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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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  8-12.4.19, No. 763  
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Foreign Policy

Greek Prime Minister Alexis Tsipras expected to attend 16+1 talks as country looks set to join following 'tough' EU-China negotiations (SCMP)
2019-04-12
Greek Prime Minister Alexis Tsipras is expected to add his country to Beijing's 16+1 trade and investment initiative in person, after the EU's hard-fought negotiations with China ensured the final document would contain language on reciprocity, UN standards and more, an insider has told the South China Morning Post. Tsipras is expected to arrive in Dubrovnik, Croatia, ahead of Friday's signing ceremony, adding Greece to the list of 11 EU countries and five Balkan nations that have so far joined the umbrella platform with China. This week the prime minister expressed his willingness to join the platform in a letter to Northern Macedonian Prime Minister Zoran Zaev that was seen by the Financial Times. Requests to Greece's foreign ministry went unanswered, as did telephone calls to the ministry and Tsipras's office. This year's final document – known as the "Dubrovnik Guidelines" – will include a pledge for a "level playing field" between China and companies based in Central and Eastern Europe. Negotiations with China were "tough", a source familiar with the matter told the Post, and there had been growing qualms with the cooperation, but ultimately European partners walked away generally satisfied with the outcome. The Dubrovnik Guidelines also mention the "three pillars" of the United Nations by name but, notably, do not specify what they are: peace and security, human rights, and development. The guidelines also contain language on World Trade Organisation (WTO) reform. This year's 16+1 gathering falls just after the EU-China summit, which was held in Brussels on Tuesday. Last year it preceded that summit, drawing protestations from the EU, which wanted to use the outcomes of the Brussels talks to inform its demands at the 16+1 conference. This time around, European partners were able to use the stronger outcomes of the Brussels-Beijing joint statement in 16+1 discussions to extract similar promises from Beijing on WTO reform. A strong outcome from this year's EU-China summit helped the 16+1 nations get more from China, the source said, though the Dubrovnik document stops short of including key elements, such as agreements to address Beijing's state subsidies for strategic industries, which China called a "red line". China and the EU nearly failed to sign their joint statement ahead of Tuesday's summit after major European economies, including Germany, France and the UK, threatened to not endorse the document if Beijing did not include promises to address industrial subsidies. The final EU-China document included those promises, which EU Council President Donald Tusk called a "breakthrough". ^ top ^

US, Canada and EU to offer 'robust alternative' to state-led development finance, as belt and road increases reach (SCMP)
2019-04-12
A development financing arm of the United States government entered into a trilateral agreement with Canada and the European Union on Thursday, part of a US-led bid to offer emerging economies a development alternative to state-led models such as China's "Belt and Road Initiative". Representatives of the Overseas Private Investment Corporation (OPIC), a US federal agency that connects private American lenders with governments and developers in developing countries, and its Canadian and EU counterparts announced the new alliance in the form of a memorandum of understanding, signed into effect at a ceremony at OPIC's Washington headquarters. The pact was signed by OPIC's acting president and chief executive, David Bohigian; Nanno Kleiterp of the 15-member European Development Finance Institutions (EDFI); and Paul Lamontagne of FinDev Canada. It will enhance cooperation "to advance shared development objectives and underscore the participants' commitment to providing a robust alternative to unsustainable state-led models", a statement from OPIC said. The trilateral agreement is the second of its kind brokered by OPIC, which entered into a similar partnership with Japan and Australia late last year as part of a whole-of-government push to protect the economic and sovereign rights of countries in the Indo-Pacific region. Since that agreement, OPIC has posted an official in Tokyo to facilitate coordination on projects in the region. The pact with Canada and the EU will allow strategic and tactical collaboration, said Bohigian, enabling the three to consult on where to focus their investments and assist each other in matters of due diligence and the monitoring of projects. The move came as Beijing's belt and road plan continues to attract partners around the world, most recently drawing its first G7 member nation when Italy, which is an EDFI member, signed onto the investment programme last month. Now in its sixth year, the belt and road strategy, considered a signature foreign policy of Chinese President Xi Jinping, is a loosely defined scheme to broaden and deepen China's economic connections in Asia, Africa and beyond, primarily through infrastructure projects in transport, telecommunications and energy. Critics say the lending programme burdens weak economies with crippling levels of debt, which could in turn bolster China's geopolitical influence abroad when borrowing countries default and cede control of infrastructural projects to Beijing. There was "legitimate concern" that the Chinese government is engaging in "debt diplomacy", according to a white paper released on Thursday by the Institute of International Finance. Xi has denied that its belt and road project is about creating a global "China club". Speaking to the South China Morning Post, Bohigian stressed that OPIC was committed to pursuing development finance according to five principles: the sovereignty of the host nation; environmental protection; local job creation; transparency; and ensuring each project is long-lasting. Bohigian did not mention China by name, but those are all areas around which much of the criticism surrounding belt and road-backed projects has centred. "We're trying to hold up an example for the world of the way that development finance should work," he said. Kenneth Kang of the International Monetary Fund said that the belt and road scheme had the potential to "foster greater regional cooperation, particularly in the areas of trade, investment and finance", but warned that the initiative could entail risks if not managed well, both to lenders and to China itself in the form of credit risk. Kang, deputy director for Asia Pacific at the IMF, called on Beijing to select high quality projects, adhere to high corporate governance standards and encourage private sector participation, adding that the IMF was "working closely with the Chinese authorities on sharing international best practices, including in the area of debt sustainability". The US government has taken a much harsher position, reprimanding allies around the world who choose to sign onto the belt and road project. A White House National Security Council spokesman said ahead of Rome's signing onto the programme that there was "no need for [the] Italian government to lend legitimacy to China's infrastructure vanity project". And last year Secretary of State Mike Pompeo warned Central American countries that "when China comes calling, it's not always to the good of your citizens". OPIC's collaborations on development finance in the face of an expanding Belt and Road Initiative comes as the agency's powers are set to be increased during the US government's next budget cycle. The agency will be granted an increased portfolio cap to US$60 billion, from its current limit of around US$29 billion, as well as new authority to make equity investments. OPIC's offerings now centre primarily around financing and political risk insurance. The changes, signed into law under the BUILD Act, will take effect on October 1, and will see OPIC absorb some staff from the United States Agency for International Development and undergo a name change to the United States International Development Finance Corporation (DFC). The renamed agency will, according to OPIC's website, "help countries sidestep opaque and unsustainable debt traps being laid by Beijing throughout the developing world and help more American businesses invest in emerging markets, including many places that are of key strategic importance to the United States". ^ top ^

Chinese envoy calls for efforts to boost women's participation in peacekeeping (Xinhua)
2019-04-12
A Chinese envoy on Thursday asked for more efforts from the international community to boost women's participation in peacekeeping. Efforts must be made to create conditions for women's wider participation in peacekeeping, Ma Zhaoxu, China's permanent representative to the United Nations, told the Security Council. The international community should strengthen communication to increase support for women's participation in peacekeeping. A favorable environment should be created for women's participation in terms of training, deployment and field operations, he told the council in an open debate on women in peacekeeping. Ma asked for attention to the national conditions of troop-contributing countries in efforts to gradually increase women's participation in peacekeeping. Such efforts can start on trial basis before they become general practice, said Ma. Expanding women's participation in peacekeeping requires concerted efforts of all parties, he said. Developed countries should increase their participation in UN peacekeeping and demonstrate their support for women's participation with real action. The UN Secretariat should increase cooperation with troop-contributing countries, draw up targeted training plans to help them with capacity building, said the Chinese ambassador. The main goal of UN peacekeeping is to promote the political settlement of conflicts and to achieve peace and stability in the mission areas. All activities must serve this purpose, said Ma. Strengthening the effectiveness of UN peacekeeping requires joint efforts from the Security Council, the UN Secretariat, troop- and police-contributing countries and host countries at the guidance of the UN Charter and the basic principles of peacekeeping, he said. The Chinese ambassador also asked for a holistic approach that involves efforts in various fields, such as political settlement, logistical support, personnel safety, and partnerships. China supports UN Secretary-General Antonio Guterres' initiative of Action for Peacekeeping, said Ma, noting that China is an important supporter of and participant in UN peacekeeping as well as a main troop and financial contributor. At present, Chinese female peacekeepers serve in six of the eight missions that China participates. China is not only working to expand Chinese women's participation in peacekeeping, but also trying to help other countries to do so. In recent years, the Chinese Defense Ministry and UN Women have jointly organized international training for female peacekeeping officers in Beijing to help increase women's participation in peacekeeping, said Ma. China will continue its active participation in UN peacekeeping so as to make an even bigger contribution to world peace, he said. ^ top ^

Li calls on China, Czech Republic to create just, fair business environment (Xinhua)
2019-04-12
Chinese Premier Li Keqiang on Thursday called on China and the Czech Republic to create a just and fair environment for their respective enterprises doing business in each other's country. Li made the remarks during his meeting with Czech Prime Minister Andrej Babis, who is here to attend the eighth leaders' meeting of China and Central and Eastern European Countries (CEEC). Noting that this year marks the 70th anniversary of the establishment of diplomatic relations between China and the Czech Republic, Li said China is willing to enhance political mutual trust with the country, expand practical cooperation and strengthen people-to-people and cultural exchanges. Bilateral practical cooperation enjoys a 70-year old tradition, noted the premier, saying that China supports competent Chinese enterprises to participate in infrastructure construction projects in the Czech Republic in compliance with rules and standards of the European Union. China is willing to work with the country to explore new cooperation patterns, make joint efforts to improve trade balance, and promote practical cooperation in industrial field and nuclear energy, among others, he said. China expects the Czech Republic to play a constructive role in promoting China-Europe cooperation, he added. For his part, Babis said the Czech-China relationship has seen a steady development, and his country welcomes more Chinese investment. He also called on the two sides to continuously promote practical cooperation in areas including energy and transportation infrastructure construction, and to enhance cultural and tourism cooperation as well as people-to-people exchanges. Babis said he is looking forward to a stronger Czech-China relationship under the China-CEEC cooperation framework so as to contribute to the development of China-Europe relations. ^ top ^

Top EU technology official still concerned about Beijing's access to data from Chinese firms (SCMP)
2019-04-11
The top official overseeing 5G technology policies for the European Union said on Wednesday he is concerned that Chinese companies are legally bound to share information with the government's intelligence apparatus back home – a stark example of the high-level resistance confronting Chinese officials as they fight Western attempts to block Chinese tech giants. Andrus Ansip – one of the European Commission's five vice-presidents, under President Jean-Claude Juncker – made the remarks in an interview with the South China Morning Post, just a day after Chinese Premier Li Keqiang disputed diplomatic concerns about industrial espionage. Ansip highlighted the urgency for the EU to complete its assessment of potential security threats, as several member nations plan to issue licences for 5G networks soon. "Indeed, we will have to deal with risk assessment and the need for action is now; otherwise it will be too late," Ansip said. "This has an influence on our economy and our democracy." "Any vulnerability in 5G networks or a cyberattack targeting the future networks in one member state would affect the union as a whole," he said. While these concerns have been raised before, they have become a priority in the last year. Not only have nations begun to plan for their next-generation 5G communications networks, but the US has pressed its allies to keep Chinese tech companies out of their plans. American officials fear that the Chinese government may force companies such as Huawei, a global leader in 5G technology, to incorporate software code or hardware that would let Beijing spy on the US or its allies and perhaps even disrupt a nation's power and transport grids in a crisis. US President Donald Trump banned US government agencies from buying Huawei equipment last year, and US diplomats have pressured European countries not to grant Huawei contracts. In an attempt to allay such concerns, Li in Brussels on Tuesday insisted that Beijing "has never requested, let alone imposed any laws or regulations requiring, Chinese enterprises overseas to … conduct eavesdropping". Ansip, though, cited the specific Chinese law that troubled him. "As far as we are aware, China's 2017 national intelligence law includes broad requirements for all organisations and citizens to support, cooperate with, and collaborate in national intelligence work," Ansip said. "There are no provisions about limiting the application of these requirements to not apply extraterritorially." Ansip also noted what he called a "general context of alleged large-scale espionage and intrusion activities by some entities in China" and called it a relevant concern for the EU. It is not the first time an EU official has expressed concern about the law, but the very timing of Ansip's statement – just hours after Li delivered a joint statement with Juncker and European Council President Donald Tusk – speaks volumes concerning the EU's continued scepticism towards Chinese reassurances. According to that EU-China statement, the two sides recognise that "5G network will provide the basic backbone for future economic and social development". "China and the EU welcome progress and further exchanges in the China-EU dialogue and working mechanism on 5G based on the 5G Joint Declaration of 2015, including on technological cooperation between respective business communities," it read. Even so, China faces increasing pressure from Western countries – from the US to Poland; from Australia to Britain – amid widespread fears that Chinese telecoms firms like Huawei or ZTE would compromise 5G networks and provide sensitive information to Chinese intelligence. Ansip, the EU official overseeing its effort to tighten scrutiny on foreign companies planning to build the 5G networks in its member states, is a man on a wire. While acknowledging his own scepticism about China, he still managed to displease Washington when the EU chose not to join the US in banning Huawei. "The European Union has regular policy dialogues in place with the United States on cybersecurity and information security," Ansip said. "During this type of dialogue, we are discussing the increasing need for global coordination and cooperation, to safeguard an open, stable and secure cyberspace." Austria, Belgium, the Czech Republic, France, Germany, Greece, Hungary, Ireland, the Netherlands, Lithuania and Portugal are all preparing to auction 5G licences this year; six other EU countries will do so next year. According to Ansip, individual EU countries may decide whether they want to ban any company on national security grounds. While admitting that "a large part of the public debate focuses on China", Ansip said that the EU was not targeting any specific country or company. Across the EU, he said, "we have an open market. Everybody who complies with the rules can access it". The European Commission in March rolled out a three-step plan in a bid to ensure cybersecurity among EU states. By June, EU nations will have completed risk assessments on 5G infrastructure, especially when granting rights of use for radio frequencies in 5G bands. By October, the states will exchange information with each other and complete a coordinated risk assessment. By the end of this year, they will agree on a set of mitigating measures that can be used at a national level. These can include certification requirements, tests, controls, as well as the identification of products or suppliers that are considered potentially non-secure. Huawei has welcomed the European approach while strongly rejecting US allegations. The company has launched a lawsuit against the Washington ban. ^ top ^

US and China agree to establish trade deal enforcement offices, says US Treasury Secretary Steven Mnuchin (SCMP)
2019-04-11
US Treasury Secretary Steven Mnuchin said on Wednesday that US-China trade talks continue to make progress and that the two sides have basically settled on a mechanism to police any agreement, including new enforcement offices. Mnuchin, speaking on CNBC television, said that a call with Chinese Vice Premier Liu He on Tuesday night was productive and that discussions would resume on Thursday. "We've pretty much agreed on an enforcement mechanism; we've agreed that both sides will establish enforcement offices that will deal with the ongoing matters," Mnuchin said, adding that there were still important issues to be addressed. Mnuchin declined to comment on when or if US tariffs on US$250 billion worth of Chinese goods would be removed. Although US President Donald Trump said recently that a deal could be ready around the end of April, Mnuchin declined to put a time frame on the negotiations, adding that Trump was focused on getting the "right deal". "As soon as we're ready and we have this done, he's ready and willing to meet with President Xi (Jinping) and it's important for the two leaders to meet and we're hopeful we can do this quickly, but we're not going to set an arbitrary deadline," Mnuchin said. Washington is demanding that China implement significant reforms to curb the theft of US intellectual property and end forced transfers of technology from American companies to Chinese firms. Washington also wants Beijing to curb industrial subsidies, open its markets more widely to US firms and vastly increase purchases of American agricultural, energy and manufactured goods. ^ top ^

Joint statement signals broad consensus between China and EU (Global Times)
2019-04-10
China and the European Union (EU) on Tuesday issued a joint statement after the 21st China-EU leaders' meeting in Brussels. It is a move that contradicts earlier predictions by some Western media that there would be no joint statement at this meeting. The text of the statement signed by Chinese Premier Li Keqiang, President of the European Council Donald Tusk, and President of the European Commission Jean-Claude Juncker covers a wide variety of topics, including common concerns on a strategic level from both sides and hot issues in bilateral trade and investment. The joint statement reflects broad consensus reached by China and the EU. Meanwhile, US President Donald Trump on Tuesday threatened to impose tariffs on $11 billion of EU products, amid ongoing trade talks between China and the US. Although there are disagreements between the two countries, China and the EU have managed to find a constructive way to overcome their differences and resolve problems through dialogue to maintain bilateral cooperation. It is a positive demonstration of how to deal with international disputes. There have been some pessimistic opinions expressed recently on China's relationship with the EU. However, the actual progress made is clearly a more convincing description of that relationship. President Xi Jinping's recent visit to Europe was a significant triumph, which further consolidates the sound relationship between the two. The joint statement signed during the China-EU leaders' meeting demonstrates the capability of both sides to make breakthroughs on specific issues. The joint statement reiterates the two sides' willingness to enhance cooperation on issues of concern such as non-discriminatory market access, the protection of intellectual property rights and pushing forward with 5G technology. The joint agreement mutes those voices suggesting the China-EU relationship is confrontational and makes those provocative claims more unconvincing. Regarding similar trade frictions between the US and Europe, tariffs should be added both ways to stop ongoing bickering; while negotiation has always been the preferred alternative between China and Europe. Such a difference is significant in terms of both economics and international politics. The US and EU are often described as allies or "close friends". But unilateral policies of "close friends" are often more disturbing than the differences between two partners. Unilateralism is becoming a prominent challenge in international relations. As two major economic powers in the world today, it seems that the voices of both China and Europe are not loud enough. This is worth thinking about. In fact, the common interests of China and Europe are greatly underestimated by Western public opinion, which, as a whole, are overshadowed by the national interests of the United States. European interests are given relatively minor importance. Enhancing bilateral cooperation is an inevitable choice for both China and the EU. Both should underline the spirit of negotiation and mutual understanding during the process and exclude any third-party influence. This principle is of great significance to the interests of both China and the EU. More specifically, China and Europe must properly handle the relationship while contending with "the gravitational pull" of the United States. Certainly, it is neither necessary nor possible for China and Europe to "unite against the United States". Nevertheless, it is definitely harmful to both sides if either one holds the illusion of suppressing the other by means of a relationship with the United States. There is no essential conflict of interest between China and the EU. Both are willing to achieve mutual benefit through fair cooperation. The two also have the capability to solve disputes through dialogue. Both need to recognize that this is the fundamental foundation for their bilateral relations. In terms of bilateral relations, China and the EU should maintain a clear mind and block interference from ideologies and traditional notions of geopolitics. The joint statement at the China-EU summit is not necessarily a big deal because there were not always joint statements from previous meetings. Nevertheless, there is consistency in the continuous development of the China-EU relationship. But instead of there being no joint statement, as was rumored could be the case, it turned out to be a very comprehensive one, which sends quite a powerful signal at this particular time. The joint statement has sent a strong message to all: No matter what tremendous changes the world is experiencing and regardless of whether there is confusion or problems between China and Europe, the two will continue to improve their relations and move on forward. ^ top ^

 

Domestic Policy

China's state pension fund to run dry by 2035 as workforce shrinks due to effects of one-child policy, says study (SCMP)
2019-04-12
China's main state pension fund will run out of money by 2035 due to a decline in the available work force, according to new research. The urban worker pension fund, the backbone of the country's state pension system, held a reserve of 4.8 trillion yuan (US$714 billion) at the end of 2018. It is predicted to peak at 7 trillion yuan in 2027, then drop steadily to zero by 2035, a report by the World Social Security Centre at the government-supported Chinese Academy of Social Sciences has said. And the gap between contributions and outlays could be as high as 11 trillion yuan (US$1.64 trillion) by 2050, with each retired citizen supported by only one worker, down from the current level of two, the government think tank calculated. The report confirms long-standing concerns among the general public, especially among younger people, that China's state pension system is financially unsustainable and highlights a major challenge for the government after four decades of restrictions on births. The number of mainland Chinese citizens older than 60, the normal retirement age at which men can claim pension benefits, reached 249 million at the end of 2018, some 18 per cent of the total population and close to three quarters of the population of the United States. China's efforts in recent years to increase the population have failed so far. Births in China fell to 15.23 million last year, the lowest since China relaxed its one-child policy in 2014 to allow couples to have a second child. China's social security regulations require employers to pay up to 20 per cent of their employees' salaries into the government pension fund, while employees are required to contribute 8 per cent of their wages. But while the contribution rates are mandatory, enforcement has been lax, with local governments allowing small businesses to pay less to ensure that they maintain high employment. Last year, Beijing announced it would take over collection of social taxes to ensure adequate contributions into the pension fund. However, the tougher policy was watered down almost immediately to help small business survive during the economic slowdown. China's State Council announced last month that the employer pension contribution rate would be cut to 16 per cent as part of Beijing's efforts to reduce the tax burden on businesses, though that move will cut income into the government pension funds. The combined level of local pension funds, managed by provincial and municipal authorities, was still positive last year, with incoming contributions exceeding pension payments. However, signs of stress have started to emerge, with some provinces already struggling to pay pensions. The central government created a special fund in July 2018 to shift pension funds from the richer coastal provinces like Guangdong and Zhejiang, where the working population is large, to pay pensioners in poorer provinces such Liaoning, where the number of retirees is large. Beijing is also mulling other measures to address the funding challenge, including extending the retirement age from the current 60 for men and 55 for women, but analysts argue it must make bold moves soon to avoid a crisis in coming years. Liu Xuezhi, a senior researcher with the Bank of Communications in Shanghai, said that the government should budget more funds for pensions rather than infrastructure projects. The government has budgeted 528.5 billion yuan (US$79 billion) to support social security payments this year, a rise of 9.4 per cent from a year earlier but a tiny amount compared to the country's total pension expenditure. Wang Jun, the chief economist at Zhongyuan Bank, said Beijing's decision to cut the corporate contribution rate for the pension fund is necessary to help the economy but that it should consider using other means, including the country's US$3.1 trillion in foreign exchange reserves, to increase the available retirement funds while also asking state-owned firms to contribute larger portion of their profits to shore up the pension system. China's urban worker pension fund was formed in 1997 when Beijing smashed the Soviet-style cradle-to-grave welfare system for state sector employees. Up to that point, employees working for state-owned enterprises, public servants and government officials did not make contributions to the pension fund. China's current pay-as-you-go system relies on contributions from the current work force to pay current retirees. Those born in the late 1970s and the 1980s – the one-child generation – are now contributing a quarter of their salaries to the state-run funds but are the most likely to bear the brunt of necessary adjustments to pension benefits in the future. Yang Bing, a 41-year-old engineer in Beijing, said the pension funding shortage in the coming decades means he has to "work harder and save more". "It's better to prepare early by ourselves for the future rather than count on the government," he said. ^ top ^

CPC decides to abolish 54 central Party regulations, normative documents (Xinhua)
2019-04-11
The Communist Party of China (CPC) Central Committee has decided to abolish 54 central Party regulations and normative documents, a decision released by the committee said. Another 56 will be annulled, with eight amended. The release of the decision marked the conclusion of the second round of centralized clean-up of Party regulations and normative documents, which was launched in November last year. A package of amendments to 14 central Party regulations related to the reform of Party and state institutions will also be made. The CPC Central Committee urged that the execution of the regulations and normative documents to be abolished and annulled must be stopped with the release of the decision, while asking relevant central and state organs to ensure the quality and efficiency of the amendments. The clean-up was significant to maintaining the unity and authority of Party regulations and policies, and accelerating the construction of a sound system of Party regulations, according to the decision. ^ top ^

China spends big on IPR royalties, values innovation more (Xinhua)
2019-04-11
China has been lavishing money on intellectual property right (IPR) royalties with a 20-year streak of double-digit growth amid efforts to close a longstanding gap in technology and innovation. China's external payments of IPR royalties rose 24 percent year on year in 2018 to 35.8 billion U.S. dollars, resulting in a deficit of 30.2 billion dollars, the latest data from the State Administration of Foreign Exchange (SAFE) showed. This marked an average annual growth of 22 percent from 1997 to 2018 in the IPR royalty payments. The fast expansion represents not only the country's strong demand for advanced technology to support its economic development and industrial upgrading, but also its enhanced IPR protection and respect for innovation, SAFE said. The payments mainly came in the computer, telecommunication, electronics, auto manufacturing, ship-building and aviation sectors, which accounted for more than 40 percent of the total. The United States, Germany and Japan were the top three exporters. Stronger IPR protection is a requirement of foreign enterprises, and even more so of Chinese enterprises. Although growth is shifting down a gear, China remains a dynamic market full of opportunities, striving to build an economy reliant on technology and innovation. In 2018, the contribution of technological advances to China's economic growth rose to 58.5 percent, according to this year's government work report. In pursuing innovation-driven growth and fostering new growth drivers, China has recorded stellar growth in home-grown innovation on the back of lavish investment and better IPR protection. China's spending on research and development increased to 1.96 trillion yuan (about 293 billion U.S. dollars) last year, about 2.18 percent of its GDP. The number of patent applications saw a year-on-year increase of 16.9 percent, amounting to 4.32 million at home and abroad. According to the Global Innovation Index, China's global ranking in terms of innovation jumped from the 22nd in 2017 to 17th in 2018. Qi Aimin, an IPR expert with Chongqing University, said the large deficit in IPR royalties reflected discrepancy between the country's insufficient IP supply and rapidly-expanding demand. "The data also show Chinese firms have a rising eagerness on IPR investment and compliance in competition," Qi said. "Though the deficit is going to persist, it will narrow in the long run with China's IPR-related capabilities growing." A new report by U.S. think tank Information Technology and Innovation Foundation showed China's high-tech manufacturing value-added grew from 30 percent in 2006 to 77 percent in 2016. If this growth rate were to continue, China would exceed the United States in high-tech manufacturing value-added by 2020, according to the report. The report said it was a misconception that China was a copier, as it could and does innovate. In addition to fostering stronger home-grown innovation prowess, China is assuming a greater role in international cooperation in IPR-related issues. China has been active in contributing wisdom to the development of international rules on IPR, and cooperation under the Belt and Road Initiative (BRI) is a typical example, said He Zhimin, deputy chief of the National Intellectual Property Administration. It has established cooperation partnerships with more than 40 countries participating in the BRI and offered IPR training programs for experts and officials from nearly 30 of them, He said. The country also advocated joint efforts with BRI-participating countries in fighting IPR infringements and creating enabling environment for IPR protection, he said. ^ top ^

Xi encourages ethnic minority people to create better future (Xinhua)
2019-04-11
President Xi Jinping has encouraged people of an ethnic minority group living in a remote area of southwest China to build a good homeland, guard the border, and create a better future. Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, made the remarks Wednesday when answering a letter from people of the Dulong ethnic minority group in Dulongjiang Township, Gongshan County of Yunnan Province. In the letter, the Dulong people informed Xi that they had been lifted out of poverty as a whole group in 2018 and villagers were enjoying a better life. Xi said he was very glad to hear the good news and congratulated them. "Letting the people of all ethnic groups have a good life has been my aspiration as well as our common goal," he wrote. After the founding of the New China in 1949, the Dulong people bid farewell to the primitive life. They have now shaken off the long-standing poverty. "This vividly demonstrates that people's dream to live a happy life will surely come true with the strong leadership of the Party and the concerted efforts of the broad masses of the people," Xi said. "Poverty eradication is only the first step, better days are yet to come," he noted in the letter. The Dulong, one of China's smallest ethnic groups, live along the deep gorges of the Dulongjiang River in Yunnan. This area was listed as one of the least developed regions in the country. The six administrative villages in Dulongjiang Township eradicated poverty as a whole last year. ^ top ^

US urges China to lift exit ban on prominent lawyer Chen Jiangang to travel for fellowship (HKFP)
2019-04-11
The US State Department on Wednesday urged China to let a human rights lawyer travel after he said he was prevented from flying to the United States for a fellowship. "We are disturbed by reports that Chinese authorities prevented prominent human rights lawyer Chen Jiangang from leaving China to participate in a State Department-sponsored exchange program," said the department's spokeswoman, Morgan Ortagus. "We urge China to respect Chen's freedom of movement and to view lawyers and rights defenders as partners in strengthening Chinese society through development of rule of law," she tweeted. Chen had been selected to study English as part of the Hubert H. Humphrey Fellowship, a program named for the late vice president that provides a year of US education for emerging leaders around the world. The lawyer said he was ready to board a flight to Seattle on April 1 when he was pulled aside by customs at Beijing Capital airport and told he was banned from leaving China. "This persecution of lawyers and disregard for the rule of law once again shows to the world that the Chinese government is openly and unceasingly depriving people of their human rights," he said in a statement. "Nothing stops the Chinese government from doing whatever it wants to, disregarding any law or commitment it makes," he said. Chen had represented Xie Yang, himself a leading lawyer in politically sensitive causes such as defending Hong Kong pro-democracy activists, who was rounded up in a sweeping crackdown on legal staff in 2015. Chen remained vocal on the case even after authorities removed him as Xie's lawyer, including drawing attention to his former client's allegations of torture in police custody. Exit bans are a common way for China to try to curb the activities of figures it sees as disturbing the communist system. In a 2017 incident criticized by the United Nations human rights office, Chen was stopped while vacationing with his family in remote Yunnan province. His wife and young children were allowed to fly back to Beijing, but Chen said he was taken back on the 3,200-kilometer (2,000-mile) journey by road under police escort. ^ top ^

Swine fever contained, minister says (China Daily)
2019-04-11
China has contained the spread of African swine fever, with the number of new outbreaks slowing this year, according to Han Changfu, minister of agriculture and rural affairs. Since the highly contagious disease was first detected in August in Liaoning province, 119 cases affecting domestic pigs and three involving wild boars have been confirmed in 30 provincial-level regions, he said at the International Symposium on Prevention and Control of African Swine Fever held in Beijing this week. As of Tuesday, quarantines had been lifted in 108 disease-stricken areas, he said, adding that the number of new cases in each of the first three months of this year was held to single digits, signifying a slowdown. Han added that domestic live hog production and pork supplies are generally stable. Monique Eloit, director-general of the World Health Organization for Animal Health, said she appreciated China's efforts in combating African swine fever, as the massive scale of hog production in the country and the dispersed breeding farms pose great difficulties. She also encouraged the ministry to share its experience, tools and measures with other countries to enhance their capability to fight the disease. Bukar Tijani, assistant director-general of the Food and Agriculture Organization of the United Nations, said it's both surprising and encouraging to see the number of new outbreaks drop in China. He said the situation could have been much worse because China is responsible for more than half of global pork consumption, and more than half of the world's small pig farms are located there. Han said the ministry will continue to enhance international cooperation mechanisms, establish stronger early warning and rapid response systems and step up research on vaccines. Vice-minister Yu Kangzhen added that the ministry will soon formulate a plan to divide the country's hog industry into several zones to better coordinate efforts in containing infections, regulating cross-regional transport and guaranteeing the pork supply, China National Radio reported. Hainan, the southernmost province, will set up the country's first zone free of African swine fever, Yu said. The disease, which is deadly to pigs but not harmful to people, was discovered in Kenya in 1921 and has since spread to 64 countries and regions. Last year saw a surge in infections worldwide, with 25 countries and regions reporting more than 6,500 new outbreaks. There is no effective vaccine. ^ top ^

Lowering hukou rules significant to reform, opening-up (Global Times)
2019-04-11
China has a flow of people greater than that of any other country in the world. People are seeking a better life by leaving their relatively underdeveloped hometown for urban areas. The most important aspect of such a flow is equal basic rights for urban and rural citizens. China's system of hukou, or household registration, has set limits on migrant people enjoying these rights due to finite public resources in their resident cities. This has led to various problems, but China is on the right track by taking them seriously. Flow of workforce has been an impetus to China's economic development since the country's reform and opening-up. It was also a factor in the miracle of Shenzhen, dubbed China's Silicon Valley, whose GDP surpassed that of Hong Kong in 2018. China is facing challenges of an aging population and dwindling population dividend, and the new household registration policy - lowering the threshold in cities with less than 5 million residents, which means hundreds of cities rather than slightly more than a dozen in China, would generate a "new population dividend." We should applaud the reform as it could be conducive to China's economic transition. Hukou is a crucial document for every Chinese, which entitles them access to public resources like healthcare and public education. Without household registration in resident cities, migrant people's children cannot get enrolled in local public schools for better education than in their relatively backward hometown. This situation does no good to China and it could worsen as more than 115 million post-1980s generation people have participated in the migrant flow in the past dozen years. On this aspect, the restricted access to public resources could make migrant people feel like outsiders in the cities where they reside, although they have also contributed to the development of those places. Guaranteeing working people's equal rights will help eliminate such sentiment, and thus promote the sustainable economic development in the coming decades. The new hukou policy is also conducive to urbanization. The move will attract more people to cities and accelerate the flow of people. More people means more talent as well as greater demand for goods and services. This will then stimulate not only the growth of primary and secondary industries but also an upgrade in the services industry. Given the government's decision, we can see why China is sticking to the reform and opening-up policy domestically and internationally. The Chinese people are the basis for and closely linked to China's opening-up. China is taking an important step toward the right direction. Established in 1958, the system of hukou has been a concern of society since China's reform and opening-up began and one of the most important social issues. This step is significant for deepening reforms and conducive for the country to develop in a fairer, more reasonable and balanced way. ^ top ^

Latest crackdown on Chinese social media sees dozens of high-profile Weibo accounts silenced (SCMP)
2019-04-09
One of China's leading social media platforms announced on Monday that it had silenced a number of leading opinion formers, including Yu Jianrong, a popular outspoken liberal intellectual with more than seven million followers. Sina, the owner of the Twitter-style microblog Weibo, announced officials on Monday that "according to the relevant laws and regulations", it had suspended or shut down more than 50 accounts which published "politically harmful information". Alibaba, the owner of the South China Morning Post, is a major shareholder in Sina. The purge comes amid a growing crackdown on social media as the government pushes tech companies to do more to censor content. Yu, a researcher at the rural development institute of the Chinese Academy of Social Sciences, was told that his Weibo account would be suspended for 90 days. "I feel odd. I don't know which of my comments violated the country and Sina's regulations," Yu told the Post. He said he had not posted any political content on his account for two years. "Every day, I post about art. They can't find any 'politically harmful information' in my posts, but it's up to them." Yu said. Weibo's vague definition of "politically harmful information" includes not only content that violates the law or the constitution, undermines national unity and incites hatred, but also bans spreading rumours and publishing "adverse information" that could undermine "social morality". Yu said he had initially received a message from the Weibo official account on April 4, which said his account would be suspended for 180 days. Later that day he received a second message to say that had been shortened to 90 days. Yu attracted a wide following on social media for his online activism and calls for political reform at a time when controls on social media were looser. He came to prominence in 2011 by posting a set of photographs of child beggars in the hope of reuniting them with their parents and starting an appeal for book donations for rural areas. The following year he posted a broad-ranging set of proposals for economic and social reform including calls for greater democratisation and an end to media censorship. Others who were silenced for 90 days include Wang Xiaolei, a former journalist with the official news agency Xinhua, who had half a million followers and used the alias Liushen Leilei. He has denied posting about politically controversial matters, but his posts about classical Tang dynasty poetry and the hugely popular martial arts stories of Jin Yong (the pen name of Hong Kong journalist Louis Cha) have been taken by many to contain veiled allusions to current events. Weibo's action follows a series of crackdowns on social media as the authorities move to tighten their grip on the online sphere. In 2013, hundreds of people were detained across the country on charges of "inciting trouble" and "posting unverified or critical information" on Weibo. In October 2018, nearly 10,000 social media accounts were shut down and the two main social media platforms Weibo and WeChat were given "serious warnings" for their "irresponsibility and lax management"and allowing the platforms to "grow wild and create chaos". However, Yu said many of those targeted in the latest purge should not be seen as political. "I used to talk about politics and the constitution, but I don't say anything now," he said. According to a study by Hong Kong University's journalism and media studies centre, the most widely censored words and topics last year included the trade war between the US and China, American sanctions on the telecoms giant ZTE and the arrest of Huawei executive Sabrina Meng Wanzhou. In January, the Cyberspace Administration of China said that it had scrubbed the web of more than seven million items in less than three weeks and deleted more than 9,300 smartphone apps to screen out information deemed inappropriate or harmful. Sina declined to comment further. ^ top ^

 

Shanghai

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Tibet

Dalai Lama 'doing much better', should leave hospital in few days (HKFP)
2019-04-11
The Dalai Lama has been admitted to hospital in New Delhi for treatment but is "doing much better" and should be released soon, his close aide told AFP on Wednesday. "His Holiness is doing much better, but he is still undergoing treatment at a hospital and we hope in few days he will be discharged," Tenzin Taklha, the Dalai Lama's personal spokesman, told AFP. Another aide told AFP the 83-year-old Buddhist monk flew to the Indian capital early Tuesday for a doctor's visit at Max hospital after he experienced a "light cough." "The doctor said there's nothing to worry about. It's not that serious," said Ngodup Tsering, the Dalai Lama's representative in the United States. "He's taking a few days' rest." Kangra police superintendent Santosh Patial told The Indian Express that the Dalai Lama, who is based in Dharamshala and has been in permanent exile in India for some 60 years, took a regular morning flight Tuesday and was not airlifted. A spokeswoman for Max hospital in Delhi said they would not comment on the condition of the Dalai Lama's health due to patient confidentiality. Although the exiled leader remains a hugely popular speaker, he has cut back on his global engagements and has not met a world leader since 2016 — while governments have been wary of extending invitations to him for fear of angering Beijing. The Dalai Lama has sought to pre-empt any attempt by Beijing, which has effectively wiped out any organized opposition to its rule in Tibet, to name his reincarnated successor, even announcing in 2011 that he may be the last in the lineage. The Tibetan spiritual leader enjoys wide support across the partisan divide in Washington, where a senator raised the issue of his succession at a hearing Tuesday. Senator Cory Gardner, the Republican who heads the Senate Foreign Relations subcommittee on Asia, said that the United States should follow the Dalai Lama's lead on how to choose his successor. "Let me be very clear — the United States Congress will never recognise a Dalai Lama that is selected by the Chinese," Gardner said. But even India, which offered asylum to the Dalai Lama in 1959 when he made a daring escape across the Himalayas dressed as a soldier, has turned its back, with the government reportedly warning officials against attending events featuring him, citing diplomatic sensitivities. ^ top ^

 

Xinjiang

EU calls out Beijing on human rights but activists want harder line against China's Xinjiang and Tibet policy (SCMP)
2019-04-10
The European Union called out China on human rights abuses at their annual joint summit, while human rights campaigners in Brussels streets pressed the bloc to be more vocal on Xinjiang and Tibet. Several hundred people held a demonstration a few hundred metres from the site of the EU-China summit as Chinese Premier Li Keqiang arrived in Brussels. European Council President Donald Tusk said the union raised human rights with China, but he did not say which issues were brought up. "As I have stressed many times before, human rights are, from our European point of view, as important as economic interests," Tusk said. A joint statement said that human rights were discussed and a commitment was made to continue their annual human rights dialogue. This year's took place last week, where the EU raised concerns about the freedom of religion, and minority rights in Xinjiang and Tibet. In Brussels, demonstrators chanted slogans that chided Beijing, calling on it to "close the camps" – a reference to mass detention centres in the western province of Xinjiang – and for an "independent EU", hoping Brussels would not be soft on human rights at the expense of economic interests. Representatives of the groups attending the protests said the EU needed to take a clear stand against a deteriorating human rights situation in China, particularly in the contested regions of Tibet and Xinjiang. Melanie Blondelle, policy advocacy officer of the International Campaign for Tibet in Brussels, said EU leaders should raise the issue of Tibet and Xinjiang directly with the Chinese premier. EU leaders should publicly "ask him [Li] to act and make concrete progress in human rights situation, like closing the camps in Xinjiang, or to stop interference in the succession of the Dalai Lama in Tibet". In March, Beijing said the Dalai Lama – a spiritual and political leader for many Tibetans who is exiled in Daramsala, India – must be chosen in accordance with Chinese law, which has regulations on the reincarnation of lamas. Buddhist organisations must apply to Beijing for approval of potential reincarnate lamas, according to Chinese rules. Ryan Berry, researcher at the World Uygur Congress based in Munich, Germany, said the many of those who turned out to demonstrate had family members who were in the camps in Xinjiang, which Beijing has described as "vocational training" facilities. "It's an absolutely urgent issue, and a crime against humanity, against Uygurs and Tibetans, and it will spread to other countries if something is not done," Berry said. "The EU must put human rights first and stand up for its values. Now is the moment, and action has to be taken, because this is not acceptable." Jo Leiden, president of the EU parliament delegation on relations with China, said human rights issues are an "open wound" between China and the EU. "The suspicion is that economic interests will outweigh human rights values," he said, adding that the EU and China had been "drifting apart" rather than moving together on issues such as human rights and governance. ^ top ^

 

Hongkong

Accusations of political persecution unfounded, says Chief Exec. Carrie Lam after Umbrella Movement convictions (HKFP)
2019-04-11
Chief Executive Carrie Lam has dismissed accusations that Hong Kong has been using judicial means to politically persecute Umbrella Movement activists. Nine leading activists of the 2014 pro-democracy movement were found guilty of public nuisance charges on Tuesday. They each face up to seven years in prison. Lam said on Wednesday afternoon that she had noticed negative comments from local and foreign politicians and media, and had to make a response. "I take great exception to those comments that this particular case relating to Occupy Central was a question of using judicial means to carry out political prosecution, or even political persecution," she said. "I think those comments are totally unsubstantiated and unfounded, and they will damage Hong Kong's international reputation in terms of our rule of law and the independence of the judiciary." She said the "One Country, Two Systems" principle had been implemented successfully since the 1997 Handover and Hong Kong's rule of law and judicial independence were recognised internationally. "Our hard-earned international reputation cannot be affected by unreasonable attacks and criticism by some individuals. I, as the chief executive, have to point out their fallacy," she said. She urged those who made critical comments to read a speech made by Chief Justice Geoffrey Ma this year, who said that it was not the court's duty to adjudicate on political, social or economic issues. "Rather, at all times, the court is concerned with dealing with one aspect and one aspect only: a resolution of the legal issues arising in the dispute before it," Lam quoted Ma as saying. Lam's comments came after 22 pro-democracy lawmakers issued a joint statement in support of the nine activists convicted by the court, which said that the case was political persecution by judicial means. They cited reports by international media and said the judgment dealt another blow to shrinking freedoms in Hong Kong. "The Beijing and Hong Kong governments should be ashamed," the lawmakers said. They said they believed that the nine activists will receive high praises in the history books. The sentencing for the nine will be handed down on April 24. ^ top ^

 

Macau

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Taiwan

Taiwan Act a US 'burden' (Global Times)
2019-04-10
The influence of the Taiwan Relations Act (TRA) is gradually weakening and will become a burden for the US as the Taiwan question will be solved eventually, Chinese mainland analysts said on Wednesday, after the US and the leader of the Taiwan region called for strengthening ties over the 40th anniversary of the TRA. US Deputy Assistant Secretary of State for Trade Policy and Negotiations David Meale arrived in Taiwan Tuesday, and is scheduled to attend the anniversary at the American Institute in Taiwan's (AIT) new complex on April 15, the Taiwan-based Central News Agency reported. In response, Chinese Foreign Ministry spokesperson Lu Kang said at a routine press conference on Wednesday that China opposes official contact of any form between the US and Taiwan, and the visit by a US official is a severe violation of the one-China principle and US obligations under the three joint communiqués the US signed with China. "We urge the US not to make wrong practices," Lu said. In a video teleconferencing speech given to US think tank Center for Strategic and International Studies on Tuesday, Taiwan regional leader Tsai Ing-wen urged the US to make it clear that protecting the security of Taiwan is vital to "the defense of democracy." Mainland experts warned that the US should realize the TRA will become a serious burden to Washington when the mainland has no choice but to solve the Taiwan question militarily or the day China's reunification is realized. China's reunification is certain, which is only a matter of time, and if the US strictly follows the Act, then the Act could draw the US into unnecessary conflicts with China when the reunification is realized or during the process of reunification, so weakening the Act's influence is a wise choice for the US, said analysts. The TRA is meant to maintain US economic and trade interests with the island after the two sides ended their diplomatic ties. However, the TRA doesn't include definite promise to Taiwan or clear obligation of the US should military clash erupts between mainland and the island, despite allowing the US to sell defensive weapons to the island. The TRA has offered an alleged domestic legal basis for the US to interfere in cross-Straits affairs, analysts noted. When the US follows the TRA, it will unavoidably challenge the bottom line of China by breaking the three joint communiqués and weaken the one-China principle. From a practical point of view, the US tends to implement a "two China" policy in accordance with the TRA, Xin Qiang, deputy director of the Center for US Studies at Fudan University, said. Chinese analysts said that after 40 years, the influence of the TRA has been gradually weakened as China has the capability to exert its influence on regional affairs and cross-Straits situation doesn't depend on what the US says. Xin believes the US will continue to abide by the TRA, including its promise to the island, such as selling arms to the island, and the US will also continue to remain ambiguous on the cross-Straits question. But Jin Yi, an expert at the Institute of Taiwan Studies of the Beijing-based Chinese Academy of Social Sciences, said that the role of the TRA will be gradually weakened and the US will restrain itself on the Taiwan question. "In the end it is only a domestic law. Whether it will continue to exert influence on the cross-Straits situation depends on the US' strength." China on Wednesday confirmed that two People's Liberation Army (PLA) fighter jets crossed the "middle line" of the Taiwan Straits on March 31, and the Taiwan Affairs Office of the State Council spokesperson Ma Xiaoguang said that it is a normal arrangement within the PLA's annual training program. Ma said that China's sovereignty and territorial integrity have never been divided and no division is allowed, and safeguarding national sovereignty and territorial integrity is PLA's sacred duty as well as the fundamental interests of compatriots on both sides of the Straits. China's Anti-Secession Law, adopted in 2005, has clearly stipulated that the state shall employee "non-peaceful means and other necessary measures" to protect China's sovereignty and territorial integrity. The wording is much more determined than the TRA's lines about protecting Taiwan. "In the event Taiwan secessionist forces should act under any name or by any means to cause the fact of Taiwan's secession from China, or that major incidents entailing Taiwan's secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted," according to Article 8 of the Anti-Secession Law. If the Chinese mainland decides to solve the Taiwan question militarily, whether the US will respond is unknown, Xin said. "Taiwan secessionists should be clear that they won't get an absolute security guarantee from the US under this circumstance, but might be bankrupted from purchasing expensive but useless US weapons, and this would only benefit arms dealers." The US reportedly gave its tacit approval to Taiwan's request to buy more than 60 US-made F-16V fighter jets. But Time magazine reported on Monday that the Trump administration has put on hold the F-16V sale until it reaches a trade deal with China. ^ top ^

Taiwan 'at the front line of threats' from Beijing, Tsai Ing-wen tells US think tanks (SCMP)
2019-04-10
Taiwanese President Tsai Ing-wen on Tuesday vowed to strengthen defence, as she sought support from the US and other countries to counter what she called aggression from mainland China. Speaking during a video conference with three US think tanks in Washington, Tsai said the self-ruled island had faced coercion from Beijing, and it had worsened since she became president in 2016. "Because of the Taiwan Relations Act, the US has played a crucial role to help [Taiwan] reject coercion," she said, referring to aggression – including military intimidation and diplomatic isolation – from Beijing since she took office and refused to accept the one-China principle. Tsai was speaking ahead of the 40th anniversary of the act, which defines US ties with the island in the absence of formal relations. "In terms of security, [the act] laid out a framework to not only 'provide Taiwan with arms of a defensive character' but also 'to consider any effort to determine the future of Taiwan by other than peaceful means, including by boycotts or embargoes, a threat to the peace and security of the Western Pacific area and of grave concern to the United States'," she said. "Cooperation between our two countries has continued to fulfil the spirit of these articles. Already, a steady drumbeat of arms sales have been announced by the current US administration, and we have more in the pipeline." She was referring to US President Donald Trump's approval of US$1.4 billion in arms sales in 2017 that included advanced missiles and torpedoes, followed by a second arms package worth US$330 million last year. In the last few weeks, the US Department of Defence announced two more contracts – a US$9 million deal for supporting Taiwan's Patriot air defence system, on April 4, and a US$50 million contract as part of a radar restoration program for Taiwan's navy, on March 26. Tsai said Taiwan was not alone in facing threats from the mainland, including the spread of disinformation and fake news, saying democratic countries around the world faced the same problem. "Taiwan is at the front line of these threats," she said, adding that there was a need for the US and other like-minded countries to fend off such threats. "As we speak, forces working against freedom and democracy are becoming more active around the world. For while we measure progress in terms of freedom and individual liberty, the metrics they use are fear and control, both at home and abroad." Tsai also said Beijing was attempting to change the status quo and undermine Taiwan's democratic system. "One thing that we learned from the previous century is that the forward march of democracy is not a given," she said. She said Beijing had broken a "tacit agreement" when it sent warplanes across the median line dividing the strait between the island and the Chinese mainland. "Less than two weeks ago, China's PLA sent two fighter jets across the median line of the Taiwan Strait, breaking a tacit agreement that has served the interests of peace and stability over the past two decades," she said. Stressing the need to increase the defence budget because of the mainland's increasingly aggressive actions, Tsai said: "We will continue to leverage our industrial capabilities to build new defence articles. That includes submarines, and we just completed the first phase last month." She said she expected the first Taiwanese-built submarine to be operational by 2024. "And for items we can't build ourselves, we will continue to seek arms sales from the United States, as consistent with the Taiwan Relations Act." Tsai said her administration did this not because it wanted confrontation. "Quite the opposite," she said. "We want to deter aggression by showing we are capable of effectively defending ourselves. This is what it will take to maintain peace and stability across the Taiwan Strait." She also sought the creation of a free-trade agreement with the US, saying the island had a real capacity to expand economic ties with the US given that the two economies are complementary rather than competitive. "Taiwan's economic diversification is related to whether we can remain a free and open society," she said. "China's influence campaigns are undertaken using economic actors. By aligning ourselves with the United States and other free-market actors, we can reduce our economic reliance on China and their capacity to interfere in our media, politics and security." She said a trade deal was "particularly relevant" amid worries over Chinese telecoms giant Huawei and "the scramble for control over the future of 5G networks". "We need to shape the flow of this supply chain so that critical technologies, infrastructure and assets do not fall into the wrong hands," she said. The United States has been pressing for countries to avoid Huawei as they build their next-generation networks. Calling Taiwan a full partner of the Trump's "free and open Indo-Pacific strategy" – basically to ally countries in the region to counter Beijing's expansionism – Tsai said the island was "working hand in hand to defend a rule-based region, based on our shared values and interests". Last month, Taiwan and the US announced the launch of the Indo-Pacific Democratic Governance Dialogue, which serves as a platform for like-minded countries in the region to pursue joint projects advancing good governance and human rights. Tsai stressed Taiwan's cooperation with Japan, which is one of US' security allies in the Indo-Pacific region, and pointed out the goodwill the Taiwanese feel towards Japan and the fact it is Taiwan's major trading partner and largest market for outbound tourism. "I spoke about our cooperation in the Indo-Pacific earlier, but I want to make clear that we don't limit that to the US. We also share the same vision of the Indo-Pacific with Japan," she said, adding she sees great potential for working together on enhancing economic prosperity, clean governance and shared regional security. "We are grateful that very senior Japanese officials have spoken out, quite forcefully, on Taiwan's participation in international [forums] such as the World Health Assembly," she said. Tsai was speaking with representatives of the Centre for Strategic and International Studies, the Brookings Institution and the Woodrow Wilson International Centre for Scholars. Observers said she was using the event, and the 40th anniversary of the Taiwan Relations Act on Wednesday, to seek support in the United States, including for her re-election bid next year. Tsai's first four-year term ends in 2020, and she is under pressure from all angles – from Beijing, the opposition Kuomintang and from members of her own party. After a crushing defeat at the local government elections in November, Tsai stepped down as head of the Democratic Progressive Party. The independence-leaning DPP lost seven of 13 local government positions it used to hold, retaining just six – the least since 1989. Meanwhile, the KMT won control of 15 cities and counties, including the DPP's independence stronghold of Kaohsiung in southern Taiwan. ^ top ^

 

Economy

IMF leader Christine Lagarde praises China's economic stimulus but warns on debt-heavy 'Belt and Road' loans (SCMP)
2019-04-12
Lower global debt levels, more disciplined tax policy and an end to trade battles that result in "self-inflicted wounds" are needed to shore up the global economy at a delicate juncture, the head of the International Monetary Fund warned on Thursday, while adding that China's recent stimulus moves are welcome as long as excessive debt-fuelled investment is avoided. Christine Lagarde, the IMF's managing director, said global leaders should address looming problems before the next downturn, and drew a parallel with global warming. "Just like nature, the global economy is also currently quite uncertain," she said in Washington at the spring meetings of the IMF and World Bank. "We certainly would recommend two key principles. One is do no harm. Second is do the right thing." Those recommended measures include addressing distortions in the global trading system, reforming the Geneva-based World Trade Organisation, resolving uncertainty over Brexit and having nations adopt stronger financial policies. High on the list of "self-inflicted wounds" is the China-US trade war, which has seen hundreds of billions of dollars' worth of tariffs slapped on manufactured goods, unsettling global markets and adding to the uncertainty. On Tuesday, the IMF slashed its 2019 global growth forecast to 3.3 per cent from 3.6 per cent in 2018 even as it boosted its outlook for China's annual growth to 6.3 per cent, up 0.1 percentage point from its last forecast. Beijing's recent stimulus moves and a better outlook for a US-China trade deal spurred the change. As China's global footprint has expanded, its lending activities as part of its "Belt and Road Initiative" have come under a spotlight amid concern that some Asian, African and Latin American borrowers may be unable to repay Beijing, leaving them politically and economically vulnerable. An example is crisis-hit Venezuela, which owes China an estimated US$20 billion as it struggles with a leadership and humanitarian crisis and little immediate ability to repay the debt. Africa has received particular scrutiny given expansive Chinese lending as part of the Asian giant's search for resources to fuel its growing economy. Beijing doesn't release data on its overseas loans, but the Johns Hopkins School of International Advanced Studies estimates that China lent US$143 billion to African countries between 2000 and 2017. Much of that remains unpaid. Lagarde said the IMF and World Bank were trying to bring more transparency to Chinese lending practices in Africa to better identify debt levels, loan terms and maturity dates. "It's clear that any debt restructuring programmes going forward in the years to come will be more complicated than debt restructuring programmes that we conducted 10 years ago," she said. Newly named World Bank President David Malpass said on Thursday that he had met with Jin Liqun, president of the Beijing-based Asia Infrastructure Investment Bank (AIIB), during the week-long gathering in Washington. The two institutions have weathered sometimes testy relations as the AIIB has called for more efficient, less bureaucratic multilateral lending – an implicit criticism of the US-led World Bank, the Asian Development Bank and other established players. But Malpass said Thursday that there was room for varied multilateral institutions, given the huge global need for development aid. "We had very good conversations about ways that we can, that there can be cooperation that achieves very high-quality lending programmes," he said. While China received a nod of approval from the IMF for its recent measured stimulus to shore up its economy, the world's second largest, economists cite deep structural problems. State-owned enterprises are often highly inefficient and deep under water, with China among the world's most indebted countries as household, government and corporate debt approach 300 per cent of gross domestic product, according to the Institute of International Finance. "China is ageing rapidly and is set to face its most abrupt decline in population in centuries, setting the stage for potential macroeconomic and social vulnerabilities going forward," the group said in a white paper released on Thursday. "Beijing has its hands full and the world is watching." Louis Kuijs, Hong Kong-based head of Asian economics with Oxford Economics and a former IMF official, said he expected China's rate of economic growth to stop falling in the second quarter of this year. "However, still anxious to avoid another credit binge, Beijing's ambitions on growth are more modest now than in the past," Kuijs said. "Thus, people that expect a major growth recovery in China this year are going to be disappointed." Oxford Economics said it expected global growth to pick up in the second half of the year after a nine-month slowdown, aided by a more stable Chinese economy and an upturn in Europe and some major developing economies. Lagarde's call for countries to clean up their acts before the next downturn is valid, economists said. But in the real world, politicians too often focus on the next election or, in countries such as China, concern that job losses could fuel social instability. This all comes as central banks around the world bow to political pressure to increase monetary supply. In the US, President Donald Trump has launched unprecedented verbal attacks on the Federal Reserve, which, related or not, have dovetailed with an easing bias that other central banks seem inclined to follow. "The Fed U-turn quickly led to changes in the outlook for Asian interest rates as well," Kuijs said. An Oxford Economics report due for release soon identifies a clear "structural shift" towards more government spending and higher fiscal deficits in more advanced Asian societies such as Singapore, Hong Kong and South Korea as well as others facing elections, notably India and Indonesia, making them less resilient when the next downturn hits. "While Lagarde's advice is sensible," Kuijs said, "it remains to be seen how many countries will listen." ^ top ^

China can't ditch state-led drive for high technology (Global Times)
2019-04-11
The US produces only 5 percent of the world's lithium-ion batteries, some statistics show, lagging far behind China. Now, US government officials plan to meet with automakers in early May as part of a "first-of-its-kind effort to launch a national electric vehicle supply chain strategy," Reuters reported. While China's state-owned enterprises and state-led research projects have been criticized by some US observers for disrupting market competition and posing a threat to national security, the US government may enhance its role in the scientific field by announcing "first-of-its-kind" national strategies. A new trend in the world economy is emerging, as national industrial strategies are mapped out across major countries, ranging from the US and Germany to Japan and South Korea. Many nations have attached importance to state-led research and development (R&D) plans to advance their competitiveness in the global cutting-edge technology race. The Japanese government is reportedly studying a new R&D mechanism to promote disruptive innovations, with 100 billion yen ($900 million) worth of investment in five years. The EU has announced that it will mobilize 2.7 billion euros ($3.1 billion) in 2018-20 to support high-risk, high-gain innovation that will "create the markets of the future." Some observers think Western countries focus on state-led research projects because they feel threatened by the improvement of China's scientific and technological strength. But this view is unjust and misses the big picture of cutting-edge innovation in today's world. In the 20th century, companies or even individuals could bear the cost of cutting-edge innovation. As a result, many well-known high-technology companies emerged. But now, most cutting-edge innovation costs a fortune, and it's based on breakthrough in the field of basic science. Only a government is capable of mobilizing the money and human resources to drive such innovation. Global high-technology competition has become an inter-state race, with governments as the participants. While China is trying to develop strength in advanced technologies that have until now been the domains of the US and European countries, they also view China as a major competitor. China should not reduce support for state-led projects under pressure from the West. In contrast, more effort is needed to push forward China's national industrial goals to further invest in state-led research projects, especially in strategic industries such as 5G networks, aerospace, advanced numerical control tools, and energy-efficient and new-energy vehicles. ^ top ^

 

DPRK
'I enjoy being with the chairman': Donald Trump floats idea of third North Korea summit after failed talks with Kim Jong-un in Vietnam (SCMP)
2019-04-12
US President Donald Trump said on Thursday he is considering a potential third nuclear summit with North Korea's leader. "We will be discussing that and potential meetings, further meetings with North Korea and Kim Jong-un," Trump said in the Oval Office at the start of talks with South Korean President Moon Jae-in. A third summit would follow on Trump's historic breakthrough last year, when he met Kim in Singapore, and a follow-up this February in Hanoi that ended without progress in getting North Korea to give up nuclear weapons. Both Trump and Moon are heavily invested in bringing North Korea out of the cold. But the unsuccessful summit in Vietnam was a setback for the two allies that has yet to be resolved. At the White House, Trump insisted that a peaceful resolution of the North Korea stand-off remains within reach, and that he continues to place considerable hope in his personal brand of diplomacy. "I enjoy the summits, I enjoy being with the chairman," he said. Kim is "a person I've gotten to know very well, and respect and hopefully, and I really believe over a period of time, a lot of tremendous things will happen. I think North Korea has a tremendous potential", Trump said. The Vietnam summit ended without Trump being able to extract major concessions from Kim on the country's nuclear arsenal or Kim getting the reduction he wanted in heavy economic sanctions brought to pressure him into cooperating. Despite the sanctions, Trump said on Thursday that he supports unspecified South Korean moves to bring humanitarian relief. "We are discussing certain humanitarian things right now. I'm OK with that, to be honest," he said. Although the broader sanctions should "remain in place", he said he opposes any further tightening and noted that he had stopped planned new measures. There was "the option of significantly increasing them … but I didn't want to do that," he said. Trump has emerged as an unlikely peacemaker in the Korean peninsula, reversing his initially bellicose approach with a determined effort to put Washington and Pyongyang on a historic path to reconciliation. But the Hanoi meeting was a letdown. The two leaders cut their talks short, skipping a scheduled final lunch and the expected issuing of a joint statement. In Washington, that outcome brought Trump praise from Republican legislators who had worried he would give too much away in pursuit of big headlines. Trump continues to face criticism that he is out of his depth in talks with Kim, and that sitting down with the dictator has yet to bring much benefit. But he insists that while he retains an unusually good personal relationship with Kim, he will maintain a tough negotiating line. "Sometimes, you have to walk," Trump said, slipping into his real estate dealer's lingo, after the Hanoi meeting. For Moon, the aftermath has been even more complicated. In his talks with Trump, he insisted that the summits have produced important results, especially "the dramatic, significant reduction of military tension on the Korean peninsula". "In this sense, I believe that the Hanoi summit is not actually – was not a source of disappointment, but it is actually the part of a bigger process that will lead us to a bigger agreement." But Moon has staked his presidency on concrete engagement with isolated North Korea, pushing for a resumption of South Korean tourism to the North's Mount Kumgang and operations at the Kaesong Industrial Complex, where companies from the South used to be staffed by workers from the North. Plans to unveil details of such projects on March 1, right after the Hanoi summit, had to be shelved and he is under pressure from opponents on the right. One lawmaker branded him the North Korean's "top spokesman". Kim himself has used the impasse to speak out against international sanctions and warn in colourful, defiant terms that his country will not bow to pressure. The state-led economy will "deal a telling blow to the hostile forces who go with bloodshot eyes miscalculating that sanctions can bring the DPRK to its knees," a state media report quoted him as saying on Thursday, using the acronym for the North's official name. Shortly after the Hanoi summit, a series of satellite images emerged suggesting increased activity at the North's Sohae rocket site, triggering international alarm that the nuclear-armed state might be preparing a long-range or space launch. ^ top ^

Kim Jong-un promises to land 'telling blow' against countries imposing sanctions on North Korea (SCMP)
2019-04-11
North Korean leader Kim Jong-un said his country needs to deliver a "telling blow" to those imposing sanctions by ensuring its economy is more self-reliant, state media Korean Central News Agency (KCNA) said on Thursday. It was the first time Kim stated North Korea's position on the second US-North Korea summit in Hanoi that collapsed in February, and signalled a continued focus on economic development, a strategic direction officially declared a priority last April. On North Korea's position on the summit, Kim said he would double down on efforts to create a self-supporting national economy "so as to deal a telling blow to the hostile forces who go with bloodshot eyes miscalculating that sanctions can bring [North Korea] to its knees," according to KCNA. US-North Korean engagement has appeared to be in limbo since the February 27-28 summit in Hanoi, which collapsed over differences about how far North Korea was willing to limit its nuclear programme and the degree of US willingness to ease economic sanctions. Kim has continued to highlight his economic push in recent weeks despite the lack of sanctions relief. State media have published images and reports of Kim's visits to at least four economic projects in five days over the past week, including a remodelled department store, tourist resorts, and an economic hub near the border with China. At a similar plenary session last year, Kim formally announced a "new strategic line" that focused on economic progress and improving North Koreans' lives, rather than the previous two-pronged approach of economic and nuclear weapons development. Despite not explicitly naming the "hostile forces" that imposed sanctions, Kim is displaying a more hardened stance toward Washington than was recently in state media, analysts said. The comments were reported hours ahead of a summit between US President Donald Trump and South Korean President Moon Jae-in in Washington on Thursday to discuss North Korea and other alliance issues. Moon has suggested that sanctions could be eased to allow inter-Korean economic engagement in return for some nuclear concessions by North Korea, but so far Washington has not agreed. "It did not directly mention the US, but linked sanctions with hostile forces," said Shin Beom-chul, a senior fellow at the Asan Institute for Policy Studies in Seoul. "He's saying North Korea would take an independent course unless the US offered to lift sanctions. You maintain sanctions, you're a hostile force; if you ease sanctions, you're not." North Korea is expected to convene a session of its rubber-stamp legislature, the Supreme People's Assembly, on Thursday. ^ top ^

 

Mongolia

International electoral observer training center to established in Mongolia (Montsame)
2019-04-11
Chairman of the General Election Commission Ch.Sodnomtseren received Steven Martins, senior adviser at the Office for Democratic Institutions and Human Rights (ODIHR) of the Organization for Security and Co-operation in Europe (OSCE), and Ulvi Akhundlu, ODIHR election adviser. The OSCE representatives are visiting Mongolia at the invitation of the Foreign Minister to improve the legal environment for election in Mongolia, provide recommendations and advice on draft law on election and share the experiences of other countries. They will also help develop training program and plan for the International electoral observer training center to be established in Mongolia. At the meeting, Mr. Ch.Sodnomtseren introduced the preparation works for the 2020 parliamentary election and briefed on some challenges and difficulties. He also expressed gratitude to the ODIHR for the cooperation and support. ^ 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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