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SCHWEIZER BOTSCHAFT IN BEIJING
EMBASSY OF SWITZERLAND IN BEIJING
AMBASSADE DE SUISSE EN CHINE

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
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  4.-8.3.19, No. 758  
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Foreign Policy

I'd side with rich China over fickle US: Malaysia's Mahathir Mohamad (SCMP)
2019-03-08
If forced to take sides in the high-stakes geopolitical rivalry and trade war between the United States and China, Malaysian Prime Minister Mahathir Mohamad would prefer the economic largesse of Beijing. He pointed to the current state of unpredictability of the American superpower as a negative factor when asked about the impact of Sino-American tensions on other, smaller nations in the region. In a wide-ranging and exclusive interview with the South China Morning Post focused on his Southeast Asian nation's foreign policy, Mahathir said Malaysia's strong ties with China were not "static" over time or issues. Rather, the overarching goal must be to find ways of working with the rising power rather than to let fears about its ascent cloud the government's judgment. In particular, he said MalayPsia would not be swayed by Western scaremongering that the Chinese telecom firm Huawei was involved in spying. "When China was poor, we were frightened of China. When China is rich, we are also frightened of China," he said. "I think we have to find some way to deal with China." In the past, China exported communism to the region, including Malaysia But even though Malaysia learned to navigate the relationship, Mahathir offered a perspective from history: "We always say, we have had China as a neighbour for 2,000 years, we were never conquered by them. But the Europeans came in 1509, in two years, they conquered Malaysia." And, while Western suspicions of Beijing have deepened over issues from cyber espionage to interference in domestic politics, Mahathir said his 10-month-old government would make its own, independent decisions on how to deal with its largest trading partner rather than take cues from abroad. "Well, it depends on how they behave. Currently the US is very unpredictable as to the things they do," Mahathir said in Manila before talks with Philippine President Rodrigo Duterte. For now, Malaysia had to "accept that China is close to us", he said. "And it is a huge market. We want to benefit from China's growing wealth." This was a purely economic consideration, Mahathir said. "So at this moment, economically, we would prefer China. Politically, of course, we are not attracted towards a system of government that is very authoritarian." His nuanced comments to the Post on China will further entrench the view of many analysts that he has softened his publicly hawkish views about Asia's biggest economy since beginning his second stint as prime minister – he also held the post from 1981 to 2003. Before the election last May, in which he toppled one-time protégé Najib Razak, Mahathir's views on China had at times verged on being unvarnished – at one point even provoking sharp rejoinders from the Chinese embassy in his country. In the interview, Mahathir's first with foreign media this year, the prime minister offered his views on a range of concerns raised by the international community – and particularly the West – about Beijing in recent months. Over the past year, Western countries have voiced fears that China is using the homegrown telecoms equipment supplier Huawei to spy on other countries, and that Beijing's cheap loans to developing countries as part of President Xi Jinping's " Belt and Road Initiative" are a type of "debt-trap diplomacy" aimed at creating a network of pliant, debtor states. On Huawei, Mahathir said Malaysia was "watching closely" discussions on whether the firm's involvement in next-generation, high-speed " 5G " internet networks would pose a threat to national security. The US and Australia are among the Western countries that have restricted Huawei's involvement in developing such networks, citing concerns that the company would insert "back doors" in the technology that would be accessible to the Chinese state. Huawei on Thursday said it was suing the US government, claiming that Washington's ban on government agencies, employees and contractors from using its products was "unconstitutional". Mahathir said: "At the moment we have not found them a threat to our security. Not yet, maybe later." "But we cannot just follow actions taken by other countries because Chinese technology seems to be ahead of Western technology," he said. Mahathir also addressed the debt-trap accusation. Western countries point to the example of Sri Lanka, which ceded control of its Hambantota port to China on a 99-year lease after falling behind on its debt obligations, as highlighting their concerns. But Mahathir said sovereign governments were free to decide whether to take on foreign loans. "The Chinese by nature are very good businesspeople," Mahathir said. "They see opportunities and with their capital they want to penetrate areas where before they had no representation or little representation." But "the countries concerned must be able to distinguish what is allowable or needed by their country and what is not. If countries prefer to borrow huge sums of money, well, that is [their] decision." "You make that decision, you know capital flowing into the country exerts some influence over the country. So it is up to the countries concerned to make sure that the money flowing into their country is not borrowed money, is not money for infrastructure, but maybe limited to money for investment in productive processes." Still, pressed on whether he bought the "debt threat" theory, the prime minister said: "Well, yes maybe it is that way because that is one way of buying influence." He offered the caveat that while China had a strong influence "on our economy and maybe even our politics", the Asian power had not moved to colonise like Europeans of yesteryear who "came to the East and very simply conquered the East". "It is all up to us," Mahathir said. Since coming to power, Mahathir's government has been swift to pare down what it sees as overpriced and unnecessary China-backed infrastructure projects that Malaysia signed up to under the scandal-tainted former prime minister Najib Razak. Among these projects is the 55 billion ringgit (US$13 billion) East Coast Rail Link project that, according to Mahathir, remains under negotiation. While questions over the future of the rail project – to have been built by China Communications Construction Company – linger, Mahathir said he would be all ears when he visits Beijing in April for a second Belt and Road Initiative summit to be hosted by Xi. While no official date for the summit featuring world leaders involved in the trillion-dollar initiative has been set, diplomatic sources told the Post it would be from April 25 to 27. Mahathir's visit will be his second to China since his shock election victory over Najib last May. "I am going there because I want to listen to what they are saying about the belt and road and at the same time given a chance I would like to explain Malaysia's attitude towards this policy of China," Mahathir said. He added: "Whatever may be our attitude towards China, we have to admit that China is a big power. It is a regional power and we need to deal with them. We need to understand their policies and strategies and we have to make adjustments so that we can gain some benefit from China's policies." In usual fashion, the sprightly 93-year-old took veiled potshots at the West during the 40-minute interview. He slammed President Donald Trump's trade war against Beijing as a strategy that "doesn't have any positive, good results". Asked about the mounting unease towards Beijing cited repeatedly by the US and its allies, Mahathir quipped that the Western nations during their stints as former colonial rulers did not "talk about domination or about how they used military might against small countries even to the point of conquering them". "Now we see China having economic strength, and it is going to make use of economic strength to achieve what is to China the best objective – that they have to grow richer and richer, and this is the ambition of all countries. "With their wealth they are going to be in the same position that the Western countries were in the past." But, again drawing from history, he offered this assessment: "China's attitude, of course, is to gain as much influence as possible. But so far China doesn't seem to want to build an empire. So we will remain free people." Still, Mahathir said his visit to the Philippines – the fifth Southeast Asian country he has visited since returning to power – also had a China angle to it, suggesting that his talks with Duterte, who is widely viewed as dovish towards the Asian superpower, would delve into how the 10-nation Association of Southeast Asian Nations ( Asean ) should collectively deal with Beijing. "Southeast Asian countries must have a common stand. We, as far as possible, [should not] deal with China as one single country and only think about what we [can] gain when the other countries are losing," he said. ^ top ^

Reject idea of a blanket ban on Chinese access to US tech, US senators urged (SCMP)
2019-03-08
The US should reject the idea of imposing an outright ban on China's access to US technological expertise and instead bolster America's long-time strengths as an innovator and beacon for top talent, a US Senate subcommittee was told on Thursday. "Overreaching [via] a blanket ban, unwinding global supply chains and discrimination against individuals is not the answer," Samm Sacks, cybersecurity policy and China digital economy fellow with the non-partisan New America think tank, testified at the Subcommittee on Security hearing, "China: Challenge for US Commerce". The hearing aimed to examine Washington's possible responses to Beijing's technology aspirations and the challenge China's growing hi-tech prowess is seen as posing to American competitiveness. Sacks – one of a number of technology specialists and analysts who testified before the panel, a subunit of the Senate Committee on Commerce, Science and Transportation – said the US government should "be selective about what technology is vital to national security but be aggressive in protecting it". The hearing comes as the US and other Western nations grow increasingly worried about China's state-supported plans to become a world leader in technology, and with the US and China deep into a months-long tariff war. US President Donald Trump's administration has repeatedly accused Beijing of failing to play by international rules, citing its heavy subsidies for home-grown companies and policies it says are aimed at blocking US firms' access to Chinese markets. The risks of Chinese researchers in the US leaking their hi-tech know-how back to Beijing and Chinese firms pumping investment into US tech firms to get access to proprietary American technology also is a frequent theme of the Trump administration. Amid growing opposition to China having access to US technology, American lawmakers have tightened their scrutiny of Chinese investment in US firms on national security grounds. The US Commerce Department also is developing legislation to restrict hi-tech exports to China. Subcommittee Chairman Dan Sullivan, a Republican senator from Alaska, opened the hearing by saying the US was suffering from "promise fatigue" created by broken Chinese vows to improve intellectual property protection and to create a level playing field for foreign companies operating in Chinese markets. Daniel Rosen, a partner at independent research provider Rhodium Group, told the hearing that China's promises to set its innovation strategy by market demands rather than by Beijing's directives "have not matched up with actions". But instead of responding with a full ban on Chinese access to US technology, the US should answer with "provisional" actions that would be "reversible, depending on whether China takes note of the dangers of its non-market policies right now and reverses back to a market course", he said. A selective response would make more sense than a full ban, Rosen said, because "the US can still say yes to most Chinese manufacturing and direct investment in the States without having to forego the benefits of that interaction". "Peaceful engagement" rather than disengagement, was the way to go with China, Rosen stressed. Sacks said Washington, in its trade talks with Beijing, should demand a commitment from China to revise its cybersecurity regulations to allow commercial data to flow across borders more smoothly. US firms in China have long complained that China's cybersecurity and local data storage rules expose foreign firms to risks by pressuring them to disclose source codes, encryption keys and other sensitive information to Chinese authorities. Sacks suggested the US government work with China to set industry standards for the treatment of foreign operators' emerging technologies. "The US benefits from exchange and cooperation with Chinese practitioners and scholars," she said. "There are grave risks in losing visibility and insights into China's approach on these matters." Washington also should work with its international allies to pressure Beijing to play by international rules, she said, noting that "multilateral pressure has been effective in the past". "We cannot just play defence, we must play offence," Sacks said, urging the US to invest to strengthen its innovation capabilities and competitiveness with China. "China will not abandon its technological aspirations", she said. Chinese telecoms supplier Huawei Technologies is currently a flashpoint in the technology rivalry between the world's two largest economies. The US has announced criminal charges against the company and CFO Meng Wanzhou, who faces extradition to the US from Canada following her arrest in Vancouver on charges she lied to banks about the company's alleged dealings with Iran. The US also has urged its allies to ban Huawei from the 5G market to keep China from gaining leadership in next-generation mobile technology. "The significant resources that Huawei derives from the backing of the Chinese government put the US and European telecom firms at a clear disadvantage, and this comes in particularly when it comes to developing and deploying some technology necessary for the next generation of broadband networks," said Eric Rosenbach, co-director of Harvard University's Belfer Centre for Science and International Affairs. "Clearly, allowing Huawei equipment into the US 5G backbone will be a grave national security concern," he said. The US also needs to win the race for talent, he said. "We will not outcompete the Chinese unless we ensure more highly skilled workers are able to obtain H-1B visas," he said. Trump has said he is planning changes including a possible pathway to US citizenship to foreigners holding H-1B visas, which are issued temporarily to highly educated immigrants who work in specialised occupations such as technology or medicine. Trump has often said he wanted an immigration system that favoured educated or highly skilled people. Sacks voiced concern about the damage to US research efforts that would be done by US universities and labs moving to close the door to Chinese students and researchers over worries about the potential for technological espionage. "I am deeply concerned that Chinese researchers, scientists and students are being discriminated against on US campuses," she said. "This is highly problematic, not just from the moral perspective. It gets at the heart of the openness and values that define our country. "We need to compete for the best talent in the world," she said. "If those people do not feel welcome on our campuses, they will go elsewhere. So we have to get the balance right." On the sidelines of the hearing, Sacks expanded on her call for a more moderate response to China's growing competitiveness. If the US overreaches, "we're going to shoot ourselves in the foot because we're going to undermine our own ability to engage in these sort of global supply chains and international research collaborations, which are very important," she told the South China Morning Post. US lawmakers needed to let American law enforcement and counter-intelligence officials "do their job" – handling the real risks of illicit acquisition of technology, she said. "But that doesn't mean that you sort of need to have FBI agents busting into research labs in universities or calling students and harassing them, which I've heard is occurring," she said. Responding to comments by Democratic Senator Richard Blumenthal about Huawei posing a national security risk, Sacks said it was important to clarify the types of risks the company was connected to, because they "often get blurred". "One, does Huawei have a back door that would allow access?" she said. Second, the company has "shoddy engineering", Sacks said, citing what she said were complaints made by "our partners in UK". "Third is, what would a company like Huawei be prevailed upon to do in a warlike situation?" When Blumenthal posited that the US was indeed in a "warlike setting" with China, Sacks promptly responded: "Are we?", an exchange that prompted laughter in the room. The combative rhetoric surrounding China was "a DC phenomenon", Sacks said in an interview after the hearing. "When you get inside the beltway, there's a very toxic China narrative that is: 'We are at war'." ^ top ^

Future of Sino-US ties lies in cooperation (China Daily)
2019-03-08
More than 40 years ago China and the United States engaged in "ping pong diplomacy", easing the tensions between the two countries ever since the founding of New China in 1949. With the People's Republic of China retaining its rightful seat in the United Nations Security Council in 1971 and its international status continuously improving, it had become apparent that the US policy to contain New China would be fruitless. The US, on the other hand, was mired in the Vietnam War, which was sapping its national power. So the US administration realized it should establish friendly relations with China in order to end the war. Against this background, on Jan 1, 1979, the two countries formally established diplomatic relations. But even before it established diplomatic relations with the US, China launched reform and opening-up in late 1978. As the leader of the Western world, the US played the dominant role in the global economy, as well as the technology, investment, finance and other fields, with which China had to integrate to ensure its economic development. Over the past four decades, Sino-US economic and trade relations have not only become more interdependent but also changed qualitatively. To start with, China today exports an increasing volume of high-quality goods to the US. Considered as the "world's factory" and a country with a very high savings rate, China has built huge foreign exchange reserves and greatly improved its trade environment. And thanks mainly to China's manufacturing prowess, Sino-US trade has risen from $2.5 billion in 1979 to $633.52 billion in 2018, an increase of 253.4 times which is unprecedented in history. Sino-US trade and economic relations have not been beneficial to Beijing alone, as inexpensive but quality Chinese products have met the rising demand of the American people for affordable and reliable goods. Economists generally believe that Chinese products, which are good in quality and low in price, help the US to keep inflation in check, and an average American family to save at least $800 a year. Yet Sino-US relations have gone through some twists and turns, which prevented both sides to enjoy optimal mutual benefit. Also, the US has tried to contain China's rise by hyping up issues such as the China-Japan conflict in the East China Sea, the islands' disputes in the South China Sea, and the Taiwan question. Some conservative forces in the US have even exaggerated and manipulated Washington's differences with Beijing on human rights, political systems, and structural reform, intending to slow down China's economic growth and contain its rising global influence. This year marks the 40th anniversary of the establishment of diplomatic relations between China and the US. But since last year, the US has been taking some unilateral and trade protectionist measures that have created trade frictions between the two countries. Thanks to its "America First" policy, the US administration wants to squeeze the maximum benefits from Sino-US trade, but the problem is that the resulting rising costs of consumer and other goods for ordinary Americans and the not-so-easy-to-reduce US trade deficits show that intensified trade tensions would harm not only China but also the US. The history of international relations and the development of Sino-US relations tell us that conflicts and confrontations cause damage to both sides. Sticking to the Cold War mentality or taking unilateral measures would be harmful to both sides. It would be in the fitness of things therefore that China and the US learn to coexist with each other despite their ideological differences, and to follow the diplomatic principle of mutual respect and equality to not only improve their diplomatic relations but also derive optimum benefits from Sino-US trade. As two major countries and the two-largest economies, the US and China have no established model to follow to coexist as the established power and the rising power. Perhaps they could build a new model for major-country relationship which is characterized by non-conflict, non-confrontation, mutual respect and win-win cooperation. Only in this way can China and the US avoid the "Thucydides trap", continue to deepen win-win cooperation and move toward a better future. ^ top ^

China's Thousand Talents Plan fuels US suspicions about overseas students, warns leading ex-Harvard academic Wei Yingjie (SCMP)
2019-03-08
An eminent Chinese professor has warned that an "over-promoted" programme to lure hi-tech talent home is fuelling foreign suspicions about international students' ties to the Chinese government. Wei Yingjie, a cardiovascular health specialist at the Chinese Academy of Medical Sciences, said during the annual gathering of the political elite known as the "two sessions" that China should also stop sending university outreach groups to US campuses. The Thousand Talents Plan is a high-profile, state-backed recruitment drive set up in 2008 to attract overseas Chinese students and academics – particularly those in the science and technology field – with cash grants to fund their research and living costs. However, US intelligence officials have accused it of "[facilitating] the legal and illicit transfer of US technology, intellectual property and know-how" to China – a key point of contention in the ongoing trade war. "If the US did this in China, it would be suspicious – who would believe that?" Wei, a delegate to the Chinese People's Political Consultative Conference, said on the sidelines of a meeting of the All-China Federation of Returned Overseas Chinese. "In recent years I think we haven't grasped the scale of the propaganda for the Thousand Talents Plan, it's been over-promoted," said Wei, a former Harvard professor who was one of the first recruits for the Thousand Talents Plan back in 2009. He continued that the Americans "have retaliated in terms of customs tariffs and job talent, throwing accusations of stealing state secrets or intellectual property at Chinese students for no reason." He said the "extreme measures" adopted by the US meant China "doesn't really bring up TTP much any more", adding that parts of the programme needed to be improved to protect Chinese students from undue suspicion. Several Chinese researchers in science and technology have reported delays in processing their US visas, or flat-out rejections as the Trump administration has tightened entry conditions in recent months. Wei also said that he knew "over a dozen" Chinese science professors who have decided to leave due to the climate of suspicion they faced in the US, adding: "They really couldn't bear it any more." Recent incidents such as a protest by Chinese students against a Uygur activist's talk about Xinjiang detention camps at Canada's McMaster University – apparently in coordination with diplomatic staff – have further raised suspicions about their ties to the Chinese government. In my experience almost all Chinese students are deeply patriotic … It does not make them 'spies' or 'agents of influence'. Such terminology reeks of prejudice. These are ordinary human beings not alien monsters Professor Simon Marginson, Oxford University But academics at other institutions said such concerns may be overblown. "In my experience almost all Chinese students are deeply patriotic," said Simon Marginson, professor of education at Oxford University. "Most Chinese students are in general terms loyal to their government, though individual students are often critical of specific actions of the government. Few of those I have met are blindly loyal. "This makes them similar to most other people in the world and no more or less unreasonable than American students, who tend to be patriotic and, mostly, loyal. "It does not make them 'spies' or 'agents of influence'. Such terminology reeks of prejudice. These are ordinary human beings not alien monsters. "There are certainly legitimate criticisms to be made of the international conduct of the Chinese state, especially where it intervenes to reduce the self-determination of non-Chinese people. But it is important to conduct such criticism on the basis of objective and universal norms." Tang Yezi, 23, a postgraduate student at Cranfield University in the United Kingdom, said she felt her foreign classmates had a intrinsic prejudice against the Chinese political system. "One classmate from United States just questioned me on why China set up camps in Xinjiang," said Tang. "Some other classmates can't understand China's political representative systems, thinking they're shallow and cannot truly represent the whole society. "But generally, if a Westerner visited China even once, their attitude towards China would become [more] moderate." But Akito Okada, a professor at Tokyo's Institute of Foreign Studies who supervises around 20 Chinese postgraduates, said that she had never encountered anti-Chinese prejudice in her field, although she conceded that it may exist in the sciences. "Japan is now facing a rapidly ageing society, if our university does not accept international students it is likely to face closure," she said. "I am even grateful to China for letting so many international students study in Japan. I will continue to welcome Chinese students in a positive manner in future." ^ top ^

Italy's plan to join BRI a 'wise choice' (Global Times)
2019-03-07
Joining the China-proposed Belt and Road Initiative (BRI) will be a wise choice for Italy as an effective way to stimulate its economic growth, benefit third markets along the routes of the BRI, and attract more EU countries to the initiative in the future, experts said. The remarks followed a report by the Financial Times on Wednesday saying that Italy is "set to formally endorse" the BRI and sign a memorandum of understanding (MOU) with China to take part in the initiative. "We want to make sure that 'Made in Italy' products can have more success in terms of exports to China, which is the fastest-growing market in the world," said Michele Geraci, an undersecretary in Italy's economic development ministry, said the report. If Italy signs up, it would be the first Group of Seven member to so. Italy, the eighth-largest economy in the world, will also become the largest to join the BRI by far, the report said. "If the news is confirmed, it would be a wise choice for Italy, since the move will not only enable its products and companies to have easier access to China's market - it will also create more job opportunities with Chinese companies' entry in the future," Liang Haiming, dean of the Hainan University Belt and Road Research Institute and chairman of the China Silk Road iValley Research Institute, told the Global Times on Thursday. The European country has been under pressure from mounting debts and slowing economic growth. Rising Chinese enterprises might be able to stimulate its economy, which the US and other EU countries have failed to do, Liang added. From 2000 to 2017, China's total investment in Italy reached 13.7 billion euros ($15.49 billion), making it China's third-largest investment destination in the EU, after the UK (42.2 billion euros) and Germany (20.6 billion euros), according to the website of the Ministry of Commerce, citing a report from Italian economic newspaper Il Sole 24 Ore. There are more than 600 Chinese-funded enterprises in Italy, with a turnover of about 18 billion euros and more than 30,000 employees. According to Liang, foreign investment of $100 million could bring more than 1,000 job opportunities to the local market. "Within the BRI framework, and an increasing bilateral relationship, we will consider expanding our engagement in Italy, and will set out to hire more local people once the project starts to operate," said Ye Hui, executive general manager of Shanghai's Zhenhua Heavy Industry Corp (ZPMC). ZPMC, the world's largest manufacturer of port machinery, has been engaged in a smart port program in Italy since 2016, and Ye said the program is proceeding quite well, with completion expected by the middle of the year. "We are also willing to share our experience in infrastructure construction, as well as equipment production. That would be quite helpful for the developed European countries, whose infrastructure facilities have been aging," Ye said. "The only problem that bothers us is some of our engineers who are sent to Italy to train local workers have had some difficulty in getting work visas. We hope the problem could be solved," he noted. The increasing bilateral relationship could also boost tourism connections between the two countries, which has been sought by the Italian side, experts said. In a recent interview with the Global Times, Ettore Francesco Sequi, the Italian Ambassador to China, said that the two countries have broad cooperation scope in the tourism sector. The country established 11 new visa centers in China in 2016, and Chinese tourists can get now a visa within 36 hours. A report from the China Tourist Academy said that Italy is among the most popular destinations in Europe, second only to Russia. Official figures also showed that in 2018, the number of visas issued by Italy in China increased by 15 percent, and the number of tourists from China reached 1.8 million. Experts predict that under the framework, the two may also seek cooperation in third markets along the BRI routes, which could reduce risks, avoid competition, and bring more opportunities and high-quality investment to economies along the routes. "We have already set foot in areas such as Africa, Latin America and Southeast Asia, and we are looking forward to cooperating with Italy in those areas also. We'd like to share our existing resources there, taking full use of both our advantages there," Ye said. "With the participation of Italy, more developed countries will join," Liang said. A number of EU states have signed MOUs with China, including Croatia, the Czech Republic, Hungary, Greece, Malta, Poland and Portugal, said Reuters. "Those who still hesitate to participate and remain absent from the initiative may find it's a loss for them," said Liang. ^ top ^

Donald Trump on US-China talks: 'a good deal or it's not going to be a deal' (SCMP)
2019-03-07
US President Donald Trump said on Wednesday that trade talks with China were moving along well and predicted either a "good deal" or no deal between the world's two largest economies. Washington and Beijing have been locked in intense negotiations to end a months-long trade war. Trump, citing progress in talks, last week delayed a planned tariff increase to 25 percent from 10 percent on US$200 billion of Chinese goods. "They're moving along well and we'll see what happens," the president said on Wednesday during a meeting in the Oval Office, referring to the trade talks. He said there would either be "a good deal or it's not going to be a deal, but I think they're moving along very nicely." Trump's comments after the US Commerce Department said on Wednesday that the US goods trade deficit surged to a record high in 2018 as strong domestic demand fuelled by lower taxes pulled in imports, despite the president's tariffs and "America First" policies aimed at shrinking the trade gap. Talks are primarily taking place via video teleconference and going well, Ted McKinney, undersecretary for Trade and Foreign Agricultural Affairs, told a press call. "Right now, I think there's just a lot of work in getting words down … a contract or agreement, and that's the current status," he added. The United States has demanded that China make substantial changes to its laws and practices to protect US intellectual property, end forced transfers of US technology to Chinese firms, curb generous industrial subsidies and open the domestic market to US companies. In addition, Washington has sought increased Chinese purchases of US goods, including farm and energy commodities and manufactured products, to reduce a US trade deficit with China that it estimates at more than US$417 billion for 2018. People familiar with the talks said the two sides still had substantial work ahead to reach agreement on a way to ensure China follows through on any pledges. Talks could still collapse if a deal cannot be reached on enforcement of these "structural" issues. ^ top ^

Former Canadian diplomat stole sensitive intelligence from China: authorities (Global Times)
2019-03-04
Chinese authorities alleged on Monday that former Canadian diplomat Michael John Kovrig had stolen sensitive intelligence from China, and another detained Canadian national, Michael Peter Todd Spavor, was Kovrig's intelligence contact. Chinese authorities said Monday that Kovrig has been frequently traveling to China since 2017 with a regular passport and a business visa. They confirmed that Kovrig had spied on and stolen sensitive information and intelligence through contacts in China. Kovrig was on December 10, 2018 investigated in accordance with the law by the Beijing State Security Bureau on suspicion of engaging in activities that harm China's state security. Authorities also said Spavor, who has been under investigation by the Dandong State Security Bureau in Northeast China's Liaoning Province on suspicion of jeopardizing China's state security, had provided intelligence to Kovrig and was an important intelligence contact of Kovrig. Kovrig is suspected of spying and stealing national secrets for foreign agents and his behavior has severely violated Chinese law, authorities said. Authorities stressed that China is a country run by the rule of law and the country will resolutely crack down on criminal activities that jeopardize national security. They also stressed that the case will be dealt with according to the law and the legal rights of Kovrig and Spavor will be fully guaranteed, including arranging for consular visits. Relevant government departments that handle the case will promptly start the next judicial procedure based on the condition of the case. Spavor, according to an Associated Press (AP) report, is known for his contacts with high-ranking North Korean officials. He also helped facilitate NBA player Dennis Rodman's visit to North Korea in 2013, AP reported. ^ top ^

 

Domestic Policy

China's tech strategy all talk, no action and a waste of taxpayers' money, says its former finance minister Lou Jiwei (SCMP)
2019-03-08
"Made in China 2025" has been a waste of taxpayers' money, China's former finance minister Lou Jiwei has said, as Beijing tones down its tech development strategy and nears reaching a trade deal with Washington. "[Made in China] 2025 has been a lot of talking but very little was done," Lou, chairman of the National Council for Social Security Fund, said on Wednesday on the sidelines of Beijing's annual meeting of its policymaking bodies, or "two sessions". "There was no need to talk about the year 2025 in the first place," he said. "[The government] wants industries to be at the top notch by then, but those industries are not predictable and the government should not have thought it had the ability to predict what is not foreseeable." Lou, who was finance minister from 2013 to 2016, was attending the meetings as a delegate of the Chinese People's Political Consultative Conference, an advisory body for Beijing's rubber-stamp legislature, the National People's Congress. China's plans to dominate hi-tech hit stumbling block A notable feature of this year's government work report, presented by Premier Li Keqiang to the NPC on Tuesday, was the absence for the first time in three years of any mention by name of the Made in China 2025 (MIC2025) strategy, Beijing's blueprint for tech supremacy. This was seen as an attempt to de-escalate the trade war with the United States. Since the plan's launch in 2015, the government has poured money into MIC2025 to try to turn a number of domestic industries – including artificial intelligence, pharmaceuticals and electric vehicles – into global leaders by 2025. The strategy has become an underlying theme of the trade war, in which the US has accused China of unfair trade and market practices, and asked it to make changes to protect intellectual property, end forced transfer of foreign technology to Chinese firms, curb generous industrial subsidies and open the domestic market to foreign companies. Lou made his comments after a panel meeting in which everyone else began their speech by stating their support and praise for Li's work report. When asked whether he thought it was a good move for Beijing to play down its tech strategy in Li's report, Lou said: "It [the strategy] should not have been done that way anyway. I was against it from the start, I did not agree very much with it. "The negative effect of [the plan] is to have wasted taxpayers' money." He suggested the market should have played a greater role in developing the industries that MIC2025 was designed to push. "The [resources] should have been allocated by the market; the government should give the market a decisive role," Lou said. "Why has the government pushed so hard on this strategy? [Hi-tech industry prospects] can all change in a few years, it is too unforeseeable." The 68-year-old, who helped to shape China's economic reforms that began in the 1980s before serving as finance minister, has been an outspoken figure since leaving the main policymaking arena and is generally regarded as a reformist. When Washington introduced its first phase of tariffs on imported Chinese goods in July, it targeted 818 products central to MIC2025, focusing particularly on technological parts. The two countries are trying to reach a deal to end their trade dispute by the end of March. Lou said he was optimistic that the US and China could come to an agreement. "They should be able to make a deal," he said. "China needs to go global – just make matters clear and all will be fine." ^ top ^

Orbiting internet satellite system to begin trial run (China Daily)
2019-03-08
Development and construction of the country's first low-orbit broadband communications satellite network, Hongyun, is on a fast track at China Aerospace Science and Industry Corp. The sole Hongyun satellite now in orbit will soon start a trial run to demonstrate how high-speed internet services from space can work, according to Ma Jie, Party secretary of the CASIC Second Academy, which developed the system. She is a member of the 13th Chinese People's Political Consultative Conference National Committee, the nation's top political advisory body. In the information age, the internet has become an inalienable part of many people's lives, but access is not always available, especially in remote or underdeveloped regions or at sea. As a rising power in science and technology, China is enthusiastic about offering solutions, including Hongyun and others, as it moves rapidly toward a system capable of providing broadband internet anywhere in the world. "The first Hongyun satellite has conducted communication tests with ground control. These tests were successful in establishing a space-based internet connection and proved that the Hongyun network will allow online browsing, video display and use of the WeChat instant messaging service," she said on the sidelines of the second session of the 13th CPPCC National Committee in Beijing. The satellite was launched atop a Long March 11 carrier rocket in late December at the Jiuquan Satellite Launch Center in northwestern China. The 247-kilogram satellite works in a sun-synchronous orbit about 1,100 kilometers above Earth. It is powered by solar arrays and has a design life of one year, but it is expected to operate longer, according to designers. "In the second half of this year, the satellite will begin an application demonstration to provide communication service to a selected group of users," Ma said. "And this will become the first trial operation of low-orbit broadband internet service in China." After a year of operations by the satellite, around the end of next year, CASIC plans to launch four Hongyun satellites to form a small network for a larger-scale trial run, she said, noting that once the four-satellite system enters service, users will have access to Wi-Fi with speeds several times faster than current internet service in Chinese households. The Hongyun project, begun by CASIC in September 2016, aims to build a space-based communications network to provide broadband internet connectivity to users around the world, especially those in underserved regions. CASIC intends to place more than 150 Hongyun satellites into orbit about 1,000 kilometers above Earth by about 2023. The constellation is likely to be further expanded, depending on market demand, said Xiang Kaiheng, Hongyun's chief designer. "By that time, Hongyun users will be able to access high-speed internet anywhere and anytime in the world," Xiang said. ^ top ^

China advances all-round opening-up at "two sessions" (Xinhua)
2019-03-07
China expects to see wider opening-up as it pledges to do more to attract foreign investment and promote global cooperation at the ongoing annual "two sessions." "We will promote all-round opening-up and foster new strengths in international economic cooperation and competition," Chinese Premier Li Keqiang said when delivering the government work report to the annual legislative session Tuesday. At the session, further relax of controls over market access has been announced, a draft foreign investment law will be deliberated, and the Belt and Road cooperation has been promoted. The government will further shorten the negative list which outlines fields off-limits to foreign investors, Ning Jizhe, deputy director of the National Development and Reform Commission, told a press conference on the sidelines of the annual legislative session Wednesday. China will roll out more opening measures to the agriculture, mining, manufacturing and service sectors, and allow wholly foreign-funded enterprises to operate in more sectors, Ning said. John Huang with the British information service provider Experian believes that international investors will welcome China's further opening-up. "Some core industries, once considered to be 'the most difficult areas to open up,' such as automobile manufacturing and financial services, are now welcoming foreign investment," said Huang, managing director for decision analytics of Experian Greater China. "The Chinese government's consistent commitment to opening-up has given foreign enterprises confidence about the business environment here," said SangBoem Han, CEO of LG Display from the Republic of Korea. In July 2018, LG Display opened an OLED panel factory in south China's Guangdong Province with a total investment of 46 billion yuan (6.9 billion U.S. dollars). China saw a record foreign direct investment of 135 billion U.S. dollars in 2018 despite a global economic downturn and rising protectionism. "In the early days, foreign firms received preferential policies regarding land, electricity and taxes in China," Han said, "but more recently, the government has increased its protection of intellectual property and improved efficiency." On Tuesday, Premier Li emphasized opening up based on rules and related institutions. This will help China better conform with the international rules, said Zhang Jin, a national political advisor and businessman from Guangdong. "This is also in line with China's further integration with globalization and engagement in international competition," Zhang said. A highlight at this year's "two sessions" is the draft foreign investment law, which is to be submitted to this year's session of the 13th National People's Congress (NPC) for review. Once adopted, the unified law will replace three existing laws on Chinese-foreign equity joint ventures, non-equity joint ventures (or contractual joint ventures) and wholly foreign-owned enterprises. The foreign investment law would be highly significant to protect legitimate rights and interests of foreign investors and ensure fair competition, said Loh Jen Yuh, president of China & Investment Management of CapitaLand Group, one of Asia's largest real estate companies. "The law shows China's openness and the rule of law," said Han, who hoped that the enact of the law would further improve China's business environment. Along with the efforts to attract foreign businesses, China is also stepping up the implementation of the Belt and Road Initiative (BRI) to benefit more participants. To date, a total of 152 countries and international organizations have signed cooperation documents with China on the BRI. "Many countries along the Belt and Road have shown their intention to cooperate with Chinese manufacturers," said Wu Gang, a national political advisor and chairman of wind power firm Xinjiang Goldwind Science & Technology. "We are more confident in going global under the government's favorable policies related to the BRI," said Wu, whose business has gained great market shares in Pakistan and Australia. According to the government work report, China will continue to "promote the joint pursuit" of the BRI, aiming at "shared growth through discussion and collaboration." China has signed free trade agreements with over 20 countries and regions. According to Zhao Ji, a national political advisor and president of China's Northeastern University, the country's efforts to strengthen the opening-up are especially important against the weak global economic growth. "The development of China, which has been closely connected with the world, will continue to play a key role in promoting globalization," Zhao said. ^ top ^

Freed Chinese human rights lawyer Jiang Tianyong 'threatens to protest if reunion with wife and daughter is blocked' (SCMP)
2019-03-07
A prominent Chinese human rights lawyer who was released from prison last week has threatened to protest if the authorities continue to keep him apart from his wife and daughter, neither of whom he has seen for six years, a source has said. Jiang Tianyong is now back in his parents' home in Henan province, but his wife said he was being kept under close watch by police, with officers following him everywhere he went – even when out shopping or walking the dog – and preventing him from speaking to strangers. He is not being allowed access to a mobile phone, and visits by relatives, neighbours and friends are being tightly restricted by the police, who have been stationed near his parents' home in Xinyang to keep round-the-clock watch over the activist. Jiang, who has represented leading human rights activists in the past, was detained in 2016 in the aftermath of the sweeping "709" crackdown on human rights lawyers and activists. The following year he was sentenced to two years in prison for inciting state subversion. His wife Jin Bianling and daughter fled to the United States in 2013. Although Jiang's sentence also included the deprivation of political rights for three years, a source said that this should not affect his freedom to travel. "If [the authorities] will not allow [a reunion], he is prepared to make his demands known through protests and other forms of activism," the source added. Both Jin and Wang Qiaoling, the wife of a "709" lawyer, said Jiang could not sit upright in a chair because of spinal injuries sustained while in jail. He is also suffering from ailments such as memory loss and high blood pressure, as well as an eye inflammation because he had been held in a darkened cell without sunlight in a prison in Hunan province for two years. According to his wife, her husband wanted to have a physical check-up at a hospital of his choice, but "he is followed everywhere by police who guard him" and her husband did not want them to accompany him to hospital. Speaking to the South China Morning Post from Los Angeles, where she now lives with her daughter, Jin said her husband had been taken away by state security following his release from jail and had only been allowed to return to his parents' home after a one-day hunger strike. She added that Jiang had wanted to rest and comfort his ailing parents who had been under intense pressure since his arrest and conviction. Jiang was detained by Hunan police in late 2016 after he tried to visit Xie Yang, one of the 300 or so lawyers and advocates caught in the "709" crackdown on civil rights. He pleaded guilty to inciting state subversion at his trial in 2017 and was given a two-year sentence. Wang, the wife of Li Heping, one of the affected lawyers, was able to visit Jiang last Saturday but only after she had been held for six hours at a local police station. "He [Jiang] told me that he had been threatened and deceived by his interrogators [who told him] that many of the rights lawyers and their wives have been arrested. He was worried because of that and that added to his anxiety," Wang said. Jiang was disbarred from practising law in 2009, but continued to advise human rights campaigners and lawyers, including the blind activist Chen Guangcheng, who fled to the US embassy in Beijing while under house arrest in 2012 and was later given asylum in the United States. Jiang has also acted on behalf of his fellow human rights lawyer Gao Zhisheng as well as members of Falun Gong and victims of the tainted vaccine scandal. ^ top ^

Xi Jinping says revival of Chinese economy must not be bought at expense of the environment (SCMP)
2019-03-07
While a slowing economy and pressure on jobs dominated the "two sessions" this year, President Xi Jinping refocused his attention to the environment at China's key annual political gathering. Speaking to fellow deputies from Inner Mongolia at the National People's Congress on Tuesday, soon after Premier Li Keqiang presented the government's work report, Xi said boosting the economy must not come at the price of a degraded environment. "Do not ever think about launching environmentally damaging projects for growth, or any attempt to breach the red line of ecological protection, even when we meet some difficulties in economic development," state news agency Xinhua quoted Xi as saying. "As the Chinese economy goes from high-speed growth to high-quality development, pollution prevention and environmental governance are important barriers to cross … We must grit our teeth, climb over this slope and pass this ridge," the president said. The joint sessions of China's top legislature and its political advisory body, the Chinese People's Political Consultative Conference, begin with annual work reports delivered by the premier and the CPPCC head. More detailed – and revealing – messages from Xi are usually released during his meetings with panels of lawmakers and advisers. Against the backdrop of an economic slowdown and a damaging trade dispute with the United States, Li's address to the NPC referred to "risks", "pressure" and "challenges" more than three dozen times while setting China's economic growth target for 2019 at the range of 6 per cent to 6.5 per cent. The premier said companies, as the main polluters, had a responsibility to protect the environment. But he also instructed the environment watchdogs to consider legitimate requests from businesses and give them a reasonable time to take corrective measures, and to avoid shutting down polluting factories outright. Xi and other top officials have seats at the national legislature, and the president is a member of the Inner Mongolia delegation. He has said he wanted to join the region's panel discussion because it would demonstrate the Communist Party's support for poverty alleviation, minority rights and environmental protection. He told the panel it was the responsibility of the party and the government to tighten spending and he tasked officials with ensuring China's economic stability. Xi also reminded them that they should unswervingly continue to protect the environment. Inner Mongolia, which lies in northern China, was a vast grassland, but in recent decades dust storms and desertification have become major environmental threats. Mining, overgrazing and tourism have all caused environmental problems in the resource-rich region. After he visited the area in 2014 and spoke of building it up as an "ecological shield" for China's northern border, banners and slogans echoing his thoughts went up in the streets. On Tuesday, Xi told deputies that protecting grasslands and forests was the top priority for Inner Mongolia. He also revisited his "three critical battles" call of 2017, with the priorities being environmental issues, alleviating poverty and reducing economic risks. Zhang Lifan, a political commentator and Chinese historian, said Xi regarded environmental protection as one of his legacies. He said Xi's place on the Inner Mongolia panel suggested he wanted to strengthen his green credentials, given the serious environmental situation in the region. In his meeting with national political advisers on Monday, Xi talked about "cultural self-confidence" and raising the public's moral standards. ^ top ^

Commentary: How will China win the final war on poverty? (Xinhua)
2019-03-07
With only two years left for China to meet the deadline in its war against extreme poverty, the country stands ready to face the toughest challenges to meet the goal and ensure the victory stand the test of time. The Chinese government has decided to eradicate poverty by 2020, the target year for China to become a moderately prosperous society. There will be no retreat until the promise, made to the nearly 1.4 billion Chinese people and the entire world, is kept. China has lifted more people out of poverty than any other country. There were 13.86 million success stories last year. Another 10 million are expected this year. By any standard, it is a daunting task for a developing country whose per capita GDP stands only at the middle of the world rankings. The drive will not stop until the day dawns when the last person living in poverty finds his or her rightful place as a citizen of a well-off society. As goes the Chinese expression, "You should not bomb fleas with grenades," meaning appropriate resources should be used in the right place at the right time. This precision poverty relief adopts varied policies for different regions according to their needs. More support has been given to impoverished areas in developing businesses that leverage local strengths. Projects have been arranged according to the specifics of every region or even every family. For those living in remote areas with few natural resources or fragile ecology, the government has offered assistance to relocate or provide compensation. While creating jobs will not work so well for many -- particularly the old, the sick, and the disabled, China ensures social safeguards for these most vulnerable groups. China gives priority to the work of seeing that the basic living needs of rural poor populations are met and that such people have access to compulsory education, basic medical services, and housing. The further China gets in the crucial stage of the fight, the greater the need to tackle real problems with attention to details, to ensure substantive, sustainable outcomes. Policy is just the first step. Implementation of those policies is the responsibility of cadres at all levels. They must seek out the very poorest and work with them. Local officials must interact with people and businesses to find solutions and mobilize all available resources including money, markets and talents. China has a unique and efficient governance system that can concentrate resources and accomplish big things, poverty reduction being one of them. The central government departments and affluent eastern regions of the country are allocating more resources to poverty-stricken areas. This year, the central government will specially allocate 126.095 billion yuan (18.82 billion U.S. dollars) to fund poverty alleviation, an increase of 18.9 percent, according to a draft budget report submitted to the ongoing legislative session. Actions speak louder than words. The government eschews doing things for show. Evaluation and oversight on the poverty alleviation efforts are being strengthened. Corruption, fraud or embezzlement of poverty-relief funds are dealt with in the most severe ways. Declaring a "war on poverty" is easy. The hard part is uprooting the causes of poverty. Hundreds of reform measures have covered education, health care, finance and innovation. China is aware of the danger for those who have recently escaped poverty to be pushed back into it as a result of natural disasters or illness. Support policies that apply to populations that have recently been lifted out of poverty will be maintained until the progress in poverty alleviation is consolidated. China is also making full use of the fundamental role of education in stopping poverty from being passed on to future generations. Professional training in poverty-stricken areas is producing an army of workers with the skills that modern industries need. China's model may not work in other countries due to different systems and development stages, but it may help the world realize that, as long as a government makes real promises and takes real action, poverty is a foe that can be defeated. ^ top ^

China Focus: China to ramp up efforts to provide better elderly care (Xinhua)
2019-03-07
As China is faced with a growing aging population, the government has pledged to provide better elderly care services and facilities for the silver-haired, and give a strong boost to domestic demand. Elderly care remains high on the agenda in this year's government work report, which said that significant steps would be taken to develop elderly care, especially community elderly care services. The number of people in China aged 60 and above reached 250 million by the end of 2018, accounting for 17.9 percent of the country's population. "Growing demand will trigger greater market potential in China's senior care industry," said Tang Wenxiang, founder of Fullcheer Group, a major elderly care services provider based in Changsha, capital of central China's Hunan Province. Fullcheer Group has 50 branches in more than 10 provinces and cities with a total of 5,000 beds. Tang expects the number of his company's beds to increase to 50,000 in five years. "There is still a huge gap between the demand of China's aging population and the number of elder care facilities," Tang said. The country will provide support to institutions offering services in the community like day care, rehabilitation care, and assisted meal services and outdoor fitness services using measures such as tax and fee cuts and exemptions, funding support, and lower charges for water, electricity, gas and heating, according to the government work report. Tang said government's measures to develop elderly care services greatly boosted the confidence of entrepreneurs who run businesses in the sector. Developing the elderly care industry is good for improving people's well-being and stimulating consumption, said Xu Hongcai, an economist with the China Center for International Economic Exchanges. "Consumption on elderly care requires the supply of the elder care market, offered by both the government and the market," he said. A research report issued by Guolian Securities suggests that a string of policies have been carried out in China to encourage the participation of the social sector in the senior care industry, which will boost the country's consumption in the health and medical sectors. As China opens this sector, foreign firms such as France's Orpea and Japan's Nichii have tapped the elderly service market in China. China still lacks leading players in the senior care market which includes nursing care, rehabilitation assistive devices and daily necessities for seniors, Tang said. The long-term care insurance system will help increase the occupancy rate of some elderly services facilities given a number of elderly people can hardly afford the expenses, according to Tang. ^ top ^

No let-up in China's push to 'Sinicise religion' despite global outcry over crackdown (SCMP)
2019-03-06
Beijing has vowed to push ahead with its controversial campaign to "Sinicise religion", defying growing international condemnation over its sweeping crackdown on Muslims and Christians. Delivering his annual government work report on Tuesday, Premier Li Keqiang told the national legislature that "we must fully implement the [Communist] Party's fundamental policy on religious affairs and uphold the Sinicisation of religion in China". The push to "Sinicise religion" – introduced by President Xi Jinping in 2015 – is an attempt by the officially atheist party to bring religions under its absolute control and into line with Chinese culture. The campaign has coincided with an intensified clampdown on religious freedom across the country, especially on Protestants, Catholics and Muslims who the party fears could become tools of foreign influence or ethnic separatism. In the far western region of Xinjiang, over 1 million Uygurs, Kazakhs and other Muslim minorities have reportedly been held in internment camps and forced to denounce Islam and pledge loyalty to the party. Expressions and observance of Islam, ethnic customs and culture have also been curbed or discouraged in what some critics called a "cultural cleansing" of the Uygur minority. Meanwhile, in the neighbouring regions of Ningxia Hui and Gansu – home to many Hui Muslims – domes, Islamic decor and Arabic signs have been taken off the streets and some mosques. No new "Arab style" mosques can be built and some Arabic-language schools have been shut down. Outside the western regions, a wave of underground congregations – including the Zion Church in Beijing and Early Rain Covenant Church in Chengdu, both prominent "house churches" – have been forced to shut down, with their members and pastors interrogated and detained. Early Rain pastor Wang Yi has remained in detention facing subversion charges since a raid on his church in December. The crackdowns – especially the mass detentions and security lockdown in Xinjiang – have been met with a rising chorus of criticism not only from human rights groups, but also academics, foreign governments and the United Nations. But according to the government's work report, Beijing plans to continue tightening its grip on religion. The "Sinicisation of religion" was included in Xi's report – laying out broad policy directions for the next five years – to the party congress in late 2017 that kicked off his second term in power. It has been included in the two government work reports that followed, for 2018 and 2019. Last year, the party-controlled governing bodies for Protestants, Catholics and Muslims in China all released detailed five-year plans on how to Sinicise their own religions. For Christianity, the plan calls for "Sinicised theology", including retranslating the Bible and rewriting annotations. It also demands Chinese traditional culture be integrated into expressions of faith, with "Chinese elements" to be added to liturgies, sacred music, clerical clothing and church buildings. Examples given include using traditional Chinese tunes to compose hymns and encouraging Christians to practise calligraphy and Chinese painting. ^ top ^

China Focus: More reform needed to benefit private enterprises (Xinhua)
2019-03-06
China should push forward its reform to facilitate the development of private enterprises, a political advisor said Wednesday. The reform should give them tangible benefits in terms of steady development and fair competition, Liu Shijin, deputy director of the economic committee of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), said at a press conference. Compared with state-owned enterprises, private enterprises have seen more difficulties partly due to insufficient credit support, Liu said. The reform of existing financial enterprises should be promoted, and more importantly, the country should relax market access for the development of a number of financial institutions and financial products that provide special services to smaller firms, Liu said. The private sector plays an important role in the economic system, contributing more than 50 percent of tax revenue, 60 percent of GDP, 70 percent of technological innovation, 80 percent of urban employment and 90 percent of new jobs and new firms. "The private sector and the country's economic and social development have been closely related to each other, and formed a community of a shared future," Liu said. However, the difficulties that private firms and small businesses face in accessing affordable financing have not yet been effectively solved. The business environment still falls short of market entities' expectations, according to a government work report delivered Tuesday by Premier Li Keqiang at the opening of the annual legislative session. Loans to small and micro businesses by China's large state-owned commercial banks will increase by over 30 percent in 2019, the report said. The country also announced reducing the tax burden on and social insurance contributions of enterprises by nearly 2 trillion yuan (about 298 billion U.S. dollars) this year, with a focus on the manufacturing sector and smaller businesses, according to the report. Liu said that the government's policy of supporting the development of private enterprises had been "explicit and consistent." The non-public sector's status and functions in the country's economic and social development have not changed. The principle and policies to unswervingly encourage, support and guide the development of the non-public sector have not changed, and the principle and policies to provide a sound environment and more opportunities to the sector have not changed either, according to an important symposium on private enterprises last year. Private enterprises have truly felt the government's unchanged stance on, confidence in and policy support for the private sector, said Nan Cunhui, a member of the Standing Committee of the CPPCC National Committee and chairman of power equipment giant CHINT Group. "The only change is that what we receive keeps becoming better and better," he said. The tax-cut measures for the manufacturing sector put forward in the government work report is a big stimulus to private enterprises and the whole sector, Nan said. Private firms also need to have the conditions for equal development and a level playing field, Liu said. Policy support is important, but what's more important is a stable law-based environment that does not change with short-term policy changes, Liu added. "We will strive to create a positive business environment in which entrepreneurs can be free of concerns in doing business and running companies," the government work report said. ^ top ^

 

Tibet

Tibetan religious activity slashed, Lhasa mayor confirms (SCMP)
2019-03-07
Just days before the 60th anniversary of Tibet's deadly uprising against Beijing's rule, the mayor of its capital Lhasa has made a rare public statement about the extent of the government's restrictions on religious activities in the spiritual centre of Tibetan Buddhism. Speaking at China's annual legislative meetings in Beijing, Go Khok, mayor and deputy Communist Party chief of Lhasa, said on Wednesday that the number of days spent observing religious events, and the number of people attending them, had both been reduced to less than 10 per cent. "In 2018, Lhasa … took a clear-cut stand in eliminating the negative influence the Dalai Lama exerted via religion and took great effort in ridding the passive religious influence," he told a room of Tibetan delegates and journalists in the Great Hall of the People. "Based on the premise that believers' religious needs were met, the number of days major religious activities were held and the number of people attending them both reduced to below 10 per cent," he said, without specifying if the figure referred to a proportion of the entire year and the entire Lhasa population. Repeated calls to the Tibetan delegation's press officer for clarification went unanswered. According to the 2010 census, 76.7 per cent of Lhasa residents are Tibetans. Sunday marks the anniversary of the beginning of the failed 1959 uprising, which began in Lhasa, led to the exile of the Dalai Lama, Tibet's spiritual leader, and an increasingly stringent grip by Beijing on the Himalayan region's predominantly Buddhist faith. Images of the Dalai Lama – regarded by Beijing as a dangerous separatist – are banned in public and in homes in Tibet, and religious practices of students and state employees are highly controlled. But it is rare for authorities to so blatantly disclose the actual figures of such restrictions, according to Tsering Woeser, a Tibetan poet and writer living in Beijing. "These restrictions have been in place for years, and are very specific," she said. Retired party cadres, civil servants and other public employees are all banned from attending religious activities, with offenders risking reduced pensions, salaries or even dismissal. Students, from primary schools to universities, are also banned from the activities, Woeser said. "As a result, the number of believers taking part in religious activities nowadays is far fewer than before … but this is only the appearance. The belief Tibetans – including the young people – hold towards Buddhism and the Dalai Lama are not only prevalent, but unflinching." In his speech, Go Khok said maintaining stability would be a key task for the city government this year, because of the anniversary. He said the city had been doubling down on its so-called "grid management system" – a neighbourhood surveillance and control measure introduced by Tibet's previous Communist Party boss Chen Quanguo. Since leaving Tibet and becoming the party boss of neighbouring Xinjiang in the summer of 2016, Chen has transferred and escalated many of the security measures he tested in Tibet to his new posting, placing the restive region under a sweeping security lockdown and holding an estimated 1 million Muslim minorities in internment camps. Go Khok also said the government had "appointed specially assigned people to follow, serve and manage key Muslim targets who headed overseas", without elaborating. ^ top ^

 

Xinjiang

'Politically biased': China rejects UN recommendations on death penalty, freedoms in Xinjiang and Tibet (HKFP)
2019-03-05
China has not accepted 62 of the 346 recommendations made at the United Nations (UN) 2018 Universal Periodic Review (UPR), saying they are inconsistent with national conditions and laws, "politically biased or untruthful." Of those not accepted, the majority addressed China's continued use of the death penalty, restrictions on individual freedoms, or the subjugation of ethnic minorities in Xinjiang and Tibet. Countries delivered recommendations during the third cycle of the UN's UPR in Geneva last November, covering areas including poverty alleviation and international law. The majority of the points were accepted. During the assessment – which all 193 UN nations must undergo approximately every four years – the Chinese delegation was grilled on the detention of an estimated one million Muslim Uighurs and other minorities in the northwestern Xinjiang region. According to NGO reports, offences such as having a long beard or reading religious texts can land non-Han Chinese residents in extrajudicial "re-education" centres. China said in its responding report that the accepted recommendations demonstrate its "active, open attitude toward promoting and protecting human rights," while criticising those it did not accept as interfering in its "sovereignty and internal affairs." Patrick Poon, a researcher at NGO Amnesty International, told HKFP that Beijing's response is superficial: "It's clear that the Chinese government doesn't respect the comments from other states. It only picks those favourable comments and rejects all important and valid criticisms," he said. "The Chinese government should show its willingness to follow the international standards which it also endorses at the United Nations. That is the only way to show its determination to improve its human rights record but not to turn the UN mechanism as window-dressing." Seven of the UPR recommendations related to Hong Kong. Of those made, China accepted all but Indonesia's suggestion to ratify the UN's migrant worker's rights treaty in the territory, saying: "The specific date of ratification depends on whether relevant conditions in China are in place." The Hong Kong UPR Coalition – an alliance of 45 civil society organisations – said on Tuesday that they were pleased to see the majority of recommendations accepted, but were disappointed by the refusal to ratify the migrant workers' rights treaty. In the second UPR cycle in 2013, China accepted recommendations from Egypt, Ghana and Guatemala on acceding to the UN's migrant worker's rights treaty, neither of which mentioned Hong Kong. China accepted France's recommendation to guarantee freedoms in the country and in Hong Kong, saying that measures had already been implemented to do so. No such recommendations were made about the city during the prior iteration of the UPR in 2013. An inter-agency mechanism, led by China's Ministry of Foreign Affairs and comprised of over 40 legislative, judicial and administrative departments, was established to consider the recommendations, according to Beijing. After the review, each state is expected to implement the recommendations it accepts before the next UPR in around four years time. ^ top ^

 

Hongkong

5 more years: Carrie Lam has ability to run again as Hong Kong leader, says Exco convener Bernard Chan (HKFP)
2019-03-08
Executive Council convener Bernard Chan floated the possibility of Carrie Lam being a two-term chief executive, while ruling himself out as a candidate for the job. Speaking to RTHK, Chan said on Thursday that Lam's policies responded to the needs of society and she "definitely has the ability" to run for re-election. "The current administration is in place for almost two years, and it is very practically minded. Since Lam is an experienced civil servant, people can see that she has very strong implementation skills," Chan said. He added that he would not be up to the job of chief executive: "I believe people will be more hesitant when they know what the job really entails. It is not as easy as people think." Chan was speaking from Beijing, where he was attending the "two sessions" – China's annual meeting of top lawmakers and political advisers. Chan is a Hong Kong deputy at the National People's Congress. He was also Lam's campaign manager during the small-circle chief executive election in March 2017. When Lam took office, she compared the Executive Council to her "sages" and asked for them to be more involved in policy-making. On Wednesday, Lam was reportedly praised by China's Vice-Premier Han Zheng for being "proactive and getting things done." Han said at a closed-door meeting with Hong Kong delegates that China will support Lam and her administration's governance. Han further said that it was not just "normal support" but "full support," and said it would regularly make suggestions to Lam's administration. Zhang Xiaoming, Beijing's top official on Hong Kong and Macau affairs, also said on Wednesday that Lam "won widespread acclaim" for her participation in the Greater Bay Area plans and the Belt and Road Initiative. Zhang also praised Lam for being "responsible and proactive" in banning the pro-independence Hong Kong National Party. According to polling by the University of Hong Kong, Lam's popularity rating as of February 21 was 50.0 points. It had previously sunk to an all-time low of 45.5 points at the end of January. Since Hong Kong's handover in 1997, no chief executive has served more than one five-year term. ^ top ^

'Grave concerns': Hong Kong's extradition law update faces new pushback from business sector and Taiwan politicians (HKFP)
2019-03-07
Hong Kong's business sector has poured cold water on the government's plan to update its extradition laws, a sentiment echoed by political parties across the spectrum in Taiwan. The American Chamber of Commerce in Hong Kong (AmCham) said that it has "serious reservations" about the proposal and asked for "more narrowly tailored solutions." In a letter addressed to Secretary for Security John Lee, it said that the city's international business community has "grave concerns about mainland legal and judicial system." "Mainland criminal process has deep flaws, including lack of an independent judiciary, arbitrary detention, lack of fair public trial, lack of access to legal representation and poor prison conditions," read the letter, which was dated March 4. If international business executives were seized in Hong Kong due to allegations of economic crimes in the mainland, that would undermine the city's reputation as a "safe and secure" international financial centre, AmCham added. Last month, the government proposed a case-by-case system that would allow the city to handle extradition requests from jurisdictions where there are no pre-existing agreements – most notably China and Taiwan. The move was spurred by the case of Poon Hiu-wing, a pregnant 20-year-old Hong Kong woman who was killed during a trip to Taiwan last February. Hong Kong authorities arrested the woman's boyfriend Chan Tong-kai but were unable to charge him with murder in local courts. He is, instead, being held on theft charges. Pro-democracy lawmakers have questioned whether the system would mean Hongkongers could be sent to the mainland over political crimes, but the security chief has denied the possibility since the amendment will explicitly exclude political charges. However, both politicians and the business community have questioned whether the Chinese authorities could use economic crimes as a pretext for extradition. The current Fugitive Offences Ordinance covers 46 categories of crimes: at least 12 on the list are related to economic activity, such as "offences against bankruptcy law or insolvency law," "offences against the law relating to companies," and "offences relating to fiscal matters, taxes or duties." AmCham said in its letter that China is prone to "criminalise what are essentially commercial disputes between foreign and local business interests." On Thursday, James Tien – honorary chair of the pro-business Liberal Party – suggested the government should focus on serious crimes like murder, instead of white collar crimes. "If the government only targets those eight or 10 crimes, then the business sector will be less worried," Tien said, noting that both local and foreign firms had expressed fears. "I don't understand why the government would want to cover all 46 categories." He added that there were substantial differences between the Hong Kong and mainland legal systems, and he had "seldom heard of businesses winning lawsuits against the government" in China. Chinese courts have a conviction rate of 99.92 percent. Both the Liberal Party and the Business and Professionals Alliance previously met with security chief Lee to give feedback. The public consultation period for the law – which was only 20 days long – ended on Monday. In its letter, AmCham also complained that there was not enough time to scrutinise the amendment. Four members of the pro-democracy camp – lawmakers James To, Ray Chan, Eddie Chu, as well as former legislator Nathan Law – travelled to Taiwan on Wednesday to meet with the island's political representatives. Law said that the group met with representatives from Kuomintang, the Democratic Progressive Party, and the Mainland Affairs Council – an agency under the Executive Yuan that handles cross-strait relations. "We felt that the Taiwan political sphere, regardless of affiliation, is very concerned about the effect of the law amendment. Taiwan has many citizens working and doing business in Hong Kong, with an average of 1.8 million Taiwanese visitors each year, so the amendment will directly affect their personal safety," Law wrote. A representative from the Mainland Affairs Council also told the group that the Hong Kong government has never directly contacted them about the murder case, and the amendment was proposed without consulting the Taiwan side. Huang Ting-hui, the council's official responsible for Hong Kong affairs, had previously said that the Taiwanese government "will not accept any act that has the goal of destroying national sovereignty" amid reluctance by the Hong Kong side to strike an extradition deal directly with Taipei. At a legislative panel meeting, Taiwan's Democratic Progressive Party lawmaker Tuan Yi-kang pressed his government to clarify its stance on the extradition law proposal. The four-man delegation from Hong Kong will continue to meet with Taiwanese representatives on Thursday. ^ top ^

Greater Bay Area blueprint addresses Hong Kong's persistent shortage of land (SCMP)
2019-03-07
On February 18, China's State Council laid out its plan for the "Greater Bay Area", naming Hong Kong as one of the key cities in the new economic hub ("China's State Council reveals details of Greater Bay Area plan", February 19). The Greater Bay Area blueprint notes that "Hong Kong lacks sustainable and stable support" for economic development and mentions the "constraints on resources" in the region. In Hong Kong, one of these constraints is a shortage of space for development. Currently, Hong Kong's 7.5 million people live and work in only 276 square kilometres of land. Hong Kong's Task Force on Land Supply believes the shortage of land is "urgent and dire". The Greater Bay Area can play a role here. The recently released blueprint asks Hong Kong, Guangdong and Macau to "promote coordinated regional economic development". The measures suggested include developing "enclave economies" to facilitate "relocation of industries in the pan-[Pearl River Delta] region", "national innovation demonstration zones", "national hi-tech development zones" and "an industrial belt for advanced equipment manufacturing". All these address Hong Kong's need for land, while easing the flow of resources. Proposals for such cooperation are not new. On January 27, 2018, Chen Yiwei, Huizhou's then-municipal party secretary, said at a meeting of the 13th National People's Congress of Guangdong province: "Huizhou hopes to cooperate with Hong Kong through making full use of Hong Kong's innovative resources and Huizhou's industry advantages, and, therefore, building special cooperation zones to create a highland of innovative industries." Cheng Yiu-tong, a Hong Kong delegate to the National People's Congress, last year proposed renting 30 square kilometres of land in Huizhou to build housing for 600,000 Hongkongers while implementing Hong Kong laws. In September 2018, Jacinto Tong Man-leung, CEO of Gale Well Group, said the development of the Greater Bay Area could alleviate the land supply shortage in Hong Kong.With regional integration, people from the mainland working in Hong Kong could settle in the cities nearby, while Hongkongers could also consider moving to other cities. As the Greater Bay Area will gradually dissolve the traditional boundary between Hong Kong and the mainland, Hong Kong will have more land to choose from. ^ top ^

'Jumping the gun': Barristers, scholars and democrats oppose update to Hong Kong extradition law as consultation ends (HKFP)
2019-03-05
The government's proposed amendment to Hong Kong's extradition law has been met with a fresh round of opposition as the consultation period drew to a close on Monday. In a statement, the city's professional body of barristers accused the government of "jumping the gun" with the proposal and failing to fully consult the public. The body also recommended two alternatives – either the city should make an extradition agreement with Taiwan, or amend the law so that people who commit homicide overseas could be tried in Hong Kong. The government proposal was spurred by the case of Poon Hiu-wing, a pregnant 20-year-old Hong Kong woman who was killed during a trip to Taiwan last February. Hong Kong authorities arrested the woman's boyfriend Chan Tong-kai but were unable to charge him with murder in local courts. He is currently in custody and charged with theft. Hong Kong's proposal, which works on a case-by-case basis, would allow the city to handle extradition requests from jurisdictions where there are no pre-existing agreements. Lawmakers have questioned whether the system would mean Hongkongers could be sent to the mainland over political crimes, but Secretary for Security John Lee has denied the possibility. Lee had previously said the amendment did not require a public consultation. However, the Security Bureau later admitted that it was collecting the public's opinion for 20 days up until March 4. The Hong Kong Bar Association said on Monday that the proposal could have "significant and wide-ranging effects" that could undermine Hong Kong's reputation as a free and safe city with the rule of law. Rejecting the government's line that there is a "loophole" in the law, the HKBA said that it was no accident that Hong Kong has had no extradition agreement with mainland China since 1997. "If circumstances have changed since then and the objections to [excluding China] have gone, then the HKSAR Government needs to say why things have changed," the statement read. "If there have indeed been significant changes such that the [Hong Kong government] now has confidence in the criminal justice system in those other parts of China, then logic would suggest that comprehensive surrender and assistance agreements should be negotiated, and not ad hoc agreements and the Legislative Council should continue to have its say." If ad hoc agreements were to be made, they should be made with Taiwan exclusively, the HKBA added. The HKBA also suggested amending the Offences Against the Person Ordinance and the Criminal Jurisdiction Ordinance to cover situations where Hong Kong permanent residents commit homicide outside the city, or where the victim of such a homicide is a Hong Kong permanent resident. Aside from barristers, the Scholars' Alliance for Academic Freedom – along with 21 scholars – have started a petition asking the higher-education sector to oppose the amendment. The petition called for the amendment to be withdrawn: "Given the notoriety of the legal system on the mainland, the Hong Kong government's amendments will massively weaken the protection of human rights by local laws," the document read. The pro-democracy camp and the Civil Human Rights Front also held a protest on Sunday outside Mong Kok police station. The coalition included lawmakers such as Claudia Mo, Alvin Yeung and activists such as "Long Hair" Leung Kwok-hung and Jimmy Sham. They said they planned to host two more protests: marching to the China Liaison Office on Sunday, and a march from Wan Chai to the government headquarters on March 31. On Monday, around 20 pro-establishment demonstrators voiced their support for the amendment outside the government headquarters in Admiralty. The demonstrators, who were from Politihk Social Strategic, Hong Kong Legal Exchange Foundation and other pro-Beijing groups, said that Hong Kong should not become a safe haven for criminals and that China's criminal justice system has already received international recognition. ^ top ^

 

Taiwan

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Economy

China to make forced technology transfer illegal as Beijing tries to woo back foreign investors (SCMP)
2019-03-07
Beijing will make it illegal to force foreign investors to transfer their technology to Chinese partners while also lowering market barriers for foreign firms to enter the domestic market, a senior economic planning official said on Wednesday, highlighting an effort to lure overseas investment inflows. China is expected to pass a new law next week intended to protect the interests of foreign investors, both as a response to demands from the United States that have formed part of the ongoing trade war negotiations, and to help shore up economic growth, which slowed last year to its lowest rate in 28 years. Foreign investors will be allowed to set up ventures in which they have full ownership, instead of being forced into joint ventures with local partners, in more industries, said Ning Jizhe, a vice-chairman of the National Development and Reform Commission, in Beijing on Wednesday during the National People's Congress. In addition, China will set up a special task force to facilitate "key" projects like electric-car maker Tesla's new factory in Shanghai or BASF's new chemical complex in Guangdong, both of which are solely owned by the foreign company. China's leadership has listed foreign investment as one of the six areas that it must "stabilise" in 2019, along with employment, growth, trade, domestic investment and market expectations. Foreign direct investment in China amounted to US$135 billion in 2018, an increase of 3 per cent from a year earlier, according to Chinese government data. But foreign investment into the world's second biggest economy have slowed over last decade, which could deprive China of access to advanced technologies and marginalise the country in the development of future global supply chains. Beijing is trying to lure more foreign capital and technology to support its plan to upgrade its manufacturing industries and boost the development of new, hi-tech sectors. "China will roll out more opening-up measures in the agriculture, mining, manufacturing and service sectors, allowing wholly foreign-owned enterprises in more fields," Ning said. Since December, China has been rushing to draft legislation for a new foreign investment law, a key clause of which prohibits local government's from forcing transfer of technology in return for being allowed to conduct business in their jurisdictions. The National People's Congress is expected to endorse the new foreign investment law next week. "After passing the law, the government will take serious measures to obey and implement it," Ning added. He said that China will remove market entry restrictions for foreign investors to ensure that domestic and foreign firms "are treated as equals." However, the jury is still out whether Beijing's promises of fair treatment, market access and protection for intellectual property rights will be enough to generate a steady inflow of hi-tech investment. The US has long complained that China has been unwilling to implement previous commitments under the World Trade Organisation to open up its market – allegation Beijing denies. Shen Jianguang, chief economist at JD Digits, an arm of Chinese e-commerce firm JD.com, said restrictions on foreign investment will exist in China despite the government's promises. China's domestic market remains large and attractive for some foreign investors, he said. "Foreign investors are still very interested in the Chinese market, if the openness of the economy is sufficient," Shen added. ^ top ^

China counts on tax cuts to buoy business in tough economic times ahead (SCMP)
2019-03-05
Chinese Premier Li Keqiang delivered a sombre outlook for the year ahead but offered hope in the form of cuts in fees and taxes as he presented the central government's annual work report to the country's political elite in Beijing on Tuesday. On the opening day of the National People's Congress, Li referred to "risks", "pressure" and "challenges" more than three dozen times in total, underscoring the hardship China expects in the fallout from slowing economic growth and its trade war with the United States. The government is counting on lower taxes on business to give the economy a lift, a sharp contrast to a decade ago when the authorities resorted to stimulus to steer the world's second-biggest economy through troubled waters. The report included 30 mentions of reductions in taxes, costs and fees, with Li forecasting that planned cuts in areas such as employer contributions to pensions could save businesses as much as 2 trillion yuan (US$298 billion) this year, compared to the 1.3 trillion yuan in savings Beijing said were made last year. "There will be key measures to relieve companies' tax burdens and invigorate the market," the premier said. "We will release the water to nurture the fish." The cuts are part of a bigger effort to address "graver and more complex" risks and challenges of a "both predictable and unpredictable" nature, according to the work report. Li also said Hong Kong and Macau would develop and progress with mainland China as they seized opportunities under the nation's trade and integration plans. He made no mention of the pro-independence campaign in Hong Kong, choosing instead to say Beijing will uphold the high autonomy of the special administrative region. "We will help Hong Kong and Macau access the opportunities from the 'Belt and Road Initiative' and the Greater Bay Area, and maximise their potential for further integration with the mainland," he said. "We believe that Hong Kong and Macau can seek common development with the mainland, and maintain long-term prosperity and stability." But he made clear that Beijing would not tolerate Taiwanese independence – Beijing would promote cross-strait cultural exchanges, but would stick to the one-China principle, he said. As he focused on the year ahead, the premier urged the public to be "prepared to fight tough battles". As such, the government has set the economic growth target in a range of 6.0 to 6.5 per cent, compared to last year's target of around 6.5 per cent. China's economy grew at 6.6 per cent in 2018, the lowest rate since 1990. For the first time, the government named employment – a key factor in social stability – as the priority for macro policy. It also announced a 3 percentage point cut in the value-added tax rate (VAT) for manufacturers to 13 per cent and a 1 percentage point cut in the VAT rate for construction and transport companies to 9 per cent. The goal is to help domestic businesses, especially the manufacturing sector, which are vital for jobs. "[These cuts] could help support investment recovery in both the manufacturing and services sectors," HSBC economists wrote in a research note. Manufacturing accounts for more than two-thirds of all VAT payments and economists said a tax cut of 3 percentage points in this bracket would bolster China's efforts to upgrade industry. The VAT rate cut in the manufacturing, transport and construction sector will generate tax savings of around 800 billion yuan, according to HSBC estimates. Other measures outlined in the report include lower requirements for employers to pay into pension funds, cuts in road tolls and reductions in utility prices. Electricity rates for industry will be cut by 10 per cent, broadband internet fees will shrink by 15 per cent and mobile internet fees will be 20 per cent lower, according to the report. Larry Hu, chief China economist at Macquarie Capital, said the tax cuts were positive "but we don't want to get too excited as the fiscal deficit target set rather small room for potential cuts". "We don't see the tax cut turning the economy around. It never did in the past," Hu said. The fiscal deficit is set at 2.8 per cent of GDP, or 2.76 trillion yuan. The increase of 380 billion yuan from last year is deemed by many analysts as insufficient to accommodate substantial tax cuts. "While popular, tax cuts tend to be less effective in boosting economic growth than government expenditure increases," Louis Kuijs, the Hong Kong-based head of Asia research for Oxford Economics, said. Cheng Shi, chief economist with ICBC International, said the VAT cut pointed to China's "strategic focus" on developing high-end manufacturing. China will rely heavily on innovation to upgrade traditional manufacturing industries and bolster the economy, according to the government report. But there was no mention of "Made in China 2025", an industrial strategy to promote self-sufficiency and global prowess in core technologies. The programme was among the key tasks listed in last year's work report for 2018, but dropped this year amid concerns overseas about China's rise as a technology powerhouse. While asked by the South China Morning Post about the absence of the strategy, Huang Shouhong, head of the work report's drafting panel, said space was limited in the report and there was nothing special about policies "being mentioned last year but not this year". "Nevertheless, facilitating high-quality growth in China's manufacturing sector is a must to upgrade and transform the Chinese economy," Huang said. ^ top ^

 

DPRK
US plays down reports a North Korean rocket site had 'returned to normal operational status' (SCMP)
2019-03-08
The US State Department responded on Thursday to claims by North Korea observers that a partly dismantled rocket and satellite test site had restarted operations, saying that while commercial satellite imagery suggests some level of reassembly, it was too soon to draw conclusions. The remarks by a senior State Department official came after the specialised website 38 North announced that such imagery showed operations at part of the Sohai Satellite Launching Station test facilities in Tongchang-ri had restarted in late February. The official, who spoke at a press briefing on background, conceded that the images 38 North cited suggest some level of activity but that the US had not determined "why it's happening and for what purpose it's happening". The official added that "we are watching closely" for further developments. Earlier in the day, 38 North and other North Korea watchers said that the long-range rocket launch site appeared to have resumed "normal operation status", with work to rebuild the launch pad proceeding rapidly. "Given that construction, plus activity at other areas of the site, Sohae appears to have returned to normal operational status," 38 North said. That assessment came a day after the Washington-based Centre for Strategic and International Studies said there had been "rapid rebuilding" of the facility. The 38 North website and the CSIS tracked activity at the site – which began before last week's aborted summit in Hanoi between US President Donald Trump and North Korea's Kim Jong-un – using commercial satellite imagery. Images taken on Wednesday, March 6, showed that a rail-mounted structure to transfer rockets to the launching pad appeared to have been completed and "may now be operational". Cranes have been removed from the pad while progress also appeared to have been made on rebuilding the support structure for a rocket-engine testing stand. Kim had agreed to close the Sohae site at a summit last year with the South's President Moon Jae-in in Pyongyang as part of confidence-building measures, and satellite pictures in August had suggested workers were already dismantling the engine test stand. Pyongyang used the site in 2012 and 2016 to launch satellites. Western experts believe the satellite launches inform North Korea's development of intercontinental missiles capable of striking the United States. CIA director Gina Haspel said in late January that North Korea remains committed to developing long-range missiles despite its denuclearisation talks with the US. Asked Wednesday about the renewed activity at the site, Trump said it was "too early" to tell if the reports were true, but if confirmed, he would be "very, very disappointed in Chairman Kim." Trump and Kim abruptly ended a summit in Hanoi, Vietnam, on February 28 without an agreement or even a joint statement. "Sometimes you have to walk," Trump said at a news conference afterwards. The State Department official reinforced that position on Thursday, saying that the Tongchang-ri site was "not a critical part" of North Korean nuclear infrastructure but that it was an important location for tests, and the US would like to see complete dismantle of the test site. The officials added that sanctions, which have "a crunching impact" on the North Korean economy, remain in place. The official said that the talks were productive, though it was "a grinding process". The US had closed some gaps with North Korea on some denuclearisation issues, but not on other important areas. "What we need to see soon is meaningful and verifiable steps on denuclearisation," the official said. "It is going to be up the North Koreans to some extent to decide to engage on meeting some of the expectations that are out there on denuclearisation." ^ top ^

North Korea glorifies Trump-Kim summit in documentary, omitting failed negotiations in Hanoi (SCMP)
2019-03-07
North Korea's state TV has aired a documentary glorifying leader Kim Jong-un's recent visit to Vietnam that omitted the failed nuclear negotiations in the second summit with US President Donald Trump. The footage's release on Wednesday came amid reports that Pyongyang is restoring some facilities at its long-range rocket launch site that it dismantled last year as part of disarmament steps. The documentary shows a smiling Kim talking with Trump while walking together inside a Hanoi hotel last week. It shows Kim's black limousine passing through a Hanoi street lined with residents waving flags. The footage also shows Kim visiting the North Korean Embassy where some skipped and wept with emotions before they took a group photo with the backdrop of a huge picture of Kim's late father and grandfather. The documentary cited Kim as saying North Korea and the US must put an end to their decades-long animosity and confrontation. But it did not mention about the lack of an agreement following the Kim-Trump summit. The Hanoi summit broke down due to disputes over US-led sanctions on North Korea. Washington and Pyongyang blame each other for the talks' breakdown, but both sides still leave the door open for future negotiations. North Korean documentaries are typically propaganda venerating Kim, the subject of a strong personality cult among the North's 25 million people. Some observers say omitting the status of the nuclear talks also shows the North hopes to continue negotiations, while also not letting North Korean people know of any diplomatic failures that could damage his leadership. Earlier on Tuesday, two US-based websites specialising in North Korea studies cited commercial satellite imagery as indicating that North Korea is rebuilding some structures at its northwestern rocket launch facility. The renewed activity was recorded two days after the summit and may "demonstrate resolve in the face of US rejection" of the North's request for sanctions relief, said researchers at the Washington-based Center for Strategic and International Studies (CSIS). "Activity is evident at the vertical engine test stand and the launch pad's rail-mounted rocket transfer structure," the CSIS report said. "Significantly, the environmental shelters on the umbilical tower, which are normally closed, have been opened to show the launch pad. "This facility had been dormant since August 2018, indicating the current activity is deliberate and purposeful." Researchers said that the activity may be intended to "demonstrate resolve in the face of US rejection" of the North's request for an easing of sanctions in return for some dismantlement of nuclear weapons infrastructure. South Korea's spy service gave a similar assessment to lawmakers in Seoul in a closed-door briefing on Tuesday. "I would be very, very disappointed in Chairman Kim," Trump said when reporters asked him about reports of new work at the North's launch site. "But we'll see what happens." ^ top ^

North Korea rebuilding part of missile launch site it promised it would dismantle at first Trump-Kim summit in Singapore: reports (SCMP)
2019-03-06
North Korea has restored part of a missile launch site it began to dismantle after pledging to do so in a first summit in Singapore with US President Donald Trump last year, South Korea's Yonhap news agency and two US think tanks reported on Tuesday. Lawmakers briefed by South Korea's National Intelligence Service (NIS) were quoted by Yonhap as saying the work was taking place at the Tongchang-ri launch site and involved replacing a roof and a door at the facility. Satellite images seen by 38 North, a Washington-based North Korea project, showed that structures on the launch pad had been rebuilt sometime between February 16 and March 2, said managing editor Jenny Town. A report released by the Center for Strategic and International Studies (CSIS), also citing satellite imagery, that concluded North Korea is "pursuing a rapid rebuilding" at the site. "Activity is evident at the vertical engine test stand and the launch pad's rail-mounted rocket transfer structure," the CSIS report said. "Significantly, the environmental shelters on the umbilical tower, which are normally closed, have been opened to show the launch pad." The news comes days after a second summit on denuclearisation between Trump and North Korean leader Kim Jong-un broke down over differences on how far North Korea was willing to limit its nuclear programme and the degree of US willingness to ease sanctions. The summit took place in Hanoi on February 27 and 28. Trump's national security adviser said on Tuesday the US will look at ramping up sanctions if Pyongyang doesn't scrap its nuclear programme. "If they're not willing to do it, then I think President Trump has been very clear... they're not going to get relief from the crushing economic sanctions that have been imposed on them, and we'll look at ramping those sanctions up in fact," John Bolton said in an interview. Trump told a news conference after the unprecedented first summit with Kim on June 12 in Singapore that the North Korean leader had promised that a major missile engine testing site would be destroyed. Trump did not identify the site, but a US official subsequently told Reuters it was the Sohae Satellite Launching Ground, which is located at Tongchang-ri. Kim had also pledged at a summit with South Korean President Moon Jae-in last September to close Sohae and allow international experts to observe the dismantling of the missile engine-testing site and a launch pad. Signs that North Korea had begun acting on its pledge to Trump were detected in July, when a Washington think tank said satellite images indicated work had begun at Sohae to dismantle a building used to assemble space-launch vehicles and a nearby rocket engine test stand used to develop liquid-fuel engines for ballistic missiles and space-launch vehicles. However, subsequent images indicated North Korea had halted work to dismantle the missile engine test site in the first part of August. The fact that the site had been dormant since August indicates the new activity is "deliberate and purposeful", the CSIS report said. A US government source said the NIS was considered reliable on such issues, but added that the work described did not seem particularly alarming, and certainly not on a scale of resuming missile tests that have been suspended since 2017. Lawmakers briefed by intelligence officials were also quoted by Yonhap as saying the five-megawatt reactor at North Korea's main nuclear site at Yongbyon, which produces weapons-grade plutonium used to build bombs, had not been operational since late last year, concurring with a report from the UN atomic watchdog. Yonhap quoted the sources as saying there had been no sign of reprocessing of plutonium from the reactor and that tunnels at North Korea's main nuclear test site in Punggye-ri had remained shut down and unattended since their widely publicised destruction in May. The fate of the Yongbyon nuclear complex and its possible dismantling was a central issue in the Hanoi summit. The breakdown of the second summit has raised questions about the future of US-North Korea dialogue. US Secretary of State Mike Pompeo said on Monday he was hopeful he would send a delegation to North Korea in the coming weeks but that he had "no commitment yet". While North Korea's official media said last week Kim and Trump had decided at the summit to continue talks, its Vice Foreign Minister Choe Son Hui told reporters Kim "might lose his willingness to pursue a deal" and questioned the need to continue. US State Department spokesman Robert Palladino told a news briefing that the US remained "in regular contact" with North Korea, but he declined to say whether they had been in contact since the summit. Palladino said US Special Representative for North Korea Stephen Biegun, who led pre-summit negotiation efforts, planned to meet his South Korean and Japanese counterparts on Wednesday. ^ top ^

 

Mongolia

L.Oyun-Erdene: This is a clear depiction of where the fight for justice halts (Montsame)
2019-03-08
Chairman of the Board of Directors of Trade and Development Bank (TDB) D.Erdenebileg, the bank executive director O.Orkhon and Director of the Mongolian Copper Corporation Ts.Purevtuvshin were detained on March 05 for being accused of money laundering during the purchase of 49 percent shares of the Erdenet Mining Corporation (EMC). However, yesterday on March 6, the Primary Court of Sukhbaatar District ruled to release them and they have been freed. In connection with the release, Head of the Cabinet Secretariat of Government L.Oyun-Erdene and MPs J.Batzandan and L.Bold made a statement today. "The Government's refusal of its preference to buy 49 percent of EMC from the Russian Federation and transferring it to MCC was suspected of being an act of money laundering and the three persons were detained. However, yesterday, the Primary Court of Sukhbaatar District ruled that there is no need to continue to detain them and freed the suspects. Despite the likelihood of them having committed a crime of money laundering being 99.99 percent, they have been freed. This is a clear depiction of where the fight for justice halts," said Mr.Oyun-Erdene. He then continued on by saying, "When the case was opened at the National Police Agency, the Prosecutor's Office of the Capital City continuously disrupted the investigation and defended the suspects and the case used to be halted at the courts. This time, the matter of whether the three suspects should be continued to be detained was first assigned to a judge named Boldbaatar, but shortly, the case was transferred to judge Kh.Ider for the reason that the previous judge became sick, and judge Kh.Ider made the decision to release them. Today, the Prosecutor's Office of the Capital City will discuss whether to consider the persons as defendants. The citizens of Mongolia as well as the media have been persistently waiting for the decision. I call for the Mongolian parliament to fight similar cases and the MPs to unite." MP J.Batzandan highlighted that the President, Speaker and the Prime Minister support the fight for justice for other major cases alongside the 49 percent purchase of EMC. ^ top ^

Mongolia to chair WTO TRIPS Council (Montsame)
2019-03-07
Ambassador and Permanent Representative of Mongolia to the World Trade Organization L.Purevsuren was appointed as chair of the WTO Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council), one of the three subsidiary bodies of the organization. In its meeting on February 28, the WTO General Council agreed on the slate of names for chairpersons to WTO bodies who will preside the councils for a year. The WTO TRIPS Council is responsible for monitoring the operation of the Agreement on Trade-Related Aspects of Intellectual Property Rights, an international legal agreement between WTO and is member states, in particular, the member' compliance with their obligations. ^ top ^

Six-month emergency regime announced for Erdenet Mining Corporation (Montsame)
2019-03-06
The Cabinet on March 6 issued a resolution to set an emergency regime for six months at Erdenet Mining Corporation and Mongolrostsvetmet LLC based on the Law on Government and other related laws. During the period of emergency regime, there will not be interruptions in operations of Erdenet Mining Corporation and Mongolrostsvetmet LLC and financial documents will be inspected only. The Prime Minister set up a working group to implement the resolution. On February 27, the Government made a decision to declassify the minutes of Cabinet meeting of which the privatization of 49 percent shares of the Erdenet Mining Corporation (EMC) was discussed and other related documents. Head of the Cabinet Secretariat of Government L.Oyun-Erdene reported that the Government did not accuse a transfer of 49 percent shares of the EMC into a Mongolian private company and documents which can prove a hypothesis that the state property might be illegally purchased by state money are becoming available to the public. "Mongolian Copper Corporation (MCC) purchased 49 percent shares of EMC at USD 400 million 270 thousand. 72.4 percent of the funding was raised from the state and 27.6 percent from Trade and Development Bank. The financial sources of MCC causes the situation to inspect whether the financing has connection with criminal activity of money laundering. EMC, one of the largest copper mine in Asia, set up in 1973 and started its production in 1978 as a joint venture between the Soviet Union owning 51 percent, and Mongolia the rest. A review of the agreement led to a reversal of the ownership structure in 1991, giving Mongolia 51 percent and Russia percent. State Corporation Rostec of Russia made a decision to sell the 49 percent stake in joint ventures Erdenet and Mongolrostsvetmet offering it to the Mongolian side according to joint agreement. However, the Government of Mongolia of that time refused its preference to buy the 49 percent stake and MCC bought it. Mr.L.Oyun-Erdene gave some information concerning how Mongolian Copper Corporation (MCC) raised its funding, who were owners of the companies that partnered for the deal, as well as how many transactions were made from the Bank of Mongolia, the Ministry of Finance and the Development Bank of Mongolia and in what ways. He also accuses then Government for the refusal of buying the stake even though the facts show that the Government had sufficient source to buy it. Mr.Oyun-Erdene underscored that the minutes of Cabinet meeting of that particular period evidenced the connection between the Trade and Development Bank and MCC. ^ top ^

 

Jennia JIN
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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