faith be shaken by the crackdown. Instead of gatherings of hundreds at fixed venues, unregistered churches are switching to worship in homes, restaurants, public parks and even shopping malls. They also keep a low-key presence in cyberspace to avoid drawing attention. "As persecution intensifies, China's unregistered churches are returning to home gatherings but nothing, not even the Cultural Revolution, could stop us," Paul said. ^ top ^



Tibet vows to fight against separatism (Xinhua)
China's Tibet Autonomous Region has taken a "clear-cut" stance against the Dalai Lama clique and resolutely safeguarded national security and core interests, a regional government official said Thursday. "Tibet has firmly curbed and cracked down on secession, infiltration and sabotage activities by hostile forces at home and abroad," said Qizhala, chairman of the regional government, in his government work report delivered at the second session of the 11th People's Congress of Tibet Autonomous Region. Qizhala said the region has taken resolute measures to safeguard the stability of the region on certain occasions and strengthened social management governance across the region. He said that the regional government has managed religious affairs in accordance with the law and strictly followed the revised regulations on religious affairs. Last year, the region launched an education campaign among monks and nuns, and improved the mechanism for long-term monastery management, he said in the report. "Tibet has also strengthened joint efforts in border areas to maintain harmony and stability," Qizhala said. ^ top ^



Xinjiang offers classes to Muslim clerics to guide them to resist extremism, foster national unity (Global Times)
Northwest China's Xinjiang Uyghur Autonomous Region recently held training classes for Muslim clerics, which aims to guide them to resist extremism and contribute to regional stability and prosperity. The class was held in Urumqi, the capital city of Xinjiang, on January 1, according to a statement released on the website of the United Front Work Department of the Communist Party of China Central Committee on Tuesday. Muslim clerics are required to have comprehensive understanding of Xinjiang's stability and development, and the statement said the religion department should strengthen their politics, law and religious education. The training sessions require the Muslim clerics to study traditional Chinese traditional, the history of the country and the Party, especially the modern history of the country and of Xinjiang. They also need to learn Putonghua. Muslim clerics should be the model of patriotism, law abiding, national unity and kindness, and should resist extreme ideas, promote harmony and lead religious believers to embrace national unity as much as their own eyes, and cherish national unity as much as their own lives, the statement said. Xinjiang is home to 24,400 mosques and about 29,000 Muslim clerics. Since 2001, the State Administration for Religious Affairs has held 12 training sessions for Muslim clerics, and has trained approximately 500 clerics for the region, according to a white paper issued by the State Council in 2016. "Muslim clerics generally refer to imams, who are respected by Muslims. Trained imams can help tens of thousands of believers nurture patriotism and national unity," Gao Zhanfu, a vice dean of the Beijing-based China Islamic Institute, told the Global Times on Wednesday. The China Islamic Association is about to compile textbooks for Muslim clerics around the country, which will further standardize their training. Professors who specialize in a certain subject are usually invited to train the clerics, Gao noted. The Central Institute of Socialism also frequently organized trainings for the clerics from Xinjiang, which covered five subjects - Putonghua, Chinese culture, Islam sinicization, de-extremism and a united Xinjiang of all ethnic minorities. Those sessions usually last four months, professors from the school told the Global Times on Wednesday. To strengthen the awareness of cultivating Muslim clerics, the China Islamic Association recently enacted a code of conduct for them during a meeting in Beijing. The news was published on the association's website on Monday. "The code of conduct for Muslim clerics will standardize their behavior, which, in general, requires them to support the Party leadership and abide by China's laws," Jin Rubin, deputy chairman of the China Islamic Association, told the Global Times on Wednesday. ^ top ^

China says UN officials can visit Xinjiang as long as they 'avoid interfering in domestic matters' (SCMP)
UN officials are welcome to visit Xinjiang as long as they obey Chinese law and follow the procedures, China said on Monday as it seeks to counter a global outcry over its mass internment programme in the far western region. The comment from China's foreign ministry came after the government arranged tours for foreign journalists and non-Western diplomats to visit the internment camps over the past weeks – the first since its mass detention of Muslim minorities drew criticism from United Nations human rights experts, foreign governments, activists and scholars. At a regular briefing, ministry spokesman Lu Kang said all parties, including UN officials, were welcome in Xinjiang provided they "abide by Chinese law and comply with relevant procedures", according to a transcript on the ministry website. UN officials should also "avoid interfering in domestic matters or undermining [China's] sovereignty" and adopt an objective and neutral attitude, Lu said. Lu's remarks followed a similar invitation by Shohrat Zakir, chairman of the Xinjiang regional government, on Sunday. He said China welcomed UN experts to Xinjiang so they would "know the real situation... and their comments will be based on facts and ground realities", according to Pakistani newspaper The News International, which was part of last week's foreign media tour. Last month, Michelle Bachelet, UN high commissioner for human rights, said her office was seeking access to Xinjiang to verify "worrying reports" of the re-education camps. But China turned down a similar request by Germany in December, according to German Human Rights Commissioner Bärbel Kofler. A UN rights panel in August said it had received credible reports that at least a million Uygurs and other Muslim minorities in the region were being held in such facilities. Detainees who have been released have told international media they were forced to denounce their faith and pledge loyalty to the Communist Party when they were in the camps. Some have also described being subjected to harsh treatment and even torture. China initially denied the existence of the camps, but later shifted to an aggressive propaganda drive to justify the facilities as "vocational training centres" that help to save people from "religious extremism" by teaching them Mandarin, legal codes and skills to find a job. Last week, a small group of foreign reporters were taken to visit three of the facilities in Xinjiang. A similar visit was also arranged for diplomats from 12 non-Western countries including Russia, Indonesia, India, Thailand and Kazakhstan. During the media trip, reporters were closely escorted at all times, and interviews with residents were all done under the watchful eye of government officials, according to Reuters, which joined the tour. In one class briefly visited by journalists there was even a performance in English of the song If you're happy and you know it, clap your hands, Reuters reported. Residents interviewed spoke of their "mistakes" of being "infected with extremist thought" – all in similar language to that used by the "trainees" featured in a report on state broadcaster CCTV about the camps in October. Rights advocates said the staged visits would do little to convince Beijing's critics. Sophie Richardson, China director at Human Rights Watch, said: "I'd describe Lu Kang's idea as a UN visit with Chinese party-state characteristics – and therefore one that would be devoid of credibility." ^ top ^



Two years to investigate abuse against China's national anthem under proposed Hong Kong law is too much time, top lawyers say (SCMP)
Giving law enforcers two years to investigate abuses of the national anthem under a proposed law is too much time, according to two top criminal lawyers. Former deputy director of public prosecutions John Reading and veteran criminal lawyer Stephen Hung Wan-shun were responding to the bill the government unveiled on Wednesday which seeks to criminalise any public abuse of March of the Volunteers. Under the bill, the authorities would have up to two years from the time of the incident to decide whether to lay charges against offenders. If alleged wrongdoing came to light at a later date but the timing of it was unclear, police could also lay charges within one year of the discovery. Prosecutors typically are required to press charges for offences heard by magistrates' courts within six months, while there is no time limit for more serious crimes, such as the public nuisances charges Occupy leaders are facing or bribery related offences. Secretary for Constitutional and Mainland Affairs Patrick Nip Tak-kuen said there was a practical need for a lengthier period before the authorities decided on charges. "In some cases involving a large crowd, police may need more time to investigate," Nip said on Thursday, referring to spectators booing the national anthem before the start of a soccer match. "Also, when some [abusive acts] are published via social media or foreign IP addresses, it may take longer to collect evidence." Reading, however, said two years was too long when it came to charging those who abused the national anthem. "For charging and summoning offenders, that could easily be done," he said. "It's a bit unusual." He also rejected the government's argument that authorities needed time to deal with social media hosts, saying Hong Kong courts may not have jurisdiction anyway if the alleged abuse was broadcast overseas. Hung, a veteran criminal lawyer, also doubted the two-year period was really necessary. "The existing National Flag and National Emblem Ordinance doesn't have a similar [relaxed prosecution] rule," Hung said. "We don't want the offence to be viewed as retribution … offenders caught under the radar and only charged when prosecutors wanted." He said the time limit should be shortened to within a year of when the offence took place. Civic Party lawmaker Tanya Chan said her party would move amendments to delete the two-year time frame, highlighting how an investigation into localist lawmaker Cheng Chung-tai was completed well within six months. Cheng was in 2017 fined HK$5,000 (US$641) for desecrating small Chinese and Hong Kong flags in the Legislative Council the previous year by flipping them over. In response, the Constitutional and Mainland Affairs Bureau said the bill already had the right balance. There are similar time extensions in at least five ordinances, although they are typically related to white collar crime. For instance, prosecutors can bring a case under the Securities and Futures Ordinance within three years, or one to two years for some relatively minor offences under the Prevention of Bribery Ordinance. Companies can also be sued within three years for producing substandard goods under the Toys and Children's Products Safety Ordinance. Offenders of the proposed national anthem law could face a maximum three years in jail and a fine of HK$50,000. ^ top ^

Legco closes down inquiry into misconduct allegations against CY Leung, for want of first-hand information (SCMP)
Hong Kong's legislature decided on Thursday to wrap up its inquiry into the misconduct allegations against former leader Leung Chun-ying, after admitting it had not been able to get any first-hand information over the past 25 months. The decision came after the Independent Commission Against Corruption (ICAC) announced in December that its four-year investigation into Leung had ended with the Justice Department concluding that there was not enough evidence to press charges against the former chief executive. The Legislative Council set up a select committee in November 2016 to look into Leung's receipt of part of the HK$50 million (US$6.4 million) payment from Australian firm UGL during his time in office. The payment, which was not declared to the Executive Council, was made under a deal with UGL stipulating that Leung could not form or join a rival firm. UGL had bought DTZ, an insolvent property company of which Leung was a director before becoming chief executive. Speaking after a closed-door meeting, the select committee chairman Paul Tse Wai-chun said the committee needed to end the inquiry and proceed to the next stage of drawing conclusions from its findings. "The biggest difficulty was that we did not get any help from relevant individuals," Tse said, adding that the committee's requests for documents and statements were unanswered. "We do not have any first-hand evidence," Tse admitted. Tse said motions to summon Leung and Secretary for Justice Teresa Cheng Yeuk-wah had been voted down by the committee, which comprised seven pro-government lawmakers and four pan-democrats. A source on the committee said pro-Beijing lawmakers Wong Kwok-kin and Junius Ho Kwan-yiu had suggested shutting down the committee right away, but Tse said this went against the original plan to submit a report to Legco's house committee on the inquiry by the third quarter of this year. If committee members were not satisfied with the report, Tse said they may draft their own minority report. The four pan-democrats on the select committee said that from the beginning they had not had high hopes that the inquiry would make an impact. Democratic Party lawmaker Lam Cheuk-ting said: "The effectiveness of the probe is of course limited. "Important witnesses, especially CY Leung, had broken their promises and refused to attend our hearings." The select committee was not formed under the Legislative Council (Powers and Privileges) Ordinance and hence did not have the statutory power to summon witnesses to its hearings. Soon after the formation of the select committee in November 2016, then-deputy chairman Holden Chow Ho-ding was exposed as having submitted documents to the meeting amended by Leung. Chow later resigned from the committee and another pro-establishment camp lawmaker joined. While Chow also faced investigation by the ICAC for alleged misconduct, the justice department said the act of submitting the amended document would not affect the proper functioning of the committee. The justice department's handling of the UGL case had raised questions as to why it did not seek external advice, given the sensitivity of Leung's position. Speaking at Legco on Thursday morning, Chief Executive Carrie Lam Cheng Yuet-ngor said she cannot interfere with Teresa Cheng's prosecutorial decisions. "I understand there may be some issues over perception … but perception cannot override the rule of law," Lam said, adding that Cheng will attend a Legco panel meeting on January 28. ^ top ^

Hong Kong bishop brought out of retirement by Pope 'mainly over China relations' (SCMP)
Pope Francis had the Vatican's relationship with China on his mind, when the Holy See brought Hong Kong's former bishop John Tong Hon out of retirement to serve as acting head of the city's 394,000-strong Catholic community, according to fellow worshippers and commentators. The Vatican's surprise move on Monday of appointing a retired bishop as the diocese's "apostolic administrator", broke with past practice in Hong Kong and Asia. The post in such regions is usually meant for younger promoted clerics or the handling of crises or allegations related to church affairs. While the move sparked speculation on whether it was politically motivated to block a bishop who was sympathetic to Occupy protesters, others have called for calm and not to look into sinister motives. Among them was Cardinal Joseph Zen Ze-kiun, Tong's liberal predecessor, who issued a statement on Tuesday, dismissing critics' suggestion that the appointment of Tong contravened the Catholic Code of Canon Law. "The apostolic administrator will help the Vatican find a new bishop for Hong Kong... and it would be more convenient and neutral for Tong to take up that role as he will not become the next bishop," Zen said. Tong, who played a role in efforts by the Vatican and Beijing to secure a breakthrough in bilateral ties, was appointed as acting head, after his successor Michael Yeung Ming-cheung, 73, died last Thursday from illness. Local Catholics expect the Vatican to appoint a new bishop for Hong Kong within six months. Monday's announcement came just months after China and the Vatican reached a historic agreement in September on the appointment of mainland bishops, paving the way for rapprochement between Beijing and the Holy See, which cut diplomatic ties in 1951. Under the Catholic Code of Canon Law, a diocese would choose a Vicar Capitular, or acting bishop, when the leadership position is left vacant. The diocese was originally expected to elect auxiliary bishop Joseph Ha Chi-shing, a supporter of the Occupy movement for greater democracy, as acting bishop last Friday. The Pope would then appoint a new bishop for Hong Kong later this year. However, after a leadership meeting on Friday, Ha said the diocese had decided to focus first on Yeung's funeral on January 11. Three days after that, the Vatican unexpectedly stepped in and named Tong as an apostolic administrator. He will lead the diocese "until further notice from" the Vatican, according to a notice issued by diocesan chancellor Lawrence Lee Len. Civic Party chairman Alan Leong Kah-kit, a devout Catholic, said he was "utterly disappointed" by the decision. "It was out of the ordinary, to say the least," Leong said. "[The Vatican] wanted to be thrice as sure that there will be no hiccup... when the Vatican-China relationship is in such a critical, sensitive moment." Under Canon 371 of the Catholic code, the Vatican can appoint an apostolic administrator to lead Catholic communities, such as those not yet recognised as dioceses, out of "special and particularly grave reasons". But it was rare for the Vatican to appoint a retired bishop to the post in a long-established diocese like Hong Kong. Last year, the Vatican appointed at least eight apostolic administrators across Asia, according to a database by Union of Catholic Asian News, an agency covering Catholic matters across Asia. Yet, those cases – which included five in India, two in Vietnam and one in the Philippines – involved promoting auxiliary bishops locally or appointing a senior or retired bishop from another region, to help a Catholic community deal with retirement issues, infighting or scandals. For example, Pope Francis had appointed Bishop Jacob Manathodath to replace the cardinal of the Syro-Malabar church in India, after the diocese was accused of dubious land deals, and had its two auxiliary bishops suspended from administrative duty. The Hong Kong diocese, established in 1946, had in the past followed the rule of electing acting bishops when a bishop died before his successor was named by the Pope. Ying Fuk-tsang, director of the Divinity School in Chinese University, also said he believed the Vatican's relationship with China played a major role in Tong's appointment. "Ha supported the Occupy movement, fought for democracy, and attended June 4 vigils. Beijing would not consider him a friendly bishop," Ying said. He added: "It seems that the Vatican has considered the China factor in its plans. It was not only about appointing an official bishop for Hong Kong. "It seems the Vatican did not even want the acting position, or transitional arrangement for the top post to cause a hindrance to the China-Vatican relationship." ^ top ^

China's Hong Kong, Japan set to enhance arbitration cooperation (Xinhua)
The Department of Justice of China's Hong Kong Special Administrative Region (HKSAR) government and the Ministry of Justice of Japan on Wednesday signed a Memorandum of Cooperation (MoC) to strengthen Hong Kong-Japan collaboration on international arbitration and mediation. The MoC, signed here by HKSAR government's Secretary for Justice Teresa Cheng and Japanese Minister of Justice Takashi Yamashita, provided a framework for the two sides to strengthen communication, collaboration and cooperation on issues relating to international arbitration and mediation and to facilitate the development of services for international arbitration and mediation in the two places, the HKSAR government's Department of Justice said. Signing the MoC is an encouraging step in furthering legal cooperation between the two sides, Cheng said at the signing ceremony. Hailing Hong Kong's "fine reputation as a popular international hub of international commercial dispute resolution," Yamashita said the document set the cornerstone for further cooperation on legal services between the two sides. Cheng said her department had set up an office to enhance the overall coordination of mediation and arbitration work, taking into account the need for Hong Kong to capitalize on the opportunities offered by the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area. ^ top ^



Taiwan by-election first of many challenges for new DPP chairman (SCMP)
The newly elected chairman of Taiwan's ruling Democratic Progressive Party, Cho Jung-tai, vowed to hit the ground running after he was officially sworn in on Wednesday, admitting there was no time to lose. His most urgent task is to lead the ruling party's campaign for two legislative by-elections on January 27, the first test for the DPP since its crushing defeat in November's local government polls. Cho replaces Taiwan's President Tsai Ing-wen, who resigned from the party leadership immediately after the November election, when the mainland-friendly opposition Kuomintang (KMT) won 15 of the self-ruled island's 22 cities and counties, including Kaohsiung, the pro-independence stronghold in the south. "We must never forget November 24 because it was the day that almost led to the fall of the party," Cho said after the swearing-in ceremony. "We will need to immediately deal with the legislative by-election to be held later this month." Cho, 59, former secretary general to the cabinet, was Tsai's favoured candidate in the two-way race for the party chairmanship. He defeated Michael You Ying-lung, head of the Taiwanese Public Opinion Foundation, who was backed by the hard core pro-independence faction. He faces a series of challenges if he is to live up to his promise to steer the party back on track – including helping Tsai secure the DPP ticket to run for a second term and win next year's presidential election – and none of them would be easy, analysts said. In addition to the by-elections – prompted by the departure of six legislators who resigned to run in November's local government elections – Cho must find ways to boost the party and regain the support and trust of voters, disappointed by Tsai's performance. Her drastic labour and pension reforms, along with a failure to raise living standards, are seen as part of the reasons for the DPP's resounding defeat in the November polls. Cho, a moderate, is seen as a protégé of Tsai's and a consensus candidate with the backing of major party figures and especially those of the younger generation. "It remains to be seen whether he can pacify the various factional leaders and resolve their differences to realign the seriously wounded party following the November elections," said Liao Da-chi, a political-science professor at National Sun Yat-sen University in Kaohsiung. "This is highly important for the DPP in the upcoming legislative by-elections and next year's presidential elections," she stressed. "His most important mission is to help the party win the 2020 presidential elections," said Fan Shih-ping, a professor of political science at National Normal University. Fan said, even though Cho was favoured by Tsai for the role of DPP chairman, it remained to be seen whether she would be able to win the party ticket for a second term, given the strong opposition of the hard core pro-independence camp, and the ambitions of other faction leaders. Tsai was recently challenged by four veteran pro-independence party heavyweights, who demanded she give up her intention to run for a second term. Although their call did not receive approval from most members, Fan said Cho would need to wrestle with the veterans and other factional leaders in the next 17 months to secure the party ticket for Tsai. The new party chairman must also deal with the pressure from Chinese President Xi Jinping, who has called for unification talks with Taiwan. "Tsai's rejection of Xi's '1992 consensus' and proposal for unification talks, however, helps alleviate such a pressure on Cho – in terms of devising the 2020 campaign strategy – as Tsai's refusal means she has already set the tone for next year's elections," Liao said. Tsai's popularity has risen somewhat, with more than 85 per cent of the public in Taiwan backing her rejection of Xi's calls for cross-strait unification talks under the "one country, two systems" model with the "1992 consensus" as the foundation for talks. ^ top ^



Xiaomi aims for the top spot in European market (China Daily)
Chinese smartphone vendor Xiaomi Corp said on Thursday that it is aiming to be the No 1 or 2 player of its kind in Europe, as it strives to expand its presence in overseas markets amid mounting competition with rivals such as Huawei Technologies Co Ltd. Lei Jun, founder and CEO of Xiaomi, said: "At first, we want to become the No 1 or 2 smartphone vendor in one or two European countries. We have selected Spain and France as our primary destinations." Lei said he will personally make a trip to Europe in the first quarter of this year to see how Xiaomi is doing in the highly competitive battlefield. The Beijing-based company's smartphone shipments to Western Europe grew 386 percent year-on-year in the third quarter of 2018, according to market research company Canalys. Lei's comments came as Xiaomi is stepping up its push to lure foreign consumers as the China market reaches saturation point. From June to September, Xiaomi was ranked as the fourth largest smartphone vendor in terms of smartphone shipments, while its international revenue grew 112.7 percent year-on-year. "Our products and services are now available in more than 80 countries and regions. We also plan to enter Africa and the Middle East in the future," Lei said. Xiaomi on Thursday officially unveiled its new independent brand Redmi, which is seen by analysts as a key way to compete with Honor, one of the two signature brands of Huawei. The Redmi brand is designed to make cost-effective smartphones while the Xiaomi brand will focus on the higher-end segment, Lei said at the launch event. Lu Weibing, former president of local smartphone vendor Gionee, is in charge of Redmi's business. As of September 2018, a total of 278 million Redmi series smartphones had been sold globally. According to him, Xiaomi will ramp up its push to offer quality smartphones with highly competitive prices and quality, and Redmi will also help drive its global expansion. Xiang Ligang, a telecom veteran and CEO of industry website Cctime, said the global smartphone market has declined considerably, with 2019 being a quite challenging year. "Redmi is now already very popular in markets such as India, but more efforts are needed in Europe where consumers prefer more premium devices," Xiang said. Honor said earlier that it achieved 150 percent year-on-year growth in foreign markets in 2018. ^ top ^



Xi Jinping accepts offer to visit Pyongyang, North Korea state media says (SCMP)
Chinese President Xi Jinping accepted an offer to visit Pyongyang after meeting North Korean leader Kim Jong-un in Beijing this week, according to state media in the hermit nation. Beijing, however, has yet to confirm the trip, which some analysts said was possibly because it did not want to increase tensions with the United States. "Xi accepted the offer [to visit Pyongyang] with pleasure and informed Kim of the plan," the Korean Central News Agency reported on Thursday, without providing further details. At a press briefing, China's foreign ministry spokesman Lu Kang neither confirmed nor denied the KCNA report but said Beijing would "announce [Xi's visit to Pyongyang] immediately if there is news". North Korea has made repeated invitations for Xi to visit, including in September – as relations between the two countries were warming – to attend its national day celebrations. South Korea's President Moon Jae-in said in October that Xi was expected to visit Pyongyang "soon". While Kim's visit to Beijing was his fourth since taking over as leader in 2011 – his previous three came in the space of three months last year – Xi, who was elected president in 2013, has yet to reciprocate. China's state news agency Xinhua made no mention of Kim's invitation but said Beijing supported Pyongyang's efforts towards denuclearisation and advocated concessions from both North Korea and the United States so that an agreement could be reached at a planned second summit between Kim and US President Donald Trump. "China supports the DPRK's continued adherence to the direction of denuclearisation on the peninsula, supports the continuous improvement of inter-Korean relations," Xi was quoted as saying, using the short form of North Korea's official name, the Democratic People's Republic of Korea. "[China also] supports the DPRK and the United States holding summits and achieving results, and supports relevant parties resolving their respective legitimate concerns through dialogue. China hopes that the DPRK and the United States will meet each other halfway." Washington favours complete, verifiable and immediate denuclearisation, whereas Pyongyang wants a more gradual approach known as "phased and synchronised measures". Kim acknowledged China's role in developments on the Korean peninsula, according to the Xinhua report. "The Korean peninsula situation has been easing since last year, and China's important role in this process is obvious to all … the DPRK side highly and sincerely appreciates the Chinese efforts," he was quoted as saying. "[North Korea will] make efforts for the second summit between DPRK and US leaders to achieve results that will be welcomed by the international community." Kim's visit to Beijing coincided with the latest round of trade talks between officials from the US and China, prompting suggestions he might be seeking to use his links with the world's second-largest economy as a bargaining chip in his next meeting with Trump. In contrast, observers said that the fact Beijing had not mentioned the possibility of Xi visiting Pyongyang was because it did not want to appear to be taking a more hawkish stance towards Washington. Since July, China and the US have been locked in a trade war and Beijing has in recent months been working hard to offset the impact of the conflict on its economy. "The [Chinese state] media's silence is obviously a result of a government decision," said Zhang Baohui, a professor of political science and director of the Centre for Asian Pacific Studies at Lingnan University in Hong Kong. "China doesn't want Washington to read too much into it [Kim's visit]. As you may remember, after the previous meetings between Kim and Xi, Trump complained that China was trying to sabotage US negotiations with North Korea," he said. "If Xi does visit North Korea, it would symbolise the full restoration of bilateral relations since North Korea became a nuclear power. But North Korea would retain its strategic independence and Beijing would not be in control of Kim's foreign and security decisions." Zhao Tong, a fellow at the Carnegie-Tsinghua Centre for Global Policy in Beijing, said that if Xi did visit Pyongyang he was likely to make clear China's support for the denuclearisation process to prevent any unwanted backlash from Washington. "[Xi's] visit won't necessarily be seen by Washington as provocation as long as China reaffirms the message … that it wants to help create the conditions for North Korea to take a more flexible attitude towards achieving denuclearisation," he said. "A visit by the Chinese leader would reassure Kim about China's commitment to their relationship and represent the start of a new era in bilateral ties." ^ top ^

North Korean leader Kim Jong-un spends his birthday in talks with Chinese President Xi Jinping (SCMP)
North Korean leader Kim Jong-un spent his 35th birthday in Beijing for talks with Xi Jinping just weeks ahead of his second planned meeting with US President Donald Trump – a move that analysts interpreted as an effort to undermine Washington's confidence in international sanctions. Kim began his four-day trip to China on Monday with a train journey, and arrived in the capital on Tuesday morning, which also marked his birthday, a more low-key affair in North Korea than the celebrations of his predecessors. The birthdays of Kim's father and grandfather are official public holidays in North Korea, but it does not hold any official events to celebrate the current leader's birth. His trip to China was made at the invitation of Chinese President Xi Jinping, according to both Chinese and North Korean state media. South Korean news agency Yonhap said Xi and Kim held talks for an hour, but Chinese state media did not disclose any details about the meeting, only confirming that Kim was in China. Kim's visit coincided with the latest round of trade talks between the US and China in Beijing, prompting suggestions that China may use North Korean denuclearisation as a card in the negotiations with Washington. But Chinese Foreign Ministry spokesman Lu Kang insisted that Beijing would not use its influence over North Korea as leverage in trade talks with the US. This is Kim's fourth trip to China since his maiden visit in March last year. He is accompanied by his wife Ri Sol-ju, as well many of the regime's most senior officials including his right-hand man Kim Yong-chol and Foreign Minister Ri Su-yong, according to North Korean state media KCNA. Daryl Kimball, executive director of the Washington-based Arms Control Association, said Kim would be seeking Chinese support and help with respect to the policy direction outlined in his New Year's Day Address, while trying to strengthen Pyongyang's position going into another possible summit with Trump. Reports suggest that the summit may be held in Hanoi, Bangkok or Hawaii. "We are negotiating a location … It will be announced probably in the not-too-distant future," Trump told reporters at the White House on Sunday. Zhao Tong, a fellow at the Carnegie-Tsinghua Centre for Global Policy in Beijing, said that Kim's visit may be intended to send a warning signal to Washington. "This visit could send the message to Washington that North Korea can fare well even if the US continues the sanctions and North Korea can still achieve its goals by accepting the Chinese support. This may be aimed at undermining Washington's confidence in its coercive leverage against North Korea through economic sanctions," Zhao said. North Korean has long argued that the US must accept a phased and synchronised denuclearisation process, meaning that it must ease sanctions during the disarmament process rather than waiting for Pyongyang to complete the process. China has long been a supporter of this "action-for-action" approach, which it believes will ensure stability in the Korean peninsula and neighbouring parts of China. But Trump on Sunday insisted sanctions would remain "in full force" until he gets "positive" results. "It may make Washington a little more nervous about the geostrategic implications of a closer DPRK-China ties as Washington may hate to see Beijing strengthening its regional influence over the Korean peninsula and beyond," Zhao said. Sean King, a former US diplomat who is now senior vice-president of political strategy firm Park Strategies, said North Korea was using China as its security guarantee before the summit with Trump. "North Korea has long used mainland China and its banks as a transit gateway and funding source for its many illicit businesses the world over … This way, Kim can be more confident up against Trump," King said. "If Kim is indeed going to meet Trump again, he obviously wants to check in with his chief enabler and patron, Xi, before stepping out on the world stage again. "Kim will likely seek guarantees from Beijing that it will maintain its violations of sanctions against North Korea and keep its taps to Pyongyang flowing," he said. China remains North Korea's closest ally and the 1961 Sino-North Korean Mutual Aid and Cooperation Friendship Treaty dictates that the two must undertake all necessary measures to oppose any country or coalition of countries that might attack either nation. Kim, in his annual New Year's Day speech, repeated his pledge to denuclearise the Korean peninsula – but only said he would not "make, test and spread" nuclear weapons in the future and did not make specific pledges concerning is existing nuclear arsenal. He also proposed "multiparty negotiations" on replacing the armistice agreement that brought an end to the 1950-53 Korean war with a formal peace treaty. "It is still not very likely that North Korea would make concessions such as providing a full list of its nuclear inventory, which could make its small nuclear arsenal more vulnerable to a US military strike," Zhao said. "As a rational strategy, Kim Jong-Un should want to play strategic balance between the two big powers in Northeast Asia: China and the United States. "This would give Kim the best chance for achieving his goal of keeping a nuclear deterrent capability and having the economy develop simultaneously," he added. Cheong Seong-chang, a researcher at the Sejong Institute in Seoul, said Kim's summit with Xi was expected to focus on denuclearisation of the Korean peninsula, the establishment of a peace regime to replace the current armistice and relief of sanctions against the North. It cannot be ruled out that Kim and Xi will discuss shipping the North's intercontinental ballistic missile out of the country to dismantle them, an issue that the US wanted to address, he added. ^ top ^

Kim Jong-un's New Year's speech offered no real surprises but one clear message from North Korea (SCMP)
Kim Jong-un's seventh New Year's address was marked by visible changes in its format. Kim addressed the nation from a comfortable armchair, overlooked by portraits of Kim Il-sung and Kim Jong-il, one way of showing his connection to the North Korean population. Optics aside, however, the message did not contain many surprises. Importantly, there was a clear message sent to the US, namely that the steps Washington takes in 2019 will be crucial in any development – positive or negative – on the nuclear issue. Yet the North must also take steps itself, and we must not forget the relationship between Pyongyang and Beijing, one that has not always been amicable, not least in recent years. The supreme leader affirmed his commitment towards an "independent socialist economy" as part of the five-year development plan put forth in 2016. Reaching out to the 25 million citizens in the DPRK, domestic goals of "relieving the shortage of electricity" and revitalising coal mining, fishing and light industries, would all aid "national prosperity and the people's well-being." Amid the slogans of a socialist nation undergirded by the state ideology of juche (loosely translated as "self-reliance"), the focus on the domestic economy was nothing new. After all, this is part two of the byungjin policy of parallel nuclear and economic development, announced in March 2013, but what about the first? Pyongyang perceives itself to be a fully fledged nuclear power, a declaration it did not shy away from announcing in April 2018 before the third inter-Korean summit, but also announced in December 2009, after the second nuclear test in May of that year, under Kim Jong-il. Fast-forward less than 10 years, and in his New Year's Day address, Kim Jong-un declared that the North "would neither make and test nuclear weapons any longer nor use and proliferate them." This is an overt pledge – far more overt than Kim has stated previously – but whether this is a true signal of the North's intentions remains unclear. An established nuclear power does not need to perform ongoing visible tests of its capabilities. Moreover, while Kim stated how the North had "taken various practical measures" regarding the moratorium on future nuclear testing and production, there was no commitment to cap existing production of nuclear or fissile material. He reiterated the declaration's call to "advance towards complete denuclearisation", yet the gulf between the definitions of "denuclearisation" espoused by Pyongyang and Washington (and its allies), remains. The former calls for the removal of US security guarantee over the Korean peninsula (of note, US military presence), and the latter want a complete declaration and removal of North Korea's nuclear weapons and fissile material. The longer this divergence remains – and any actual progress on denuclearisation is stalled – the longer Pyongyang can keep buying time. The address praised the rapprochement between the two Koreas witnessed in 2018 as a way of "revers[ing] inter-Korean relations in the utmost extremes of distrust and confrontation to those of trust and reconciliation." Kim stressed his willingness to resume operations at the Kaesong Industrial Complex and Mount Kumgang tourist area "without any precondition". Economic development is high on the North's agenda, but inter-Korean economic relations remain limited in scope by UN sanctions, and the nuclear problem remains unsolved. Beyond the peninsula, the North's key ally of China, with whom it engaged in continuing dialogue in 2018 with three visits by Kim to Beijing, was praised for "boosting strategic communication and traditional ties of friendship and cooperation". Yet it not just talks between Washington and Pyongyang that have decelerated; those between Beijing and Pyongyang also lack direction. A visit by North Korean Foreign Minister Ri Yong-ho to Beijing in early December aimed to strengthen the historic DPRK-PRC relationship, which has not always been as cordial as often expected. China has multiple considerations: its own status as a responsible great power, and its desire for the US and DPRK to put their differences aside and engage in a productive implementation of the statement that came out of the Singapore summit. This is no surprise, but at a time when the Beijing-Washington relationship is far from positive, will China step up its support for the North? Despite China not committing itself to a traditional "alliance" with the North – instead emphasising its traditional "friendship" – China remains the North's main trading partner, accounting for 90 per cent of the North's trade. The PRC simultaneously remains committed towards encouraging the North's denuclearisation, having supported (albeit reluctantly) UN Security Council sanctions on the state, but, together with Russia, has also called for softened sanctions. Kim's affirmation of the Pyongyang-Beijing relationship may be symbolic, but also strategic. The call to China in his New Year's address – and other socialist allies, including Cuba – may signal how 2019 will see not just the continuing of diplomacy between the US and South Korea (and the growing differences between these two allies on how best to deal with the North), but a growing attempt for Pyongyang to consolidate its friendships elsewhere, especially given the current political battles between China and the West. Pyongyang must now juggle multiple balls: diplomatic momentum with the US and South Korea, coercing Washington into conceding on sanctions and pressure, and enhancing friendships with China, Vietnam and other socialist states. Yet, diplomacy with a smile is not akin to tangible progress. It seems unlikely that China will take any drastic move to punish its "little brother" of the North, beyond what it has already done in 2018, but will keep up its calls for peace, denuclearisation and stability on the peninsula. A second meeting between Kim and US President Donald Trump in 2019 seems likely, but will only make substantive progress if the summit statement does not echo of ambiguity, as was seen in Singapore. Kim's speech stated his readiness "to meet the US president again", but he followed this with a warning to the US. If sanctions and pressure continue, the world should not be shocked if Pyongyang seeks to "find a new way for defending the sovereignty of the country". When the threshold is crossed – whatever it may be – we may be back to the days of nuclear and missile testing. The big question is when this threshold will be crossed. Although we know what happened in 2018, in the months following the New Year's address, we should not be surprised if 2019 commences with somewhat less momentum. ^ top ^



Frontclear facilitates a transaction with Development Bank of Mongolia and Societe Generale (Montsame)
Frontclear arranged and structured back-to-back USD/JPY cross-border cross currency swap transactions for the value of USD 30 million with Societe Generale and Development Bank of Mongolia. Credit, legal and operational risks have made it very difficult for Mongolian banks to access global capital markets. This second landmark transaction of Frontclear in Mongolia has made it possible for Development Bank of Mongolia LLC (DBM) to competitively access the swap market with foreign banks and hedge the proceeds of a Samurai bond issue into USD. Both cross currency swap transactions were documented under an International Swap and Derivatives Association (ISDA) agreement, whereby Frontclear customized the swap confirmation to overcome legal issues in the Mongolian market. The transactions helped to further clarify certain legal issues related to close-out netting in Mongolia, which were mitigated by effective Frontclear deal arranging and structuring. The transaction documents introduced best practice operational and legal concepts, which were reviewed and discussed in a Frontclear organized Executives' Roundtable in Ulaanbaatar in September 2018. Frontclear is already planning further technical assistance in Mongolia to address those legal issues as well as other roadblocks preventing Mongolian banks effecting accessing global funding and swap markets. "We are proud to execute our second transaction in Mongolia and the key role we have played in originating the structure and bringing Societe Generale to work in money market transactions in the country. The transaction strengthens Mongolian banks' ability to mitigate legal and operational risks and sets a benchmark for the development of Mongolia's money market going forward," according to Andrei Shinkevich, Senior VP at Frontclear. "This is DBM's first ever swap transaction with Societe Generale and we look forward to working with new partners to expand our treasury operation," – Amgalan Battulga, Head of Treasury Management of Development Bank of Mongolia noted. "Societe Generale is delighted to have concluded this transaction with Frontclear allowing Development Bank of Mongolia to hedge interest rate and currency risks related to its Samurai bond. It illustrates the strength of the collaboration between our two institutions, Societe Generale and Frontclear, which share the common objective to participate to the development of capital markets in emerging countries," says Jérôme Sabah, Global Head of Rates, Credit and Forex Sales for Financial Institutions at Societe Generale said. ^ top ^

Photo exhibition marks 70th anniversary of Mongolia-China ties (Xinhua)
A photo exhibition featuring the known and unknown aspects of the China-Mongolia friendship was held here Tuesday to commemorate the 70th anniversary of diplomatic relations between the two countries. The exhibition, titled "what we know and do not know about the China-Mongolia friendship," showcased China's great efforts to promote bilateral ties and support Mongolia's economic and social development since the establishment of diplomatic ties. "I am confident that the album can provide Mongolian readers with a deep understanding of China's outstanding contribution to the development and construction of Mongolia," said Khorloo Baatarkhuu, a leading Mongolian sinologist and editor of the album. A total of 500 photos were exhibited, including many rare archive photos on China-backed infrastructure projects. Senior Mongolian and Chinese officials, including Mongolian Deputy Prime Minister Ulziisaikhan Enkhtuvshin and Chinese Ambassador to Mongolia Xing Haiming attended the exhibition. In his speech, Enkhtuvshin said that since the establishment of diplomatic ties 70 years ago, Mongolia-China relations have made great progress, which is inseparable from the selfless efforts of the Chinese government and the Chinese people. For his part, Xing said that since China-Mongolia relations entered a comprehensive strategic partnership, high-level exchanges between the two sides have been frequent and political mutual trust has deepened. Meanwhile, economic cooperation and cultural exchanges have become closer, bringing tangible benefits to the two peoples. Mongolia and China established diplomatic relations on Oct. 16, 1949. In the 1950s and 1960s, China sent large numbers of workers to Mongolia to help with its infrastructure development. Some of the projects have since become symbols of Mongolia-China friendship. ^ top ^

Construction work for Nalaikh road to start in April (Montsame)
On January 8, Minister of Road and Transport Development Ya.Sodbaatar held a meeting with Acting Governor of the Capital City J.Batbayasgalan, Deputy Governor of the Capital City P.Bayarkhuu and representatives of Ministry of Finance as well as other corresponding officials to discuss the construction of the road connecting Ulaanbaatar and Nalaikh. Deputy Governor P.Bayarkhuu reported that the preparations to build 20.9 km road between Gachuurt and the Nalaikh-Choir crossroad, funded with the soft loan from the Chinese Government, is currently in progress and noted that the work to make the road's blueprint and evictions have been completed. Despite being originally planned to be built in 2 years, the work to build the road is to be accelerated and planned to be completed in November. ^ top ^


LEW Mei Yi
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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