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
  25-29.5.2020, No. 818  
Startseite / Homepage   Archiv / Archives
Table of contents

^ top ^


Foreign Policy

European Union can play vital role in preventing a 'new Cold War' (China Daily)
There is growing concern about a possible "new Cold War" between the United States and China with tensions between the two countries rising from the fields of technology, investment and trade to military, Taiwan and Hong Kong. But in almost all these fields, Washington has been the provoker, waging trade and technology wars, breaking decades of US practice vis-à-vis Taiwan, and launching a full-scale smear campaign against China leading up to the Nov 3 US presidential election. State Councilor Wang Yi, promoted by US actions, reiterated on Sunday that both countries stand to gain from cooperation and lose from confrontation. He said China has no intention to change, still less replace, the US, but China will defend its sovereignty, territorial integrity, legitimate rights to development and dignity and place in the world. While people in China and US should do everything they can to avoid a "new Cold War", Europe, which suffered greatly due to the Cold War, can play a key role in preventing such a dangerous scenario from becoming reality. European Union foreign policy chief Josep Borrell's speech on Sunday at the German ambassadorial conference provides some encouraging clues. Borrell, like former Swedish prime minister Carl Bildt in his op-ed in The Washington Post on May 19, lamented the total lack of US global leadership. He said Asia will become increasingly important in economic, security and technological terms, stressing that he believes the 21st century will be "Asia century". According to PricewaterhouseCoopers, the top 10 world economies by 2050 will include four Asian countries: China, India, Indonesia and Japan, with the US in the third place. Borrell admitted the growing pressure to choose sides. But like many countries in Asia, Africa and Latin America, he said that the EU does not want to do so and instead wants to "follow our own interests and values and avoiding being instrumentalized by one or the other". The truth is that China has never forced the EU or any other economy to take sides, because it believes in win-win cooperation rather than zerosum games that some US politicians indulge in. China will support what Borrell called a "robust strategy" for China, a strategy that includes better EU relations with other Asian countries such as Japan, the Republic of Korea and India. In fact, China, Japan and the ROK are pushing forward their free trade agreement and are major parties to the Regional Comprehensive Economic Partnership, which is expected to be signed at the ASEAN Summit later this year. China and the EU, too, hope to wrap up their Comprehensive Agreement on Investment this year. China and the EU are major forces upholding multilateralism and international rules at a time when the US has become a major disruptor by quitting the Paris climate accord, the Iran nuclear deal, withdrawing from UNESCO and the UN Human Rights Council, attacking the World Trade Organization and the World Health Organization, unilaterally terminating the Intermediate-Range Nuclear Forces Treaty and the Treaty of Open Skies, and threatening to end the New Strategic Arms Reduction Treaty with Russia, all of which would endanger European security. Borrell said China is getting more powerful and assertive, and its rise is impressive and triggers respect but also raises many questions and fears. But, he added, he does not subscribe to the claim that "we are reaching a Thucydides moment", and stressed the importance of a relationship based on trust, transparency and reciprocity and expected the China-EU Summit in Leipzig scheduled for autumn to be an important moment. The EU and its member states have been expanding cooperation with China while handling their differences, whether on trade or human rights, through dialogues instead of US-type confrontation. And unlike the US, China has been supporting a stronger EU. China and the EU have much to cooperate in achieving the "Next Generation EU Vision" laid out by European Commission President Ursula von der Leyen on Wednesday, including those on developing a digital economy and a climate neutral continent. So the EU and the rest of the world can and should play their roles in preventing a so-called new Cold War scenario, at least by refusing to participate in it. ^ top ^

Racist attacks spike in Australia, with anti-China politicians calling themselves 'Wolverines' (Global Times)
Despite a campaign by a local Australian government targeted at xenophobia, Chinese observers said the COVID-19 pandemic is fueling racist attacks against Chinese and Asian communities in the country, partly due to the country's deep-rooted racism, which can be seen in a group of anti-China politicians who call themselves "Wolverines." A report on Wednesday in The Australian said the government of New South Wales carried out the Stop Public Threats campaign in response to a spike in racist incidents targeting Asian Australians as a result of the COVID-19 pandemic. However, observers are not optimistic about the success of the campaign, noting that racism is deeply rooted in Australian society. Australian think tank Per Capita released a survey which shows that 81 percent of the respondents experienced attacks related to the coronavirus, among which 61 percent of the incidents included racist insults and abuse. The think tank's research fellows said the Chinese community has especially been affected. Australia has made some efforts to curb the racist attacks but gained little. Observers noted that mainstream society in Australia barely pays attention to discrimination against Chinese and Asian groups, which has also fueled racist incidents. Moreover, it is difficult to obtain evidence against such crimes. The words "CHINA = COVID" were found written on the wall of a house on Sunday in a Chinese community in Sydney. The owner of the house is said to be a Chinese who was not at home. The Per Capita survey said 88 percent of incidents are committed by people the victims do not know. Also, such incidents are in legal limbo, so the offender escapes punishment even if the victim calls the police, observers said. Chinese observers in Australia said they found few reports about the incidents in Australian media, while many outrageous incidents of racial discrimination spread in local Chinese media. For example, local Chinese media reported that some Chinese families have seen their homes vandalized, some were abused on public transportation, and others beaten for wearing masks. The prevalence and severity of the situation is greatly underestimated by Australian society, observers said. In Australia, respecting the rights of original residents is "politically correct" while being anti-China is also "politically correct," observers noted. In 2019, infamous Australian right-wing politicians Andrew Hastie, James Paterson and Kimberley Kitching formed a bipartisan group called the "Wolverines" to speak out against China. The group pasted their logo - four wolf claw marks - on office windows around Parliament House. Australian media, which has decried China's "wolf warrior diplomacy," has praised "the Wolverines." Some scholars have pointed out that the current anti-China sentiment is the revival of the "white Australia policy," which is also the reason why racial discrimination in Australian society is difficult to eradicate. Andrew Jakubowicz, an honorary professor of sociology at University of Technology Sydney, said that although the racist attacks against Chinese and other Asians during the coronavirus would backfire, racism remains strong among political parties, mass media, and many other fields. The "white Australia policy" was aimed at preventing people of non-European ethnic origin, especially Asians (primarily Chinese) and Pacific Islanders, from immigrating to Australia. ^ top ^

China brands Canada 'accomplice' of US, as Huawei's Meng Wanzhou loses bid to have extradition case thrown out (SCMP)
China has accused Canada of acting as an "accomplice" to the United States in a "grave political incident", after a judge in Vancouver rejected a bid by Huawei executive Meng Wanzhou to have her US extradition case thrown out. Justice Heather Holmes of British Columbia's Supreme Court ruled on Wednesday that the US fraud charges against Meng satisfied the Canadian extradition requirement of "double criminality", which demands that suspects be accused of something that would constitute a crime in Canada as well as in the requesting country. The extradition case – which has thrown China's relations with Canada and the US into turmoil – will therefore continue. "On the question of law posed, I conclude that, as a matter of law, the double criminality requirement for extradition is capable of being met in this case," Associate Chief Justice Holmes wrote in her judgment. In a statement on social media, China's embassy said: "China hereby expresses strong dissatisfaction and firm opposition to this decision, and has made serious representations with Canada." "The United States and Canada, by abusing their bilateral extradition treaty and arbitrarily taking forceful measures against Ms Meng Wanzhou, gravely violated the lawful rights and interests of the said Chinese citizen," the statement said. "The purpose of the United States is to bring down Huawei and other Chinese high-tech companies, and Canada has been acting as an accomplice of the United States. The whole case is entirely a grave political incident." The statement urged Canada to "immediately release Ms Meng Wanzhou and allow her to return safely to China, and not go further down the wrong path". Canada's Department of Justice had hailed "the independence of Canada's extradition process", in a statement after the ruling. Meng's lawyers will continue to fight against her extradition on other grounds. US prosecutors want Meng extradited from Canada to face trial in New York. Canadian police, acting at the request of US authorities, arrested her at Vancouver's airport on December 1, 2018. The arrest set off a diplomatic firestorm amid the US-China trade war and sent Beijing's relations with Ottawa plummeting. Meng is accused of defrauding HSBC bank by deceiving an executive in Hong Kong about Huawei's alleged business dealings in Iran, a breach of US sanctions. Meng's lawyers had tried to have the extradition case dismissed by arguing that the fraud charges were in fact a "dressed up" accusation that Meng had broken US sanctions, which is not a crime in Canada. But Holmes said that the "essence" of Meng's alleged wrongful conduct "is the making of intentionally false statements in the banker client relationship that put HSBC at risk". "The US sanctions are part of the state of affairs necessary to explain how HSBC was at risk, but they are not themselves an intrinsic part of the conduct," wrote Holmes. "For this reason, I cannot agree with Ms Meng that to refer to US sanctions in order to understand the risk to HSBC is to allow the essence of the conduct to be defined by foreign law. Canada's laws determine whether the alleged conduct, in its essence, amounts to fraud." Meng, 48, will remain under partial house arrest in Vancouver, where she lives in a C$13.6 million (US$9.9 million) mansion on C$10 million bail. Holmes said that the double criminality analysis of Meng's lawyers "would seriously limit Canada's ability to fulfil its international obligations in the extradition context" regarding economic crimes, noting that "the offence of fraud has a vast potential scope". Canadian Prime Minister Justin Trudeau this week tried to emphasise that Canada's courts are independent from political considerations. But the case has deeply strained relations between Ottawa and Beijing. On Tuesday, China's foreign ministry said Canada "should immediately correct its mistake, release Meng and ensure her safe return to China at an early date, so as to avoid any continuous harm to China-Canada relations". In the wake of Meng's arrest, China detained two Canadians, Michael Kovrig and Michael Spavor, accusing them of espionage. But their treatment is widely viewed in Canada as hostage-taking, and retaliation for Meng's arrest. Holmes' decision represents a major setback for Meng, who is the daughter of Huawei CEO Ren Zhengfei. However, her lawyers are continuing to contest extradition by arguing that her case has been tainted by political interference, such as when US President Donald Trump said in December 2018 that he might intervene in the case if it suited US economic interests. Meng's lawyers have also said her Canadian rights were violated by her treatment at Vancouver's airport, when border agents searched her belongings and questioned her in what they allege was a "covert criminal investigation" on behalf of the US FBI. Holmes' ruling outlined the US accusation that Meng gave "false assurances" about Huawei's Iran business to a HSBC banker in the back room of a Hong Kong restaurant in 2013. These assurances allegedly put HSBC at economic and reputational risk by "significantly understating" Huawei's relationship with Skycom, a company based in Iran. Meng allegedly described Skycom as a partner. But although Huawei had sold its shareholdings in Skycom and Meng herself had resigned as a member of its board, "Huawei in reality continued to control Skycom and its banking and business operations in Iran", wrote Holmes in her summary of the US case. In her decision, Holmes said that although Canada did not have a sanctions regime against Iran, such US laws were "not fundamentally contrary to Canadian values in the way that slavery laws would be, for example". After Holmes' ruling was released online, Meng appeared at a brief court hearing. Proceedings were adjourned until a case management conference on June 3. Protesters hold a banner before a court hearing attended by Huawei Technologies Chief Financial Officer Meng Wanzhou in Vancouver, British Columbia, on Wednesday. Photo: Reuters Further hearings are scheduled until October, but appeals mean the extradition case could last years. Huawei said in a statement that it was "disappointed" by Wednesday's ruling. "We expect that Canada's judicial system will ultimately prove Ms Meng's innocence," the statement said. However, the Canadian extradition hearings are not to determine Meng's guilt or innocence, only whether the case meets a test for committal and she should be sent to the US to face trial. Holmes' ruling was released in stages: participating lawyers were emailed copies of the decision at 9am; Meng and Canadian and US authorities were allowed to be informed at 10am; then the ruling was finally made public at 11am. There had been intense speculation about the ruling, heightened on Saturday when Meng was seen posing for photos on the steps of the Supreme Court in downtown Vancouver with about a dozen friends and Huawei colleagues. On Wednesday morning around 8am, four women who were among that group turned up at Meng's mansion in the exclusive Vancouver neighbourhood of Shaughnessy, bustling past about two dozen waiting reporters. Nine and 10 o'clock ticked past without the curtains at the house even flickering. "We're just waiting for the Navy Seals to come in," joked a guard from Lion's Gate Risk Management, pointing a thumb in the direction of the US consul-general's residence, just a couple of doors from Meng's house. The Lion's Gate guards are tasked with preventing Meng from escaping, but also act as her de facto bodyguards. She pays their bills under the terms of her bail. It would not be until 10.45am that Meng herself emerged from the house, greeting reporters before climbing into a black Chevrolet Suburban SUV and heading to court. ^ top ^

As a new cold war dawns and the US pursues strategic competition with China, Beijing must reassess its own policies (SCMP)
As China's national legislature deliberates a draft decision on establishing and improving the legal system and enforcement mechanisms for Hong Kong to safeguard national security, huge criticism has poured in from the West. Leading the charge was US Secretary of State Mike Pompeo, who urged China to "reconsider its disastrous proposal" and "abide by its international obligations". Chris Patten, the last governor of the former British colony, also aired his views, having never failed to seize any opportunity to criticise China on Hong Kong. The average Chinese citizen would find it very difficult to understand the logic behind these criticisms. The US Congress has, on a number of occasions, passed legislation on the issue of Taiwan, Hong Kong and the Xingjiang, which are all Chinese territories. If a foreign country can pass laws which apply extraterritorially and which interfere in China's domestic affairs, why should China not pass laws which apply to its own territory? If, in doing so, China is accused of violating its international obligations, how should the legitimacy of the legislative actions of the United States be assessed? There are clues in a Trump administration report, "United States Strategic Approach to the People's Republic of China", released on May 20, which acknowledges the failure of an engagement policy that had been pursued for 40 years and declares a reappraisal of the US' strategic advantages and shortcomings. The document makes clear that "through a whole-of-government approach and guided by a return to principled realism", the US will attempt to contain China on all fronts – economic, political and military. This new US policy towards China is both significant and symbolic. It marks the beginning of a strategic showdown with China at the level of US national policy, essentially announcing the onset of the new cold war with China. The new strategy also reflects the trend of the US opposing whatever China does regardless of its merits. Even before the start of the trade war, the US had adopted this anti-China approach and criticised China's economic, political and military actions. The criticism of China over the national security law in Hong Kong is just one example of this trend. The criticism is not because China has no authority to enact such laws, as any sovereign state does, but because the state taking such legislative action is China. It is not because the implementation of the national security law will destroy the freedom, prosperity and autonomy of Hong Kong guaranteed by the "one country, two system" framework, but because it is China that will enforce the law. It is irrelevant to China's critics that the implementation of a similar law in mainland China has guaranteed people's freedom and prosperity, and provides the bedrock for the growth of modern cites, such as Shanghai and Shenzhen. US Secretary of State Mike Pompeo speaks during a press conference with Chinese officials during the US-China Diplomatic and Security Dialogue at the State Department in Washington on November 9, 2018. Pompeo has criticised the National People's Congress's decision to pass a national security law tailor-made for Hong Kong. Photo: AFP Another example of US criticism is the accusation that China is bullying Vietnam with regard to the Chinese coastguard vessel's collision with and the sinking of a Vietnam fishing vessel, although the Vietnamese vessel entered the territorial waters of China's Xisha (Paracel) Islands to carry out illegal fishing activities. The US' identity-based anti-China approach will be even more disastrous if applied to military activities. It would be hard to prevent a "whole-of-government" anti-China approach from influencing the military. Once opposing China becomes the political norm, there will an inevitable impact on frontline military operations, where military professionalism is called for in making decisions. Although theoretically this "whole-of-government" approach and all-front strategy to contain China will remain within the scope of a cold war, its application in the military domain increases the potential for a miscalculation of each other's strategic intentions and more than doubles the risk of a military incident, confrontation or even real conflict. The Covid-19 pandemic has aggravated this "oppose-China-whatever-it-does" trend. The Trump administration has taken calibrated measures to deflect blame for its own failure to contain the disease, despite its previous affirmation of China's efforts. In sum, the US' evaluation of China's conduct is no longer based on any standards stipulated in international law or the values shared by the international community, but simply on opposing China. Given that the US has changed its strategic policy towards China, China must reassess its own policy. One of China's strategic assessments is that it is still in an "important period of strategic opportunity". The core of this assessment is that peace and development remain the themes of the times. To maintain a strategic environment for peaceful development, China has always pursued a cautious, tolerant and conservative strategy in its diplomatic relations. In its relations with specific countries, whether big or small, China is also willing to stomach small losses, either economic or in security terms, to positively maintain this period of strategic opportunity. However, it is now time for China to rethink its policy. Although peace and development remain the theme of the times, the strategic environment has changed. To accommodate the US stance of opposing whatever China does, China must adopt what I term "negatively maintaining" the important period of strategic opportunity. Chinese President Xi Jinping and US President Donald Trump shake hands on November 9, 2017, during a meeting outside the Great Hall of the People in Beijing. Since then, the US has taken an increasingly hard line on China. Photo: Abaca Press / TNS Several elements could be pivots of this approach. First, since the US opposes China whatever it does, China should adopt a more active posture in its strategic competition with the US and resolutely exercise its right to safeguard national sovereignty and its development interests within the limits of international law. Second, China should adhere to multilateralism and maintain a multilateral framework based on international rules. This is the starting point for developing relations with all countries. Third, China should further expand the reform and opening up process. The domestic market should be more open to foreign investors, with their legitimate rights and interests guaranteed in accordance with domestic law of international standards. The US imposed strategic competition on China. While China hopes the two countries will maintain the benign coexistence of cooperation and competition, exploring complementary interests to achieve win-win outcomes, since the US insists on making major changes, China must do the same. ^ top ^

US will join G7 artificial intelligence pact, citing threat from China (SCMP)
The US plans to join an international organisation that will advise companies and governments on the responsible development of artificial intelligence, becoming the last of the Group of Seven countries to sign on. The group, called the Global Partnership on AI, will study and provide recommendations to encourage the creation of AI technologies that respect privacy and civil liberties, said Michael Kratsios, the chief technology officer of the US. He called the partnership "a first of its kind global organisation that sees the future of AI as something that can uplift Americans and people around the world." US officials plan to outline their involvement in the program on Thursday at a G7 meeting of science and technology ministers. In addition to G7 members, several more countries outside the group, including New Zealand, are expected to eventually join the programme. Kratsios acknowledged that the Trump administration had generally been sceptical of multilateral agreements but said that this one was important as a check on China's approach to AI, which often involves using new technologies to augment an already-robust surveillance state. The Chinese government, Kratsios, said, "has twisted AI in ways that are in direct conflict with the values of the US and its allies." Tensions between the US and China, heightened throughout Donald Trump's presidency, were further escalated in the last week over a Chinese national security law that tightens Beijing's grip over Hong Kong. Michael Pompeo, the US secretary of state, said Wednesday that the country could no longer certify Hong Kong as politically autonomous, a move that could trigger sanctions. Kratsios compared the new AI partnership to past US-led efforts to contain China's influence over 5G wireless technology. Last year, the US and 31 other countries met in Prague and agreed to a set of cybersecurity standards that included warnings about suppliers from countries that do not have adhere to international standards on security and data protection. This was widely seen as a reference to Huawei Technologies and ZTE, the big Chinese telecom equipment makers. The US has tried to keep the companies out of its own country and international markets, fearing they would create back doors for Beijing. Both companies have vigorously denied the charges. The idea of both the 5G and AI initiatives is to set limits on Chinese companies seeking to expand abroad, said Kratsios, a former chief of staff at Thiel Capital, an investment fund backed by Peter Thiel. For years, American tech executives have suggested that Chinese influence could erode free speech around the world because companies in China are required by law to censor politically sensitive topics while allowing authorities access to user data. The White House has expressed similar concerns. In a speech last year, Kratsios warned that adoption of Chinese standards in 5G and AI could "run the risk of repeating the same mistakes our nations made nearly 20 years ago," when China joined the World Trade Organisation. The G7 meeting on Thursday will be led by Kratsios and Kelvin Droegemeier, Trump's science adviser. The new group will ask member states to follow principles drafted by the Organisation for Economic Cooperation and Development, which recommends developing AI technologies that respect human rights and are transparent to anyone affected by them. The US had initially refused to join the new G7 partnership, it said, in part out of a concern that the group would conflict with the OECD's framework. The group's members will be nominated by each country and composed of experts from academia, business and non-profits. Ahead of the meeting, Kratisos said that Covid-19 had made fears about China more urgent, pointing to reports that Beijing had been silencing critics of its coronavirus response, as well as a new software system that tracks citizens and automatically assigns them a colour-coded health score, which is then used to limit their movements. "This Covid crisis has put in focus a stark choice," Kratsios said. "AI must not be a tool to repress people and invade their privacy. ^ top ^

Destined for conflict? Xi Jinping, Donald Trump and the Thucydides trap (SCMP)
When thousands of China's elites flock to Beijing for the delayed national legislative session starting on Friday they will face a renewed debate about relations with the US. Specifically, can armed conflict between the two economic superpowers be avoided? The question is not new, but it has taken on a new urgency as the acrimony escalates between Washington and Beijing amid the Covid-19 pandemic, exposing growing cracks in the current global order. Harvard professor Graham Allison raised the question in a 2017 book, Destined for War: Can America and China Escape Thucydides' Trap? The reference being to the Greek historian of 2,500 years ago and the conundrum named after him on the likelihood of armed conflict when a rising power challenges a ruling power. While observers generally agree that an all-out war between the nuclear-armed nations is improbable, there are potential risks for a limited military conflict. President Xi Jinping has shown personal interest in the Thucydides trap concept, which Allison first posed in a 2012 newspaper article, referencing it on at least three occasions, including the eve of the swearing-in ceremony of US President Donald Trump three years ago. Speaking at the World Economic Forum in Davos in January 2017, Xi said the Thucydides trap "can be avoided … as long as we maintain communication and treat each other with sincerity". Xi Jinping referenced the Thucydides trap concept on the eve of Donald Trump's swearing-in ceremony. Photos: AFP But since then, the devastating Covid-19 pandemic has driven the deeply fraught US-China relations to the brink of an all-out confrontation as a result of strategic distrust and misperception, said Wang Jisi, president of Peking University's Institute of International and Strategic Studies. "China and the US are shifting from an all-around competition to a full-scale confrontation, with little room for compromise and manoeuvring," Wang said in a speech in late March. "We cannot rule out the possibility that the two powers may fall into the Thucydides trap." That seems to sum up the tone of recent communications from the US side. Trump has vowed to "take whatever actions that are necessary" to seek reparations and hold China accountable for the Covid-19 disease that was first identified in the city of Wuhan at the end of last year. His top aides, especially Secretary of State Mike Pompeo and Defence Secretary Mark Esper, have been particularly blunt. During the Munich Security Conference in February, Esper described China as a rising threat to the world order and urged countries to side with the US in preparing for "high intensity conflict against China". Mainland authorities are usually reluctant to play up sensitive diplomatic topics during the annual gatherings of the National People's Congress and the Chinese People's Political Consultative Conference, known as the "two sessions". Domestic concerns, especially the socio-economic upheaval wrought by the pandemic, will no doubt dominate the week-long meetings as the country faces the deepest economic contraction in decades, mass unemployment, and a possible manufacturing exodus from China. However, the sharp decline in relations with the US in recent months and its possible consequences are expected to loom large in the minds of over 5,000 participants at the two sessions, according to Gu Su, a political scientist at Nanjing University. "Considering the boiling tensions with the US over Covid-19 and the resulting scrutiny of China's global ambitions – which have dealt a heavy blow to the economy, especially at local levels, and left the country increasingly isolated – it may be hard to suppress such discussions," Gu said. Given the widespread public interest in these contentious topics, Xi and other top leaders may need to weigh in personally and set the tone for the national debate, especially on the future of China and US relations, he said. But it would be unrealistic to expect major policy decisions on diplomacy, as "the two sessions are not usually known for substantial foreign policy deliberations", said Zhu Feng, an international affairs expert at Nanjing University. Paramilitary police officers patrol in Tiananmen Square near the Great Hall of the People in Beijing, where China's political elites are about to meet for the "two sessions". Photo: Reuters 'Worst-case scenarios' The deterioration of US-China ties has clearly alarmed Xi and his top aides. On April 8, the Chinese leader issued an unusually stark warning that "we must get ready for the worst-case scenarios" in light of unprecedented external adversity and challenges, according to Xinhua. While the state news agency did not elaborate on what Xi meant by worst-case scenarios, a recent study by a Chinese government-backed think tank offered some hints. The China Institutes of Contemporary International Relations (CICIR), affiliated with the Ministry of State Security, said Beijing may need to prepare for armed confrontation with Washington amid the worst anti-China backlash since the Tiananmen crackdown in 1989, according to Reuters, which cited an internal report. The report warned that China's overseas investments, especially the ambitious Belt and Road Initiative, could fall victim to rising anti-Chinese sentiments, while the US may accelerate efforts to counter Beijing's expanding clout by increasing financial and military support for regional allies. While the think tank declined to confirm the Reuters story, many international relations analysts shared similar bleak assessments of US-China relations. "We are already in an all-around confrontation with the US, which sees both sides at odds on almost every front – from trade and tech tensions, military, ideological and geopolitical rivalry, to political and legal battles over the coronavirus," Zhu said. "The prospects for bilateral ties are deeply worrying and we are just one step away from a new cold war." With much of the world still in the grip of the Covid-19 pandemic, Beijing's critics and opponents, led by the US, have upped the ante in the blame-shifting game as they line up to pursue an international investigation into the origins of the deadly virus. The coronavirus has also derailed most of China's diplomatic agenda for the first half of the year, with Xi's planned state visits to Japan and South Korea postponed. Meanwhile, China's relations with the European Union have become more tense, though Beijing managed to dodge a bullet at this week's World Health Assembly, which adopted a mildly worded resolution drafted by the EU to carry out an independent inquiry into different countries' response to the outbreak at "an appropriate time". But a growing number of European countries have pushed back against China's diplomatic assertiveness and followed Washington's lead to press Beijing for greater transparency over the coronavirus. Shelley Rigger, a political science professor at Davidson College in North Carolina, said the CICIR report, if confirmed, offered a clear-eyed assessment of the situation and did not have the usual triumphalist tone present in many papers on international relations from China. "That's a good thing. Everyone needs to be realistic, and not indulge in wishful thinking or overconfidence," she said. Seth Jaffe, assistant professor of political science and international affairs at John Cabot University in Rome and an expert on Greek history, said the Chinese think tank report was "profoundly concerning". "The acrimonious narratives surrounding Covid-19 are currently reshaping the attitudes of leaders and populations alike, which is leading to harder-line strategic postures, as evidenced by the hawkish CICIR report," he said. "In this way, the virus blame game is stirring up nationalistic pride and grievance, narrowing the space for political leaders to manoeuvre, and creating zero-sum dynamics that invite future conflict – a vicious cycle." According to Jaffe, the author of Thucydides on the Outbreak of War: Character and Contest, although the temperaments of Trump and Xi would matter enormously in any actual crisis, it was the structural shifts in the balance of power in recent years that had brought the two sides closer to the brink. The most likely collision scenario, he said, would be in the South China Sea. "I still worry most about military close encounters associated with American freedom of navigation operations, which could rapidly escalate in unintended but dangerous directions, for example, in the direction of a serious naval conflict." Guided-missile destroyer the USS Barry sails in the South China Sea last month. Photo: AFP He said an international incident would put Trump and Xi on a reputational collision course, with each leader facing pressure to stand up to the other and not back down, given the mistrust and heated rhetoric. "The danger, then, is an unforeseen spark, which could set off a frightening movement up the escalation ladder," he added. Zhao Tong, a senior fellow at the Carnegie-Tsinghua Centre for Global Policy in Beijing, also expressed concern that military incidents and conflicts with the US had become "less unimaginable given how quickly mutual animosity is building". Nationalist sentiment In recent months, many senior Chinese diplomats have risen to Xi's hardline, nationalist call and displayed their "fighting spirit", often at the expense of the country's global image. "In future crises, if People's Liberation Army officers, like some Chinese diplomats, calculate that it is in their personal interests to act extra tough, even if they know their aggression could cause war and cost China dearly, they might still feel incentivised to do so," Zhao said. To make things worse, according to Zhang Tuosheng, a security analyst from the China Foundation for International and Strategic Studies, Beijing and Washington had yet to set up an operational crisis management mechanism. "One of the major lessons is that we've paid scant attention to the establishment of a series of mechanisms that have proven necessary during the Cold War era in preventing tensions spiralling out of control in the event of emergencies or a real crisis," he said. Beijing made clear its resentment over the warming ties between Washington and Taipei ahead of and during Taiwanese President Tsai Ing-wen's inauguration on Wednesday, but a military confrontation over the self-ruled island in the near term was not likely, according to Rigger. "The Chinese leadership surely understands the massive costs – in blood, treasure and reputation – of military action against Taiwan. They are way too smart to count on the US not intervening," she said. Rigger noted several retired PLA officers, including air force Major General Qiao Liang, had unusually toned down their hawkish stance on seeking reunification with Taiwan by force. "That is a frustrating message for many Chinese to hear, but war is very costly and very unpredictable – something the US has learned through painful experience," she said. While experts called for efforts to lower tensions in the lead-up to the US presidential election in November, most said that would largely hinge on Trump. "Anything is possible with Trump," Rigger said. "If he thinks better relations with China will help him win re-election, he will do whatever it takes to turn the relationship around. I'd be really surprised if the Chinese leadership didn't respond positively to such an opportunity." But Zhu said it would be naive to pin hopes on Trump, who was desperate to play the China card in his re-election campaign. "Beijing should be particularly cautious on Taiwan and the South China Sea disputes and should not engage in rhetorical tit-for-tat with Washington," he said. "We need to look beyond the Trump presidency and prioritise the steady development of bilateral relations over the need to outcompete Trump." ^ top ^

World needs to recognize gravity of a US-China 'financial war' (Global Times)
US President Donald Trump warned on Tuesday that his administration could react strongly against China's push for a national security law for the Hong Kong Special Administrative Region (HKSAR). As the SAR has apparently set off a new round of tussles between the world's two largest economies, many fear that the city could risk losing its special status as a global trade and financial center. Fundamentally speaking, Hong Kong is a special administrative region of China, and legislation of its law is purely an internal affair of China, so the US intervention in Hong Kong affairs has no legal basis and tips China's bottom line. There is growing speculation that the US' strong response may open a new front in the US-China confrontation, which could escalate into a "financial war" and lead to regrettable economic repercussions. A financial war is very different to the exchange of trade sanctions. Punitive trade measures may target a country's trade sectors or companies, but it is hard to punish a country's financial market precisely. This is because finance and capital have no boundaries. As an international financial center, Hong Kong's capital market is intertwined with the rest of the world. A blow to Hong Kong would inevitably spread to the Chinese mainland, Southeast Asia, and even to the Asian and global markets, triggering a fresh wave of risk. And that's the last thing the world, already hit hard by the coronavirus pandemic, needs at this juncture. Moreover, undermining the global financial system could have a boomerang effect, inflicting even greater pain on US interests. One significant backfire would be that the US' immoral behavior is translated into actual economic losses and damage to the country's international credibility. Unfortunately, the Trump administration may choose to turn a blind eye to the loss even as it appears to try to protect the interests of its own investors from the upcoming financial war. Obviously, the interests of its allies are not in its consideration. If Trump takes on China in the financial field, he would roil the global markets as such a war would certainly go beyond Chinese and US markets. No developed countries could shelter their open financial systems from the shocks. The Trump administration needs to think about consequences before taking any reckless moves, because no one knows how fast market risks could spread and what crisis they may cause. And it should be made clear that if Trump insists on initiating a financial war with China, China won't sit back and take the hit. Foreign Ministry Spokesperson Zhao Lijian said on Wednesday that China will take necessary measures to counter the outside forces that wrongly interfere in Hong Kong's affairs. The trade war has already shown that China always has the ability to counterattack under the principle of reciprocity. Of course, China will do its best to avoid involving other countries into a potential financial war initiated by the US. ^ top ^


Domestic Policy

Premier Li's press conference mirrors China's confidence (Global Times)
At Chinese Premier Li Keqiang's press conference after the conclusion of the third session of the 13th National People's Congress on Thursday, the economy and people's livelihood were the most prominent topics. Li said the international community is now confronted with dual challenges - containing the pandemic while resuming economic and social development. Yet these two tasks contradict each other. He said we need to strike a balance between the two conflicting goals and explore ways forward during the process. The remarks undoubtedly touched upon the common dilemma of national governance in all countries. Although Li responded to many difficulties facing the Chinese economy, reporters were more focused on those hardships China has to deal with in the post-pandemic era. If taking a look at the press conferences of the US leaders, where the main discussions have been about the reasons to reopen the country, one can see how far ahead China is in this regard. Li's press conference highlighted the importance of ensuring stability and maintaining security without downplaying the country's current and future challenges. A major country such as China is destined to be concerned about continuously emerging issues. China has been pragmatic in the past, working hard to resolve problems. Looking back, pragmatism has become China's decisive advantage. This year, China will give priority to employment. Expanding employment is related to economic growth. If people have jobs, the Chinese economy is bound to grow. To expand employment, China must break the existing restrictions. Whoever suppresses employment for the sake of governance regulation or because of their conservative mind-sets will be held accountable by both the people and the higher authorities. There will be difficulties in seeking economic development, but the Chinese government has more methods and initiatives. Most of the Chinese economy's major uncertainties come from abroad. How should China open its door to countries and regions where the COVID-19 epidemic has not yet been tamed? How should we deal with the US provocations? We will have to learn from experience. China must firmly safeguard its interests, weigh its choices and make strategic adjustments. China should be confident. The novel coronavirus has hugely impacted China, yet the country became the fastest one to rein in the epidemic. Foreign forces, which attempt to challenge China, will find it harder to do so. We should not fear Washington's public opinion war. The US may initiate more battlefields against China, but the impact can hardly exceed those of last year and the year before. Li calmly responded to the questions over China's foreign relations. This reflects China's harmony-oriented mind-set and the country's steadily growing confidence. China's way is to do its own things well. We might not know what will happen in the future. But China can take its situation under control and prevent specific details from harming its national interests. In fact, this year's two sessions were a comprehensive show of such ability. Unpretentious as it is, China has always been attacked by Western public opinions. However, China has made more achievements than others have and the Chinese people are surely living an increasingly better life. ^ top ^

Top legislature adopts Civil Code (Global Times)
If someone steals my virtual goods in a video game, can I get them back? Can my unborn baby inherit property? Can I sue someone for using my voice for deep faking?Now, you can get the answers to all these questions simply by opening the encyclopedia of your life, China's first Civil Code, which has been adopted by the nation's top legislature. Chinese lawmakers on Thursday voted to adopt the long-expected Civil Code at the third session of the 13th National People's Congress (NPC). The Civil Code will take effect on January 1, 2021. China's first law with "code" in its name, the Civil Code is a wide-ranging legislative package that aims to provide legal protection of private rights including property, contracts, personality, inheritance, marriage and family. The Civil Code, which puts people's interests at the center and responds to major public concerns, takes China's legal system in terms of private rights protection to a new level, and it reflects the Communist Party of China's governing philosophy of "putting people first," analysts said. During the third session of the 13th NPC, which concluded on Thursday, NPC deputies made some 100 changes to the draft Civil Code that was first unveiled in December 2019. Those changes include expanding the definition of sexual assault to include using texts and images to assault others, not only just speeches and actions. The 1,260-article draft has seven parts: general provisions, property, contracts, personality rights, marriage and family, inheritance and tort liability. The highlight of the world's latest modern-day civil law is that personality rights have become an independent part of the law. This indicates that China's new law has made up for the defects of the traditional Continental law system, which puts more emphasis on property than people. The Civil Code responds to all kinds of challenges of protecting one's personality rights in the internet era, analysts said. The personality rights part describes in detail the rights of reputation, name, image and privacy. Rights of voice, name and property in the virtual world are mentioned for the first time in any Civil Code in the world, which fully reflects the "internet feature" of the law as it keeps pace with the times, Zhu Wei, a professor at the China University of Political Science and Law in Beijing, told the Global Times on Thursday. Zhu said that the personality rights section will become the chief basis for the protection of online personality rights. Local residents read reports about a draft civil code being deliberated at the two sessions in front of an outdoor newspaper display board in a park in Beijing on Tuesday. Photo: cnsphoto On Thursday, several Civil Code-related topics trended on China's social media. Among them, the topic of a cooling-off period for divorce attracted more than 800 million views on Sina Weibo. The law introduces a cooling-off period for couples who apply for a divorce amid soaring divorce rates in recent years. Zhu said this provision does not mean that China isn't protecting people's freedom to marry; instead, it shows that the law has the function of correcting improper social customs. As for wide public concerns that the cooling-off period should not apply in cases involving domestic violence, the Legislative Affairs Commission of the NPC Standing Committee explained that it only applies to couples who apply for a divorce at the civil affairs department. Divorces involving domestic violence are usually dealt with through lawsuits. In its marriage section, which is based on China's Marriage Law, the code didn't mention the family planning policy in the draft that was released for public comment last year. However, the Marriage Law clearly stipulates that China implements a family planning policy. This omission has triggered speculation that China might further ease its family planning policy, allowing couples to have three or more children. Huang Wenzheng, a demographics expert, told the Global Times on Thursday that since last year. the family planning policy has gradually faded into history, and the final version of the Civil Code is unlikely to include the policy. "It means that China will end its family planning policy eventually, and that time may come after China finishes its seventh population census next year," Huang said. During this year's two sessions, several legislators and political advisors proposed to further ease the family planning policy to allow couples to have a third child, considering the continuously dropping birth rate and mounting pressure of an aging society. The decision to compile the Civil Code was announced in October 2014 at a plenary session of the Communist Party of China Central Committee. The legislative process started in June 2016. ^ top ^

Two Sessions 2020: China-US rivalry in 'high-risk period', Chinese defence minister says (SCMP)
The strategic confrontation between China and the United States has entered a high-risk period, China's top defence official said in a rare statement directly naming an adversary. Speaking during a panel discussion on the sidelines of the National People's Congress (NPC) on Saturday, Defence Minister Wei Fenghe said that China needed to bolster its fighting spirit, while other military leaders said the country had to catch up with Western nations in its development of core technologies. "The United States has intensified the suppression and containment of our side since the [coronavirus] outbreak, and the Sino-US strategic confrontation has entered a period of high risk," Wei, who is also a general in China's People's Liberation Army (PLA), said. "We must strengthen our fighting spirit, be daring to fight and be good at fighting, and use fighting to promote stability." Wei's comments were made available to accredited journalists covering the NPC in Beijing. While it is relatively rare for PLA officers to name specific countries or regions, more have done so this year amid rising tensions between China and the US, and souring ties between Beijing and Taipei. Zhu Cheng, head of the PLA Air Force's armament department, said the rivalry between China and the West in the cyber, space, deep sea and biological spheres was intensifying. "[I] suggest speeding up the application of home-grown innovative and revolutionary technologies," he said during the panel discussion by the PLA delegation. "We need to avoid the strategic vulnerabilities caused by generation lapse with the United States and the West." Beijing said last week it would boost defence spending by 6.6 per cent this year, despite reporting an economic contraction in the first quarter – its first since such records were introduced in 1992. And for the first time at the NPC, the government did not set an annual target for economic growth. It said also that it would cut spending across a range of sectors, including foreign affairs, education and science, with general public services to take the biggest cut, of 13.3 per cent. Beijing said the increase in defence spending was necessary because of growing security threats, particularly from Taiwan. Both China and the US have both deployed navy vessels and fighter jets to the Taiwan Strait and the South China Sea, as well as trading accusations over their respective handling of the Covid-19 pandemic. Miao Hua, a navy officer and head of the PLA's political work department, also named the US in his remarks, saying tensions between the two countries had increased since the start of the global health crisis. "In the past year, in the face of the US's dogged confrontation and the sudden blow of the coronavirus pandemic, Chairman Xi [Jinping] has led us to overcome the difficulties and turn danger into opportunities," he said. As Sino-US relations have slumped to their lowest level for decades, Chinese officials and scholars have repeatedly warned of the risk of the two sides becoming involved in an "accidental conflict". Former Chinese finance minister Lou Jiwei said in November that China did not seek to "export revolution or start a proxy war", but was prepared to defend its "bottom line" on issues such as the South China Sea and Taiwan. Former US secretary of state Henry Kissinger told a forum in Beijing the same month that a "relatively minor crisis" could spiral out of control, giving as an example the start of the first world war. Observers had hoped that the phase one trade deal signed between Beijing and Washington in January might alleviate some of the tensions, with Chinese Premier Li Keqiang saying last week that Beijing was committed to "jointly implementing" the deal. But the war of words has only escalated with the Covid-19 pandemic. At the Munich Security Conference in February, US Defence Secretary Mark Esper described China as a rising threat to the world order and urged countries to side with the US in preparing for "high intensity conflict against China". Xi said the Chinese army had to be better prepared for armed combat and should explore ways of training during the pandemic. ^ top ^

Two Sessions 2020: China increases defence spending by 6.6 per cent but sets no GDP target, focuses on Hong Kong national security law (SCMP)
Beijing has announced an increase of 6.6 per cent in its military spending, but did not set a target for gross domestic product (GDP) growth for 2020 as the National People's Congress, China's most important annual political event, got under way in Beijing on Friday. Premier Li Keqiang said a sound legal system and enforcement mechanism for safeguarding national security in Hong Kong should be established and separatist activities seeking Taiwan's independence should be resolutely rejected. Delayed for about two months because of the global health crisis, this year's congress is expected to be several days shorter than usual. The thousands of deputies taking part were all tested for the coronavirus and isolated ahead of the event, while most of the interactions between deputies and reporters are expected to take place online. With reporters in Beijing and across the country, the South China Morning Post will provide comprehensive daily coverage of NPC 2020, starting with Li's opening address. Defence spending China has increased its military budget to 1.27 trillion yuan for 2020, a 6.6 per cent rise from last year despite the economic decline in the first quarter of the year, the country's top legislative body revealed on Friday. This year's growth in defence spending marked a continuous expansion over two decades in the 21st century. The number has boomed over 12 times from 107.6 billion yuan in 1999. Chinese Premier Li Keqiang delivers his work report during the opening session of the National People's Congress on Friday. Photo: AFP However, the rate of increase this year is the lowest in 20 years. It came after the 6.8 per cent shrinkage in GDP in the first quarter of 2020 – the first contraction since quarterly records began in 1992 – after an extensive shutdown to contain the coronavirus outbreak. Beijing said it always keeps military spending below 2 per cent of its annual GDP. However, China's official figures have long been criticised as lacking transparency with significant omissions of important items. The Stockholm International Peace Research Institute (SIPRI) estimated the actual expenditure on defence in 2019 was US$261 billion, rather than the announced 1.19 trillion yuan (US$178 billion). No GDP target China set no specific growth target for 2020, for the first time in history. "We do not set the specific GDP target mainly due to the global pandemic and big uncertainties about the economy and trade. China is facing unpredictable factors in its development," Li said in the report. The government set an urban unemployment rate target of around 6 per cent, compared to 5.5 per cent last year. A CPI target was set at 3.5 per cent, versus 3 per cent last year. According to the government's work report, a new target for urban job creation was set at 9 million, versus 11 million last year. Beijing set a central government budget deficit target of 3.6 per cent of GDP this year, up from 2.8 per cent last year, giving it more room to increase spending to combat the damage caused by the coronavirus pandemic. The government will issue one trillion yuan in new "special treasury bonds" this year – the first issuance of such bonds since 2007. The issuance size is at the lower end of expectations. Beijing has set the local government special bond quota for this year at 3.75 trillion yuan (US$527 billion), compared to 2.15 trillion yuan last year. The government said it would maintain the current tax cut measures to year end. The full-year tax cut for corporations is expected to cut their tax burden by more than 2.5 trillion yuan this year alone, according to the report. Last year's tax cut saved corporations and individuals 2.3 trillion yuan. Hong Kong legal system In the government work report, Li said the central government would "accurately" implement the "one country, two systems" and the principle of "the Hong Kong people governing Hong Kong". It also said a sound legal system and enforcement mechanism for safeguarding national security in the Hong Kong special administrative region should be established. The principle of "Hong Kong people governing Hong Kong" was omitted in the report by Chinese People's Political Consultative Conference chairman Wang Yang on Thursday. National security resolution today The central government will table a resolution today to enable the NPC Standing Committee to craft and pass a new national security law tailor-made for Hong Kong. Sources earlier told the Post the new law would proscribe secessionist and subversive activity as well as foreign interference and terrorism in the city, which have been pressing issues over the past year of anti-government protests in the city. Sources said Beijing believed it was impossible for the city's Legislative Council to pass a national security law to enact Article 23 of the city's Basic Law given the political climate. This was why it was turning to the NPC to take on the responsibility. The Basic Law, or the city's mini-constitution, requires the Hong Kong government to enact its own national security law prohibiting acts of "treason, secession, sedition, or subversion" under Article 23. But the law has been in abeyance since 1997. In 2003, the Hong Kong government was forced to shelve a national security bill after an estimated half a million people took to the streets in July that year to oppose the legislation which they said would curb their rights and freedoms. Hong Kong security 'a national matter' An editorial published by official state newspaper People's Daily at midnight on Friday said the building of a fully functioning legal and implementable framework for Hong Kong's national security was "a national matter instead of just a Hong Kong matter". "The fact is, Hong Kong has been handed over for nearly 23 years but local legislation [on national security law] has been delayed without progress. Anti-China radicals have used this period of time to frequently challenge the authority of the central government, promoted and encouraged 'independence', secession and sedition activities," the article said. "In 2019, protests roiled from the anti-extradition bill even showed that anti-China radicals are repeatedly stepping on the bottom line of the security of national sovereignty, challenging central authority and authority of the Hong Kong Basic Law. Violence erupted and riots emerged. "This has seriously threatened the practice of 'one country, two systems' and the prosperity and stability of Hong Kong. These are all testimonies of how building a fully functioning legal and implementable framework in Hong Kong is necessary and urgent," the article said. Sharp fall for Hong Kong markets Hong Kong's stocks fell sharply on Friday after Beijing said it plans to pass a security law to curb secession and sedition in the city. The Hang Seng Index slid 2.6 per cent, or 619.47 points, to 23,660.56 right after the open. The resolution expected later today will add to the confrontation between Beijing and Washington, with US President Donald Trump saying his administration would respond strongly. "A horrible risk for markets is that much of the attention from today's NPC will turn to Hong Kong. The agenda includes an item that would mean the government will tighten its grip over the special administrative region, which could potentially reignite the protests that wracked the city last year," said Stephen Innes, a strategist at AxiCorp. "But even more worrisome is the global backlash, especially with the US-China hawks circling overhead. A denouncement by the White House, which is almost certainly to happen, could exacerbate already tenuous US-China relations and could trigger a global backlash that Trump seems to be pinning his hopes on. Indeed, it is starting to look like a US-China summer of discontent in the making." Phase one China-US trade deal to continue Li vowed the phase one trade deal with the US would be implemented from January. "We need to implement the phase one trade deal with the US," he said, adding that China was committed to a multilateral trade system and reform of the World Trade Organisation. He also said China would push forward with the China-Japan-South Korea Free Trade Agreement. According to the phase one deal signed with the US, China pledged to buy, over two years, at least US$200 billion more in American goods and services than it did in 2017, including about US$40 billion in agricultural goods. Earlier this month, US President Donald Trump threatened to terminate the phase one trade deal, if China failed to fulfil its promise of buying US goods. Many have speculated about China's capability to keep up with that promise after the pandemic. Foreign investment China will "significantly shorten" its negative list for foreign investment as trade tensions with Washington continue, over issues such as market access. Without referencing specific sectors, Li said the government would draw up a negative list of areas in cross-border trade in services, in which foreigners may not participate. He said, however, that Beijing would seek to ensure a market environment which would allow "all companies, Chinese and foreign, to be treated as equals and engage in fair competition". Rejection of separatist activities in Taiwan Li called in his address for the resolute rejection of separatist activities seeking Taiwan's independence, and urged a deepening of ties across the Taiwan Strait towards the goal of peaceful reunification. His comments came just after Taiwanese President Tsai Ing-wen's official inauguration for her second term on Wednesday as leader of the democratic island. Beijing has said it will not renounce the use of force to assert its claims of sovereignty. Tsai's administration has forcefully rejected the "one country, two systems" model of semi-autonomy proposed by Beijing for the island, and has refused to recognise the "1992 consensus", a political understanding that Tsai's predecessor claimed meant there was only one China, but different interpretations of whether Taipei or Beijing ruled. Li's remarks echoed those made in last year's work report, but left off mention of the "1992 consensus" which was included last year. Taiwan slams national security legislation for Hong Kong Taiwan's Mainland Affairs Council slammed the proposed national security law for Hong Kong, saying it violated the democratic and human rights of the city's people. It said the legislation would increase dissatisfaction and endanger all people in the city, as well as its status as an international financial centre. "In a reflection of the CCP's inability to self-reflect, it is blindly ignoring the root of Hong Kong's instability and blaming it instead on external forces and 'Hong Kong independence' forces, and is therefore anxious to legislate to be on guard against any national security loopholes," the council said in a statement. "The laws of any civilised country should be the protector of the people, not the shackles of freedom," it said. "We hope the relevant parties will think twice, and not make the wrong decision, to plunge Hong Kong into further chaos." Covid-19 challenges persist Li said the Covid-19 pandemic had not yet come to an end, and that China faced an "immense" task in promoting development. Li said China had given top priority to protecting people's lives since the outbreak in the central Chinese city of Wuhan in December, and the country would strive to resume economic development and ensure employment while maintaining regular epidemic prevention and control measures. The coronavirus has infected more than 5 million people and killed over 320,000 around the world, including 4,645 people in China. Economic focus The NPC comes as China continues its re-emergence from the health crisis, but amid widespread criticism of its initial handling of the outbreak and attempts to cover it up. Some Chinese activists and scholars have even called for the meeting to be a reckoning of Beijing's response to the pandemic, which has infected more than 5 million people and killed close to 330,000 around the world. Those appeals are likely to go unanswered, however, as the nation's leaders are expected to spend the next week or so expounding their policies and proposals for reviving the economy, alleviating poverty and fiscal reform. Unemployment measures Li stressed the need to increase jobs support, including for the country's 8.74 million college graduates this year, in the midst of soaring unemployment in China. The Covid-19 pandemic has left tens of millions without work. Several hundred million casual labourers and other low-income earners would be able to postpone their social insurance premiums and employment-related government fees, and the government would provide more vocational training, he said. The grim outlook for Chinese unemployment Chinese officials have increasingly been under pressure to respond to unemployment, which threatens social stability. The unemployment rate jumped by 6.2 per cent in February, the highest on record, but independent analysts have said the numbers may be higher, and could reach 10 per cent this year. Belt and Road Initiative Li said China would focus on quality for "mutually beneficial outcomes" in its Belt and Road Initiative. Criticism has escalated over Beijing's lending practices in its billion-dollar development drive, which have left poorer countries out of pocket in the midst of the pandemic. A number of African countries, Pakistan, Sri Lanka, and others have requested delays and restructuring in billions of dollars of existing loans for major projects, raising concerns among Western countries in particular over Beijing's use of the initiative for its geopolitical ambitions. ^ top ^

CDC chief urges bigger role for disease prevention and control system (Global Times)
A political adviser, who is also the chief of the Chinese Center for Disease Control and Prevention (CDC), has called for giving a bigger say and scientific authority to the disease prevention and control system to address problems exposed in the COVID-19 pandemic. "The pandemic has revealed loopholes in China's major epidemic prevention and control mechanism and its public health system," Gao Fu, head of the CDC and member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), told media. He called for reform of the system, noting that disease prevention and control institutes failed to fully exert effects in early warning and monitoring, epidemiological surveys and launching prevention measures during the COVID-19 outbreak. Gao is not the only expert who called for a more powerful disease prevention and control system in the wake of the epidemic. Renowned respiratory disease expert Zhong Nanshan previously told media that the pandemic revealed an "overly low status" of disease prevention and control institutes in China, and he called for some level of executive power for these institutes. Echoing Zhong's suggestion, Gao stressed that the goal of the reform is not to empower the system but to prevent administrative interference and safeguard the system's scientific independence and authority. The epidemic showed that the current system lacks decision-making power, has only loose cooperation among CDCs at different levels, and features an ineffective coordination mechanism between CDCs and other medical-related departments, Gao noted. According to Gao, the number of working staff in disease prevention and control institutes at different levels declined by 4 percent from 2010 to 2018 and the number of certified doctors in the institutes declined by 11 percent during the same period. He suggested enhanced vertical leadership in the China's CDC system, as well as direct reports to government officials about key public health events and the power to release epidemic information to the public upon official authorization. Wang Hongwei, a professor at Renmin University's School of Public Administration and Policy, told the Global Times that he thought the direct report system Gao suggested could reduce the unnecessary interference of administrative departments at different levels and effectively facilitate the reporting procedures. Wang warned that public health issues are complicated and require the participation of different departments, so the CDC institutes could not be fully independent. Gao also suggested enhancing infrastructure construction, including P4 labs for the national CDC and having at least one P3 lab in each province. As a CPPCC member, Gao proposed to establish infectious disease monitoring centers, infectious disease sample databases and restart research on SARS, media reported. ^ top ^

Xi emphasizes 'people first' in governance (China Daily)
Yu Cheng, a deputy of the National People's Congress from Hubei province, was a participant in delegation panel discussions attended by President Xi Jinping on Sunday, during which she and fellow deputies talked about the people's war on the novel coronavirus outbreak in what was the hardest-hit region in China. "We all feel that our country puts people's life, health and safety as the top priority in the face of the unprecedented epidemic," Yu said. Yu, who works for Wuhan Second Light Industry School, acted as a volunteer to help community workers in a neighborhood in Wuhan to combat the contagion after the epidemic struck the city. She said the country's epidemic response is a reflection of the governing philosophy of the Communist Party of China, which was highlighted by Xi, who is also general secretary of the CPC Central Committee, as "putting people first". While joining discussions with the NPC deputies from Hubei province, Xi showed his great care about issues that matter to people's livelihoods in the epidemic-stricken province, such as employment, schooling, social welfare, poverty relief and the legitimate concerns of people who have suffered great losses due to the epidemic. He also urged prompt efforts to strengthen public health and medical service systems to better protect people's lives. While taking part in a deliberation with NPC deputies from the delegation of the Inner Mongolia autonomous region on Friday, Xi particularly stressed adhering to "people first" in coordinating epidemic control and economic and social development. He mentioned a story told by another NPC deputy from Hubei province, Luo Jie-president of Taihe Hospital in the city of Shiyan-who told reporters how medical workers in his hospital spent 47 days saving an 87-year-old COVID-19 patient. "About 10 medical workers meticulously took care of the patient for dozens of days, and finally saved the patient's life," Xi said. "I am really impressed." Amid the spread of COVID-19, the CPC has, from the very beginning, stated clearly that people's lives and health are the top priority. "We mobilized from around the nation the best doctors, the most advanced equipment and the most needed resources to Hubei and Wuhan, going all out to save lives," Xi said during the deliberations, adding that the oldest patient to be successfully treated is 108. "We are willing to save lives at all costs. No matter how old the patients are and how serious their conditions have become, we never give up," he said. Wu Fan, a member of the National Committee of the Chinese People's Political Consultative Conference, the nation's top political advisory body, said that as a disease prevention and control professional, she witnessed the country's all-out efforts to mobilize all available resources to save lives. The CPC's "people first" philosophy is reflected by the nation's emphasis on improving admission and recovery rates and reducing the infection and mortality rates to the maximum extent, Wu said. While delivering this year's Government Work Report to the ongoing NPC session, Premier Li Keqiang said China's economy posted negative growth in the first quarter of this year, but that was "a price worth paying" to contain COVID-19, since life is invaluable. He added that "it is only by overcoming enormous difficulties that China has been able to contain COVID-19 in such a short time while also ensuring our people's basic needs". President Xi, while talking to NPC deputies from the Inner Mongolia autonomous region, also called for wholehearted efforts to solve problems that concern people's immediate interests, including healthcare, housing, elderly care and food safety. He said the ultimate goal for advancing socioeconomic development is to meet people's increasing needs for a better life. Huo Zhaoliang, an NPC deputy and also governor of the autonomous region's Xilin Gol League, said Xi always bears in mind people's livelihoods, and he added that he will faithfully carry out Xi's requirements in his future work and lead the people to have a better life. The Party's long-term governance rests on always maintaining a close bond with the people, Xi told the NPC deputies, and "we must always remain true to our aspiration and work in concert with the people through thick and thin". ^ top ^



US House passes Uygur Human Rights Policy Act that would target Chinese officials – but Donald Trump still needs to sign it (SCMP)
A bill directing the Trump administration to sanction officials in China over the treatment of ethnic minority groups in the country's northwest breezed through the US House of Representatives on Wednesday, setting up its passage to the White House for US President Donald Trump's consideration. The chamber passed the legislation, called the Uygur Human Rights Policy Act of 2020, by an overwhelming 413-to-1 majority, following the Senate's approval two weeks ago. The legislation is named for the Uygur people, who, along with other predominantly Muslim ethnic minority groups, have been targeted in recent years by "re-education" programmes that Beijing says are aimed at wiping out religious extremism. The campaign has led to mass internment of around one million people in the Xinjiang Uygur Autonomous Region (XUAR), according to United Nations estimates. Condemning what it calls the "arbitrary detention, torture, and harassment" of ethnic Turkic Muslims in China, the legislation calls for sanctions against Chinese officials that would see their US-held assets frozen and entry to the US barred. The Chinese government, which considers the legislation to be a violation of its sovereignty, has previously vowed retaliation but has not specified what form those countermeasures would take. Following Capitol Hill's passage of the bill, the decision now falls on Trump to either enact or reject it. Speaking at a briefing on Tuesday, Trump did not answer a reporter's question about whether he was willing to sign the bill into law, but said: "We're taking a look at it very strongly." A presidential veto, which can be overturned by a two-thirds majority in Congress, would likely trigger a strong response from Capitol Hill. The legislation passed the Republican-controlled Senate on May 14 with more than two-thirds of the chamber listed as cosponsors, while a previous version approved by the House last December also passed overwhelmingly, 407 to 1. The legislation was "more proof that we can come together as Republicans and Democrats to address the generational threat by the Chinese Communist Party and champion American values", Texas Republican Representative Michael McCaul said on the House floor ahead of the bill's passage. The sole dissenting vote on Wednesday came from Kentucky Republican Thomas Massie, a staunch non-interventionist who has protested similar legislation before on the grounds it could invite interference in the United States' own affairs. Capitol Hill's greenlighting of the bill comes as relations between Washington and Beijing continue to sour amid the coronavirus pandemic, with Trump and congressional Republicans increasingly seeking to portray China as responsible for the outbreak. It also comes as Beijing's newly proposed security law tailor-made for Hong Kong has prompted outrage among US lawmakers and triggered an official certification by the State Department that the city is "no longer autonomous from China". "The manner in which [Chinese president Xi Jinping] is governing China – the detention centres in Xinjiang, the initial handling of the Covid-19 outbreak, the [Hong Kong] national security law – makes it especially easy for this administration to scapegoat it for all that troubles the world and America," said Allen Carlson, director of Cornell's China and Asia-Pacific studies programme. Combined with the broad support for the Uygur bill in Congress, that meant it was "hard to imagine" that Trump would not sign it into law, said Carlson, especially as the US leader increasingly seeks to portray presumed presidential contender Joe Biden as weak when it comes to confronting Beijing. "If bashing Biden on China is going to be a signature issue for Trump through November, then he can ill afford to stand in the way of a bill that seeks to hold Beijing accountable for the human rights violations that are taking place in Xinjiang," said Carlson. While the Uygur issue has not featured prominently in Trump's own list of grievances with China – which until the pandemic were largely trade-related – his administration has previously taken some steps against Chinese entities over their involvement in alleged human rights abuses. House Speaker Nancy Pelosi said if the US does not speak out for human rights in China, then the country loses "all moral authority". Photo: AP On Friday, the Commerce Department hit eight companies and one Chinese government body with restrictions on US companies' ability to export goods to them, adding to a list of 28 entities it designated last year. In October, the State Department announced visa restrictions on Chinese officials over Beijing's "campaign of repression in Xinjiang", though it did not publish the identities or the number of individuals targeted. Despite those actions, pressure from lawmakers on the administration for a tougher response has continued unabated, amid a Congress that has coalesced around confronting Beijing on matters pertaining to human rights. That unity was on full display last year as lawmakers successfully pushed through legislation in support of Hong Kong's pro-democracy movement. Trump quietly signed the bill into law in late November, later complaining that it could complicate his trade negotiations with Beijing. "If America does not speak out against human rights [violations] in China because of some commercial interest, then we lose all moral authority to speak out on … human rights violations any place in the world," House Speaker Nancy Pelosi said on Wednesday in support of the Uygur bill. In a sign that attention on the Uygur issue will not be short lived, Pelosi on Friday appointed a prominent Uygur rights advocate, Nury Turkel, to the US Commission on International Religious Freedom, an independent panel that offers policy recommendations to the executive and congressional branches. If the Uygur bill is enacted, the first action required of the administration would be to report to Congress within three months on its efforts to protect US citizens and residents, including ethnic Uygurs, from harassment or intimidation from Chinese government agents. The bill's more forceful provisions, including the identification and punishment of Chinese officials, would not come into effect until late November at the earliest. Under the legislation, the president has the authority to waive sanctions under certain circumstances. The sanctioning provisions establish a legal framework for holding China accountable, but do not specify how actively such measures would be enforced, said Carlson, adding that Trump has shown a "clear willingness to sacrifice human rights concerns in favour of what he sees as issues that are more central to his interests". Last June, Trump pledged to Xi in a phone call that he would stay quiet on Hong Kong's pro-democracy protests while trade talks continued, CNN reported, citing two people familiar with the discussion. Looking ahead, said Carlson, "a central question with this bill, and the broader US-China relationship, will be how the somewhat volatile Trump balances his apparent admiration for Xi with his pivot to make being tough on China a crucial plank in his campaign to not become the first one term US president since George H.W. Bush". ^ top ^



US taps allies to pressure China over Hong Kong national security law (SCMP)
The US has stepped up diplomatic pressure against China's move to impose a national security law on Hong Kong, forming a common position with the UK, Australia and Canada. In a four-nation statement, US Secretary of State Mike Pompeo and his counterparts called on China to work with Hongkongers on forging a way forward to honour its commitments made under the Sino-British Joint Declaration. "China's decision to impose the new national security law on Hong Kong lies in direct conflict with its international obligations under the principles of the legally binding, UN-registered Sino-British Joint Declaration," said the statement, which was also signed by UK Foreign Secretary Dominic Raab, Australian Foreign Minister Marise Payne and François-Philippe Champagne, Canada's foreign minister. The four foreign ministers said Thursday the national security law would undermine the "one country, two systems framework". "It also raises the prospect of prosecution in Hong Kong for political crimes, and undermines existing commitments to protect the rights of Hong Kong people," they said. Issued hours after China's National People's Congress nearly unanimously endorsed the law, the statement by the four countries asked Beijing to work things out with Hongkongers. "As Hong Kong's stability and prosperity are jeopardised by the new imposition, we call on the government of China to work with the [Hong Kong government] and the people of Hong Kong to find a mutually acceptable accommodation that will honour China's international obligations under the UN-filed Sino-British Joint Declaration," the statement said. It did not mention what action might be taken should China fail to do so. State Department spokeswoman Morgan Ortagus said in an interview on Thursday that the US continues to confer with other allies in a bid to garner more countries to speak out against China's toughening stance toward Hong Kong, although she did not cite specifics. In response to Beijing's assertion that the new law targets "a very narrow category of acts that seriously jeopardise national security and has no impact on Hong Kong's high degree of autonomy", Ortegus said the US obviously disagrees. "We will continue to look for ways that we can support the people of Hong Kong and support these protests," she said. "But if the Chinese Communist Party thinks that they're going to continue to break their promises to the world, to openly defy the rule of law, the United States of America is going to stand up and tell them no." The Thursday statement came a day after Pompeo told Congress that Hong Kong no longer enjoyed a high degree of autonomy, an assessment that paved the way for further action, including tariffs, sanctions and visa treatments. Beijing has said the joint declaration, reached between UK Prime Minister Margaret Thatcher and Chinese premier Zhao Ziyang in 1984, was no longer valid since Hong Kong's handover of sovereignty in 1997. The European Union, which is not part of the four-country statement, insisted that it had been in dialogue with US, UK, Australia and Japan to discuss issues about Hong Kong All 27 EU foreign ministers will discuss the situation on Friday in a scheduled meeting. They will also discuss future EU-China relations. New Zealand, the other country of the Five Eyes security alliance, did not join the statement. Analysts said they expect the EU parliament to, at a minimum, sign on to Thursday's joint statement. "The challenge is to lay out steps to a solution," said Michael Davis, a research scholar at Columbia University and former University of Hong Kong law professor. "China has been quite expert at playing countries in Europe against each other under a united front strategy. Whether those countries will find common ground will be the challenge." Analysts said Thursday's joint statement shows the four signatories are in agreement on calling out Beijing for violating commitments it made to the UK and the global community over Hong Kong's future, and on voicing concern over civil liberties and autonomy in the city. But there is little indication of multilateral concrete steps. "The joint statement does not suggest any consequence," Davis added. "So at this point it is a gentle nudge for Beijing to pause and consider the concerns being raised by Hong Kong people and the international community." The US has threatened sanctions, tariffs, asset seizures and visa treatment. The UK has proposed immigration changes, announcing on Thursday that Hongkongers with British National (Overseas) passports will be offered a path to British citizenship if China enforces the national security law in the city. However, it is not clear that Beijing cares much about Hong Kong residents who chose the special BN(O) status. prior to the 1997 handover. With US-China diplomatic channels badly clogged by mistrust, analysts say the two economic giants are signalling through the press and their actions as they try to assess each other's position. "We're posturing," William Zarit, senior counsellor with the Cohen Group consultancy said, even as China moves ahead with tough new Hong Kong security and sedition legislation. "What I'm hoping is that our policymakers will take into consideration the benefits, the values, of the Hong Kong people," he added, speaking at an event co-sponsored by Concordia and the China General Chamber of Commerce. The usually partisan US Congress is almost unanimously in favour of taking a tougher line on China, which points to President Donald Trump enacting some sort of punitive measures against Hong Kong in a US election year. "We should all be speaking out against that security act, not just the United States, the EU, people around the world should be speaking out against it," said House Speaker Nancy Pelosi, a Democrat from California, in a press conference Thursday. "Hong Kong is so much part of the vitality of trade and commerce that goes into mainland China, you would think that they would want that vitality to continue. But President Xi is a very oppressive tyrant," she added. Beijing's passage of the security law – and Thursday's joint statement – has widened political fissures within Canada, giving rise to "very strong countervailing pressures" on Prime Minister Justin Trudeau from political opponents, said Fen Hampson, an international affairs expert at Ottawa's Carleton University. Trudeau has tried to improve relations after Canada's 2018 arrest of Huawei executive Meng Wanzhou at the request of US authorities and Beijing's arrest days later of two Canadians living in China, a move widely seen in Canada as retaliatory hostage-taking. The Canadian prime minister from the Liberal Party now faces growing calls for action against China, particularly from the opposition Conservative Party, Hampson said, as well as others "who say we should never do business with China, it's an autocratic regime, whose values are completely antithetical to Canadian values", he added. ^ top ^

Ministry of Public Security to instruct HK police on cracking down on subversive sabotage (Global Times)
China's Ministry of Public Security vowed to fully instruct and support the Hong Kong Police Force in ending riots and violence while severely cracking down on penetration of subversive and disruptive sabotage by hostile forces and resolutely safeguarding national political security. Zhao Kezhi, State Councilor and Minister of Public Security, said in a meeting following the closing of the third session of the 13th National People's Congress that the country's public security authority will fully study and implement the decision on establishing and improving the legal system and enforcement mechanisms for the Hong Kong Special Administrative Region (HKSAR) to safeguard national security, which was passed at the closing meeting Thursday, according to a statement published on the ministry's website. The country has taken the first crucial step regarding the national security legislation for Hong Kong as the decision was passed by majority of votes, and experts noted that the next step will be finalizing the legislation in detail and making the law executable in the city within its common law legal system. The law will directly strike against the US-controlled proxies and political groups in Hong Kong, who had previously incited trouble in the city with little concern about consequences. The passage of the decision would be followed by an acceleration of formulating the law, which is expected to take effect in Hong Kong through the Annex III of the Basic Law. While the state-level national security departments are expected to establish special agencies in the SAR, and both central-level and local-level law enforcement mechanisms are expected to be enhanced in tackling acts and activities endangering national security, observers said. The ministry showed its supportive stance for the upcoming law for Hong Kong after the Chinese People's Liberation Army (PLA) Hong Kong Garrison declared on Tuesday that the troops have the determination, confidence and capability to safeguard national sovereignty, security, development interests and long-term prosperity and stability in Hong Kong. Zhao met with Tang Ping-keung, commissioner of police of the Hong Kong SAR, in December 2019 in Beijing, expressed strong support for Hong Kong police in ending chaos and riots across the city since mid-June last year. The minister also expected the local police force to resolutely protect Hong Kong's rule of law and social order. ^ top ^

Hong Kong national security law: city awaits Trump's response, casting shadow over long-term economic status (SCMP)
Economists, diplomats and business figures were scrambling on Thursday to quantify the effect of Washington's decision to deem Hong Kong "no longer autonomous" from China, with many gaming out the "nuclear option", in which the United States revokes the city's special trading status. Former White House officials said that the most likely immediate scenario is that US President Donald Trump approves a "variety" of sanctions, potentially on both Chinese and Hong Kong officials, by the end of the week in response to China's national security law for Hong Kong. However, "the nuclear option is certainly on the table", said a former senior Trump administration official, which would see Hong Kong's status as a region apart from the rest of China removed at a later date, leaving the city vulnerable to trade war tariffs, technological export controls, visa and travel restrictions and greater financial sector scrutiny. "Coming out and decertifying Hong Kong's autonomy is not the hard decision," said Evan Medeiros, who served as former president Barack Obama's top adviser on the Asia-Pacific and who confirmed that he would have done the same. "The hard work comes now, which is how you implement it." Should Trump go gung-ho on China, there would be no direct change to Hong Kong's international status. It would remain a member of the World Trade Organisation (WTO) and the Asia-Pacific Economic Cooperation group. The direct economic impact would be sharp, but short-term, analysts said. But in the long run it will be a huge blow to Hong Kong's image as an international commercial centre – even as a gateway to China. "I guess the significance of Hong Kong is eroding and when I go to see the members in Shenzhen and Guangzhou and listen to discussion about the Greater Bay Area, it is pretty much one story, as if Hong Kong is insignificant," said Joerg Wuttke, president of the European Union Chamber of Commerce for China in Beijing. "Hong Kong cannot be replicated, the unique density of professionals, the transparency of the system, the rule of law, the kind of debate possibilities, the openness. They're definitely important for developing business in China, for many of us it's being challenged right now," Wuttke said. One international consular official in the city said that had they been aware of how disruptive the past few years would have been for business, they would have bypassed Hong Kong and opened a consulate branch in Guangzhou instead. "In this regard, the national security law and the US response will be a continuation of what has been going on since last year," he said. A consultant who advised Facebook on finding a data centre site in Asia in 2018 said that at the time Hong Kong ticked all the right boxes in technical terms, but the tech giant was worried about how the data centre would be regulated in the future, so the company chose Singapore instead. "That's emblematic of what's happening to me. You're not going to see immediate flight capital, you're just not going to see a lot of new investments and you're going to see the gradual diminution of Hong Kong as an economic centre for south China," said the source, who did not want to be named due to the sensitive nature of the situation. Many are shocked by the speed with which the situation has deteriorated, but are also resigned to it worsening further still, as the wider US-China relationship continues to sink to unforeseen lows. The American Chamber of Commerce in Hong Kong said in a statement the law "may jeopardise future prospects for international business, particularly if a long list of details is not spelled out and clarified". However, the chamber declined to comment on the fallout of a potential US response. "Trump is not interested in anything but himself and [compared] to slaughtering the Trans-Pacific Partnership, to dismantling the WTO or pulling out of the [World Health Organisation], actually changing the state of Hong Kong is a small piece for him. It's another tool in the box and he will use it if deemed necessary," said Wuttke, from the European Union Chamber. If the city's special trade status is revoked, Hong Kong would lose access to sensitive American technology components, though it has little large-scale, hi-tech manufacturing. It would be subject to trade war tariffs, but most of the goods shipped through Hong Kong are made elsewhere anyway, several trade experts said. As an independent member of the WTO, Hong Kong could bring a legal case at the Geneva-based body if Washington decides further direct tariffs are necessary. "Hong Kong's WTO membership is decided by the WTO members collectively, not one member such as the US. Thus, if the US were to revoke its separate status and treat it as part of China, the US would be violating its own WTO obligations and Hong Kong could sue the US at the WTO – not that it would help, of course," said Henry Gao, a trade professor at the Singapore Management University. Furthermore, Hong Kong's direct trade with the US is relatively small, exporting just US$431 million in goods to America in March, according to US Census data, and importing US$2.4 billion in return. "Ninety-nine per cent of Hong Kong exports to the US are re-exports from a third economy – mostly China – and are already taxed in the US on the basis of origin, not as Hong Kong goods," wrote Deutsche Bank analyst Michael Spencer in a note. "So, Hong Kong's exports to the US were as impacted by US tariffs on China as China's exports were. Raising the tariff rate on the last 1 per cent of exports will have virtually no impact on Hong Kong's economy." Spencer added that the implications would be "potentially more far-reaching" than trade and finance, with many others pointing to the huge symbolism the move would hold. ^ top ^

What to expect now US deems Hong Kong no longer autonomous (SCMP)
US President Donald Trump has to decide what actions to take after the US state department told Congress on Wednesday that Hong Kong was no longer considered autonomous from China, an assessment that could threaten the city's long-standing special trading status. "It's a one-two action," David Stilwell, assistant secretary of the Bureau of East Asian and Pacific Affairs at the state department said on Wednesday evening. "One being the state department making the assessment that Hong Kong no longer enjoys autonomy," he told reporters, referring to US Secretary of State Mike Pompeo's statement earlier in the day. "And then, [the second action will be] the determination by the White House as to how we're going to respond," he said. "A lot of" options were being considered, including personnel and sanctions "as determined in the United States-Hong Kong Policy Act of 1992 and in the Hong Kong Human Rights and Democracy Act [of 2019]," Stilwell said. Under the Hong Kong Human Rights and Democracy Act passed by the US Congress in November, the administration must decide every year whether governance of Hong Kong is suitably distinct from China, which is the prerequisite for the special status to continue. A revocation of Hong Kong's special trading status with the US will put an end to the preferential economic and trade treatment the city has enjoyed and which has, at least partly, contributed to making it the financial and business hub in the region. Some analysts and members of the business community, following the state department's assessment, have voiced concerns that a status change would inflict more pain on Hong Kong and its people than on Beijing. "Today's action is best understood as another turn of the screw," said Terry Haines, an independent political analyst and former Congressional staffer. "It is a strong signal of US government displeasure." But given that this was only the first step and did not necessarily lead to US sanctions or other actions against Hong Kong, there was an opportunity to lessen the tension, he said. "Expect Congress to help Trump pressure China on Hong Kong autonomy, but not to force Trump's hand or require sanctions or other actions," he said. Stilwell acknowledged that "there is going to be an impact in some way both for the US and for the PRC [People's Republic of China]" if the change was implemented. "The business community, like everyone else, is reading the writing on the wall," he said, adding that China's increasingly aggressive assertion of political power on Hong Kong had to be stopped. "The actions will be as targeted as possible. I do firmly believe that there are things we can do that do not necessarily directly impact the folks who are out there working hard to maintain the democratic processes," Stilwell said, without elaborating on the specifics. "We're going to do this in a smart way, in a way that takes care of the things that people care about, at the same time letting Beijing know that what they're doing contravenes what they agreed to do back in 1997," he said. Pompeo said in his statement on Wednesday that "no reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground." His assessment came a day before Beijing could pass the national security law tailor-made for Hong Kong. The move aimed to thwart Beijing's plan to move forward with the passage of the legislation, which is considered a violation of the Sino-British Joint Declaration, the treaty that established the principle of "one country, two systems" and which stipulates the sovereign and administrative arrangement of Hong Kong after the 1997 handover. ^ top ^

Education on Chinese history and national identity needs to be boosted in Hong Kong: experts (Global Times)
As the Ministry of Education is in its annual process of selecting and dispatching teachers from the Chinese mainland to Hong Kong Special Administrative Region, some experts and officials are calling for a boost to education on Chinese history and national identity among students and teachers. The 2020-21 annual selection of teachers from the Chinese mainland for curriculums including Chinese language studies, history and math for kindergartens and schools of Hong Kong and Macao Special Administrative Regions organized by the Ministry of Education (MOE) is ongoing, several teachers and schools involved told the Global Times on Wednesday. The teachers who will offer instruction and assistance to curriculum building and research at kindergartens and schools of Hong Kong and Macao, could set off in September after the current batch of teachers returns from the two regions. A history teacher from Anshan, Northeast China's Liaoning Province, who declined to reveal his name told the Global Times they are waiting for further arrangements to be made as the list of teachers to be dispatched has yet to be finalized. While teachers and officials hailed the annual communication project as having a positive role in enhancing the education quality of Hong Kong and Macao, some experts told the Global Times there is a necessity to increase education content on national identity to address Hong Kong's long-existing flaws in the national education system. Young school students were found to be a major group who took part in street clashes in Hong Kong last year. The average age of those protesters appears younger than those who joined the 2014 Occupy Central movement. Hong Kong education officials defended their decision to invalidate a controversial history exam question that asked students whether Japan's invasion of China did more good than harm, citing examination fairness and respect for history. The question appeared on the history test paper of the Hong Kong Diploma of Secondary Education Examination on May 14, drawing a flood of criticism from education workers and experts who said that it was like asking Western students whether they thought Hitler did more good than harm to Europe. Seeing young Hong Kong people lacking an understanding of the country's history, culture and current affairs is common, and the central government should consider establishing special agencies to help them get a sense of national identity, Tam Yiu-chung, former chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong and a Hong Kong deputy to the National People's Congress (NPC) told the Global Times in a previous interview. Tam brought the proposal to the two sessions which said some government agencies or non-profit organizations could be established to push forward Chinese history and culture education. Enhancing national identity among young Hong Kong people will facilitate the integrity of the Chinese mainland and Hong Kong regarding emotional connections, Li Xiaobing, a Hong Kong studies expert at Nankai University in Tianjin, told the Global Times. As a way of introducing more education on national identity, Kevin Choy, a young Hong Kong resident suggested the central government could arrange more communication events between teachers and students in Hong Kong and the Chinese mainland. "What you see with your eyes is more believable than what you hear in the news. You can only make a judgment about whether Hong Kong or the Chinese mainland is good or bad after seeing for yourself," Choy told the Global Times. The selection of teachers from the mainland started in 2008, according to the MOE. Each year the ministry selects roughly 50 or 60 teachers from schools and kindergartens across the country, media reported. In 2019, a total of 57 teachers were chosen from 16 provinces and regions on the Chinese mainland to go to Hong Kong and Macao. ^ top ^

PLA HK Garrison supports national security legislation for HK, confident in safeguarding national sovereignty: commander (Global Times)
The Chinese People's Liberation Army (PLA) Hong Kong Garrison firmly supports the draft decision to introduce national security legislation for the Hong Kong Special Administrative Region (HKSAR) and the troops have the determination, confidence and capability to safeguard the national sovereignty, security, development interests and long-term prosperity and stability in Hong Kong, affirmed the commander of the garrison. As an important force that safeguards national security in Hong Kong, the PLA Hong Kong Garrison firmly supports the draft decision of the National People's Congress to establish and improve the legal system and enforcement mechanisms for the HKSAR, Chen Daoxiang, a Chinese legislator and the commander of the PLA Garrison in Hong Kong, said in an interview with China's state broadcaster on the sidelines of the ongoing two session. "This important decision will contribute to containing and punishing any attempt to sabotage the national unity or split the country, help deter all kinds of secessionist forces and foreign forces attempting to interfere [in China's internal affairs], and demonstrates our resolute will in safeguarding national sovereignty and territorial integrity," Chen said. The soldiers and officers at the Garrison will carry out defense duties in accordance with the law, Chen stressed. ^ top ^

Netizens call for national security law to bring HK protesters to justice (Global Times)
Chinese netizens have called for the immediate introduction of the national security law to Hong Kong to bring to justice a dozen protesters who asked US troops to "land in" Hong Kong in protest at the national anthem bill, which will receive its second reading on Wednesday. Netizens in both the Chinese mainland and Hong Kong Special Administrative Region slammed the protesters as "disgraceful" for inviting foreign forces to interfere in China's internal affairs, and many also mocked them for "seeking US help but not even getting the English grammar correct" in their slogans. Dozens of people gathered at the International Finance Centre in Hong Kong on Monday night to protest against the national anthem bill, with some holding secessionist banners and shouting slogans calling for "Hong Kong independence." Some people held paper slogans asking US troops to "land in" Hong Kong to "protect" its people, Hong Kong-based news portal website reported. According to photos posted by the website, two young people held paper slogans which read in Chinese, "Asking US troops to land in Hong Kong to protect Hong Kong people," but the grammatically incorrect English version said, "U.S troops, pleas for help to protect HK people." The photos sparked an outcry from Hong Kong netizens, with some commenting, "Please immediately introduce the national security law to take those rioters to prison!" Some netizens mocked protesters for calling Monday's protest a "big gathering." "There were just a few dozen people, and you call this a 'big gathering'?" The photo was also widely denounced by mainland netizens, who called the protesters "too stupid" in pinning their hopes on the US, which does not even care about its own citizens. "You are just a pawn of the US. Will the US take care of you guys when its government failed to take care of its own citizens during the COVID-19 pandemic?" a netizen said. Hong Kong lawmakers will carry out a second reading of a draft of the national anthem law on Wednesday, reports said. ^ top ^



Stanley Ho: the Macau casino tycoon who set his sights far beyond the gambling table (SCMP)
Stanley Ho Hung-sun, a businessman who shaped the course of history in Macau and Hong Kong over the past half-century, is best known for the wealth generated by his casinos. But the late entrepreneur's contribution to wider society and the ambitious ideas he advanced went far beyond the gambling table. In 1989, he came up with a plan that involved leasing Hong Kong and Macau to the United Nations as its headquarters for 100 years. The scheme envisaged that would happen after the cities' successive handovers to China in the late 1990s in an attempt to restore confidence there following the Tiananmen Square crackdown. Under his imaginative plan, the two cities would become the "Switzerland" of Asia, turning them into symbols of peace. Although the project never took off, it showed how much of a visionary Ho was. It also demonstrated he was no ordinary businessman, but a canny political operator with a broad understanding of the world that helped him successfully navigate the changes taking place in Macau, while building an empire that has survived multiple administrations. "He was always a Chinese patriot – and he served many times as a bridge between the interests of Macau and even of the Portuguese authorities' interests with China," said Jorge Neto Valente, head of the Macau Lawyers Association and a former lawmaker. Macau casino magnate Stanley Ho dies aged 98 27 May 2020. Although Ho's role as an interlocutor between the two sides of the border was rarely publicised, he was involved in the discussions about the Basic Law – Macau's mini-constitution – before the city's handover to China in 1999, which came two years after Hong Kong's return. Ho was a member of the Basic Law Consultative Committee of Hong Kong and a vice-chairman of the Macau Basic Law Drafting Committee. "He discreetly maintained his contacts with the Chinese authorities," said Valente, who worked on several occasions with Ho. "And he was heard on issues that involved the local economy and politics during the drafting of the [Macau] Basic Law. He had a great and sharp understanding on many issues and was rarely wrong." The proposal to bring the UN headquarters to the neighbouring cities was seen as testament to Ho's political understanding of the region. "The June 4 incident [the Tiananmen crackdown] has shattered local confidence [in Hong Kong and Macau] and this crisis could be fully resolved if China announced in the near future the decision to lease Hong Kong and Macau to the UN after they revert to China," Ho said at the time. "My proposal could boost China's international image and freeze or even stop Hong Kong's serious brain drain." The casino tycoon pledged to help fund the plan if approval could be obtained from the UN, Britain and China. But despite the backing of prominent figures in Hong Kong, Ho's proposal did not materialise. In the late 1960s, Ho shared his plan during a dinner with Liang Weilin, then director of Xinhua news agency's Hong Kong branch, which was China's de facto embassy in the city under British rule. Several Hong Kong tycoons, including Li Ka-shing and Henry Fok Ying-tung, were also present at the gathering. But, according to Ho, Liang just smiled after he floated the idea. Despite Ho's close relations with Beijing officials, he was also able to court the Portuguese authorities in Macau and the local community. "He was often heard by the [Portuguese] governors of Macau. In many of the most crucial decisions for the city, his opinion was very important," lawyer Valente said. "But he would not brag about it … He would not come out and share the content of those meetings." Valente noted that Ho turned down plenty of opportunities to enter politics. "He never wanted to take a position in the local politics – he preferred to have a discreet [political] participation and continue doing what he knew the best, which was creating wealth, not just for him, but also for the city and the region." Miguel de Senna Fernandes, lawyer and president of the Macanese Association, also said that Ho – who had investments in Portugal – showed "great ability" in dealing with both the Chinese and Portuguese authorities. "In fact, he was always a good friend of the Portuguese. Many of his projects even took Portuguese names," Fernandes said. "He was a first nature businessman, a visionary, who was able to convince the authorities of how credible his ambition was. "And he managed to transform Macau and revolutionise the gambling industry." Ho held onto a four-decade monopoly until the liberalisation of the industry in 2002. But even after that, Ho's firm – Sociedade de Jogos de Macau (SJM), which was created in 2001, and a subsidiary of one-time gaming monopoly Sociedade de Turismo e Diversoes de Macau (STDM) – continued to grow. SJM is still the largest casino operator in Macau by number of venues, with 22. Former SJM executive director Rui Cunha also noted that Ho worked with a number of administrations in some of the region's major projects, such as the city's airport and the Macau Cultural Centre. "[Ho] was a person of good character, friendly and respectful, and a good communicator with an extraordinary intellectual capacity," Cunha said. His ability to build consensus was probably one of his greatest secrets for success, lawyer Valente said. "He knew how to adapt to all the circumstances and changes that happened over the past decades. That's why he was able to maintain good relations with authorities in China, Macau and Portugal." ^ top ^

Macao SAR govt says firmly supports decision of central govt to safeguard national security (China Daily)
The Macao Special Administrative Region (SAR) government said on Saturday that it firmly supports the decision of the central government to safeguard national security. The Macao SAR government was responding to a draft decision on establishing and improving the legal system and enforcement mechanisms for the Hong Kong Special Administrative Region to safeguard national security which has been submitted to the third session of the 13th National People's Congress (NPC) for deliberation. The Macao SAR government said national security is the cornerstone for bringing peace and stability to the country and plays a critical role in ensuring the country's long-term peace and stability and maintaining the long-term prosperity, development and stability of the Hong Kong SAR and the Macao SAR. Safeguarding national sovereignty, security and development interests is the sacred obligation and due responsibility of the Chinese people, including the majority of Hong Kong and Macao citizens, it said. Since its return to the motherland, all walks of life in Macao have firmly fulfilled the constitutional responsibility of safeguarding national security stipulated in the Constitution and the Basic Law of the Macao SAR, it said. The Macao SAR government and citizens have joined hands to ensure that the SAR enjoy social stability, economic prosperity and development, and that people live and work in peace and contentment, it said. Facts have proven that safeguarding national security is the precondition and the foundation for Macao to maintain stability and keep developing, it added. ^ top ^



Military force 'last resort' in US-China tensions over Taiwan (SCMP)
Tensions with the US over Taiwan are at boiling point, but the use of military force will remain a last resort for China, a leading researcher in Taiwan studies said on the sidelines of the National People's Congress in Beijing. Li Yihu, head of the Institute of Taiwan Studies with Peking University and an NPC deputy, said Taiwan was a "potential tipping point" for China-US relations, although it remained unknown whether it would escalate to an open collision. "The US will further look to the strategic value of the Taiwan issue in containing China, and will play the Taiwan card frequently over a long period of time, just as in the current situation," Li said. "The Taiwan Strait is indeed the main field for China-US rivalry and contention." The Covid-19 pandemic has further plunged already deteriorating relations between Beijing and Washington, with tensions widening from a blame game over the origins of new coronavirus to multiple fronts, including trade, hi-tech, military, security, Hong Kong and Taiwan. In late March, US President Donald Trump signed into law the Taiwan Allies International Protection and Enhancement Initiative Act (TAIPEI Act) – an elevated level of support for Taiwan's international recognition rarely seen since Washington cut diplomatic ties with Taipei in 1979. The US also led a campaign for Taiwan to be granted access the World Health Organisation and, in recent months, has increased the numbers of American warships and military aircraft in the waters near Taiwan. China claims Taiwan as part of its territory and views any pro-independence activity as contrary to its core national interests. Beijing has threatened a military operation for reunification if Taipei seeks independence. Earlier this month, there were debates on the mainland over whether Beijing should take advantage of the pandemic to reunite with Taiwan by force but Li said Beijing would stick to the principle of peaceful reunification, and a military option was only a last resort. "The policy regarding Taiwan will not be directly altered by public opinion, especially emotional opinion," he said. "If the voices calling to take back Taiwan by force keep elevating, it would not be positive for cross-strait relations." Whether Taiwan becomes a flashpoint for China-US tensions will be determined by other factors, he added, such as the effects of virus controls, domestic economic and political situations, and the attitudes of other major powers and neighbouring countries. In her inauguration speech on May 20, Tsai Ing-wen began her second term as Taiwan's president with a vow to defend the island from threats, and said Taiwan would not accept Beijing's "one country, two systems" proposal for cross-strait unification. Two days later, when Premier Li Keqiang read out the government work report to the annual legislative sessions in Beijing, the references to peaceful reunification had been dropped. Also not mentioned was the 1992 consensus, through which both sides tacitly agree there is only one China but have different interpretations on what this means. Despite the change, Li Zhanshu, chairman of the Standing Committee of the National People's Congress, later returned, in his address, to Beijing's decades-long rhetoric on Taiwan. The change in tone of the government work report was interpreted as a warning to Tsai's independence-leaning policy. Li Yihu said the central government would continue to stick to the principles of the 1992 consensus, but indicated there would be a more flexible and targeted approach. Tsai is under growing pressure from the self-ruled island's hardline camp to push for constitutional change to reflect an independent status – a move Beijing sees as a prelude for the island to declare formal independence from the mainland. Li noted that Tsai had made a "compromised attempt" to change the official name of the island and said it was an indication of a move towards independence, which he warned would cast "uncertainties" over the cross-Strait ties. It is still "a political stalemate and a confrontation which carries detonators [to cross-strait tensions]," he said. Li said Beijing should remain alert to any push by the Tsai administration towards independence, be vigilant against any "radical independence" movements on the island, and be aware of the possibility of a new crisis if the two trends mixed. ^ top ^

Fujian's GDP surpassing Taiwan a historic breakthrough with significance for Taiwan work: NPC deputy (Global Times)
GDP in East China's Fujian Province reached 4.23 trillion yuan ($592.9 billion) in 2019, surpassing that of the island of Taiwan for the first time, which is a "historic breakthrough" having "far-reaching significance for efforts toward Taiwan," said Zhang Zhijun, president of The Association for Relations Across the Taiwan Straits, and also a deputy to the National People's Congress this year. Taiwan's GDP in 2019 is 4.22 trillion yuan, with a growth rate of 2.73 percent year-on-year, while GDP of Fujian Province in 2019 reached 4.23 trillion yuan, with a growth rate of 7.6 percent, official data showed. The key factor that determines the direction of cross-Straits relations is the development and progress of the mainland provinces, Zhang said. Dai Shugeng, director of the International Finance Research Office at Xiamen University said that Fujian's voice and initiative will be strengthened when it comes to cross-Straits dialogue with Taiwan as a natural result of economic power. "Fujian's GDP has lagged behind that of Taiwan, thus the latter has had a lofty attitude when the two sides had discussions. Now, Fujian's economy is overtaking Taiwan's, with a much higher growth rate, which represents the enhancement of its economic strength. And the economic base of a society influences the superstructure of that society," Dai told the Global Times on Tuesday. Taiwan's GDP ranked sixth among provinces in China in 2017. By 2018, GDP of Southwest China's Sichuan Province and Central China's Hubei Province both exceeded Taiwan. In 2019, Taiwan fell one more place and ranked ninth, according to a report from domestic news site This year Taiwan's GDP will fall outside the top 10, said Dai, noting that Taiwan's economy has been in decline since Tsai Ing-wen became the regional leader, the pursuit of whom "is not economic development, but personal political interests." ^ top ^

HK national security law sheds light on Taiwan question: deputies (Global Times)
National People's Congress (NPC) deputies from Taiwan said Hong Kong's national security legislation sheds light on the Taiwan question, sending a warning shot to Taiwan secessionists. With the Hong Kong national security legislation as an example, the central government could further deepen, refine and even make related laws promoting reunification with the Anti-Secession Law as the basis, cracking down on "Taiwan independence" forces legally, said Cai Peihui, an NPC Taiwan deputy and a businessman from the island, according to a statement sent to the Global Times on Tuesday by the All-China Federation of Taiwan Compatriots. This is a powerful warning to Tsai Ing-wen's authority that "Taiwan independence," just like "Hong Kong independence," is not welcomed by the Chinese people. The central government's determination in dealing with the separatists of Hong Kong and Taiwan is the same, he said. "Taiwan independence is a dead end. National security is a sharp sword hanging over Taiwan separatists' heads," he said. China's Anti-Secession Law was adopted in 2005, aiming to prevent Taiwan's secession from China. The national security law would be an inspiration to peaceful reunification and the extension of "one country, two systems" principle, Zhang Xiong, a Taiwan deputy and a professor at Shanghai Tongji University, said, according to the statement. "The process showed that legislation should be timely. If Article 23 of the Basic Law of the Hong Kong were established early, it could have awed hostile forces… Probably the fires, riots in black, 'Hong Kong independence' flags and collusion of forces would not have taken place in the city," Zhang said. Tsai Pei-wei said that the riots in Hong Kong last year severely damaged the prosperity and stability, as well as the economic development, of Hong Kong. The violence weakened the Hong Kong government's administrative ability and international reputation. The central government making such a national law on administrating Hong Kong is supplementary to the Basic Law of Hong Kong, which would be the legal guarantee to deal with the riots and make sure the sovereignty of Hong Kong is unchanged. Liao Haiying, an NPC Taiwan deputy and a doctor working in North China's Hebei Province, said that "The law also would inform the two sides across the Straits that the bottom line of national security could not be crossed." The GDP of East China's Fujian Province reached 4.23 trillion yuan ($593 billion) in 2019, with a growth rate of 7.6 percent, surpassing the Taiwan island's 4.22 trillion yuan GDP for the first time. The two regions have similar cultures and dialects. ^ top ^

Taiwan separatists panic as mainland drops 'peaceful' in reunification narrative (Global Times)
Taiwan separatists and foreign forces that attempt to meddle in the reunification of China are becoming panicked and nervous as the Chinese mainland changes slightly the wording regarding the approach to reunification in the Friday's government work report by omitting the word "peaceful" ahead of "reunification," analysts said. This new narrative has sent a clear signal that the mainland will be more determined and pragmatic in diversifying its approach to realizing its obligatory goal of reunifying Taiwan, since the separatist Democratic Progressive Party (DPP) authorities and other political forces on the island have chosen to refuse the sincerity of a peaceful solution repeatedly encouraged by the mainland, said the experts. Premier Li Keqiang said in the government's 2020 work report that, "We will adhere to the major principles and policies on work related to Taiwan and resolutely oppose and deter any separatist activities seeking 'Taiwan independence'" and "We will encourage them [fellow compatriots in Taiwan] to join us in opposing 'Taiwan independence' and promoting China's reunification." In the 2019 report, Li said that "We will uphold the one-China principle and the 1992 Consensus, promote the peaceful growth of relations across the Taiwan Strait, and advance China's peaceful reunification." Reuters said on Friday in a report that this change is "an apparent policy shift that comes" as mainland ties with Taiwan "continue on a downward spiral." The Wall Street Journal also said in a report on the matter that this is "breaking with nearly three decades of precedent in a sign that it is taking a tougher tack" toward the island. However, this adjustment doesn't mean the mainland has abandoned a peaceful approach to realize national reunification, and the mainland government and society still believe that peaceful reunification is the best, most harmless and cost-effective approach, said Li Xiaobing, a Taiwan studies expert at Nankai University in Tianjin. "But just as the firm stance that has been consistently reinforced by the mainland in past decades, a military approach has never been abandoned as this is a final solution for the worst case scenario when secessionist and foreign forces totally separate the island from China. Therefore, in nature, the mainland's policy toward Taiwan has not changed," Li Xiaobing told the Global Times on Saturday. The reason why Taiwan separatists and foreign forces are becoming more sensitive and even panic over the change is that they know their repeated provocations to challenge China's sovereignty and bottom line will be punished sooner or later, and they might finally learn the message behind the new narrative from the mainland as being "one step closer to a non-peaceful solution," Li Xiaobing further noted. A series of provocative and harmful acts carried out by separatist DPP authorities against the mainland have seriously offended mainlanders, including backing Hong Kong rioters and separatists to create turmoil to damage the Hong Kong Special Administrative Region of China in 2019; exaggerating anti-China sentiment in Taiwan to serve its political goals to win the regional election; banning mask exports to the mainland while the COVID-19 outbreak ravaged Wuhan in January with the mainland facing temporary shortages of medical supplies; and ganged up with the US to use the coronavirus pandemic to stigmatize the mainland and seek separatism in front of the international community. As the mainland holds an overwhelming military advantage in the region, provocations made by the island and the US have caused rising fury among the mainland public and on social media against Taiwan separatism with mounting calls for a military solution to end the US' manipulation of using the island to contain China. A comment by a Chinese netizen posted on Sina Weibo noted that "the military solution should not be considered as a last choice for the worst scenario, but a considerable option to end the mess once the opportunity comes." 'One country, two systems' for Taiwan According to foreign media reports, some Taiwan politicians also noticed China's 2020 government work report not mentioning "the 1992 Consensus," and they thought that the mainland is trying to "avoid provoking Taiwan" as the separatist authorities refuse to accept this consensus. Li Fei, a professor at the Taiwan Research Institute at Xiamen University in East China's Fujian Province, told the Global Times on Saturday that "the 1992 Consensus," with respects to the one China principle which was accepted by the two sides while the KMT ruled the island, is "the passphrase" for cross-Straits cooperation, and now due to the DPP continually refusing to accept the consensus, and even the KMT wanting to keep their distance from the term, there is now no need for the mainland to keep this "passphrase." This is actually bad news for the island, as the two sides have lost "the passphrase" and it would be more harmful to the island and almost have no impact on the mainland, analysts said. These Taiwan politicians are too naïve because the one China principle will never be abandoned, and "the 1992 Consensus" is a vague term which was easy for the two sides to accept in the previous status quo for economic cooperation and people-to-people exchanges, and without this vague term, there will be only a "one-China principle" in the future, and the options and space for DPP authorities will become even more limited, said Li Fei. The draft decision on establishing and improving the legal system and enforcement mechanisms for the Hong Kong SAR to safeguard national security was also submitted Friday to the National People's Congress (NPC) for deliberation. Some NPC deputies said that the national security legislation for Hong Kong has referential value regarding the Taiwan issue, the Hong Kong-based reported on Saturday. Whether the mainland adopts a military or peaceful approach to reunify the island of Taiwan, there will be a Taiwan-version of the "one country, two systems" to be implemented after reunification, and as the island has similar issues to Hong Kong, such as separatism and anti-China proxies controlled by foreign forces, there will surely be national security legislation for the island as well to deal with these obvious problems at that time, said Li Xiaobing. "The legislation and the future law-enforcement in Hong Kong will be very valuable and meaningful for us to finally solve the Taiwan question one day," he noted. ^ top ^

China firmly opposes US arms sales to Taiwan: spokesperson (China Daily)
China on Sunday strongly urged the US to immediately stop arms sales to Taiwan and cease military contacts with the island, to avoid further damages to the relations between the two countries and the two militaries. Wu Qian, a spokesperson of the Ministry of National Defense, made the remarks in an address on the US State Department's approval of a plan to sell weapons worth 180 million US dollars to Taiwan. This move by the US side seriously violated the one-China principle and the three joint communiques between China and the United States and rudely interfered in the domestic affairs of China, to which China expressed strong dissatisfaction and firm opposition, Wu said. It also sent a seriously wrong signal to Taiwan's Democratic Progressive Party authority and "Taiwan independence" separatists, seriously undermined China's sovereignty and security, and seriously jeopardized the peace and stability across the Taiwan Strait, according to Wu. "National rejuvenation and reunification are the aspirations of the people and an irresistible trend of the times, and no one and no force can stop it," he said. The People's Liberation Army will take all necessary measures to firmly safeguard national sovereignty and territorial integrity, and to resolutely safeguard peace and stability across the Taiwan Strait, Wu said. ^ top ^

Taiwan says it 'isn't giving up on Hong Kong' as Tsai Ing-wen considers suspending special status (SCMP)
Taiwan's mainland policymaker on Monday clarified that the self-ruled island would continue to support Hong Kong, after President Tsai Ing-wen said its special status could be revoked if Beijing passed a controversial national security law for the city. Beijing last week unveiled a resolution on the legislation at its annual parliamentary session after months of anti-government protests in Hong Kong, a move that has been widely condemned overseas and in the city, where it has sparked more demonstrations. Tsai said in a Facebook post on Sunday that she might consider invoking Article 60 of the Laws and Regulations Regarding Hong Kong and Macau Affairs by suspending the "application of all or part of the provisions of the act" if the National People's Congress bypassed Hong Kong's Legislative Council to approve the security law. That would mean an end to the preferential treatment given to people from Hong Kong and Macau, including to visit and invest in the self-ruled island. Tsai said Beijing's move would break its promise for Hong Kong to remain unchanged for 50 years after it was handed over to China, and for the city to be run with a high degree of autonomy. In a statement on Monday, Taiwan's Mainland Affairs Council responded to criticism from opposition lawmakers that Tsai planned to "dump" Hong Kong people after using them to win January's presidential election. "What the president said in her Facebook post did not mean 'giving up on Hong Kong', rather she meant to let Beijing know there would be serious consequences if the Chinese Communist Party National People's Congress passes a Hong Kong version of the [mainland] national security law," the statement said. It said that the island's authorities would continue to offer necessary assistance for Hong Kong people in view of the latest developments in the city. Tsai's strong support for the mass protests in Hong Kong last year – triggered by a now-shelved extradition bill – helped win the backing of many young voters in the Taiwan election in early January. The youth vote was seen as an essential part of her turnaround in the campaign – she had been expected to lose the race to mainland-friendly Kuomintang candidate Han Kuo-yu but ended up being re-elected for a second term in a landslide. In her Facebook post, Tsai, from the Democratic Progressive Party, said if the national security law was implemented, it would seriously erode Hong Kong's freedoms and judicial independence. Opposition lawmakers said what Tsai was suggesting – suspending the city's special status – was unthinkable as it would essentially mean shutting the door to Hong Kong people doing business, studying or fleeing to Taiwan to avoid penalties for their protest actions in the city. KMT legislator Charles Chen I-hsin said he and others on Monday proposed that the legislature revise the act to allow Hong Kong people to seek refuge in Taiwan in the absence of a formal political asylum law. In response, the Mainland Affairs Council said Tsai had made clear that the government would continue to help Hong Kong people in need, and that would continue in the future. Help us understand what you are interested in so that we can improve SCMP and provide a better experience for you. We would like to invite you to take this five-minute survey on how you engage with SCMP and the news. ^ top ^

PLA drill in South China Sea about combat readiness, not seizing Taiwanese islands, experts say (SCMP)
Aircraft carriers from the PLA Navy are set to take part in combat readiness exercises this summer in the South China Sea, and while the drills are likely to raise concerns in Taipei, their aim is not to seize Taiwan-controlled territory, military observers say. Earlier this month, Japan's Kyodo News reported that the PLA was planning a large-scale beach landing exercise near Hainan province in August, simulating the takeover of the Pratas Islands – a group of three atolls in the north of the South China Sea that are controlled by Taiwan. "An aircraft carrier strike group will pass through the Pratas Islands on its way to the exercise site to the southeast of Taiwan in the Philippine Sea," said a military insider, who asked not to be named due to the sensitivity of the issue. It was not clear whether both the Liaoning – the PLA's only aircraft carrier to have achieved initial operating capability – and the Shandong, which was commissioned at the end of last year, would take part in the drills, or just one of them, the person said. China's first aircraft carrier, the Liaoning, or its sister ship, the Shandong, is expected to be involved in this summer's drills. Handout While other parts of the naval flotilla would be involved in landing exercises at a training site near Hainan, about 600km (370 miles) to the southwest of the Pratas – also known as the Dongsha or Tungsha Islands – the exercises would not be a rehearsal for seizing them, he said. "There are just 200 Taiwanese troops stationed on the Pratas, so it doesn't make sense for the PLA to deploy an aircraft carrier strike group to take such a small island," he said, adding that the landing exercises were simply part of the military's regular training programme. "The PLA has to test all of its aircraft, warships and weaponry in the South China Sea to measure its combat readiness and fighting capabilities in the tropical waters." Lu Li-Shih, a former instructor at Taiwan's Naval Academy in Kaohsiung, said the main reason the PLA would not be looking to seize any Taiwan-controlled islands in the disputed waters was that they no longer held the same strategic value for Beijing. "Both the Pratas and Taiping Island in the Spratly chain have lost their geostrategic importance since the mainland developed eight artificial islands [in the South China Sea]," he said. "Beijing has three 3,000-metre airstrips on its man-made islands nearby, and they can each accommodate all kinds of [military and civilian] aircraft." Chi Le-yi, a military observer based in Taipei, said the upcoming drills and general increase in naval and air force activity were evidence of Beijing's plan to militarise the entire region. "The landing exercise is part of the PLA navy's regular training to achieve Beijing's plan to bring the South China Sea under its control," he said. "A landing drill could be seen as preparation for an attack on Taiwan, but it is more to do with the PLA building up its combat systems for any possible conflict in the South China Sea." Song Zhongping, a military commentator based in Hong Kong, said that this summer's drills near Hainan would also be an extension of the PLA's 11-week exercise in Bohai Bay, in the northern reaches of the Yellow Sea, that got under way on May 15. "The two naval exercises are intended as a warning to [Taiwan's President] Tsai [Ing-wen] and the United States that the PLA is well prepared when it comes to issues related to Taiwan and the South China Sea," he said. ^ top ^

Taiwan to fire up missile programme as Tsai puts focus on asymmetric warfare against mainland China (SCMP)
Taiwan is expected to step up the development of missiles able to strike mainland China in the face of growing military threats by Beijing. Taiwanese President Tsai Ing-wen vowed during her inaugural speech on Wednesday to bolster the self-ruled island's defences by emphasising the development of asymmetrical warfare, apparently foreseeing bumpy cross-strait ties in her next four years in office. In asymmetrical warfare, one side uses non-traditional weapons against a more powerful enemy. Analysts said a boost to Taiwan's missile programme would mean the island could brace for the mainland's first advance before the United States came to its rescue. "Weapons listed in this [asymmetrical warfare] category include missiles, torpedoes, unmanned aerial and navy drones and cyberweaponry. But missiles are by far the most effective to strike and intimidate the enemy," said Chieh Chung, senior researcher of national security at Taipei-based National Policy Foundation, a think tank of the opposition Kuomintang party. He said it was not surprising that Taiwan wanted to step up its missile development programme to ensure it had the necessary ability to strike should a cross-strait conflict erupt, given that the mainland's People's Liberation Army was a much bigger power and Taiwan had a limited military budget to stage an arms race with Beijing. In his annual government work report on Friday, Chinese Premier Li Keqiang called for the resolute rejection of separatist activities seeking Taiwan's independence and a deepening of ties across the Taiwan Strait towards the goal of peaceful reunification. Beijing considers Taiwan part of its sovereign territory awaiting reunification with the mainland, by force if necessary. It has suspended official exchanges with Taiwan and staged numerous war games close to the island to try to force Tsai to accept the one-China principle, which she has rejected since first being elected as president in 2016. Taiwan is putting its focus on asymmetrical warfare in the face of China's People's Liberation Army. Photo: Xinhua Beijing has also warned other countries against supplying arms to Taiwan, making it difficult for the island to acquire weapons. Taiwan's National Chung-shan Institute of Science and Technology – known as the cradle of the island's missile development – has worked with the military since the 1970s to develop short and medium-range missiles. In an inspection of the institute in January, Tsai asked the defence ministry and the institute to accelerate plans for mass production of the improved version of the Tien Kung-3 and the supersonic Hsiung Feng-3 missiles to bolster Taiwan's defensive capabilities. Last month, the institute test-fired missiles, including the Tien Kung-3 and a land-attack missile capable of striking targets on the mainland. According to local news media, the Tien Kung-3 surface-to-air missile and medium-range Yun Feng land-attack cruise missile were tested between April 5 and April 23 at the Jiupeng military base in Pingtung, the southernmost part of Taiwan. The institute declined to comment on the tests, but last month made public the testing dates while warning ships and planes against approaching the announced firing zone. Local news media said the latest version of the ship-based Tien Kung-3 was test-fired on April 9-10. Its development was first revealed by legislators during a budget review session in 2014. The missile was listed as one of the 10 indigenous arms development items in the NT$7.02 billion (US$233 million) Chiang Kung – or Enhanced Bow – project. It is expected to go into mass production next year, according to the local Liberty Times. Chang Cheng, a retired engineer who led development of the Hsiung Feng-3 missiles at the institute, said the Tien Kung-3 firing range had been boosted from about 45km (28 miles) to about 70km, allowing it to intercept the PLA's guided missile. But it would be "wrong for some news reports to assume that it is able to intercept the mainland's Dongfeng ballistic or intercontinental missiles ", he said. The institute also test-fired the Yun Feng – or Cloud Peak – on April 14-15 at the Jiupeng base, according to United Daily News. Local military experts said the supersonic land-attack cruise missile had a range of 1,500km, making it capable of striking targets in inner China, including Beijing, Tianjin in China's north, Nanjing in eastern Jiangsu province, Shanghai in the east and Wuhan, Changsha and the Three Gorges Dam in central China. The Yun Feng is fitted with a ramjet engine and can carry a semi-armour-piercing high explosive and fragmentation warhead, the experts said. The institute has remained tight-lipped about development of the missile which is expected to be rolled out for production at the end of this year. Reports of the Yun Feng's development first surfaced in December 2012, but the programme has been under way since the post-1996 Taiwan Strait Crisis, when Beijing staged missile tests near Taiwan to try to warn then president Lee Teng-hui against promoting independence. The development, which has spanned the tenures of four presidents – from Lee, to Chen Shui-bian, Ma Ying-jeou and Tsai – had been shrouded in secrecy because of US concern that it might prompt an angry action by Beijing. Su Tzu-yun, a senior analyst at the Institute for National Defence and Security Research, a government think tank, said the Yun Feng could be deployed to weaken mainland China's combat capability. "The weapon is believed to be able to attack strategic targets, including airports, harbours and military command bases in central China," he said, adding the missile formed an important part of Taiwan's asymmetric warfare. The PLA Air Force was considered the biggest threat to Taiwan and if the mainland's airbases could be destroyed, Taiwan would have a better chance of defending itself, he said. Tung Li-wen, a researcher at the pro-government Taiwan think tank, said the Hsiung Feng-2E's upgraded firing range of 1,000km was already long enough to threaten the Yangtze River Delta and Pearl River Delta. "These are China's two major economic zones and any attack would paralyse their operations," he noted. The upgraded subsonic, land-attack cruise missile – first mass-produced in 2009 – was test-fired on May 14-15, according to news reports. Other operational missiles developed by the institute include the 120km range Tien Chien air-to-air missile, Hsiung Feng 1, 2, 3 subsonic anti-ship missiles, and 240km range air-to-ground Wan Chien subsonic cruise missile. ^ top ^



Li: China has room to boost its economy (China Daily)
China may achieve positive economic growth this year despite the impact of the novel coronavirus pandemic, and still has ample policy room to keep the world's second-largest economy on a steady track of growth, Premier Li Keqiang said on Thursday. "We have reserved policy space on the fiscal, financial, social security and other fronts, and we are in a strong position to quickly introduce new measures, if necessary, without hesitation," Li said at a news conference after the closing of the annual session of the National People's Congress. "I'm confident that we will, under the strong leadership of the Communist Party of China Central Committee, with Comrade Xi Jinping at its core, and with joint efforts of people across the nation, be able to prevail over the current difficulties, fulfill our tasks and goals for the whole year and complete the building of an all-around moderately prosperous society," he said. "Keeping China's economic fundamentals stable in itself will be a contribution to the whole world, and China will remain a positive force driving global economic recovery and growth," he added. China has decided to roll out a number of supportive policies to reduce the operational costs of enterprises, increase investment in infrastructure to generate growth and improve people's livelihoods. The country has pledged more government spending, raising the fiscal deficit target to at least 3.6 percent of GDP and issuing 1 trillion yuan ($139.8 billion) in special treasuries. The authorities have also planned to create more than 9 million new urban jobs, keep the surveyed urban unemployment rate at around 6 percent and maintain consumer inflation at around 3.5 percent. "We will do our utmost to keep China's economic growth stable and, at the same time, we must ensure that all measures taken are well-calibrated," Li said. "The key for the government to achieve its economic goals is to protect businesses and help them make it through hard times, because it matters for job creation and people's basic living needs," said Xu Hongcai, deputy director of the economic policy committee of the China Association of Policy Sciences. "Reducing their operating costs is one of the most effective ways to help them survive and resolve their difficulties," he added. China still has much room for economic maneuvers to keep its economy on track, analysts said. It is still possible for the country to raise its government deficit ratio to counter an economic downturn as the leverage ratio of the central government is still relatively low compared with that of the United States and European nations. Xu said choices also include further reducing banks' reserve requirement ratio, which is the money banks must set aside as reserves. Xu Gao, chief economist at BOC International, said interest rate cuts also could be used by China to boost the economy. Local government financing platforms could play a bigger role in functioning as a quasi fiscal tool, he said. Xu Gao also said that the Chinese economy is recovering solidly and the trend is expected to continue. "The recovery of the Chinese economy is on a solid track, judging from key economic data for March and April, as the country's macroeconomic policies have been very accommodative. I expect such trends to continue for the rest of the year." But he said that special attention should be paid to the task of ensuring the survival of enterprises and preventing large-scale bankruptcy as they are directly linked with employment and people's livelihoods. Li also said that the role of the market will be more respected, and the priority for supportive policies will be on "boosting market vitality". Yang Weiyong, an associate professor of economics at the University of International Business and Economics in Beijing, said he considers it major progress for the government to liberalize regulation and facilitate business operations. "Allowing the market to play a larger role will help China's economic recovery this year and also help its long-term economic restructuring," he said. ^ top ^

Coronavirus: China set to push economic policy to new limits as National People's Congress begins (SCMP)
China is set to unveil a series of extraordinary economic policies at its annual parliamentary gathering on Friday, including a fiscal package that could surpass that used during the global financial crisis a decade ago, as Beijing seeks to tackle threats from the coronavirus and an increasingly hostile world, analysts say. While China has encountered economic shocks before, none has inflicted as much pain on companies, households and individuals as the Covid-19 pandemic. In the first quarter, China was dragged into an economic contraction for the first time since 1976 and its role in global value chains is now under threat. Tens of millions of Chinese migrant workers have been thrown out of work as sectors from catering to tourism struggle to get back on track. Export orders, meanwhile, are vanishing for many small businesses as the pandemic ravages the United States and Europe. China was the first major economy to resume production after the pandemic, but the recovery has been fragile and could easily be disrupted, as shown in parts of northeastern Jilin province where partial lockdowns have been imposed to prevent a second wave of infections. Following a three-month postponement, the National People's Congress (NPC) will begin on Friday, where Beijing is expected to declare victory in bringing the pandemic under control. The gathering will be the first major political assembly in China since the rapid spread of the outbreak began in late January, with nearly 3,000 legislative delegates and another 2,000 "political consultative committee members" set to gather in the Great Hall of People to hear the government's work report read aloud by Premier Li Keqiang. Chinese authorities are also expected to reveal how it will handle the most pressing issues facing the country. Beijing has made it clear employment is the economic priority for China and it will loosen its purse strings to provide support to the economy. But the world has been kept guessing about what exactly will be done to aid struggling companies and households, while managing growing tensions with Washington. Li Weisen, an economics professor at the Fudan University in Shanghai, said China is facing mounting difficulties. "The international environment is turning from bad to worse … led by an increasingly confrontational US-China relationship," Li said. "At home, it's hard to say the economy has recovered – it's hard to find a happy restaurant owner in China these days as consumption and services are far from recovered." One long-standing limit that is expected to be smashed is China's tradition of keeping the fiscal deficit ratio below 3 per cent of gross domestic product (GDP), long regarded as a red line to safeguard fiscal stability. The coronavirus will punch a 3 trillion yuan (US$422.5 billion) hole in the federal budget in 2020, according to former finance minister Lou Jiwei. To compensate, China would have to increase its on-budget fiscal deficit ratio to about 5.8 per cent of GDP from 2.8 per cent in 2019, as each percentage point of the ratio is equivalent to around 1 trillion yuan of fiscal deficit. But the fiscal deficit is just a piece of the puzzle. At a Politburo meeting in late March, President Xi Jinping said China will sell special government bonds for the first time since 2007 and increase local government bond issuance. The proceeds from the special bonds will not be included in the central government budget, allowing Beijing to increase government spending without a massive increase in the fiscal deficit ratio. The size of the new bond issuance and how they will be issued is expected to be announced by Premier Li on Friday. "There's really no other option for China but to issue more bonds," Fudan University's Li said. Former minister Lou predicted China's central government would issue 2 trillion yuan worth of "special treasury bonds", while local governments would offer an additional 3 trillion in bonds. HSBC economists led by Qu Hongbin predicted that China's on-budget fiscal deficit could be increased to 4 per cent of GDP in 2020. But China's broad deficit, which includes both on-budget deficit and off-budget debt, could be much higher, at around 11 per cent of GDP, said Ding Shuang, chief China economist at Standard Chartered bank. Local government special purpose bonds could contribute up to 3.5 percentage points, or about 3.5 trillion yuan, with central government special bonds adding 1-2 percentage points, or up to 2 trillion yuan, he said. The expectation that China will let its fiscal discipline slip is extraordinary, given that big deficits have been regarded as undesirable by leaders for decades. Former Chinese premier Zhu Rongji said he would never accept being called the "deficit premier" because he kept the deficit ratio below 3 per cent, even though he substantially increased government debt to handle the Asian financial crisis in 1997. Wen Jiabao, who was premier between 2003 and 2013, held the fiscal deficit below 3 per cent in 2009, despite rolling out a 4 trillion yuan stimulus. Despite the historical aversion to breaching the limit, some analysts have called for China to be bolder and expand spending to save the economy. "Many people oppose plans such as the 4 trillion yuan stimulus package in 2008 due to worries about excessive fiscal deficits and a quick rise in the government's debt level," Yu Yongding, a veteran Chinese economist with the Chinese Academy of Social Sciences, wrote earlier this month on, a Chinese internet portal. "They have a point but that doesn't mean the Chinese government should rule out a fiscal policy for 2020 that is more expansive than a decade earlier." Aggressive fiscal spending was needed for China to achieve a growth rate of 3 per cent this year, he said. Whether China will set a growth rate target for 2020 is still a matter of speculation, after the economy shrank by 6.8 per cent year on year in the first quarter amid wide-ranging virus containment measures. China's economy grew at 6.1 per cent in 2019 and before the virus hit it was expected a growth target of 6 per cent would be announced for 2020. "There is a 50 per cent probability that Beijing will set its 2020 GDP growth target at 2-3 per cent, with a 50 per cent probability that Beijing will abandon a growth target for the whole year," Nomura economists led by Ting Lu said. Beijing could also postpone its goal of doubling the size of the economy between 2010 and 2020 to next summer, as July 1 would mark the 100th anniversary of the Chinese Communist Party, Justin Lin Yifu, a former World Bank chief economist and current adviser to the Chinese government, said in an online speech over the weekend. Regardless of the growth target, debate over how China should implement its stimulus efforts is still raging on the eve of the congress, reflecting deep divisions within Beijing. One controversy is whether the People's Bank of China, the central bank, should purchase the new special treasury bonds directly from the finance ministry, effectively printing money to bankroll government spending. Liu Shangxi, a researcher affiliated with the finance ministry, argued that the central bank could afford to buy 5 trillion yuan worth of special bonds, but his idea has been strongly opposed by other economists, including Ma Jun, an academic member in China's monetary policy committee. Ma argued that the "monetisation" of fiscal policy was dangerous because it could erode the nation's fiscal discipline by creating the expectation of open-ended support from the central bank. There are also heated discussions on how Beijing should allocate its stimulus package. For now, the government is relying on its old playbook of showering money on local governments and the state banking system, hoping increased spending on infrastructure and an ample supply of bank credit will trickle down to small businesses and households. In a sharp contrast to the US, where the government is handing out cash directly to households, the Chinese government's direct aid to small businesses and households has been limited. The state-run unemployment welfare system, for instance, had given benefits to only 2.3 million people at the end of March, with most unemployed Chinese unable to access relief. Zheng Bingwen, a researcher at the Chinese Academy of Social Sciences and a member of the Chinese People's Political Consultative Committee, has submitted a proposal to the government calling on the government to significantly expand unemployment benefit coverage. Xu Hongcai, a non-resident senior fellow at the Centre for China and Globalisation, a think tank in Beijing, said it was time for China to provide direct subsidies to employers so that they can avoid laying off employees. The Chinese government could subsidise 30 per cent of salaries for a given period to protect jobs, Xu said, similar to Hong Kong where the government is offering monthly support of up to HK$9,000 (US$1,200) per employee for a period of six months. The ongoing debates partly reflect the inherent contradictions in Beijing's economic policies. For instance, China's increased spending on infrastructure, a necessary step to keep its economy afloat, is set to amplify the debt burdens and financial risks at local government level, ratings agency Moody's warned in March. China has also pumped liquidity into the banking system, pushing banks to lend more to small businesses. But demand for bank credit from small businesses is weak and loan risks are high due to the state of the economy, leading to some funds being funnelled into property speculation. Hu Xingdou, a Beijing-based independent economist, said the coronavirus has provided fresh incentive for China to give the state a bigger presence in the world's second largest economy, which could be damaging in the long run. "It seems there's a growing view that a big government can solve all problems, and many are taking China's state-led model as an advantage in the pandemic," Hu said. "But if the government gets bigger and bigger … and it has to manage everything, it's actually run against the trend toward market liberalisation." ^ top ^

How should Chinese govts tighten its belt for a tough fiscal year? (Global Times)
China's newly released Government Work Report has made clear that governments at all levels must tighten their belts to lead a prudent fiscal year amid economic pressure caused by the coronavirus pandemic. Although China had prepared for a prudent fiscal situation in previous years, now the critical aim is to achieve sustainable fiscal allocation and government operations while continuing to serve overall economic and social development, which will require a package of rational choices. For starters, Chinese governments need contributive financial management with a clear perspective of the overall situation, as well as innovation and responsible consciousness. The imbalance of financial revenue and expenditure is a reflection of the various contradictions in the operations of the national economy. No matter how difficult, allocation needs to be focused on serving overall development. China needs to conquer the fallout of COVID-19, lead the new normal and achieve high-quality development despite challenges like the China-US trade war. Secondly, a prudent fiscal arrangement needs practical financial management to increase incomes and reduce expenditure through reasonable management approaches. It is important to simultaneously promote a reasonable cultivation of financial resources in terms of expanding incomes and prudently planning expenditure with optimized structures. Additionally, smart financial management with a reasonable implementation of policy instruments is also important amid a prudent fiscal year, in which fiscal deficits and the issuance of public debt need to be promoted particularly. These two measures used to be regarded as insufficient financial management but are now neutral policy instruments. The important question is how China can reasonably use the tools to cope with the imbalance of incomes and expenses. A prudent fiscal policy requires innovation in financial management, strengthening institutional reform to gain multiplier effects during the implementation of the policy so as to achieve goals with lower investments. Finally, the prudent fiscal arrangement needs to enhance coordinated financial management to roll out fiscal policies in line with monetary, industrial, regional and income allocation policies, speeding up overall collaboration to support high-quality development. The report noted that governments have to overcome formalism and bureaucratism to cultivate new energy. On the basis of a prudent fiscal arrangement, it needs to root out formalism and bureaucratism, promote institutional reform and innovation, and boost personnel enthusiasm in administrative systems through deepened reforms. The report also stated that local administrative department employees should be encouraged to do practical work, take on responsibilities and make contributions, so as to improve the overall performance of the entire government management system. ^ top ^

China can once again be catalyst for recovery (China Daily)
What is the significance of the second-largest economy in the world steadily recovering and setting no specific economic growth target for 2020? For the first time since 2002, when China began publishing its GDP goals, the Chinese government has not set a target for the year. While delivering the Government Work Report at the opening of this year's third session of the 13th National People's Congress in Beijing, Premier Li Keqiang said, "We have not set a specific target for economic growth this year." Instead, the government has made "proper adjustments to the targets that we were considering before COVID-19 struck" and "given priority to stabilizing employment and ensuring living standards", Li said. Amid the COVID-19 crisis and the resulting economic woes, with China still facing daunting domestic and external challenges, the country's adjustment of economic targets for 2020 is a wise and pragmatic decision. This shows that the Chinese leaders' top priority is not the GDP, but social welfare, public health, employment, national unity and stability. With the global economy slowing down because of the pandemic and other negative geopolitical factors, how China is going to cope with these issues has become crucial for the future of mankind. If the resilient Chinese people and the pragmatic leaders can overcome tough domestic and external challenges to ensure economic development, social stability and strong unity, China would again become a catalyst for world economic recovery, similar to what happened in 2008. Since China is the world's biggest trading nation, doing commerce with more than 120 countries and regions, and is the largest consumer market, with 1.4 billion people, and is a global leader in technology innovation and applications, the continued stability of its economy and foreign trade will have far-reaching benefits for all countries and companies. China is now a source of hope for global recovery, and is looked upon as a catalyst for global recovery. Hopefully, the China-proposed Belt and Road Initiative will continue steadily in order to help modernize infrastructure, upgrade communication, boost global trade and promote international cooperation. During this global crisis and the rise of ugly protectionist politics in some societies, a stable China can boost trade and multilateral cooperation. Whether in the United Nations, the World Trade Organization, the World Health Organization or other organizations, a stable China can contribute to a global dialogue and consensus. A recovering and stable China will also have a profound global impact due to its crucial links with the world's largest economy, the United States. Despite some mistaken notions of some US politicians defaming and demonizing China for narrow, partisan purposes in their election year, China, as the largest foreign holder of US Treasury securities has, for years, helped finance the federal government debt and helped in keeping US interest rates low. As the US' biggest merchandise trading partner and the biggest source of US imports, China has helped keep US consumer prices low. Since China is the third-largest US export market, China's economic stability and recovery will have a positive impact on the US economy, which is reeling under a public health crisis and worsening recession. In terms of containing the pandemic, a recovering Chinese economy will have more capabilities and resources to help other countries in fighting COVID-19, whether as a supplier or a donor. China has become the world's top exporter of crucial medical supplies, having exported more than 21 billion face masks since March, in addition to personal protective equipment and ventilators. During the pandemic, China should also increase its exports of traditional Chinese medicine, with its thousands of years of history and heritage, for public health worldwide. ^ top ^


Eleanore Sun
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.
Page created and hosted by SinOptic Back to the top of the page To SinOptic - Services and Studies on the Chinese World's Homepage