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
  18-22.5.2020, No. 817  
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Foreign Policy

China to firmly respond with countermeasures against US bills smearing China over COVID-19: NPC spokesperson (Global Times)
A spokesperson for the annual session of China's top legislature on Thursday slammed US bills that baselessly accuse China of being responsible for COVID-19 and demand compensation from China, noting China will firmly respond with countermeasures. The US is pushing the bills aimed at making China accountable for coronavirus, and the accusations are baseless and run against international law and the basic norms governing international relations. China strongly opposes these accusations and will watch how these bills proceed and respond with countermeasures accordingly, Zhang Yesui, spokesperson for the third session of the 13th National People's Congress,told the press conference Thursday night. More reports show coronavirus cases occurred in different parts of the world, and early cases being identified in the world shifted the timeline forward. Things will become clearer, he said. Zhang said the origin of the virus is a scientific issue. It is irresponsible and immoral to cover up one's own problems by shifting responsibility. China does not accept any unwarranted lawsuit and compensation demand. Zhang noted that China dealt with the coronavirus outbreak in an open and transparent manner and has shared information with the WHO and other related countries. "We have made every effort to carry out international cooperation in the fight against COVID-19, which has been widely recognized and praised by the international community. These are facts. Facts are facts. We will never accept any smear or attack [from the US]," he said. We hope that in the fight against the virus, reason will prevail over prejudice, conscience over lies. We hope people can take greater responsibility and play fewer political games. Only by strengthening cooperation can we save more people's lives, he said. ^ top ^

Chinese envoy voices concern over Israel's planned annexation of Palestinian territory (China Daily)
A Chinese envoy said Wednesday that China is deeply concerned about reports of Israel's plan to annex part of the occupied Palestinian territory. The two-state solution is the only viable way forward to solve the Palestinian question. China urges the relevant party to stop such a unilateral action and refrain from escalating conflict and tension, said Zhang Jun, China's permanent representative to the United Nations. It is also China's firm position that no country should back such unilateral actions. The Security Council should discharge its mandate and do its part to prevent such a dangerous move, and promote the early resumption of Palestinian-Israeli peace talks in accordance with relevant UN resolutions, the land-for-peace principle and the Arab Peace Initiative, Zhang told the Security Council. He emphasized that the Palestinian question is at the root of the turbulence in the Middle East. Independent statehood is the inalienable national right of the Palestinian people, and it is not something for trading. The Palestinian people can count on China's continued support to their just cause to restore legitimate national rights. China fully supports Palestinians in building an independent and sovereign state on the basis of the 1967 borders, with East Jerusalem as their capital. China will work closely with the international community in the pursuit of comprehensive, just and lasting peace in the Middle East, he said. ^ top ^

Huawei's Meng Wanzhou could be set free next week by extradition ruling (SCMP)
A crucial ruling in the extradition case against Huawei executive Meng Wanzhou that could see her set free will be issued by a Canadian judge next week, British Columbia's Supreme Court announced on Thursday. The decision next Wednesday by Associate Chief Justice Heather Holmes will address whether the case against Meng satisfies the rule of double criminality, which requires that suspects in extradition cases be accused of something that would constitute a crime in Canada, as well as the requesting country. Meng's arrest at Vancouver's airport on December 1, 2018, on the request of US authorities who want her to face trial in New York on fraud charges, was a pivotal moment in troubled China-US relations. Beijing's relationship with Canada has also been sent to a new low with Canadians Michael Spavor and Michael Kovrig being arrested on spying charges that have been widely seen as retaliation for Meng's treatment. If Holmes decides double criminality rules have not been satisfied, then Meng could be freed, although that could depend on whether the Canadian government lawyers representing the US decide to appeal. If Holmes says double criminality has been satisfied, the extradition case will continue, with Meng's lawyers arguing for her to be freed on other grounds. The timing of the double criminality decision was announced in a memo to lawyers that outlined details for the release of the judgment to the media. Holmes's decision will be emailed to Meng's lawyers and those for Canada's attorney general at 9am on May 27. But they are barred from sharing the decision with anyone, including Meng, Canadian authorities or the US Department of Justice, until 10am. At that time, the reasons would also be released to journalists chosen to take part in a one-hour media lock-up at the courthouse, during which they would be prevented from sharing or discussing the ruling outside the room. Journalists will finally be allowed to publish the decision at 11am, when it will also be released on the court's website. At the same time, a court appearance by Meng is scheduled. Meng, Huawei's chief financial officer and the daughter of CEO Ren Zhengfei, is accused of defrauding HSBC bank by deceiving it about Huawei's business dealings in Iran, in violation of US sanctions on the country. She faces up to 30 years in prison if convicted. Her lawyers say the fraud case is a "dressed up" attempt to prosecute Meng for breaking US sanctions, which is not a crime in Canada. But Canada's lawyers say the bank fraud charge satisfies double criminality. Meng's case has been subjected to Covid-19 considerations, with the BC courts' normal operations having been suspended since March 19. Thursday's memo said the number of reporters allowed to take part in the lock-up was being limited to 27 "in order to maintain sufficient physical distance between those in attendance consistent with public health restrictions". Meng and lawyers took part in two hearings by telephone, on March 31 and April 27, in what government lawyer John Gibb-Carsley called "a unique case occurring in unique times". Meng is living in a C$13.6 million (US$9.8 million) mansion, one of two homes she owns in Vancouver. She is free on C$10 million bail and is allowed to travel around most of Vancouver, but she must abide by a curfew, wear a GPS monitor on her ankle and not go near the city's airport. Her extradition case is expected to continue until October or November, if Holmes lets the case proceed next week. But the appeal process means it could drag on for years. ^ top ^

China and India muscle up after border dispute but diplomatic channels open (SCMP)
China and India have deployed additional troops to their border near Tibet following a renewed conflict, despite both parties insisting that diplomatic channels remain open. The move follows an encounter on May 5 at a remote, mountainous crossing in which 11 soldiers – four Indian and seven Chinese – were reported to have been injured during a patrol in Nuka La, in the northeastern state of Sikkim, which borders Bhutan, Nepal and China. The stand-off, near the 4,570-metre (15,000-feet) Nathu La crossing, was resolved after "dialogue and interaction" at a local level. China's nationalist tabloid Global Times, quoting an unnamed military official, said the Chinese troops had taken necessary measures to strengthen on-site response and border area control. "China will resolutely safeguard the national territorial sovereignty and security, and resolutely maintain peace and stability in the border area," the report said. Unnamed sources quoted by The Times of India on Tuesday said troop reinforcements and fortifications had taken place in more parts of Ladakh, part of the Kashmir region which has been disputed by India, Pakistan and China since 1947. The report said the Galwan Valley had also emerged as a flashpoint after Chinese troops pitched tents near a river and started construction activity. Observers said the latest activities by both countries could lead to further clashes. Long Xingchun, president of the Chengdu Institute of World Affairs, an independent think tank based in China's southwest, said that both the Chinese and Indian armies were defending their interests more frequently than before, which might result in more confrontations. "The more frequent the engagement becomes, the riskier the situation might become, especially when taking into account that the Indian side is eager to consolidate what they have gained by building infrastructure in disputed regions," Long said. "Similar stand-offs are expected to happen again in the future, and thus communications at both high and local levels are needed to keep dangers at bay." Rajeev Ranjan Chaturvedy, a visiting fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore, said India was well prepared to deal with Chinese adventurism. "I am not worried because there is constant communication between officials and leaders and all channels of communications are open. And both countries are mindful of their priorities and limitations." The latest China-Indian border conflict comes after India opened a new all-weather access point in late April in Arunachal Pradesh in India's remote northeast, a region also claimed by China, to enable faster movement of troops and artillery. India and China share one of the world's longest land borders and there have been several bloody conflicts, including the 1962 Himalayan war. Skirmishes have continued to break out sporadically in the decades since and, in 2017, the two sides were engaged in a months-long territorial stand-off on the disputed Doklam plateau at the unmarked border between China and Bhutan. ^ top ^

Foreign Ministry says US responsible for tensions (China Daily)
China said on Monday that it is the United States that caused and should be responsible for the current tension regarding journalists working in each others' countries, and it urged Washington to stop its suppression of Chinese media. Foreign Ministry spokesman Zhao Lijian made the remarks after US Secretary of State Mike Pompeo claimed on Sunday that China had threatened to interfere with the work of US journalists in Hong Kong. He warned Beijing that any decision impinging on Hong Kong's autonomy could affect the US assessment of Hong Kong's status, Reuters reported. An annual review of Hong Kong's special economic and trade status is required in the Hong Kong Human Rights and Democracy Act, which was signed into law by US President Donald Trump in November despite China's strong opposition. "Hong Kong affairs are China's domestic affairs that brook no interference from any foreign government, organization or individual," Zhao said at a daily news briefing. Zhao spoke out against the measures taken in the US against Chinese media, including designating five Chinese media outlets as "foreign missions" and expelling their employees and restricting visas for Chinese journalists to 90 days. China has since taken countermeasures against US media outlets in the country in response. He said China deplores and opposes such wrong practices, saying the US has a Cold War mentality and an ideological prejudice against China. Such moves will severely disrupt normal reporting by Chinese media in the US and will affect bilateral people-to-people exchanges, he said. If the US goes further down this road, it could expect strong countermeasures from China, he added. Pompeo announced on May 6 that the US State Department was delaying a report to Congress assessing whether Hong Kong enjoyed sufficient autonomy to continue receiving special treatment from the US. ^ top ^

Chinese envoy calls for political settlement of Syria crisis (Xinhua)
A Chinese envoy on Monday called on parties in Syria to engage constructively in dialogue to seek a political settlement of the crisis in the country. China attaches great importance to the appeals by UN Secretary-General Antonio Guterres and Special Envoy Geir Pedersen for a cease-fire in Syria, and calls on all parties to enhance mutual trust, de-escalate the situation and jointly combat the COVID-19 pandemic, said Yao Shaojun, China's acting deputy permanent representative to the United Nations. There is a window of opportunity to promote inclusive dialogue and create favorable conditions for a political solution, he told a virtual meeting of the Security Council. The Syrian parties should continue to engage constructively with each other and maintain dialogue within the framework of the Constitutional Committee, he said. The future of Syria must be decided by the Syrians on their own, without foreign interference. It is fundamental to respect and safeguard the sovereignty and territorial integrity of Syria, he added. At the same time, the international community should keep vigilance at terrorists seeking to take advantage of the current situation in Syria, said Yao. Terrorist groups are still making assaults in Idlib in the northwest as well as other provinces, posing constant threats to the security and stability of Syria and the entire region. The Security Council should pay close attention and support Pedersen's call for effective, cooperative and targeted counter-terrorism efforts, he said. "We call on relevant parties to step up dialogue and negotiations to find a long-term solution in terms of counter-terrorism at an early date." Although the number of confirmed cases of COVID-19 is comparatively limited in Syria, containment and prevention measures are indispensable, given the quick transmission of the virus, he said. The Syrian government is taking effective measures in medical, transportation, education and many other sectors. China appreciates these efforts. China is ready to strengthen cooperation with the people and government of Syria in combating the virus, and offer assistance within its capacity, said Yao. The international community should provide more support for Syria in the fight against the virus as the Syrian government's efforts serve the interests of the Syrian people, he said. Unilateral sanctions should be lifted without delay as they undermine countries' capacity to mobilize resources and respond to the pandemic, he said. ^ top ^

Chinese ambassador to Israel passes away due to health reasons (Global Times)
China's Ambassador to Israel Du Wei died unexpectedly on Sunday in Tel Aviv due to physical health reasons, the Global Times learned from an anonymous source. An investigation is forthcoming, the source said. Israel's Foreign Ministry confirmed Du's death with the Global Times, saying that all evidence indicates the ambassador died of natural causes. Israeli Foreign Ministry Director Yuval Rotem spoke with the Deputy Ambassador to Israel Dai Yuming and expressed his country's condolences, said Israeli Minister-Counsellor Ruth Zakh, in an email to the Global Times. "The Ministry of Foreign Affairs offers its condolences on H.E.'s death, in spirit with the good relationship between the two states, which Ambassador Du Wei helped foster," the email read. Du, 58, was appointed ambassador to Israel in Feb. He earned a master's degree in law. Prior to his Israel appointment, Du served as China's ambassador to Ukraine from 2016-2019, and Deputy Director-General of the Policy Planning Department with Chinese Foreign Ministry from 2013-2016. ^ top ^


Domestic Policy

China Focus: China's top political advisory body opens annual session (Xinhua)
China's top political advisory body started its annual session Thursday afternoon in Beijing, raising the curtain of a key season in the country's political calendar which also includes an annual gathering of the national legislature to open Friday. The session will pool the wisdom and strength of political advisors to help secure a victory in poverty eradication and complete the building of a moderately prosperous society in all respects. Party and state leaders Xi Jinping, Li Keqiang, Li Zhanshu, Wang Huning, Zhao Leji, Han Zheng and Wang Qishan attended the opening meeting of the third session of the 13th National Committee of the Chinese People's Political Consultative Conference (CPPCC), held at the Great Hall of the People. The session was attended by 2,057 CPPCC National Committee members. Attendees at Thursday's meeting paid a one-minute silent tribute to martyrs who died fighting COVID-19 and compatriots who lost their lives in the epidemic. The agenda for the session was reviewed and approved at the meeting. Wang Yang, chairman of the CPPCC National Committee, delivered a work report of the Standing Committee of the CPPCC National Committee to the session. Highlighting the Central Conference on CPPCC Work held by the Communist Party of China (CPC) Central Committee in 2019, Wang Yang said that the speech by Xi, general secretary of the CPC Central Committee, at the conference has charted the way forward for the cause of the CPPCC in the new era. He commended the contributions made by the CPPCC National Committee and its standing committee to the causes of the Party and the country under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at the core over the past year. In the report, he also noted the role of political advisors in the fight against the COVID-19 epidemic, saying that they have submitted more than 1,300 reports and suggestions on preventing and controlling the epidemic, resuming work and production, stabilizing public expectations and strengthening law-based governance. Giving full play to the role of the CPPCC as a specialist consultative body, 71 consultation meetings, 97 research trips as well as online consultations were organized in the past year, according to the report. Wang Yang said the year 2020 marks the concluding phase for China's endeavor to build a moderately prosperous society in all respects and deliver on the 13th Five-Year Plan. He called on political advisors to fulfill their duties focusing on coordinating epidemic control and economic and social development to make contributions to winning the battle against poverty and completing the building of a moderately prosperous society in all respects. Attendees were also briefed on the handling of proposals submitted by political advisors. A total of 5,488 proposals have been submitted since the previous annual session of the top political advisory body, said Zheng Jianbang, vice chairperson of the 13th CPPCC National Committee, when delivering a report on the proposals. ^ top ^

Presidium elected, agenda set for China's annual legislative session (Xinhua)
Deputies to the 13th National People's Congress (NPC) Thursday elected the presidium and set the agenda for the annual session of the national legislature. Li Zhanshu, chairman of the NPC Standing Committee, presided over the preparatory meeting for the third session of the 13th NPC. All the preparations for the annual session are completed, Li said, adding that the session is expected to gather strength for achieving the goals and tasks in winning the fight against poverty and for building a moderately prosperous society in all respects. A 174-member presidium was elected, with Wang Chen as the secretary-general of the NPC session. The meeting also adopted the agenda of the session: -- Deliberate the report on the work of the government; -- Review the report on the implementation of the 2019 plan and on the 2020 draft plan for national economic and social development, and the draft plan for national economic and social development in 2020; -- Review the report on the execution of the central and local budgets for 2019 and on the draft central and local budgets for 2020, and the draft central and local budgets for 2020; -- Deliberate the bill put forward by the NPC Standing Committee on reviewing the draft civil code; -- Deliberate the bill put forward by the NPC Standing Committee on reviewing a draft decision of the NPC on establishing and improving the legal system and enforcement mechanisms for the Hong Kong Special Administrative Region to safeguard national security; -- Deliberate the work report of the NPC Standing Committee; -- Deliberate the work report of the Supreme People's Court; -- Deliberate the work report of the Supreme People's Procuratorate; -- Others. At the start of the preparatory meeting, deputies mourned deceased national lawmaker Wan Weixing. The presidium of the session met shortly after the preparatory meeting closed. Attendees to the presidium meeting decided on the schedule of the NPC session, among other matters. The NPC will be in session for seven days this year from May 22 to 28. Prior to the preparatory meeting, the Council of Chairpersons of the NPC Standing Committee met for the meeting's preparation. ^ top ^

China, U.S. should insist on non-conflict, non-confrontation: spokesperson (Xinhua)
The China-U.S. relationship is now at a critical juncture and it is key for both sides to insist on non-conflict, non-confrontation, mutual respect and win-win cooperation, a spokesperson for the annual session of China's national legislature said Thursday. Zhang Yesui, the spokesperson for the third session of the 13th National People's Congress, made the remarks at a press conference. China and the United States share extensive common interests, Zhang said, noting that cooperation is the only right choice for both sides as history has made it abundantly clear that both countries stand to gain from cooperation and lose from confrontation. It will help both countries work together in a mutually beneficial way, both in bilateral areas and on regional and global issues, if the United States could respect China's social system and development path, put into perspective China's development and its strategic intentions in a rational manner, and interact with China in a constructive way, Zhang noted. It will serve no one's interests if the U.S. side sticks to its entrenched Cold War mentality and containment strategy towards China, and undermines China's core and major interests, he said. "We do not wish to make trouble, but if trouble comes, we won't shy away," Zhang said. "China will always resolutely safeguard its sovereignty, security and development interests." The most pressing task now is pulling together on fighting against COVID-19 and seeking an economic recovery, Zhang said, expressing hopes that the United States can work with China towards the same goal. The two sides should jointly implement the consensus reached by the heads of state of the two countries on multiple occasions, stick to the principle of building bilateral relations featuring coordination, cooperation and stability, strengthen mutual trust, expand cooperation and properly handle differences so as to move forward the bilateral relations on the right track, Zhang said. ^ top ^

China's defense budget stays moderate and restrained: NPC spokesperson (Global Times)
China pursues defensive policies and the defense budget is moderate and restrained in regards to the total amount of the budget, per capita spending and the rate of GDP, Zhang Yesui, spokesperson for the 13th National People's Congress (NPC) told a press conference on Thursday. Zhang made the remarks in response to a Japanese reporter's question on whether China's defense budget will decrease considering the influence stemming from the COVID-19 epidemic. Zhang said that China's defense budget has stayed at around 1.3 percent of its GDP, which is far below the average global level of 2.6 percent. Compared to the country with the most military spending, China's defense budget in 2019 only accounted for one quarter of that. Since 2016, the increasing rate of China's defense budget has kept decreasing to single digits and the growing rate has stayed at around 7 percent to 8 percent. From 2016 to 2019, the growth rate of the defense budget was 7.6 percent, 7 percent, 8.1 percent and 7.5 percent respectively. Experts reached by the Global Times said that this year's defense budget will keep rising at a slow rate. According to a white paper released by the Information Office of the State Council in July 2019, China makes the scale and structure of its defense budget in accordance with a developing country's development level and defense needs, and manages and uses the money in accordance with laws. "The defense expenditure/GDP ratio has been keeping steady, growing synchronized and coordinated with national finance expenses." An observer, who requested anonymity, told the Global Times that the COVID-19 epidemic definitely has had influence on the economy and the index for economic and social development will be adjusted. Under such circumstances, it's impossible the defense budget will experience an obvious increase. Liu Zhengshan, an expert from an urban development research center, told the Global Times on Thursday that the increase rate of this year's defense budget will maintain a decreasing trend. "The year of 2020 is the year to work on poverty alleviation and the building of an overall well-off society. The country's main focus for national development would be directed to people's livelihoods." Considering the impact of the epidemic, China would pay more attention to issues regarding people's livelihoods. It fits the trend to decrease the defense budget growth rate, according to Liu. The anonymous observer said that there will be no sharp decrease in this year's defense budget. A slight increase or decrease would be seen as maintaining last year's level. "Currently, China has been faced with many security threats and challenges. Pro-independence forces in Taiwan keep making separatist remarks and moves; some foreign politicians have lost rationality, which makes it hard to predict future policies. All these need China to have enough defensive strength to safeguard national sovereignty, integrity and security." According to an analytical report on the defense budget by Essence Securities on Wednesday, the defense budget growth rate for 2020 will be at 6.8 to 7 percent. "Under a background in which tension in the region has become a new normal, the development of military equipment is expected to accelerate, and the expenditure on weaponry and equipment could maintain a share of more than 40 percent," the report reads. China's defense expenditure is categorized by application, namely personnel expenses, training maintenance fees and equipment spending. Song Zhongping, a military expert, said on Thursday that since China's military spending is far less than it actually needs, the international standards and the national strategic needs, a moderate increase of the defense budget fits the needs of economic development. He thought that by going with the rate of economic development, the increase rate of the defense budget in 2020 may be around 5 percent. Liu said that compared with government investment expenses in some industrial fields, national defense funding has a relatively lower pull effect on economic growth. According to international experience or economic theories, military expenditure should not make up too much of a share, or a crowding-out effect could take place and result in negative impacts on economic growth. "But compared to developed countries like the US, China's defense expenditure/GDP ratio is not high enough, and defense expenditure will yield positive impact to economic growth," Liu said. ^ top ^

Young Chinese idolize FM spokespersons, welcome 'Wolf Warrior' diplomats (Global Times)
Chinese college student Vicky Chi, 18, recalled how excited she was hearing China's Foreign Ministry spokesperson Zhao Lijian's remarks in fighting back against the US' defamation of China amid the novel coronavirus pandemic. Chi cited Zhao's criticism of the Wall Street Journal as "lacking the courage to make an apology" for its insulting title China is the Real Sick Man of Asia in February, and his response to a Fox News host's demand that China apologize for the virus outbreak as "I don't remember anyone asking the US to apologize (for the H1N1 flu)," among other tough remarks against US politicians' slandering of China. "Zhao's words really hit the spot," Chi said, adding that her impression of the US has "fallen off a cliff" ever since the country started provoking the trade war with China and suppressing Chinese telecom giant Huawei. "His hitting back at the US is a kind of catharsis for me." Zhao, as well as some other Chinese diplomats, are becoming increasingly popular among Chinese people with their personalized remarks and resolute attitudes in defending China's interests. Their "Wolf Warrior" style of diplomacy, though attacked by some Westerners who claim it is "strident and combative" in the international public opinion field, is bringing them numerous domestic fans, especially youngsters like Chi. The current three Foreign Ministry spokespeople, Hua Chunying, Zhao Lijian and Geng Shuang, impress the public with their distinctive characteristics. Their fans that the Global Times talked to described Hua as "gentle and incisive," Zhao as "forceful and unruffled" and Geng as "thoughtful and elegant." Many fans of Chinese diplomats - some renowned current and former foreign ministry spokespeople in particular - are a Generation Z group with a strong sense of national identity and pride in being Chinese. Most fans are between 15 and 25 years old, said Chi who manages a 14,000-member online fan community of Zhao's on Weibo. They are young, confident, vibrant, and interested in national and international affairs. They are fond of China's "Wolf Warrior" style of diplomacy, many fans say. "Diplomacy of a strong country like China should be that tough," said a fan named Li Kang. Li, an 11th grader, is a manager of a Weibo fan community for Lu Kang, a former Foreign Ministry spokesperson and Li's favorite diplomat. Li remembers many of Lu's remarks. He quoted Lu's comment on the US' considering promoting China to join the New START (a nuclear arms reduction treaty between the US and Russia) in May 2019: "Is the US trying to increase China's nuclear arsenal to its level or reduce its own nuclear arms to China's level?" Li praised it as being smart and hard-hitting. Chi also said she likes the style of the Chinese diplomats who "are not afraid of the US' provocations and can fight them back at leisure." "I remember that many years ago, some citizens sent calcium tablets to the foreign ministry to express their dissatisfaction with its inadequate diplomatic tone," Chi said. "Now I'm pleased to see our diplomats firmly say 'No' to the provocations and attacks to uphold our national dignity." "I'm willing to call them 'Wolf Worriers' and even lions," she told the Global Times. Many fans reached by the Global Times refuted the criticism by some Western politicians and media which claimed China's perceived "Wolf Warrior" diplomacy is overly aggressive. College student Wen Poshui, a fan of Chinese diplomats, said it is in the nature of things that any country will take a tough stand when it comes to national dignity and sovereignty. "Having been occupying the center of international opinion for long, Westerners seem to have become accustomed to a 'submissive' role of Chinese diplomacy that they think should be busy with uploading cute panda videos," Wen said, calling this mindset arrogant and self-righteous. A fundamental difference between China's and some Western countries' diplomacy is that, China's seemingly tough tone is not a tool to attack others but a reaction to outside suppression and smears, said Chu Yin, a professor at the University of International Relations. "In general, Chinese diplomacy is not inclined toward offense but defense," Chu told the Global Times. "It is soft and flexible when there are no attacks toward China." With a growing international influence, diplomacy is no longer a matter of elites but a public concern in today's China, experts said. "When diplomatic affairs have become something that all the citizens, especially youngsters, care about, the government must respond to this request by expressing its diplomatic policies to the public in an understandable way," noted Chu. Chinese diplomacy has been stepping closer to the general public in recent years. Diplomats don't mind changing their once "low-profile, enigmatic" style to a more vivid and personalized form, some fans commented. Diplomats have become active on social media as well. Veteran fan Wen said some of her posts and comments on Twitter were liked by Zhao amid the pandemic. "I once thought they (diplomats) were very far from me," Wen said. "But now they have opened their Weibo and Twitter accounts and even interact with us on these platforms; I daren't imagine this in the past." The Information Department of the Foreign Ministry opened its Weibo and Douyin (Chinese domestic version of TikTok) accounts respectively in May and July of 2019. It has some 10 million Douyin followers and over 1.13 million Weibo followers after months of frequent uploads of articles, videos and photos of diplomats' remarks. The common touch of diplomats contributes to their popularity among young Chinese. On Weibo, fans voluntarily build fan communities for their favorite diplomats and actively discuss topics from their remarks to their clothes, hairstyles and memes. A fan said she likes to talk about Geng's neckties with other fans. "He seems to have a lot of neckties," the 19-year-old laughed. Nonetheless, fan community managers said they are trying to educate and persuade some members not to treat their diplomat idols as entertainment stars. "We suggest they mainly focus on diplomats' work rather than their clothing, privacy or other trivial matters," said a fan community manager surnamed Ma. Not 'little pinks' Chinese diplomats are becoming models for the young generation. Lots of Gen-Z fans said they are inspired by them to learn English, work or study hard and be concerned with state affairs. Nana (pseudonym), 23, regularly collects bilingual remarks by her favorite diplomat Hua in her notebook. She said the rhetoric of Hua's remarks is worth learning, such as her comment on the "human rights" and "democracy" preached by some Western politicians during the illegal and violent offenses in Hong Kong last year, saying they were "just as illusory as a mirage in the desert or the Sirens' song on the sea." Yan Er (pseudonym)'s favorite diplomat is Geng. She said many of Geng's fans dream of being a diplomat like him in the future. "I am considering pursuing a master's degree in diplomacy after graduation," added the college freshman, who majored in finance. Fans like Yan Er and Nana who are steeped in remarks of the Chinese diplomats they love are naturally getting increasingly patriotic. They nonetheless deny the "little pink" label, which the media uses to refer to young people who are fired with patriotic zeal and try to guard China against any criticism online. Some teenage fans may just be too young to express their opinions in a 100-percent proper way, Chi said. "They should not be labeled 'little pinks' if they neither hurt others nor get involved in some sensitive political issues," she added. Several managers of fan communities of diplomats told the Global Times that the overwhelming majority of their members are rational and objective, and they haven't found any extreme behavior. "If a member 'overstepped the line,' I would warn them and delete their posts," Chi said. ^ top ^

China won't fire first shot in trade war with Australia (Global Times)
After China slapped an 80 percent tariff on Australian barley this week, Australia's Agriculture Minister David Littleproud said that his country would not seek a tit-for-tat retaliation against China by imposing punitive trade policies, noting that "there's no trade war," according to an ABC report on Tuesday. His statement hints at the hope that the recent trade rows between China and Australia could be limited to barley and beef, unless there is a new conflict between the two sides. It seems the Australian government has no intention of sowing new troubles in its trade with China, but the possibility of deteriorating tensions escalating into a trade war should not be ignored.Given the principles of free trade and reciprocity to which China has long adhered, there are reasons to believe that China will not take the initiative to start a trade war so long as no party deliberately escalates tensions further. However, we hope the Australian can release more goodwill and take more measures to repair its relationship with largest trading partner China.It would be of little concern if Australia wanted to go to the World Trade Organization to seek a tariff resolution with China. Its willingness to get back on track to resolve trade disputes is welcome, because China has always supported the settlement of trade disputes within the framework of open and transparent international trade rules.On the Chinese side, there is ample evidence to show its decisions on beef and barley imports were made on the basis of facts. According to Chinese statistics, Australia's barley imports to China increased by 67.14 percent from 3.87 million tons in 2014 to 6.48 million tons in 2017, with the import price down more than 31 percent from $288.72 per ton to $198.05 per ton.Yet, as the situation has been changing rapidly, it cannot be taken for granted that the trade spat could not develop into a trade war. The news came on Wednesday that Chinese customs authorities have announced an adjustment to the quality inspection and supervision of imported iron ore. That move, coming amid tensions, may lead some to believe it targets Australia, though there is no evidence that the new adjustment will have any negative impact on future iron ore imports from Australia.We believe the adjustment is based on normal market rules and facts. If China wanted to start a trade war with Australia, it wouldn't use a measure of this degree. China has the power to hurt the Aussie economy but won't fire the first shot in a trade war.In view of past experience, China won't be the one to take the first provocative step, but it should be noted that any further attempt to confuse malicious COVID-19 inquiries with trade would only exacerbate the tensions, driving bilateral trade off track.China has already made it clear that it supports the comprehensive review of the COVID-19 response, which should be conducted in an objective and impartial manner. A resolution on identifying the zoonotic source of the coronavirus has been agreed by all the member states, including China, at the 73rd World Health Assembly (WHA) meeting on Tuesday. The resolution is entirely different from the "independent inquiry" previously backed by some Australian politicians. ^ top ^

China's New Outbreak Shows Signs the Virus May Be Changing (Caixin)
Chinese doctors are seeing the coronavirus manifest differently among patients in its new cluster of cases in the northeast region compared with the original outbreak in Wuhan, suggesting the pathogen may be changing in unknown ways, complicating efforts to stamp it out. Patients in the northeast provinces of Jilin and Heilongjiang appear to carry the virus for a longer period of time and take longer to test negative, Qiu Haibo, one of China's top critical care doctors, said Tuesday on state television. Patients in the northeast also appear to be taking longer than the one to two weeks observed in Wuhan to develop symptoms after infection. This delayed onset is making it harder for authorities to catch cases before they spread, said Qiu, who is now in the northeastern region treating patients. "The longer period during which infected patients show no symptoms has created clusters of family infections," said Qiu, who was earlier sent to Wuhan to help in the original outbreak. Over the past two weeks, 46 cases have been reported across three cities — Shulan, Jilin city and Shenyang — in two provinces. The resurgence of infection sparked renewed lockdowns over a region of 100 million people. Scientists still do not fully understand whether the virus is changing in significant ways. The differences Chinese doctors are seeing could reflect their ability to observe patients more thoroughly and from an earlier stage than in Wuhan. When the outbreak first exploded in the central Chinese city, the local health-care system was so overwhelmed that only the most serious cases were being treated. The northeast cluster is also far smaller than Hubei's outbreak, which ultimately sickened more than 68,000 people. Still, the findings suggest that the remaining uncertainty over how the virus manifests will hinder governments' efforts to curb its spread and reopen their battered economies. China has one of the most comprehensive virus detection and testing regimes globally and yet is still struggling to contain the new cluster. Researchers worldwide are trying to ascertain whether the virus is mutating in a significant way to become more contagious as it races through the human population, but early research suggesting this possibility has been criticized for being overblown. "In theory, some changes in the genetic structure can lead to changes in the virus structure or how the virus behaves," said Keiji Fukuda, director and clinical professor at the University of Hong Kong's School of Public Health. "However, many mutations lead to no discernible changes at all." It's likely that the observations in China don't have a simple correlation with a mutation, he said. "Very clear evidence" is needed before concluding that the virus is mutating, he said. Doctors have also noticed that patients in the northeast cluster seem to have damage mostly in their lungs, whereas patients in Wuhan suffered multi-organ damage across the heart, kidney and gut, Qiu said. Officials now believe that the new cluster stemmed from contact with infected arrivals from Russia, which has one of the worst outbreaks in Europe. Genetic sequencing has showed a match between the northeast cases and Russian-linked infections, Qiu said. Among the northeast cluster, 10% have turned critical and 26 are hospitalized. China is moving aggressively to stem the spread of the new cluster before its annual political gathering in Beijing scheduled to start this week. As thousands of delegates stream into the capital to endorse the government's agenda, China's central leadership is determined to project stability and control. The northeast provinces have ordered a return of lockdown measures, halting train services, closing schools and sealing off residential compounds, dismaying residents who had thought the worst was over. "People should not assume the peak has passed or let down their guard," Wu Anhua, a senior infectious disease doctor, said Tuesday on state television. "It's totally possible that the epidemic will last for a long time." ^ top ^

Baidu chief calls for coordinated Chinese government approach for personal data collected during pandemic (SCMP)
Baidu chief executive Robin Li Yanhong has called for Chinese government bodies to work together on a coordinated approach to manage the personal data collected and stored during the coronavirus pandemic. In a proposal for the Two Sessions, China's annual legislative and political advisory gathering that is slated to kick off on Thursday, the billionaire tech leader suggested having an opt-out mechanism to withdraw personal data that was collected during the pandemic. Government bodies should also study standards relating to the collection, storage and use of personal data under "special circumstances" and standardise the management of such data to reduce the risk of data leakage and abuse, Li wrote in his proposal, which was released to the public on Wednesday. As they raced to contain the spread of the outbreak that started in January, China's central and provincial governments have been gathering and analysing even more data, by extending real-name registration and facial recognition requirements to over-the-counter purchases of medicine and all forms of public transport. While some residents expressed willingness to sacrifice privacy for public safety, there have also been privacy concerns raised over the possible abuse of this data, especially as China emerges from the worst of the outbreak. A delegate at the Chinese People's Political Consultative Conference (CPPCC), Li is also proposing to speed up efforts to build a nationwide digital infrastructure and smart transport systems using the latest technologies such as 5G and artificial intelligence, and to increase tax subsidies for training and continued education. CPPCC is one of the two main political bodies of China that separately convene at the two sessions each year to discuss major laws and regulations, as well as scrutinise work reports and the national budget. The other is the National People's Congress (NPC), China's parliament. The two sessions will kick off on Thursday, after a two-month delay caused by the coronavirus. Some of the country's best-known technology names including Li, Xiaomi chairman Lei Jun, Lenovo CEO Yang Yuanqing and NetEase CEO Ding Lei are expected to appear in person at the annual event as delegates and members, reflecting the importance of tech in the country's policies. However, Tencent Holdings chairman Pony Ma Huateng will miss this year's meetings because of "health issues", according to local media. Ma plans to submit in absentia seven proposals to China's top legislative body, covering the industrial internet, financial technology and medical services, according to Tencent's post on its official WeChat account on Monday. It said Ma's proposals take into account "the impact caused by the [coronavirus] pandemic on the country's livelihood and economy", including the development of "smart hospitals", which will take advantage of the country's advanced digital infrastructure and help ease the burden for medical staff during a public health crisis like Covid-19. ^ top ^

China destroys 3,120 mafia-like organizations, 9,888 criminal groups (People's Daily)
China had rooted out 3,120 mafia-like organizations and 9,888 criminal groups as of April since a national crackdown operation against such crimes was launched in early 2018, according to China's national office against organized crime. A total of 388,442 suspects had been held in custody on criminal charges, and 67,190 people had been investigated for corruption and for sheltering organized crimes, the office said at a press conference on Tuesday. The office pledged tougher actions against such crimes amid efforts to achieve the goals of the national crackdown operation against organized crime. The Ministry of Public Security started a special operation to hunt down 1,712 fugitives involved in organized crimes on April 9. Up to 66.6 percent of the listed targets who hid on the mainland have been seized, according to the office. ^ top ^

Shulan to boost lockdown as cases rise (China Daily)
The local government in Shulan, Jilin province, announced on Monday plans to step up its lockdown measures by tightening movement control in all residential areas as the number of new cases in a COVID-19 cluster that was first detected there continues to rise. Starting from noon Monday, residential blocks that have seen confirmed or suspected cases are barring residents from leaving and nonresidents from entering. Daily necessities will be delivered by local supermarkets, according to a notice released by Shulan's epidemic control leading group on Monday. In other residential compounds and villages, each family can send one member to purchase products every two days, and one trip outside should last no longer than two hours, the notice said. Shulan is a county-level city under the jurisdiction of Jilin city in Jilin province. Shulan added one new domestic infection on Sunday, bringing the total number of locally transmitted cases to 19 since May 7, when the first case was detected. Before the latest movement restriction, Shulan had already rolled out a series of epidemic control measures, including suspending schools and halting public transportation, to contain the disease. It was classified as a high-risk area on May 10. Jilin city reported two new domestic cases on Sunday, including the one in Shulan. Since May 7, the city has reported 34 confirmed domestic infections, according to the city government. Yang Limin, deputy secretary-general of the Jilin city government, said the two confirmed cases added on Sunday were close contacts of confirmed cases that were already under centralized quarantine. In order to balance epidemic control work with the public's medical needs, the city government is also ramping up management of its health institutions, adopting appointment-based systems and triage procedures, as well as thoroughly screening patients intended to be hospitalized, according to Yang. Hospital wards have barred patients' family members and friends from visiting, and hospital workers will strengthen personal protections and monitoring of their body temperatures to stem cross infections, he said. Elsewhere, Shanghai reported one new domestic case on Sunday involving a traveler from Qianjiang, Hubei province, the hardest-hit region in China. China also reported four imported cases found in the Inner Mongolia autonomous region on Sunday, the National Health Commission said on Monday. Mi Feng, the commission spokesman, said on Monday that the global tally for daily new confirmed cases surpassed 100,000 for the first time on Sunday, with the cumulative number reaching 4.52 million cases. "The pressure to control imported infections continues to rise. Authorities should monitor the changes in the overseas epidemic situation as well as the possible increase in international travel and economic cooperation," he said. "It is also important to ensure the screening of all incoming travelers, as well as those participating in transferring these travelers, and strengthen close-off management in order to prevent a new wave of domestic infections," he added. According to the health commission of Inner Mongolia, the four confirmed cases were detected in flight passengers that were diverted from the Beijing Capital International Airport to the airport in its regional capital Hohhot. ^ top ^



Three COVID-19 vaccines in phase II clinical trials: Beijing health official (Xinhua)
Three COVID-19 vaccines have entered phase II clinical trials in Beijing, said a municipal health official on Sunday. Xu Qiang, head of the Beijing Municipal Science and Technology Commission, said that Beijing has arranged 21 science and technology projects in response to the novel coronavirus epidemic. Five innovative drugs have been approved for clinical trials, and all of them have entered phase II clinical studies, he said at a routine press conference on COVID-19 prevention and control. According to a three-year action plan on strengthening the emergency management system for public health security in the capital (2020-2022), Xu said Beijing will establish a linkage mechanism for prevention, clinical practice, scientific research, treatment and project emergency approval. Beijing will accelerate the research and development of diagnostic reagents, drugs, vaccines and medical equipment, and support pharmaceutical and vaccine manufacturers in expanding their capacity to meet demands. Beijing will improve the layout of biosafety level-3 (BSL-3) labs. Xu said that Beijing will strengthen the supportive role of new technologies such as big data, artificial intelligence, 5G and the Internet of Things in epidemic monitoring and analysis, virus tracing, prevention, control and treatment. ^ top ^

Masks outdoors no longer necessary in Beijing (People's Daily)
After months of wearing masks to prevent virus infection risks, people can breathe freely outside without a mask in China's capital, Beijing, according to new guidance from the Beijing Center for Disease Prevention and Control released on Sunday. The center said people don't need to wear masks outside, but still should avoid close contact with others. It also encourages the public can take some outdoor exercise when the weather is good, which is helpful to increase the quality of life and health. ^ top ^



Shanghai airport opens nucleic acid testing facilities (Xinhua)
Shanghai Pudong International Airport has opened two "cabin rooms" to screen air passengers for the novel coronavirus, the Shanghai Customs said Thursday. With a total area of 360 square meters, the two rooms located at the T1 and T2 terminals have 44 sampling booths that can work around the clock to offer nucleic acid tests for even big passenger flows, according to customs officials. Their opening is part of the airport's preparation for resumed passenger traffic, the customs said. Shanghai has demanded nucleic acid tests on all who arrive in the city from overseas since March. Previously the tests at the airport were performed in converted buses, but officials later decided to build sampling facilities inside the terminals to better prepare for extreme summer weathers like thunderstorm and typhoon. ^ top ^



Guangdong, Hong Kong, Macao studying mutual recognition of quarantine measures, virus testing (Xinhua)
Secretary for Food and Health of China's Hong Kong Special Administrative Region (HKSAR) government Sophia Chan said on Sunday that the Hong Kong SAR, Guangdong Province and the Macao SAR are discussing mutual recognition of quarantine measures and virus testing of COVID-19. Chan said Guangdong, Hong Kong and Macao have taken different epidemic-prevention measures and are closely discussing how to achieve mutual recognition of these measures. The public will be noticed once a specific plan and a timetable are in place, she added. She said the HKSAR government has been expanding the testing of COVID-19, and carrying out contact tracing of the recently confirmed local cases. Regarding the relaxation of epidemic-prevention measures, Chan said the HKSAR government will make decisions based on more information through measures including expanding virus testing. The anti-epidemic measures will be carried out in a reasonable and balanced manner, Chan said, adding the restrictions would be eased in a phased manner to allow Hong Kong residents' livelihood and the economy to return to normal, and would be tightened again once there are rising risks. ^ top ^



Lhasa to reopen temples as China's epidemic wanes (Xinhua)
Lhasa, capital of southwest China's Tibet Autonomous Region, will gradually reopen all temples in its towns and city proper except the Jokhang Temple starting Wednesday as the COVID-19 epidemic in the country has been subdued. After the reopening, all local temples will not hold clustered religious activities attended by Buddhist believers for the time being, said the city's Buddhist association. For entry of the temples, local residents in Tibet will need their ID cards while Buddhist believers or tourists from other regions will need both their ID cards and health QR codes. They are also asked to wear face masks and have their body temperatures taken. The Jokhang Temple, which is currently going through security, firefighting and power facilities renovation and relics protection projects, will not open to the public for the time being, said the association. ^ top ^

China Mobile's 5G tech soars to new heights (China Daily)
A line of 46 yaks laden with telecom equipment in mid-April made its way toward the 6,500-meter-high Forward Camp on Mount Qomolangma, known as Mount Everest in the West. Accompanying the special transport team were more than 40 employees from China Mobile and its partners, who were burdened with heavy optical cables and struggling to inch higher amid bone-chilling -20 C temperatures. Their mission is to achieve the impossible-building the world's highest 5G base stations and bringing 5G signals to the summit of the world's highest mountain to provide a sound telecom infrastructure for scientific research and environmental monitoring of the peak. "Do you know how cold -20 C is? Even machines cannot bear such cold. The computers cannot be turned on," said Chen Gang, an employee from China Mobile's Tibet autonomous region branch. To solve the problem, they found a workable solution."When sleeping in tents, we lay our arms across our computers all night so that they can work next morning," Chen said. That is only one of the challenges they have to face. At Mount Qomolangma where oxygen is extremely scarce due to high elevations, people need to take deep breaths with every step. As a result, it would take as many as 40 people to carry a three-kilometer-long optical cable which weighs 700 kilograms. And the whole project needs 25 km of such cables. Li Chongming, an official with the networks department at the Tibet branch of China Mobile, described the project as challenging, tough and risky. Li, who is also the field chief coordinator of the ongoing 5G network installation project, said such a project required higher levels of skill in technology and construction. Wang Xiaobo, an employee of the networks department at the branch, said "the job is a challenge both for the mind and body to work at such high altitudes". He added that many of his colleagues suffered problems such as dry skin, insomnia and headaches. After hard work, the world's highest 5G base station at an altitude of 6,500 meters finally began operations on April 30, with China Mobile and Huawei-a major telecom equipment supplier-taking 5G connectivity to new heights by bringing the network signal to the summit of Mount Qomolangma. Together with the launch of the gigabit optical fiber network, China Mobile also runs its dual gigabit network for "Roof of the World". The project once again proves the technological prowess of China in rapidly commercializing the superfast technology and it will help scientific research, environmental monitoring, high-definition live broadcasting and other activities on the world's highest mountain, said Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association. Huawei said in a statement that it has offered its end-to-end solutions in the construction of China Mobile's dual gigabit network, where base stations were built in Mount Everest North Base Camp at the altitude of 5,300 meters, the Transition Camp at 5,800 meters, and the Forward Camp at 6,500 meters. Tashi Tsering, a Tibetan mountaineering guide, said 5G coverage on Qomolangma is crucial for coordinating emergency rescue services. "Many climbers come from low altitudes, so altitude sickness is a common problem for most people, and it is worse at altitudes such as 6,500 meters," he said. ^ top ^



Xinjiang hands out subsidies to stabilize employment (Xinhua)
Northwest China's Xinjiang Uygur Autonomous Region has distributed 430 million yuan (about 60.6 million U.S. dollars) in subsidies to help stabilize employment. Authorities in Xinjiang recently have taken a slew of measures to support businesses to stabilize employment at a time when the COVID-19 epidemic hit the economy and corporate performance. The subsidies, in the form of unemployment insurance rebates, had benefited over 1.46 million employees from 72,000 companies in Xinjiang by April, according to the department of human resources and social security of Xinjiang. Of the total, 320 million yuan went to 71,000 micro, small and medium-sized enterprises, benefiting 1.21 million employees. Xinjiang has increased the return of unemployment insurance premiums to keep employment stable. For insured enterprises that lay off no or fewer employees, 50 percent of the premiums paid last year are returned. Micro, small and medium-sized insured companies with a layoff rate of no more than 5.5 percent are eligible for the rebates. For insured companies with fewer than 30 employees, the layoff rate criterion is broadened to 20 percent. ^ top ^



Passing national security law in HK shows central government's determination: expert (Global Times)
Formulating a national security legislation for Hong Kong shows that the central government is determined to safeguard its sovereignty over the special administrative region and will protect the territory from falling into the hands of the hostile forces at all cost, especially after the Hong Kong SAR government has been weakened in the past years fending off growing risks caused by local secessionists and foreign intervention, a senior expert close to the central government on Hong Kong affairs told the Global Times on Thursday. Proposing the Establishment and Improvement of the Legal System and Implementation Mechanism for the Safeguarding of National Security in the Hong Kong SAR aims to not only tackle the current chaos in Hong Kong, but also prevent Hong Kong from posing a potential national security threat to the country, Lau Siu-kai, vice president of the Chinese Association of Hong Kong and Macao Studies, told the Global Times on Thursday. While the riots continue in Hong Kong and the US increases its efforts to contain the Chinese mainland, Washington's intention of using Hong Kong as a pawn to counterbalance the China has become increasingly palpable, the expert said. Faced with such a severe situation, it has become an urgent task for the Chinese central government to deal with the chaotic situation in Hong Kong, and such determination and urgency had turned out to be very strong in the communiqué of the fourth plenary session of the 19th CPC Central Committee held in October 2019, he noted. "When the pros and cons are evaluated, the only uncertain thing left is how to implement the law," Lau added. In the face of mounting external pressures, the Hong Kong Special Administrative Region government's ability to govern has been continuously weakened, and confidence has been lost in the SAR government to push forward Article 23 of the Basic Law in the short term, Lau noted. "Though it would be successfully established, the effectiveness and strength of the law cannot be expected," he said, noting that under such circumstances, the central government would formulate national laws that would be effective in Hong Kong, and would place them in Annex III of the Basic Law to ease the social unrests through decisive and powerful means. This also shows that to protect national sovereignty over the SAR and prevent the jurisdiction of the SAR from falling into the hands of hostile forces, the central government "will maintain its basic interests and principles at all costs." The adoption of the "Hong Kong version of the National Security Law" will inevitably incur fierce reaction and protests in the city. However, the central government's determination would also change the psychological expectations of pan-democratic groups, which might reverse the situation in Hong Kong, Lau noted. "Previously, some people always had this delusion that the central government would not take aggressive and decisive measures as it is afraid of a public backlash in Hong Kong or US sanctions. But they have to reevaluate the price they are willing to pay to achieve their goals," he said. The Chinese government is taking Hong Kong as an example, sending a clear message to the US on issues related to China's national sovereignty and security, and will never yield. It's also a strong signal to other separatist forces abroad, Lau added. Lau noted that when it is passed, the US will likely use the Hong Kong Human Rights and Democracy Act to challenge China. But he cautioned that the passage of the Hong Kong act last year was, in essence, a "tentative threat" to test China's courage. "China is now using the Hong Kong issue to send a crystal clear message to the US that China will never back down on issues involving its national sovereignty and security. This strong signal is also a serious warning to Taiwan authorities and other separatist forces overseas," he said. ^ top ^

Hong Kong's dollar tumbles on market jitters about Beijing's plan to impose national security legislation (SCMP)
The Hong Kong dollar dropped sharply on Thursday as the approach of China's annual meeting of parliament fuelled market worries that policymakers would push for new legislation to restrict the city's freedom. About 3,000 delegates to the annual gathering of China's largely rubber-stamp parliament, the National People's Congress (NPC), will meet in Beijing to discuss political and economic policy. Hong Kong delegates will have their first formal meetings as part of the two sessions with Xia Baolong, director of the State Council's Hong Kong and Macau Office (HKMAO), and Zhang Qingli, vice-chairman of the Chinese People's Political Consultative Conference, the nation's top advisory body. A Beijing official told the Post that the agenda for discussion would include the Basic Law, Hong Kong's mini-constitution, and a requirement that the Hong Kong government enact its own national security law, prohibiting acts of "treason, secession, sedition, or subversion". The Hong Kong dollar tumbled 0.05 per cent to 7.7539 against the US dollar on Thursday, its weakest level since May 5. Beijing's push for national security legislation comes against the backdrop of rapidly escalating tensions between the United States and China. US Secretary of State Mike Pompeo launched a verbal salvo against China on Wednesday, attacking Beijing for its policies on health, defence, Taiwan and 5G and its "brutal" regime, as he expressed US concern over certifying Hong Kong's autonomy. The United States has until the end of this month to assess whether Hong Kong remains suitably autonomous from China under the Hong Kong Human Rights and Democracy Act of 2019 – a condition for extending the city's preferential trading and investment privileges with US businesses. In contrast to Hong Kong's weak economic growth, its currency has shown resilience. It has been trading near the strong end of the band in the past month because funds have flowed into the city despite the deteriorating economy. The city's linked exchange system allows the Hong Kong dollar to trade between 7.75 and 7.85 per US dollar. The relaxation of social-distancing rules to contain the coronavirus pandemic has revived pro-democracy protests in the city that had been dormant since January. Hong Kong's gross domestic product is forecast to shrink by 7.2 per cent this year partly because of re-escalating social disruptions compounding a rising unemployment rate caused by the Covid-19 pandemic, according to a recent note by Standard Chartered Bank's senior economist for Greater China, Kelvin Lau. Lau had said the Hong Kong dollar would stay trading on the strong side of the 7.75-7.85 band for much of this year. ^ top ^

The attitude of the Hong Kong gov't and police are fueling constant protests and clashes (HKFP)
Nobody really likes to endure the heat and humidity of Hong Kong's streets when staging a protest, not to mention the potential risk of arrest and harsh treatment nowadays. I believe most young people may have preferred to be playing video games and using Instagram before Hong Kong Chief Executive Carrie Lam attempted to pass the controversial Anti-Extradition Bill in June 2019. But the Hong Kong government and the police managed to ensure the political awakening of the city's young and middle-aged people who were previously perhaps uninterested in politics. They have ensured protests have become part of Hong Kong's youth culture. Nobody could have imagined how the movement would have progressed into a continuous confrontation between citizens and the police. During the Umbrella Movement in 2014, the case of seven police officers beating up social worker and activist Ken Tsang in a dark corner stirred up so much public anger that the officers were charged and sentenced. But since the Anti-Extradition Bill protests last year, police officers have been enjoying impunity for using force in the name of dispersing crowds and arresting protesters. Some people might ask why demonstrators persist, saying that everything should return to business as usual, especially with the city's economy hit further by the coronavirus outbreak. Who would want to take to the streets if there was another viable option, such as fair and genuine universal suffrage of Hong Kong's leader and the Legislative Council? Yet, it is actually the mischievous attitude of the local and national government that has shaped the current protest culture – in particular, the actions of Carrie Lam and the Hong Kong police. The government simply ignores protesters' demands. There has been no independent investigation of the excessive use of police force in handling the protests. And all of this has contributed to endless protests and clashes. Hong Kong officials have been trying hard to divert public attention away from police violence whilst discrediting protesters as "hooligans." They, and pro-Beijing politicians, call for ending violence at the same time as persuade the public to turn a blind eye to police violence. They claim the force has been restrained and acted within guidelines, but no sensible person would ever believe this. The report released by Hong Kong's Independent Police Complaints Council (IPCC) on 15 May will only fuel more public anger, and thus more protests in future. It will not help reduce clashes between protesters and police and will only intensify the problem. The conclusion of the report simply reinforced the need to have a truly independent investigation, instead of a toothless agency to do window dressing for the police. The report used biased "evidence" and ignored facts. It's just like a piece of propaganda issued to block public scrutiny and has zero credibility. And who knows what the consequences would be, if any, should the police fail to follow the IPCC's recommendations. According to the report, the council received as many as 1,755 complaints over police behaviour during demonstrations and incidents which took place between 9 June 2019 and March 2020. It also looked more closely at six key events, including the Yuen Long mob attack on 21 July 2019 and police operations at Prince Edward MTR station on 31 August 2019. For the Yuen Long mob attacks, the police were criticised for being absent while white-clad mobs were attacking the people at the train station. However, the IPCC only said that there were "deficiencies in Police deployment and other Police action in response to the events." For such comments, there is no scrutiny of what responsibility the police should bear for being absent at the scene and the ensuing public outcry over the evidence that suggested potential collusion between the police and triad gangs. And the report claimed that the police deployment at Prince Edward station was fine. Did the council look into the numerous first-hand videos and interview eye-witnesses to collect evidence for their "investigation"? Is the council suggesting that the 1,755 complaints are groundless? When it was the "good old days" for peaceful protest, police were helpful in arranging routes for protesters. I personally took part in many of them over the years. The notification sent to the police and the issue of a "letter of no-objection" were merely matters of formality. But that time has long gone. People are now left with nothing effective. The lack of response from the government, and the lack of choice to achieve the demands, just pushes us all – the citizens – to continue our fight. It's the government that pushes citizens to become protesters. ^ top ^



Macau bans annual Tiananmen massacre vigil citing Covid-19, despite only 1 active case (HKFP)
Macau has banned the annual Tiananmen Massacre commemorative vigil citing health concerns over Covid-19. The Special Administrative Region has seen 45 cases of the coronavirus – 44 of which have recovered. It has recorded zero deaths and has not seen any new cases for 41 days. Lawmaker Au Kam San of the organising group Democratic Development Union told Macau News Agency that they will take the issue to the Court of Final Appeal. It is the first time the vigil has been banned in 30 years, according to Macau Business. The Tiananmen massacre occurred on June 4, 1989 ending months of student-led demonstrations in China. It is estimated that hundreds, perhaps thousands, of people died when the People's Liberation Army was deployed to crack down on protesters in Beijing. Vigils are held each year in Macau and Hong Kong in remembrance of the dead. Anyone wishing to host meetings or demonstrations in public must notify Macau's Public Security Police Force (CPSP) in writing in advance. "We don't think [the CPSP decision] is justified, and we will plan our next move once the court has a decision," Au told MNA, according to Macau Business. Earlier this month, Macau banned the Union's open-air exhibition on the massacre citing unclear reasons relating to "attributions and competencies." Chief Executive-appointed lawmaker Lao Chi Ngai said that the exhibition contravened constitutional law, the Basic Law, and the One Country principle, according to Macau Daily Times. ^ top ^



China firmly opposes U.S. arms sales to Taiwan: spokesperson (Xinhua)
China resolutely opposes U.S. arms sales to Taiwan and has lodged solemn representations to the United States, a Foreign Ministry spokesperson said Thursday. Spokesperson Zhao Lijian made the remarks at a routine press conference when responding to a question that U.S. government has notified Congress of a possible sale of advanced torpedoes worth 180 million U.S. dollars to Taiwan. Zhao said that China urges the United States to earnestly abide by the one-China principle and the three China-U.S. joint communiques, stop arms sales to and military ties with Taiwan to avoid further damage to China-U.S. relations and cross-Straits peace and stability. ^ top ^

US to sell US$180 million worth of submarine-launched torpedoes to Taiwan (SCMP)
The United States is set to agree the sale of US$180 million worth of submarine-launched torpedoes to Taiwan, as the island's president, Tsai Ing-wen, vowed during her second inauguration ceremony to bolster its defences. In a move likely to further inflame tensions between Beijing and Washington, the US Department of State said on Wednesday that it had approved the possible sale of 18 MK-48 Mod 6 Advanced Technology heavyweight torpedoes, which feature advanced sonar targeting for submarines, along with support equipment and related logistics support. The arms would help Taiwan to act "as a deterrent to regional threats and to strengthen homeland defence", and serve US interests by supporting Taiwan's "continuing efforts to modernise its armed forces and to maintain a credible defensive capability", according to the Defence Security Cooperation Agency, which handles foreign arms sales. "The proposed sale will help improve the security of the recipient and assist in maintaining political stability, military balance and economic progress in the region," it said. The announcement came on the same day Tsai officially started her second term as president. During her inauguration speech she promised to push for national defence reforms and ensure peaceful cross-strait relations with Beijing, which has not renounced the use of force to assert its sovereignty over the self-ruled island. Both Taipei and Beijing had "a duty to find a way to coexist over the long term", she said, while stressing the need for stability across the Taiwan Strait but rejecting Beijing's proposal of a "one country, two systems" model of semi-autonomy for Taiwan. Tsai also outlined key national defence reforms for Taiwan's military – which critics have said is outdated and undermanned – including accelerating the development of asymmetrical capabilities, bolstering reserve and mobilisation systems, and improving management institutions. "A better country requires a greater emphasis on national security," she said. "Over the past four years, we have pushed for national defence reforms, active international participation, and peaceful, stable cross-strait relations. We hope that Taiwan can play a more active role in the peace, stability and prosperity of the Indo-Pacific region." Beijing has objected to US arms sales to Taiwan in the past, saying they undermine its sovereignty and national security. It has also threatened to sanction US firms involved in selling them. Relations between Beijing and Washington have steadily deteriorated in recent years, over a range of strategic issues, including trade, technology, ideology and clashing strategic interests around the globe. Despite Beijing's protestations, Taiwan's unofficial ties with Washington deepened during Tsai's first term. In July, the US announced the sale of US$2.2 billion worth of battle tanks and surface-to-air missiles, and a month later pushed ahead with the US$8 billion sale of F-16 fighter jets. Last week, Beijing urged Paris to cancel a deal with Taipei, reportedly worth about US$26.8 million, involving the sale of Dagaie MK2 decoy launchers to upgrade the missile interference systems of the six La Fayette frigates Taiwan bought from France in 1991. ^ top ^

How Taiwan walked into the semiconductor trap set by US (China Daily)
On Thursday evening, the Taiwan Semiconductor Manufacturing Corp announced a new $12 billion investment in a new Arizona factory in the United States to produce semiconductors in the country rather than relying on exports from Taiwan. The project will be completed in 2024. But less than 12 hours after that announcement, the US Department of Commerce imposed sweeping new restrictions against Chinese telecommunications company Huawei, prohibiting all companies (including overseas ones) using technology and software produced by the US from selling semiconductors and parts to Huawei. Ironically, the biggest victim of the move would be the TSMC, along with some US companies. As the second-largest producer of smartphones in the world, Huawei is one of TSMC's largest customers for several key components. After goading the TSMC to make a huge investment in the US, the administration has turned around and told the company that it has the right to impose restrictions on its business. The TSMC has been, in effect, conned by the US administration's dishonest business practices-in other words, the US move is a big embarrassment for the Taiwan authorities. The present Taiwan administration has pursued a high stakes gamble that it can leverage itself away from the Chinese mainland, push for "formal independence" and default on cross-Straits commitments. Encouraged by the anti-Beijing sentiment in Washington, the island authorities believed they could tilt more toward the US, and further antagonize Beijing without any repercussions. Backed by an uncritical Western media, they have sought to provoke trouble, by providing support for the violent Hong Kong protesters and attacking the World Health Organization over the novel coronavirus pandemic for their own political gain. In making this gambit, however, the Taiwan authorities overlooked one critical weakness: the economy. As a small island of a little more than 23 million people not far from the coast of Fujian province, Taiwan's trade and commerce are integrated with the mainland's. Political differences aside, Taiwan companies rely extensively on the mainland's vast market and supply chains for survival. The ruling Democratic Progressive Party in Taiwan has talked about "going south" and diversifying the economy, but the island's limited clout and the mainland's huge market make this inherently unrealistic. As a result, the TSMC is heavily reliant on mainland companies, especially on Huawei, for its semiconductor business. But with the escalation of cross-Straits tensions and the island administration's increasing tilt toward Washington, it was wishful of Taiwan to think the status quo be maintained. It's not that the island authorities were caught unawares, as the US, in a series of proposals and leaked discussions, sought to tighten restrictions on Huawei to gain the upper hand against China in its technology war. Yet, ignoring these signs, the Taiwan authorities sought to curry favour with Washington. As such, it's not surprising that, despite the negative signs, they encouraged the TSMC to invest in the US to specifically boost the White House's agenda of "American jobs and manufacturing first", in order to make potentially big political gains. But within the space of hours, the US administration exhibited its true colours, by imposing new rules that limit the TSMC's ability to sell semiconductors and other components to Huawei. The White House has implemented a policy that infringes upon the island's interests and discriminates against its trade partners. The Taiwan authorities should realize that their strategy of blindly supporting the US will have consequences. The US is not an honest, reliable or ethical business partner. It has cheated one of the island's leading companies and deprived it of a market that it depends on. The new factory in Arizona cannot compensate for the TSMC's massive loss of the mainland market. The US policy has also pushed companies such as Huawei to diversify their supply chains, self-innovate and become as much self-dependent as possible in critical technologies. The result is that the island is left with nothing. By throwing everything on an anti-mainland gamble, the Taiwan authorities have discovered there is a heavy price to pay for leaning too much toward Washington. ^ top ^

Taiwan leader Tsai Ing-wen's office targeted in suspected cyberattack (SCMP)
Hackers have reportedly targeted the office of Taiwanese President Tsai Ing-wen, days before the inauguration for her second term in office, in an incident that highlights the security threat facing the island's government amid growing tensions with mainland China. Some local media outlets said they had received four emails from an account named "tsailoser" over the weekend containing 11 files that claimed to detail the infighting and power struggles between Tsai and her confidants. While the presidential office said the content had been "doctored", legislators and some security experts said the office needed to step up its cybersecurity. Presidential spokesman Alex Huang confirmed on Monday that information security units were investigating the suspected cyberattack. "We have already reported the case to the Criminal Investigation Bureau," Huang said in Taipei. Asked if the documents were intended to smear the government, Huang said that may have been the intent of whoever sent out the files, adding that the case will still under investigation. According to local news media, the attached files of the emails appear to include minutes from a meeting to discuss cabinet appointments, details of a potential power play between Tsai and Premier Su Tseng-chang and the strategy adopted by Tsai to defeat former premier William Lai during the Democratic Progressive Party's presidential primaries last year. Legislators from the independence-leaning DPP said on Monday they believed Beijing was behind the cyberattack, and claimed it was designed to disrupt the presidential inauguration on Wednesday. "The closer the presidential inauguration is coming, the more cyberattacks will come from China," DPP legislator Wang Ting-yu said, claiming the number of cyberattacks on government offices and public utilities had risen by half in the past month. Tsai will be sworn in to her second term in office on Wednesday following her landslide victory in January over Han Kuo-yu from the mainland-friendly Kuomintang, who is said to have been Beijing's favoured candidate. Beijing, which considers Taiwan a wayward province that must be returned to the mainland fold, by force if necessary, had hoped Tsai would be defeated because she has refused to accept the one-China principle. It has suspended official exchanges with Taiwan, staged numerous war games close to the island and poached seven of Taiwan's remaining allies to try to force Tsai to accept the principle. Cross-strait relations have further soured in recent months in what Beijing sees as Tsai's attempt to use the coronavirus outbreak to increase the island's international profile. DPP legislator Hsu Chih-chieh said the increase in cyberattacks posed a security risk to the island. "Cyberattacks are a kind of information war and President Tsai must demand that the information security department steps up efforts to prevent hackers from hacking into the government system and fabricating information to affect our national security," he said. Wang also questioned why security had failed to stop hackers targeting the presidential office, which had already been given the highest levels of protection. Taiwan People's Party legislator Ann Kao – an expert in information engineering and big data – said the presidential office needed to check whether anyone had logged into the email servers using an off-site internet protocol address. She said hackers might have breached the presidential office's mail server or someone on the inside either leaked the email contacts or provided user account information to hackers. Tzeng Yi-suo, a cyber warfare and information security expert at the Institute for National Defence and Security Research, a government think tank, said the incident was a typical "influence operation" designed to make the public lose confidence in the government. He said the hacking might have taken place some time ago as it would take time to alter the files before they could be sent to the media. ^ top ^



Decoupling unwise, experts say (China Daily)
Decoupling from the global industrial and supply chain is not a good prescription for dealing with the effects of COVID-19, particularly as China will demonstrate higher efficiency, better services and a sound business environment to further support global economic cooperation, senior officials and experts said. Though the epidemic has had a huge impact on global industrial and supply chains, leaders of most countries and mainstream international public opinion have called on all nations to strengthen unity and keep global industrial and supply chains running smoothly, Guo Weimin, spokesman for the third session of the 13th National Committee of the Chinese People's Political Consultative Conference, said on Wednesday. It is clear that multinationals are not willing to withdraw from overseas markets, including China, Guo said at a news conference ahead of the annual gatherings of the nation's top legislators and political advisers. The spread of the epidemic has not only created difficulties in international economic cooperation but also made the importance of such cooperation clear, he added. "China will continue to optimize its business environment, actively expand imports, expand foreign investment and contribute to the stability of the world economy," Guo said. "China's opening-up policy will not change, its adherence to the concept of peaceful development and win-win cooperation will not change and the country's efforts to promote a community with a shared future for mankind will not change," he added. His words came after Thomas Donohue, CEO of the US Chamber of Commerce, warned on Tuesday against "reshoring" too much production from China, saying that there should be a "huge place" in the US economy for the global supply chain. Reuters reported earlier that US lawmakers and officials are crafting proposals to push US companies to move operations or key suppliers out of China. The incentives include tax breaks, new rules and carefully structured subsidies. Donohue, who spoke on Tuesday at a live web event called Protecting Supply Chains During Coronavirus, said the US is still fighting a public health crisis, and the supply chains in place are protecting front-line workers and providing people in the US with everyday items they need. "We shouldn't drastically disrupt them without first carefully considering the merits and the results of any of the alternatives," he said. Doug Barry, director of communications for the US-China Business Council, told China Daily in an email: "Many US companies have been in China for decades and are there to sell in the China market, which is where substantial future growth is likely to take place." He said it remains to be seen whether incentives to reshore will be sufficient. Once the math is done, it may not seem very alluring, he said. Global supply chains take years to build and can't easily be reconfigured "at the drop of a hat", according to Barry. Miao Wei, minister of industry and information technology, said in a news briefing on Wednesday that it is not right to politicize the matter, as the global industrial chain has its own economic logic. According to Miao, the ministry's latest survey found that more than 40 percent of foreign companies said they will beef up their investment in China despite the pandemic. "China has the complete industrial chain and system as well as a huge market. It is entrepreneurs who will finally make their choice cautiously," he said. ^ top ^

China debt: how big is it, who owns it and what is next? (SCMP)
Broadly speaking, China's debt can be divided into domestic debt and foreign debt. China's domestic debt, denominated in yuan, consists of three components: corporate, household and government debt. Corporate debt includes borrowings by private sector and state-owned companies, while China's public debt is a combination of national and local government debt. Household debt, meanwhile, is the combined debt of all people in a household, including consumer debt and mortgage loans. China's foreign debt in currencies other than the yuan includes private sector firms' borrowing from foreign banks, trade-related credit to Chinese firms from foreign trading partners and debt securities issued by Chinese state-owned and private sector firms to foreign investors. Almost all of this lending is official, coming from the government and state-controlled companies. Over the years, China has been actively lending to emerging economies such as those in Africa. China is also a large holder of US Treasuries, effectively funding federal budget deficits in the United States. However, many of the borrowings in developing countries are between governments, and China often does not disclose details or terms of the loans. China has also been expanding its overseas projects financed by state-backed loans under the Belt and Road Initiative, an ambitious infrastructure investment plan to build rail, road, sea and other routes stretching from China to Asia, Africa and Europe. An Institute of International Finance report published in May 2020 suggested that China is now the world's largest creditor to low income countries, with China's outstanding debt claims on the rest of the world having risen from US$875 billion in 2004 to over US$5.5 trillion in 2019 – more than 6 per cent of global gross domestic product (GDP). The rise in China's overseas lending has been mainly driven by increases in bank loans and trade advances, the Washington-based Institute of International Finance (IFF) said. Since the Belt and Road was launched in 2013, at least US$730 billion has been directed to overseas investment and construction contracts in over 112 countries, IIF said. The Institute of International Finance (IFF) estimated that China's total domestic debt hit 317 per cent of gross domestic product (GDP) in the first quarter of 2020, up from 300 per cent in the last quarter of 2019 – the largest quarterly increase on record. China's National Institution for Finance and Development, a government-linked think tank, put the nation's overall debt at 245.4 per cent of GDP at the end of 2019, up 6.1 percentage points from the previous year. China's consumer debt is the fastest growing segment of overall debt, particularly in the form of mortgage and consumer loans. Household debt rose to 54.3 per cent of China's GDP in the last quarter of 2019 compared to 51.4 per cent in the last quarter of 2018, according to Institute of International Finance. China's foreign debt, including US dollar debt, reached US$2.05 trillion at the end of 2019, compared to US$2.03 trillion in the previous quarter, according to China's State Administration of Foreign Exchange. Most of China's local government debt, one of the most regular issuers of domestic debt, is held by state-owned or state-controlled financial institutions. For decades, China's local governments have relied on off balance sheet borrowing through local government financing vehicles (LGFVs). Many of these borrowings are not recorded and transparency is weak when it comes to how the funds are used. Such hidden debts are estimated to be between 30 trillion yuan (US$4.2 trillion) to 40 trillion yuan by Standard & Poor's. China also issued 4.36 trillion yuan (US$614 billion) in local government bonds in 2019. Most these borrowings are held by domestic investors such as commercial banks, followed by policy banks, which are state-owned banks whose investment and lending practises support government policies, such as issuing bonds to raise funds for infrastructure investment and insurance companies. China's bond market consists of bonds issued by the national government, local governments, private companies, along with mortgage-backed securities and other asset backed securities. The bond market, the third largest in the world, has steadily grown to over US$13 trillion. Since 2016, it has become accessible to foreign investors through government controlled schemes such as the Bond Connect programme and the Qualified Foreign Institutional Investor scheme. Foreign investors including wealth managers, mutual funds, family offices and hedge funds held 2.19 trillion yuan (US$308 billion) worth of Chinese bonds in 2019, up 457.8 billion yuan (US$64.4 billion) from 2018. But foreign investors' presence in China's onshore bond market remains small, accounting for only 2 per cent of the total holdings. China's domestic debt has been growing at an average annual rate of around 20 per cent since 2008, faster than its gross domestic product (GDP) growth. In a bid to counter the impact of the global financial crisis, Beijing unleashed a 4 trillion yuan (US$586 billion) stimulus package in 2008 to boost its economy, which led to a surge in borrowing by local governments and state-owned firms. But since 2016, China has increased its effort to reduce its debt pile to curb financial risks under a deleveraging campaign led by the central bank. State firms have been told to reduce their debt levels and lift efficiency, although the process has been slow. The Ministry of Finance has sought to control the hidden risks in local government financing vehicles (LGFVs) by calling out certain regional governments for illegal fundraising in multiple audit reports. Fitch Ratings report said that around 12.2 trillion yuan (US$1.7 trillion) in government debt, including a material portion of LGFV debt, was converted to public local government bonds between 2015 and 2018 after the State Council sent out guidelines recognising part of LGFV debt as the direct debt of local governments. The State Council guidelines also stipulated the LGFV debt should be replaced with an equivalent amount of municipal bonds issued by the provincial governments in a bid to improve transparency. A special purpose bonds quota for local governments were introduced in 2015 specifically to fund infrastructure and public welfare spending. Analysts, such as those from Standard & Poor's, believe the central government is likely to phase out the LGFV model altogether. The finance ministry has also demanded a number of heavily indebted local governments clean up their debt and also ordered all provincial officials to regularly report their borrowings in a centralised system since 2019. After years of rapid growth, China's external debt has also grown partly because of the country's push to acquire foreign assets. Its overseas expansion, though, has slowed somewhat since 2015 because of a combination of factors such as sluggish domestic growth, capital and regulatory controls and increasing scrutiny by foreign countries of Chinese investment. China's domestic debt level has been mainly driven by its desire to grow its economy as fast as it can. Local government officials' performance has for a long time been evaluated almost entirely on the basis of their ability to produce economic growth. This incentive structure has been integral to China's economic success since it began its market reforms over 40 years ago, and as long as China is growing at a reasonably fast rate, borrowers are able to achieve enough profits on their projects to pay off the debts they owe. But as China's growth has slowed, there are growing concerns that many of these debts are at risk of default, which could trigger a systemic crisis in China's state-dominated financial system. Overseas investment offers China an opportunity to increase trade and business, boosting its own economy. The Belt and Road Initiative, Beijing's signature foreign policy initiative, enables China to leverage its economic strength to increase its influence abroad. As such, China's external debt level will also be affected by its foreign policy objectives under the Belt and Road Initiative. But China's increasing overseas lending has raised questions on whether it should continue to receive loans from the World Bank as a developing country. The United States, as the largest shareholder of the World Bank, has objected to lending to China. David Malpass, the American president of the World Bank, has criticised China's lending efforts to fund its Belt and Road Initiative infrastructure projects, saying the loans leave weaker countries with "excessive debt and low-quality projects". Amid criticisms from the United States and European Union and slow growth back home, China has since cut back loans to Latin America, the Pacific Islands and Africa. US-based Rhodium Group estimated that Chinese lending to Africa dropped to US$16 billion in 2017 from a peak of US$29 billion in 2016. Local governments as well as private and state companies that were in relatively poor financial health were already struggling to repay interests to investors as growth slows, triggering a wave of defaults in loan and bond markets since 2019. Rating agencies are expecting more defaults in 2020 in both the onshore and offshore markets. In May 2020, listed oil and gas firm MIE Holdings failed to make a US$17 million interest payment on its US$248 million bond. The coronavirus pandemic is likely to slow regional economies even further, driving down local governments' revenue and impairing their ability to pay off and refinance debt, with the likelihood that some regional economies will have to increase their debt burden. There were already signs of a ripple effect among China's small banks as the central government had to step in during 2019 to bail out or partially rescue a number of institutions – such as Baoshang Bank and the Bank of Jinzhou – for the first time since the 1990s. China has asked its banks to extend borrowing to small businesses which may add more bad debts to the financial system going forward because companies may struggle to generate enough revenue due to a poor demand and weak growth prospects. The overall debt level is also set to rise to a record high in 2020 as China is expected to lift its local government bond quota and issue a special treasury bonds for the first time in 2007 to rescue its coronavirus-hit economy. It is not certain whether China will be able to resume its lending and investment sprees in 2020 given that it has to defer and renegotiate past loans across the world as macro conditions deteriorate because of the coronavirus pandemic, according to a report by US-based Rhodium Group in April. Before the public health crisis, China's policy banks were already cutting back new loans under the Belt and Road Initiative. Rhodium expected that, given ongoing domestic challenges, China is likely to prioritise investment at home, but still will be able to increase foreign lending through its policy banks. Overseas investment remains an attractive option for Chinese companies given lower valuations of acquisition targets as a result of the pandemic. In every episode of the Inside China podcast, we take a deep-dive into a specific topic, mixing independent reporting and exclusive interviews to bring you unique insights into an emerging potential superpower. Now, we are featuring regular updates on the coronavirus pandemic from across the country. ^ top ^



Ulaanbaatar Mayor pledges 80 percent drop in air pollution by spring 2021 (Montsame)
On May 18, Governor of the capital city S.Amarsaikhan gave a briefing on timely matters concerning Ulaanbaatar city. He stressed "Air pollution in Ulaanbaatar city has already been cut in half, and noted that the pollution will be reduced by another 30 percent in the upcoming winter season, which will result in the city's air pollution to drop by more than 80 percent by the spring of 2021." He also said that the consumption of 150 thousand tons of raw coal has been eliminated by replacing hundreds of low-pressure stoves with electricity usage since last year. "As there are now more than 5,000 low-pressure stoves still in use, with the help of the prohibition of the raw coal supply for those using the low-pressure stove beginning from October 1, and enabling the households to be connected with central heating system, the consumption of another 150 thousand tons of raw coal will be removed. During the briefing, the Governor also presented ongoing measures being implemented in the capital city in response to Covid-19 infection. Disinfection works are being conducted in each district, and outdoor pit latrines and drain pipes of 19 thousand households have been decontaminated. ^ top ^

Air border crossing point to be transferred to Chinggis Khaan airport (Montsame)
At its regular meeting today, May 20, the Cabinet approved a resolution on some actions on airport. In accordance with the resolution, the air border crossing point at Buyant-Ukhaa international airport will be transferred to Chinggis Khaan international airport beginning from July 1, 2020 and Minister of Finance and Head of the Border Port National Council Ch.Khurelbaatar was deputed to resolve required spending on inspections to be carried out by border control authorities. At the meeting, the Cabinet also decided to submit a bill on amending the Law on Criminal Code to the Parliament. ^ top ^


Sandro Wirth
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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