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
  23-27.8.2021, No. 880  
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Swiss resorts miss tourism revenue from Asia (China Daily)
Switzerland's tourism industry has been hit hard by the novel coronavirus pandemic, with virus-related travel restrictions effectively ending visits from Asia. The mountainous, landlocked European nation has aggressively marketed itself in Asia in recent years, after its strong currency made it less attractive to fellow Europeans. The campaign led to it selling 1.8 million nights of accommodation to Chinese tourists in 2019, which was 400 percent up from a decade earlier. However, Switzerland has become a victim of its own success. In a Financial Times report, it said destinations that recently drew 70 percent of their visitors from Asia now sit largely empty. ^ top ^


Foreign Policy

Xi holds phone conversation with Putin (Xinhua)
Chinese President Xi Jinping held a phone conversation on Wednesday with his Russian counterpart, Vladimir Putin. In the conversation, Xi said since the beginning of this year, China and Russia have taken the celebration of the 20th anniversary of the signing of the China-Russia Treaty of Good-neighborliness and Friendly Cooperation as a new starting point to promote strategic coordination and comprehensive practical cooperation between the two countries. The series of new achievements in this regard provide significant support for the development of both countries and play a pivotal role in uniting the international community to overcome difficulties, he said. The two countries should explore new ways of cooperation, expand cooperation areas and work to achieve more cooperation results, Xi said. Currently, the COVID-19 pandemic waves ebb and flow, presenting the international community an arduous anti-pandemic task, Xi said, noting that China is ready to work with Russia to deepen cooperation on vaccine development and production and ensure the safety and stability of the global supply chain for vaccines, so as to protect the lives and health of the two peoples and contribute to the building of a community of common health for mankind. Only the wearer knows whether the shoes fit or not, Xi stressed, saying that it is the people of the two countries who have the most say about which system works in their own country. As comprehensive strategic partners of coordination for a new era, China and Russia should deepen cooperation against interference and firmly hold their respective national future in their own hands, Xi said. China firmly supports Russia in pursuing a development path that suits its national conditions, and firmly supports Russia's measures to safeguard its national sovereignty and security, Xi said. The two sides should take the opportunity of the 20th anniversary of the establishment of the Shanghai Cooperation Organization (SCO) this year to work in joint effort with other SCO members to strengthen solidarity, coordination and mutual support so as to safeguard the security and development interests of countries in the region, Xi said. The two leaders also had an in-depth exchange of views on the situation in Afghanistan. Xi stressed that China respects the sovereignty, independence and territorial integrity of Afghanistan and adheres to the policy of non-interference in its internal affairs, and has played a constructive role in resolving the Afghanistan issue via political means. Xi said that China stands ready to strengthen communication and coordination with Russia and the broader international community to encourage all factions in Afghanistan to build an open and inclusive political structure through consultation, implement moderate and prudent domestic and foreign policies, thoroughly dissociate from all terrorist groups, and maintain friendly relations with the rest of the world, especially neighboring countries. For his part, Putin said the Russian side is satisfied with the development of Russia-China relations. This year bears special significance for bilateral ties as it marks the 20th anniversary of the signing of the Russia-China Treaty of Good-Neighborliness and Friendly Cooperation, he added. He recalled that 76 years ago, Russia and China made tremendous national sacrifices for and decisive contributions to the victory of the World Anti-Fascist War. Under the current circumstances, Putin added, the two sides should intensify strategic coordination, firmly support each other, safeguard the victory of World War II and defend historical truth. He said Russia firmly adheres to the one-China policy, unswervingly supports China's legitimate positions of safeguarding its core interests on issues related to Taiwan, Hong Kong, Xinjiang and the South China Sea, and resolutely opposes any external force interfering in China's internal affairs. Russia, he added, is opposed to the politicization of COVID-19 origins tracing, and hopes to work with China to continuously deepen practical cooperation in various fields and strengthen collaboration against the pandemic. On Afghanistan, Putin said that the evolving situation in the country shows that the policy adopted by external forces to impose their political models upon others does not work, and will only bring destruction and disaster to the countries concerned. Noting that Russia and China share similar positions and common interests on the Afghanistan issue, the president said his country is willing to work with China to intensify communication and coordination, actively participate in relevant multilateral mechanisms, and push for a smooth transition of the situation in Afghanistan. He also called for concerted efforts to fight against terrorism, cut off drug smuggling, prevent spillover of security risks arising from Afghanistan, resist intervention and disruption by external forces, and safeguard regional security and stability. The two sides agreed that given the complex and evolving international and regional situation, it is very important and necessary for China and Russia to maintain timely communication on major bilateral and multilateral issues. They also agreed to maintaining close contact in various ways. ^ top ^

China, the Taliban and the threats from the illegal drug trade (SCMP)
China could offer farmers in Afghanistan help with alternative crops to opium poppies to try to counter threats to China posed by the Central Asian nation's continued dependence on the illegal drug trade, Chinese analysts suggested. Trafficking in poppy-based drugs and methamphetamine remains the Taliban's largest single source of income, according to various estimates, and is likely to remain so with the prospect of international sanctions on the militant group. In the past, one of the main routes for heroin from Afghanistan entering China was via Pakistan and China's western province of Xinjiang. Wang Jinguo, an international affairs expert with Lanzhou University, said China needed to focus on ensuring the trade was not revived in the aftermath of the US pull-out from the Central Asian state. "After the US withdrawal [from Afghanistan] China's anti-narcotics agencies need to pay close attention to preventing drugs from Afghanistan flowing into China through the northern route again," state news agency Xinhua quoted Wang as saying last month. The United Nations Office of Drugs and Crime said in June that Afghanistan accounted for around 80 per cent of global opium and heroin supplies. Afghanistan generated between US$1.2 billion and US$2.1 billion in income from consumption, production and exports of opiates in 2019, the office said. The trade has proved lucrative for the Taliban, with the UN Security Council saying in June that the militant group collected about US$460 million in taxes from opium growers last year. Since entering Kabul and taking power in Afghanistan this month, the Taliban has vowed that the new government will not turn the country into a fully-fledged narco-state. But Zhu Yongbiao, an expert on Afghanistan issues from Lanzhou University, said the Taliban would struggle to live up to its commitments to stamp out the illegal drug trade in the country, especially with the loss of international aid and the likelihood of sanctions. "Drug control is closely related to the sanctions imposed by the international community and the freezing of assets," Zhu said. "I don't think it can be solved despite the government ban [on heroin], or to say it's impossible to be resolved in a short time." World leaders are expected to consider new sanctions on the Taliban when the G7 group of advanced economies meet on Tuesday to discuss the crisis in Afghanistan, according to Reuters. Afghanistan is a cash economy and its currency, the afghani, was propped up by regular bulk shipments of US dollars from abroad every few weeks to Afghanistan's central bank. Those funds are drawn from some US$9 billion to US$10 billion in foreign currency and gold reserves as well as liquid assets such as US Treasury bonds, according to Ajmal Ahmady, former head of the country's central bank, who escaped from the country. The United States froze roughly US$9 billion in assets belonging to Afghanistan's central bank. And the International Monetary Fund said last week that Afghanistan would no longer be able to access the lender's resources. Aid flows represented 42.9 per cent of Afghanistan's US$19.8 billion gross domestic product last year, according to World Bank data. In an academic paper published in May, Luo Yi, a professor from Sichuan University, warned that if drug smuggling in Afghanistan could not be contained, the security of neighbouring countries, including China, would be challenged. China's Belt and Road Initiative would also be affected, Luo said. "In this sense, the drug smuggling problem in Afghanistan is directly related to China's major national interests," she said. Zhu, from Lanzhou University, said there was a danger that the link between drugs and terrorism could be strengthened. "A hidden danger is the forces involved in drug trafficking might collude with extremist terrorism forces," he said. Yang Shu, former dean of Central Asia studies at Lanzhou University, said it was uncertain whether the Taliban would ban poppy growing but China could contribute to a solution. "China can help them engage in alternative planting to grow economic crops, and help train their personnel about anti-drug technology," Yang said." ^ top ^

Type 055 large destroyer enters Sea of Japan, 'sends warning to militarists' (GT)
The Chinese People's Liberation Army (PLA) reportedly dispatched a powerful naval flotilla led by a Type 055 large destroyer to the Sea of Japan for the second time this year on Sunday, a move Chinese military experts said on Tuesday will send a warning to Japanese right-wing forces and militarists. The move came after some Japanese senior politicians recently honored World War II war criminals at the Yasukuni Shrine and the country released a defense paper that provoked China on questions involving the island of Taiwan and the Diaoyu Islands. With more Type 055 large destroyers entering service with the PLA Navy, similar voyages are expected to become frequent, analysts said. The Japan Maritime Self-Defense Force spotted a PLA Navy flotilla consisting of three warships, namely the Type 055 guided missile destroyer Nanchang, the Type 052D guided missile destroyer Guiyang and a Type 903A comprehensive supply ship with the hull number of 903, which passed through the Tsushima Strait and sailed toward the Sea of Japan on Sunday, Japan's Ministry of Defense Joint Staff said in a press release on Monday. China had yet to announce related information as of press time. This was the second time a Type 055 large destroyer entered the Sea of Japan. The first time was in March, when the Nanchang took a similar route together with the Type 052D guided missile destroyer Chengdu and the Type 054A guided missile frigate Daqing, according to the Japanese defense authority. The Chinese warships entered the Sea of Japan on March 18 and left on March 25, marking an eight-day exercise in the region. With outstanding performance and combat capabilities, the 10,000 ton-class Type 055 large destroyer can frequently conduct maritime missions, leading other warships in a flotilla, Wei Dongxu, a Beijing-based military expert, told the Global Times on Tuesday. By holding exercises in the Sea of Japan, the warships will boost their joint combat capabilities in the far sea, Wei said. A Type 054A frigate accompanied the Nanchang in its first voyage in the region, and this time it was replaced by a Type 903A comprehensive supply ship. This means the PLA Navy could be experimenting with different combinations and tactics, and with the supply ship, the group could operate for an extended period, another Chinese military expert told the Global Times on Tuesday, requesting anonymity. The Type 055 large destroyer can also play vital roles in an aircraft carrier task group, the expert noted. A second voyage to the Sea of Japan could also be an indication that similar training activities could become routine, the expert said, noting that the PLA Navy has commissioned its second and third Type 055s, the Lhasa and the Dalian, this year, with more to come. The PLA naval flotilla's latest Sea of Japan voyage comes shortly after Japanese Prime Minister Yoshihide Suga sent an offering to the Yasukuni Shrine, which honors Class-A convicted war criminals in World War II, on August 15, the 76th anniversary of Japan's surrender. Some Japanese senior politicians recently also visited the shrine, and Japan's latest defense white paper for the first time mentioned the stability of the island of Taiwan and again hyped the situation of the Diaoyu Islands. Wei said that many Japanese politicians still do not have a clear understanding on the history of World War II, and the Chinese military's display of its capabilities could serve as a warning and deter the Japanese right-wing forces and militarists. With advanced weapons and equipment like the Type 055 large destroyer, the PLA is fully capable of safeguarding national sovereignty and territorial integrity, no matter if it comes to the island of Taiwan or the Diaoyu Islands, or if foreign forces interfere, analysts said. With a displacement of more than 12,000 tons, the Type 055 is a guided missile destroyer about 180 meters long and 22 meters wide. It has 112 vertical launch missile cells capable of launching a combination of surface-to-air missiles, anti-ship missiles, land-attack missiles and anti-submarine missiles. The warship is also endowed with the capability to gain strong situational awareness, media reports said previously, leading analysts to say that the Type 055 is one of the world's most powerful warships, if not the most powerful. A total of eight Type 055s have reportedly been built, with three known to have entered service. As the first entry to the Type 055-class, the Nanchang entered service in January, 2020, the second ship Lhasa in early 2021, and the third ship Dalian on April 23, 2021. The Nanchang and the Lhasa are in service with the PLA Northern Theater Command Navy, and the Dalian is commissioned into the PLA Southern Theater Command Navy. ^ top ^

China-US relations: Beijing hits out at American credibility as Kamala Harris moves to reassure Asia (SCMP)
China accused the United States of losing credibility in its foreign policy following its chaotic withdrawal from Afghanistan, as US Vice-President Kamala Harris tried to reassure Asia of Washington's commitment to the region. Harris' trip to Singapore and Vietnam this week comes during the first major foreign policy crisis of President Joe Biden's administration. In particular, Harris' expected arrival in Vietnam on Tuesday stirred comparisons between the frantic evacuation following the fall of Kabul last week and America's humiliating withdrawal from Saigon in 1975. While in Singapore, Harris outlined the Biden administration's Indo-Pacific strategy and its shifting focus to the region. Harris said Washington's vision was one of "peace and stability, freedom on the seas, unimpeded commerce, advancing human rights, a commitment to the international rules-based order and the recognition that our common interests are not zero sum". She also criticised Beijing's vast claims and actions in the South China Sea as undermining the rules-based order and threatening "the sovereignty of nations". But Chinese foreign ministry spokesman Wang Wenbin said on Tuesday that America's abandonment of its Afghan partners undermined its reliability for allies and the world. "What is currently happening in Afghanistan has clearly shown the world what truly are American-led rules and order," Wang said. "The US can recklessly conduct military intervention against a sovereign country without taking responsibility for the people of that nation," he continued. "The US can come and go whenever they wish without consulting the international community and not even its allies. "The US has always used rules and order to justify its selfish and bullying behaviour. But how many people would still trust it now?" But Wang said China was willing to maintain communication with other members of the Asia-Pacific Economic Cooperation (Apec) forum, including the US, after Harris said Washington wanted to host the 2023 Apec meeting. Harris arrived in Singapore on Sunday and was expected to leave for Vietnam late on Tuesday. Her two-nation tour, although overshadowed by the crisis in Afghanistan, carries an outsized significance in trying to convince Southeast Asia of the US' commitment to the region. The withdrawal of American troops from Afghanistan has triggered concerns about whether Washington will withdraw its commitment from the Indo-Pacific region. China has lashed out at Washington for creating chaos in Central Asia, but Washington said it remained committed to the region's affairs. Biden is yet to speak with any Southeast Asian leader. Several of the ambassadorial posts in the region, including the one for Asean, remain vacant. In her speech on Tuesday, Harris said the US would "invest our time and our energy to fortify our key partnerships, including with Singapore and Vietnam". But she also indicated that the US was well aware that Asian nations were disinterested in engagement based on a "zero sum" mentality, insisting that the US' engagement in the region did not target China. "Our engagement in Southeast Asia and the Indo-Pacific is not against any one country, nor is it designed to make anyone choose between countries," she said. ^ top ^

China to offer 'genuine' aid in Afghanistan's economic reconstruction amid chaotic transition (GT)
As Taliban take steps to stabilize the situation and pursue international recognition, Chinese state-owned enterprises (SOEs) and private firms are employing different investment strategies in the war-torn country, with the former exercising extreme caution in carrying out new projects and the latter eager to tap into a market where "a thousand things wait to be done." While the wait-and-see approach is a result of SOEs weighing up both political security risks and China's national strategy, the boldness of risk-taking private firms also underscores China's successful diplomacy with the Taliban, which lays the foundation for the safe and smooth operation of Chinese businesses in Afghanistan. Chinese private firms are set to stand firm in Afghanistan, despite Western governments' potential sanctions on the Taliban, a move that maliciously aims to advance Western geopolitical objectives and stifle China's economic interests, said industry insiders. Chinese players' economic engagement - in contrast to some Western media's hype of "exploiting" Afghanistan's rich mineral deposits after the US withdrawal - could deliver genuine investment and technical support to Afghanistan, aiding it in economic reconstruction after the current chaos, analysts said. Most SOEs that have a presence in Afghanistan have been assessing the Taliban's new policies and drawing up response plans, the Global Times learned. A spokesperson of a state-owned enterprise, who spoke on condition of anonymity, told the Global Times on Monday that their moves in Afghanistan "will be in line with Chinese national strategy," regarding the impact of a reported Western-led sanction on Taliban. The company has built a highway for Afghanistan and construction was completed two years ago. On Sunday, US President Joe Biden said that the decision on sanctions against the Taliban will "depend on their conduct." The UK is reportedly pushing for sanctions against the Taliban at a G7 meeting that is scheduled to take place on Tuesday. Chinese businessmen and observers said the possible sanctions may include travel restrictions, limiting the raising, use and flow of funds, international recognition, and dealings with businesses with other countries. In the worst case scenario, it could cut companies operating in Afghanistan off from the global banking system - as is the case of how the West is sanctioning Iran, which could be the "last straw" that forces big Chinese companies out of the country, analysts said. "Without policy guidance, investing in Afghanistan is highly risky and not cost-effective. For example, the funds for building the highway project were loaned from the Asia Development Bank, but we didn't even earn a penny," the spokesperson noted. An employee of China Metallurgical Group Corp (MCC Group) also told the Global Times on Monday that the company is evaluating possible sanctions by US and other G7 countries. The copper mine project in Mes Aynak, for which MCC Group won exploitation rights in 2007, is one of the high-profile Chinese investment projects in Afghanistan. The mining project has yet to commence due to two decades of chaos caused by US military occupation, as well as the necessity to remove landmines, and only a few dozen staff in a local research base were there to carry out preparation work, according to the employee. "We have been engaged in the construction of Afghanistan for years. But [the sanctions] are something beyond our scope as an enterprise," the employee said, listing it as another concern besides the security issues. The MCC Group staff member added that he hoped that with the power transition, the new leadership will announce measures to resume and push forward the project. While China's large-sized state investment in Afghanistan is seeing a freeze amid lingering political instability, Chinese private entrepreneurs are displaying a more moderate attitude, particularly after the Taliban leadership offered an olive branch that has assured small- and medium-sized Chinese investors. "We saw Taliban members in every street and block... When they heard about business hurdles in China Town, they would send higher-level officials, asking about the difficulty and how they could help. They say that Chinese people are friends, and should not be afraid to ask if they run into any trouble," Yu Minghui, director of the China Arab Economic and Trade Promotion Committee, told the Global Times on Monday. Located in capital Kabul, the China Town was set up in 2019 and is home to dozens of factories producing shoes, clothes, textiles and cables, some of which have been put into trial operation. Yu was one of the founding members of China Town and has been involved in most Chinese-invested projects in Afghanistan. According to Yu, Chinese businessmen were also informed that the new leadership has vowed to protect investors, as "whoever stayed in the country is helping Afghans." Li Xijing, deputy general manager of the China Town, told the Global Times on Monday that their business plan in the country will not change, "because those projects that the Chinese are involved in are about local people's livelihood", and such issues are fundamental for the Taliban. Li added that that future investment plans in Afghanistan will have to wait until the situation becomes clearer. Cassie, a Chinese employee of the China Town, also told the Global Times on Monday that it will not change its current business decisions, and will expand the company's investment in Afghanistan as previously planned. "We have benefited a lot from our business plans in Afghanistan in the past five years, and we believe the operation will run more effectively after the situation stabilizes." Chinese private businessmen said they are relatively immune to potential Western sanctions and have drawn up backup plans to deal with any possible ensuing impact. Experts also noted that some Western countries' move to impose economic sanctions on Afghanistan is a more of a reflection of their fear of handing over economic possibilities to China rather than any other reason. The US and its Western allies are just frightened and jealous that the "economic vacuum" in Afghanistan will be filled by Chinese firms, Qian Feng, director of the research department at the National Strategy Institute at Tsinghua University, told the Global Times on Monday. Meanwhile, there is not much Western business presence in the country, so sanction won't hurt them much, Li said. Bloomberg said last week that US has frozen nearly $9.5 billion in assets of the Afghan central bank and banned cash shipments to the nation. Analysts said that is quite understandable that Chinese state-owned companies and private firms hold different views on the business prospects in the country. Zhu Yongbiao, director of the Center for Afghanistan Studies in Lanzhou University, told the Global Times on Monday that the Taliban's future regime structure, its economic policy, and its policy on foreign investment are still far from clear, as they are not the Taliban's priorities. "The Taliban's current priority is the stability of the regime and better internal power-balancing," Zhu said. While it is difficult for state-owned companies to deal with instability, there are "a thousand things waiting to be done" for Chinese private firms in economic reconstruction, and they are more adaptable and bold in "fighting for the future," Qian said. Chinese private firms' risk-taking moves are also built on China's flexible and successful diplomatic policy, which paves the way for a stable relationship with the Taliban leadership and provides a solid foundation for Chinese businesses to run smoothly in Afghanistan, analysts said. "There are more opportunities than the extraction of mineral resources. The economic foundation of Afghanistan - including transportation, telecom, industry and agriculture - has all been ruined, and China has the ability to offer a much-needed shot in the arm to help the country generate self-dependent economic drive," Liu Zongyi, the secretary-general of the Research Center for China-South Asia Cooperation at the Shanghai Institutes for International Studies, told the Global Times. Also, as the Taliban moves toward gaining international recognition and eliminating terrorism, China could also include the country, which sits along the Belt and Road Initiative route, into the benefits of the China-Pakistan Economic Corridor, Liu noted. In 2020, Chinese companies had contracts for projects worth $110 million in Afghanistan, a year-on-year increase of 158.7 percent, according to Chinese Ministry of Commerce. ^ top ^

To understand China's plans for Afghanistan, take a look at Somalia (SCMP)
The term "The Great Game" was coined to describe the great power competition between tsarist Russia and the British Empire in Afghanistan during the 19th Century. With the fall of Afghanistan to the Taliban over the weekend, the term is still being used and abused as analysts and others try to divine the future of the country and what other powers might do. China has been one particular point of interest: tongues began wagging as soon as State Councillor Wang Yi met Taliban co-founder Mullah Abdul Ghani Baradar in Tianjin on July 28 and described the group as a "pivotal military and political force". Beijing's statements in the wake of the fall of Kabul, that it "respects the choice of Afghans", will do nothing to quell speculation about China's ambitions. Questions are already being asked about whether the "Graveyard of Empires" will live up to its name by consuming the dragon next. Following the Taliban's return to power in Kabul, the highly-fluid situation will give rise to several degrees of anxiety for Beijing. China shares the same fears that Central Asian countries have over neighbouring Afghanistan: the rise of Islamic terrorism, a new wave of refugees, and increased narcotics trafficking. The proximity of Afghanistan to the US$63 billion China-Pakistan Economic Corridor represents another problem: it is part of what we can term China's "Belt and Road of Anxiety". While there are concerns in China, there are also opportunities. Beijing has made much capital of the fact that its embassy – along with those of several other nations, including Russia and Iran – has remained open despite Kabul's fall. Despite a focus on security interests, Beijing could be calculating that staying in-country could bring future benefits, such as in reconstruction. But speculation that China could play a military role in Afghanistan, including sending troops, are off the mark. In that respect, Afghanistan shares some similarities with another country in China's orbit: Somalia. The African nation is part of a bold Chinese geopolitical bet for a high-risk, high-reward undertaking, and could shed some light on what Beijing could do next in Afghanistan besides promoting an Afghan-led and -owned solution. The activities of terrorist and criminal organisations continue to be a pox on Somalia. Long considered a failed state, Somalia continues to be engulfed by ethnic conflicts, endemic piracy and terrorist activities, and frequent bursts of violence. The effects of climate change are making matters worse – the country is among those most vulnerable to drought in the world. Despite all this, geography is destiny, and Somalia's coast along the strategic Gulf of Aden overlooks one of the world's most-travelled sea lanes. With the Bab al-Mandab chokepoint nearby, Somalia is a pawn in a new "great game" – one that is unfolding in the Horn of Africa. On the Arabian peninsula across the Red Sea, the United Arab Emirates, Saudi Arabia, and Qatar are all strengthening their economic and security relations with Somalia. Turkey is in the mix as well, operating the country's air and seaports as well as training its special forces troops. China, for now, has limited its engagement to diplomacy and economics. Beijing has stuck to its prognosis that economic development is a panacea for any security problem, but that might not last much longer as jockeying for influence continues in the pivotal region. In Somalia, Chinese soft power flows from university scholarships which allow more than 1,000 Somali students to study in mainland China, to Covid-19 aid, among other efforts. Since 2008, China has sent PLA Navy warships to escort commercial vessels, mostly Chinese, to protect them against the pirates that infest the Gulf of Aden. These efforts contain an element of risk: the Jazeera Palace Hotel in Mogadishu was attacked by the militant al-Shabab group in July 2015, resulting in the death of a People's Armed Police officer attached to the Chinese Embassy. China is nonetheless firmly fixed on establishing a footprint in Somalia before the country is stabilised. A key tool for this effort is the use of Chinese private security contractors to protect the country's investments there. The embassy, for example, has contracted its security to local militias. Chinese private security companies in the country for anti-piracy operations and VIP close security protection are eager for a bigger piece of the pie – they are bidding aggressively in Beijing for contracts to provide security for diplomatic staff. Beijing's experiment with private security contractors to lay the groundwork for stabilising Somalia will be a litmus test for its broader participation in Afghanistan. Though Chinese security contractors lack sophisticated equipment or battle-tested capabilities – of the kind deployed by Russian private military companies operating in the African continent – they can provide valuable intelligence to Beijing and a boots on the ground presence that the People's Liberation Army cannot. According to Chinese official statements, there have been clear signs of progress in Somalia over the past few years, and China is eager to benefit from the peace dividend. Beijing is banking on Somalia's return as a maritime logistics hub, thus making it a key component in the Maritime Silk Road component of the belt and road. If the private security contractor blueprint in Somalia continues to move this progress along, Beijing could be encouraged to duplicate this approach in different complex environments, from Afghanistan to the Sahel, that are part of China's Belt and Road of Anxiety. Afghanistan and Somalia share similarities in terms of geostrategic positioning, as well as high risks. The latter could have belt and road credentials in the long run, Afghanistan does not. Nevertheless, one has lessons for the other as both sides affect Beijing's core interests in different ways – Kabul because of its proximity to China's borders and Mogadishu because it is a key node in the belt and road's expansion in Africa. The successful implementation of investments and security stabilisation measures taken in Somalia may well help China kill two birds with one stone. ^ top ^

Roundup: China-Arab States Expo big opportunity to strengthen trade, economic ties: experts (Xinhua)
Egyptian experts see the China-Arab States Expo as a big opportunity and an important platform for promoting trade and economic relations between the two sides. The fifth China-Arab States Expo concluded Sunday in Yinchuan, the capital city of China's northwestern Ningxia Hui Autonomous Region. The four-day event witnessed the signings of 277 deals valued at 156.7 billion yuan (nearly 24 billion U.S. dollars) that covered sectors including digital economy, clean energy, water resources, modern agriculture, green food, cross-border e-commerce and tourism cooperation. More than 1,000 Chinese and foreign enterprises have registered as exhibitors for offline and virtual events at the expo. "The event is a large platform for cooperation between China and the Arab states and for boosting joint economic ties that have been as old as the Silk Road," said Diaa al-Fiqqy, secretary-general of the Egyptian-Chinese Chamber of Commerce. China is the largest trade partner of the Arab countries, and despite the spread of COVID-19, trade exchanges between the two sides remained high, he told Xinhua. According to statistics of the Chinese Ministry of Commerce, China-Arab states' trade volume reached 239.8 billion U.S. dollars in 2020, while China's annual exports to the Arab world increased by 2.2 percent to 123.1 billion dollars last year. "Such cooperation momentum couldn't have been enhanced without holding such expos," al-Fiqqy said, noting the Chinese government's keenness to hold the expo despite the COVID-19 pandemic. This year's event was held both online and offline for the first time due to the pandemic, with the online events being the main focus. China is a sincere country that bears its responsibilities even in times of the pandemic that has crippled a lot of work and led to the cancelation of many economic and commercial proceedings across the world, he said, adding that the two sides' political, economic and trade relations are strong and deep-rooted as they were built on mutual trust. He expected more cooperation within the framework of the Belt and Road Initiative (BRI) which aims at preserving the common interests of the participating parties, many of which are Arab countries. Waleed Gaballah, professor of financial and economic jurisdictions at Cairo University, said that "the China-Arab States Expo has a significant role in enhancing the trade exchange and creating trade opportunities because it focuses on future sectors like e-commerce, clean energy, and advancing the agriculture mechanisms that have a great impact on the commercial process in the coming period." Holding the event both online and offline for the first time mirrored China's willingness to build a stronger economic relationship with the Arab world, said Gaballah, adding the expo also served as a driving force for trade among countries amid COVID-19 repercussions. Gaballah, also a member of the Egyptian Association for Political Economy, highlighted the BRI represents a new way for global trade and that the expo has paid attention to tackling difficulties in trade. Meanwhile, Mostafa Ibrahim, vice-president of the Chinese-Egyptian Business Council, said that cooperation between China and the Arab countries is vigorous, adding that the Chinese government is very interested in large Arab markets with moderate-income consumers. Through the expo, Chinese companies not only are trying to provide their best services and products to Arab clients, but also could better understand the purchasing power of Arab merchants, he said. ^ top ^

The highs and lows of Angela Merkel's long relationship with China (SCMP)
A month after Angela Merkel wrapped up her second state visit to China as German chancellor in 2007, and three weeks before the 17th Chinese Communist Party Congress in October that year, she hosted Tibet's exiled spiritual leader the Dalai Lama at her chancellery in Berlin – a toxic move for relations with Beijing. Merkel gave her hosts no warning of the meeting during her four-day state visit to China, when China and Germany agreed to a three-year series of events marking the 35th anniversary of their diplomatic ties. Relations cooled and Beijing cancelled a human rights dialogue in Berlin later that year. Merkel also refused to attend the opening ceremony of the Beijing Olympics in August 2008. The damage was mended over the years, through intensive visits by Merkel and her cabinet. No other Western leader has travelled to China as many times as Merkel – 12 during the 16 years of her chancellorship – and former premier Wen Jiabao once described her as the politician he trusted the most, "because she always told the truth". Despite the recent barrage of criticism in the West over her pro-engagement policy with China, there is no lack of appreciation for Merkel in Beijing, where officials and experts have labelled her as one of only a few foreign leaders to know China well. "Merkel has stuck to a steady, balanced and pragmatic approach in dealing with China and managed relations largely undisrupted by ideological differences, a style well accepted and highly appreciated by Chinese," said Wang Yiwei, a professor of European studies at Renmin University. With her impending retirement from political life after the German elections on September 26, China is seeing the end of a "golden era" in bilateral relations and bracing for more turmoil and setbacks with Germany and the European Union, according to observers. "We may never see someone like her again," Wang said. Throughout her tenure, Merkel has pursued close economic ties with Beijing while attempting to separate contentious issues in the relationship. The close bilateral ties also led and shaped relations between China and the EU, where Merkel has been the most influential political figure in the bloc. German exports to China rose to US$112 billion in 2020, up fivefold from 2005 when she took office, and China has been Germany's biggest single trading partner since 2016, when it overtook the US. Germany also tops the ranking of foreign technology transfer to China, with a total of US$88.9 billion as of July last year. As part of Merkel's foreign policy legacy, Berlin in 2010 became the first EU country to set up annual cabinet-level consultations and exchanges with Beijing, covering a wide range of issues from the economy, military and security, to human rights. In October 2016 German and Chinese forces held joint drills in Chongqing – the first such exercises to be held in China with a major EU member. A reciprocal joint drill took place in Germany in 2019. But Merkel also raised human rights in her closed-door talks with Chinese leaders and received dissidents at the German embassy during her visits to China. It was through her influence that doctors were able to visit the ailing Nobel Peace Prize laureate Liu Xiaobo in 2017. Merkel also used a trip to Beijing in May 2018 to press for the release of his widow Liu Xia from house arrest, and her relocation to Germany two months later. The relationship has been tested with the rising alarm in Europe over its possible overreliance on China. The takeover of German robotics giant Kuka by China's home appliances producer Midea in 2016 served as a wake-up call, triggering tighter scrutiny on technology investment, particularly from China, in Germany and then the EU. Public opinion in Europe has also turned against China in the wake of the Covid-19 pandemic and Beijing's growing assertiveness. Despite the headwinds, when Germany took over the rotating European Council presidency in the second half of 2020, Merkel spearheaded talks for the landmark investment deal between Brussels and Beijing and pushed for agreement by the end of December. But the deal has been trapped in a stalemate, with relations between China and the EU plunging to a record low in March after Brussels and Beijing exchanged sanctions over claims of human rights abuses in Xinjiang. Merkel has been criticised for her soft stance on China over human rights in Xinjiang and Hong Kong, as well as the issue of 5G market access for Huawei. China had been Merkel's "biggest blind spot", according to an assessment of her foreign policy legacy by researcher Noah Barkin from the German Marshall Fund of the US. "This is not because she failed to see the shift in China's trajectory under Xi Jinping. But she has been slow to acknowledge the risks of this shift for Germany and adjust her policy accordingly," he said in a report published last month. While acknowledging the rising hi-tech competition with China, Merkel has insisted that a sound strategic relationship with China is necessary. "We must not have illusions at this point and we must measure things against the realities," she said in September last year. At the World Economic Forum in late January – immediately after Joe Biden 's inauguration as US president – Merkel endorsed Xi's calls to avoid a new cold war by setting aside ideological differences. She refused to pick a side in the US-China rivalry, while pledging to press Beijing on human rights and transparency. […] Merkel kicked off a series of farewells with visits to Britain and the US in July. She will meet Russian President Vladimir Putin in Moscow on Friday, before holding talks with her Ukrainian counterpart Volodymyr Zelensky on Sunday. But China is not on her overseas trip list after both sides failed to agree on how to manage the pandemic-control bubble arrangement, sources said. Cui said China should not "stay passive" in its relations with the EU, adding that a post-Merkel Germany would not play a role in influencing China-EU relations as it had before. "We should step up relations with other major EU states, just like what we have done with Merkel, meanwhile we need to find a better way to deal with the European Union, this is the new task for us," he said. "We need to seek to keep exchanges on political and diplomatic fronts, make it stable and sustainable, and not let them affect and even negate economic cooperation." ^ top ^


Domestic Policy

China to push forward high-quality development of women and children's affairs (Xinhua)
The State Council's executive meeting chaired by Premier Li Keqiang on Wednesday adopted the Outline for Women's Development in China (2021-2030) and the Outline for Children's Development in China (2021-2030), and required improving support measures for the three-child policy. Gender equality and women's all-round development are important hallmarks of social progress, and children represent a country's future and a nation's hope. Recent years have seen notable achievements the country made in women and children's affairs. "We must put high premium on work related to women and children as it is an important part of our modernization drive and a symbol for social progress. The principle of gender equality and putting children first should be better manifested in social life," Li said. The two outlines set out objectives and measures in health, education, social security and welfare, family, environment, legislation and other areas, and made the following requirements. The basic state policy of gender equality must be delivered. Women's equal rights to education, employment, starting businesses, and participation in decision making and management must be protected. Equal remuneration for men and women for work of equal value will be fully implemented. Public services that support the comprehensive development of families and women will be expanded, and social security system improved to meet women's special needs. Basic support and services for women facing difficulties will be strengthened and the legal system protecting women's lawful rights and interests refined. "There must be institutional arrangements to protect women's rights and interests. Competent departments must provide support," Li said. The two outlines highlight the need to uphold the principle of putting children first. Greater emphasis must be given to the all-round protection of children at the family, school, society and the internet levels. Compulsory education will remain the top priority of education investment. Children's well-rounded development in terms of moral grounding, intellectual and physical ability, aesthetic sensibility, and work skills will be promoted. The health services system for children must be enhanced to ensure the safety of food and products for children. The rights to survival, development and safety, and the interests of orphans, unattended children, children with disabilities and homeless children must be protected. Greater care and protection will be extended to left-behind children of migrant workers, and school bullying must be prevented and effectively dealt with. "There are 250 million children in China. Their healthy development is of vital importance to families and the whole society," Li said. "We should focus our efforts on tackling the prominent issues that constrain the development of women and children's affairs." The two outlines urged updating the support measures in executing the three-child policy. Maternity leave and childbirth allowance will be implemented, and parental leave explored. Public-benefit childcare services will be developed with the support of communities. Expenses for infant and child care services for children under 3 years old will be eligible for itemized extra tax deductions for individual income tax. Housing and other support policies will be strengthened. Multi-pronged steps will be taken to lighten the burden of family in child bearing, child care and children's education. "Support measures for the three-child policy should be carefully studied, to steadily optimize the demographic mix and raise people's educational level," Li said. ^ top ^

China announces massive greening plan to achieve carbon goals (Xinhua)
China plans to plant 500 million mu (about 33.33 million hectares) of forests and grasslands in the next five years -- 100 million mu per year -- to help achieve its carbon emission reduction goals, according to the country's forestry authorities. The task includes planting 54 million mu of trees and 46 million mu of grass each year, said Zhang Wei, head of the ecological protection and restoration department of the National Forestry and Grassland Administration (NFGA). The afforestation plan is part of China's efforts to fulfill its commitment to peaking carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060, as forests and grasslands are important carbon sinks that absorb and store carbon dioxide from the atmosphere. China aims to increase its forest coverage rate to 24.1 percent and its grassland vegetation coverage to 57 percent by 2025, as outlined in the country's 14th Five-Year Plan (2021-2025) on the protection and development of forests and grasslands. The country also aims to raise its forest stock volume to 19 billion cubic meters by the end of 2025, an increase of 1.4 billion cubic meters from last year. The carbon peak and carbon neutrality targets are a huge opportunity for the development of forests and grasslands, as the country eyes the expansion of forest coverage and the improvement of forest quality to facilitate attainment of the climate goals and contribute to global ecological security. China's forest carbon reserves have hit 9.2 billion tonnes, with an average annual increase of over 200 million tonnes over the past five years, which is equivalent to a carbon sink of 700 million to 800 million tonnes, according to NFGA data. The country has created the world's largest planted forests, raising its forest cover from 12 percent in the early 1980s to 23.04 percent in 2020, with its forest stock volume hitting 17.56 billion cubic meters. As a result of sustained forest conservation and tree planting efforts, at least 25 percent of the global foliage expansion since the early 2000s came from China, according to a study published in the journal Nature Sustainability in 2019. In addition to afforestation, Zhang said work will be carried out to improve the quality of forests and their ability to reserve carbon. He said work will be done to protect natural resources to reduce carbon pool loss, and forest bioenergy will be developed. Construction materials such as steel and cement will be replaced with bamboo and timber to cut emissions. Over the next five years, China will also improve its measuring and monitoring of carbon sinks, promote carbon sink trading, and explore ways to build a platform for forest and grassland carbon sink trading, he said. In Inner Mongolia, an important ecological barrier in north China, an average of 600,000 hectares of land have been afforested annually over the past five years, raising the region's forest coverage rate to 22.1 percent. Local forestry authorities in the region's Greater Hinggan Mountains forest area have been piloting a carbon sink trading project since 2014, allowing companies that surpass their emission caps to purchase carbon sinks in the area to offset excess emissions. By April this year, the transaction volume of the carbon sink trade in the area totaled 4.9 million yuan (about 756,114 U.S. dollars). Zhang said that the participation of private capital in the carbon emissions reduction campaign will be encouraged, and the government is ready to help key regions, organizers of major events, enterprises and the public to achieve carbon neutrality with forest and grassland carbon sinks. ^ top ^

China's vision and pursuit of common prosperity (Xinhua)
While embarking on the journey of comprehensively building a modern socialist country, China has envisioned a future where prosperity is shared by everyone in the country. The term "common prosperity" has been brought up several times in key official documents recently. After listing progress in common prosperity in its 14th Five-Year Plan (2021-2025), the country's leadership stressed the need to pursue it and expounded on the term in a meeting last week, bringing it under the spotlight. What is common prosperity? Why does China emphasize it? How will the country achieve it? Here are some explanations. -- What is common prosperity? Common prosperity refers to affluence shared by everyone both in material and cultural terms, and should be advanced step by step, said the meeting on financial and economic affairs. In particular, it emphasized that such prosperity does not cover only a few people or parts of the country. Rather than being egalitarian at the expense of efficiency, common prosperity should be attained through hard work and innovation, with chances for more people to become wealthy. -- Why does China emphasize common prosperity? Common prosperity is an essential requirement of socialism and a key feature of Chinese-style modernization, according to the meeting. Since the 18th National Congress of the Communist Party of China in 2012, the country has gradually put common prosperity in a more prominent position. Now, with victory in the anti-poverty fight and the completion of the building of a moderately prosperous society in all respects, China has favorable conditions for promoting common prosperity. The goal is also vital to improving people's well-being. As China marches toward its second centenary goal, the focus of promoting people's well-being entails boosting common prosperity, said the meeting. -- How will the country achieve it? To achieve the goal, China vows to establish a scientific public policy system and a reasonable distribution system that benefits everyone. There is a focus on primary and inclusive projects that facilitate people's well-being and guarantee their basic needs. Highlighting the importance of appropriately dealing with the relationship between efficiency and fairness, the country plans to make basic institutional arrangements on income distribution. It also plans to expand the size of the middle-income group and adjust excessive incomes to promote social fairness and justice. Other planned measures include protecting property rights and intellectual property rights, the healthy development of different types of capital, and the advancement of common prosperity among farmers and in rural areas, the meeting said. Actions are already underway. According to a guideline unveiled in June, Zhejiang Province, an economic powerhouse, has been designated as a demonstration zone for promoting common prosperity. Under the guideline, the province will strive to grow its per capita gross domestic product (GDP) to the level of moderately developed economies by 2025 and basically achieve common prosperity by 2035, with its per capita GDP and the income of urban and rural residents reaching the standard for developed countries. ^ top ^

China removes 25 apps as the country cracks down on tech companies to protect citizens' online privacy (GT)
Chinese government has removed 25 apps from mobile app stores for illegal collection of personal information, as the country is ramping up measures to protect citizens' online privacy. The government examined a range of mobile apps, including maps and short videos among other apps with different functions throughout 2021, Xinhua News Agency reported on Saturday. A total of 351 apps were criticized by China's Cyberspace Administration (CAC) for privacy violations and another 25 were removed from the store for "collecting and using personal information in serious violations of regulations," noted the report. The removal follows the legislative announcement on Friday where China passed its first Personal Information Protection Law to be implemented on November 1. Analysts say that this reflects the government's resolution to stand for the wellbeing of Chinese citizens and to crack down on the common practice by technology companies of profiting from private information. "It shows that China is now determined to oppose the long-standing bad habit of companies relying on collecting private information to drive up their own profit," Hu Gang, lawyer of the China Consumers Association, told Chinese finance media Yicai on Saturday, adding that "it also comes to us with the fact that these big platforms cannot interfere with China's legislation." The Cyber Security Law from 2017 and the Data Security Law that will be implemented in September, will create a comprehensive legal framework to regulate the collection, storage and use of personal data by companies, experts said. China's actions to crack down on the illegal collection of personal information have long been traced. In early July, 25 Didi-related apps were removed from the app store for illegal use of users' information, the CAC noted in an online statement on July 9. As early as in 2019, the CAC issued a regulation explaining in detail what constitutes illegal collection of personal information and allows technology companies to collect personal information that is only related to their business. ^ top ^

China reports zero local virus cases after 5-week battle, as Delta outbreak retreats (HKFP/AFP)
China reported no new domestic coronavirus cases Monday, and Beijing appears poised to bring to heel the pandemic's most serious resurgence in months — driven by the highly contagious Delta variant — with mass testing and targeted lockdowns. The latest outbreak, which began in mid-July when cleaners at a Nanjing airport tested positive, is the most severe since Covid-19 first surfaced in the central city of Wuhan. Over a thousand people have been infected across dozens of cities. But Communist authorities reacted with swift localised lockdowns, travel restrictions and mass testing of neighbourhoods with infections as part of their "zero case" approach to the pandemic, which has virtually sealed off China's borders but allowed the economy to rebound. New domestic infections have been falling for over two weeks. On Monday, National Health Commission data showed local infections returned to zero after a five week battle. Meanwhile health experts are attempting to shore up confidence in the country's vaccination drive with leading virologist Zhong Nanshan saying "effective herd immunity" is on the horizon once over 80 percent of the population is vaccinated — a target likely achieved by year-end. Chinese vaccines have nearly 60 percent efficacy against Delta, with antibodies rising with a booster shot, he added. As of Saturday, almost 1.94 billion vaccine doses have been administered, official figures show, although the proportion of vaccinated people is unclear. Officials are using big data to "quickly identify risk areas", isolating high-risk groups in centralised zones and sharing information quickly between regions, Gao Guangming of the National Health Commission told a recent press conference. Beijing has also been clamping down on officials who mishandled local outbreaks, with dozens punished as authorities rushed to contain transmissions. ^ top ^



Shanghai Pudong Airport Suspends Cargo Handling After Two Covid-19 Cases (Caixin)
Shanghai Pudong International Airport, one of the world's busiest airports, halted all freight flights after two staffers tested positive for Covid-19. The first case was a 44-year-old male Ethiopian engineer serving foreign freighters at the airport, and the second was 45-year-old freight worker, local health authorities said Friday. Both are fully vaccinated. All of their close contacts tested negative and were put under quarantine. More than 40,000 people in the city have been tested. Of those, 8,151 tested negative, and the results of the rest are pending. According to current airport quarantine procedures, once an outbreak is found, cargo operations are suspended, and freight terminals are closed for at least 14 days, an air cargo agent told Caixin. Airports around China are lengthening the amount of time some international aircrews and ground staff must spend in quarantine after containment breaches sparked community spread of the highly infectious delta variant in several regions. Overworked airport personnel have emerged as a weak link in local and global efforts to contain the spread of the delta variant, which experts say can be twice as contagious as previous strains. Nanjing, capital of East China's Jiangsu province, was the site of a significant delta outbreak in June when workers at Lukou International Airport and their families tested positive in an outbreak traced to a passenger flight from Russia. The outbreak prompted the mass testing of millions of people and was linked to subsequent clusters in Hunan and Sichuan provinces. ^ top ^



Guangzhou plans more housing to meet demand (China Daily)
Guangzhou, Guangdong province, plans to provide more than 1.31 million urban apartments to meet its housing demand during the 14th Five-Year Plan period (2021-25). According to a development plan for housing in the southern metropolis, the newly constructed housing units will include commercial apartments, public rental housing and co-ownership housing, to meet the needs of more than 3 million new residents. Co-ownership housing refers to homes that are developed or purchased by governments and sold to qualified residents at market prices. Purchasers live in the property after they have paid part of the price, while sharing property rights with the government. The plan was published by the city's housing and urban-rural development bureau on its website on Wednesday. The plan said the housing supply in the central urban areas will increase significantly, housing space will be more optimized and the number of livable communities will increase during the period. By 2025, the targeted per-capita housing area for urban residents in Guangzhou will reach 36 square meters, the plan said. The new housing development plan will help Guangzhou attract new talent and further enhance people's sense of identity and belonging, the plan said. As a mega city with a net population inflow, Guangzhou has faced pressure in recent years to house new residents, it said. The city now has a population of more than 18 million and Guangdong province has 125 million, the most populous region in the country. ^ top ^



China Focus: Tourism boosts rural vitalization in Tibet (Xinhua)
Summer is hot in most parts of China but Nagqu, a city with an average altitude of more than 4,500 meters in southwest China's Tibet Autonomous Region, sees the temperature cool down to as low as three degrees Celsius. The chilly climate has made a local hot spring a popular destination for many, including Karma Dorje, a Nagqu native who paints Thangka in the regional capital of Lhasa. "Bathing in the hot water improves blood circulation. The pimples on my face have gone," said the 26-year-old, who comes to the hot spring every three days whenever he returns home. By utilizing natural and cultural resources, many areas in Tibet have developed rural tourism, bringing tourists as well as additional income to farmers and herders, which helps boost rural vitalization. With the water temperature around 60 degrees Celsius, the geothermal hot spring in Tonglung Village, Nagqu's Nyainrong County, is one of the highest in altitude in the world. The village has established a cooperative for the hot spring operation, receiving some 10,000 tourists from the city and nearby counties every year, according to Chophe, head of the village. The cooperative granted 12,000 yuan (about 1,850 U.S. dollars) per household to 75 households of the village last year as a dividend. A total of 35 villagers, including formerly impoverished ones, work in the cooperative. "With my job at my doorstep, I can finally take care of my ailing mother at home," said Chimed Wangmo, 20, who used to work in Nagqu City. By working as a cashier and cleaner in the cooperative, she earns 2,500 yuan a month now. In Tashi Chodan, a community known for Tibetan opera in the city of Shannan, a troupe of more than 30 performers act for tour groups from across the country every day. Tibetan opera combines talking, singing, acting, dancing, and literature and has a history of over 600 years. It is regarded as a "living fossil" of Tibetan culture and was included in the UNESCO Representative List of the Intangible Cultural Heritage of Humanity in 2009. "At the peak season, we have six to seven performances a day. The monthly income can be more than 2,000 yuan for performing alone," said 38-year-old Purbu Kelsang, a local farmer. To accommodate the tour groups, 58 households of the village are engaged in homestay businesses. Local villager, Dawa, 63, no longer has to toil at construction sites in cities. With his homestay of eight beds, he earns more than 30,000 yuan a year. He provides buttered tea free of charge and plays flute for his guests which is welcomed by them. "They like my home a lot. Some of them called when they returned home, promising that they will come every year," he said, adding that his tourists are from provinces like Anhui, Hubei and Hunan. In 2020, the per capita net income of the community reached 24,000 yuan, up 13.1 percent compared with the previous year. Wang Huadong, executive vice mayor of Shannan, said the city government has planned to help introduce a third-party company to help the community develop rural tourism more professionally. "The third-party company may be responsible for leasing nearby farmland from villagers, and turn the barley plots into galsang flower fields to attract more tourists," he said. In Tibet, rural tourism had created, directly or indirectly, 86,000 jobs for local farmers and herdsmen, resulting in an increment in annual per capita income of 4,300 yuan by 2020. Optimistic about the prospect of tourism, Tonglung Village is expanding the hot spring cooperative, with three more pools being built. The village has planned to make the resort a comprehensive venue that covers tourism, recreation and accommodation to generate more income for villagers. Nyima Degyi, deputy head of Nyainrong County, said a national highway section passing by the county is under construction. "The section linking Zadoi County, Qinghai Province, and Nagqu, will definitely bring more tourists here," she said.  ^ top ^



Beijing delegation's visit to Hong Kong much more than a briefing on economic development (SCMP)
At first glance, the high-profile visit by Beijing officials to Hong Kong this week appeared to be simply a series of meetings and forums to discuss China's five-year grand plan, but analysts have said key messages were imparted during the four-day trip. Not only was the central government keen to make known its impatience with the failure of local officials to push forward policies from Beijing's perspective, the city's administration and legislators were told they should act in concert with the central government and scrutinise relevant laws that benefit cross-border economic development under the "new political climate". Leading the delegation, deputy director Huang Liuquan of the State Council's Hong Kong and Macau Affairs Office (HKMAO) made several telling speeches over the four days. Addressing senior officials and lawmakers on Monday, Huang pointed to the "great responsibility" local leaders had, not only to govern and develop the city, but also to improve residents' quality of life. While integration with the five-year plan required the city's officials to align their thinking with Beijing's, he said, alignment went beyond convergence in policies and market practices. In the forums, which included an unprecedented session at the Legislative Council, Huang and Luo Huining, director of Beijing's liaison office in Hong Kong, warned the city must pick up the pace of its economic development. The speed of integration with mainland China must increase, they said, adding too much time had already been wasted on endless politicking and infighting. Senior officials said these warnings proved how the relationship between Hong Kong and the mainland had changed over the years. Long considered the world's freest economy, Hong Kong has been on a learning curve over its role in national development following its return from British to Chinese sovereignty in 1997. In the past decade, however, Hong Kong has been striving for greater integration with the vast, fast-growing and often aggressively capitalist market across the border, amid fears and warnings that the city may otherwise be marginalised. A senior local official, who has a working relationship with mainland authorities, said while Hong Kong authorities and community leaders might be enthusiastic about economic integration with the mainland at a policy level, they were often perceived in Beijing as being unable to see the big picture. "The central government's impatience may be more of a feeling that Hong Kong people, including senior officials, don't often see their work from the perspective of the central government's grand blueprint, and therefore have not done enough political work to align Hong Kong's interests with those of the central government," the official said. A Hong Kong finance official said the city's leader, Carrie Lam, and other high-ranking office holders might be well aware of Beijing's expectations, but civil servants, the business sector and the public were not responsive enough, which was why Lam invited mainland officials to come and "provide directions directly". "In the past few years, there has been increased cross-border cooperation, such as the launch of the northbound Bond Connect scheme, and ongoing discussions on the southbound plan, but it seems only the finance sector knew what was going on, and the public were largely not involved," the source said. "Now at least all officials and all legislators took a lesson. There will be only more top-down instructions in the future. This was just a trial." Passed in March, the 14th five-year plan, a national blueprint for the new era, has dedicated a chapter to outlining strategies to support the development of Hong Kong, with the focus on enhancing the city's competitive advantages in all spheres of economic activity, and helping it better integrate with the overall development of the country. A pro-Beijing heavyweight, who attended one of the forums, said all officials and lawmakers should get used to the "new political climate". "It's so explicit that the central government is demanding cooperation from the Legislative Council, and these talks and conversations are proving to us that we should put 'one country' higher than 'two systems' when we discuss any new legislation and law amendments," the person, who preferred to stay anonymous, told the Post. The politician said one of the more direct messages from the mainland delegation was one made by Zhou Chengjun, the director of the People's Bank of China's Finance Research Institute, who suggested Hong Kong, as home to the largest pool of offshore renminbi deposits, enjoyed "the best conditions" to offer tailor-made products in the currency for global markets. Arrangements for this high-level visit were also starkly different from those of other HKMAO leaders in previous years. It was the first time that the session between officials of both governments was formally called "a briefing". Previous meetings were referred to as "seminars", including the one led by Zhang Xiaoming, the office's deputy director, when he visited in March to gauge views on the electoral overhaul, which is designed to ensure only patriots can govern Hong Kong. All of the three sessions were hosted only in Mandarin, with officials from the National Development and Reform Commission giving lengthy speeches on national policies for the first time. Only members from pro-establishment business and youth groups were selected to attend the other two separate briefings with the mainland officials. In 2011, the then HKMAO director, Wang Guangya, invited opposition lawmakers to join hundreds of other attendants at a lunch. Speaking on condition of anonymity, a Hong Kong government information officer said that in the past, Beijing's liaison office would discuss various arrangements with their local counterparts before a major event involving mainland officials, but the practice had changed this time. "The liaison office refused to explain the media arrangements to us before we got to the site," the officer said. "That's a new normal we have to adapt to." Fang Zhou, research director of the One Country Two Systems Research Institute, a Hong Kong think tank, disagreed with the assessment that the two senior mainland officials' remarks showed Beijing's impatience with Hong Kong. But Fang said until recently, the local government seldom promoted economic development from the perspective of easing growth of a particular industry. "Hong Kong officials should have a better mastery of the nation's policies on economic and social development so as to complement the nation's economic development strategies," he said. Fang added that Huang's delegation highlighted Beijing's high expectations for Hong Kong after the imposition of the national security law in June 2020. ^ top ^

New censorship law will empower Hong Kong's no.2 official to retroactively ban movies (HKFP)
Hong Kong's chief secretary will be able to retroactively revoke the certification of films based on national security grounds, according to amendments to the Film Censorship Ordinance proposed by the government on Tuesday. Under the planned update, the maximum punishment for anyone who shows an unlicensed movie would be raised to three years of imprisonment and a HK$1 million fine. The bill will be handed to the Legislative Council for its first and second reading next Wednesday. The amendments would also "set out explicitly that a censor should consider whether the exhibition of a film would be contrary to the interests of national security." In cases of an appeal against a decision made by censors, the Board of Review (Film Censorship) will not be able to review decisions made on national security grounds. However, Secretary for Commerce and Economic Development Edward Yau said that the decision-making process would still be restricted by judicial reviews. "Because it is related to national security, we feel that the situation will exceed the areas of the board as they may not have the professional capability to deal with it," said Yau. The government also proposed removing the specified number of non-official members in the board. The bill would also give law enforcement more powers, as permit holders will be asked to provide details of film screenings, such as the date and venue, and inspectors will be allowed to enter and search any locations with a court warrant. The government updated its guidelines in June allowing censors to pull films they deem to be a violation of the national security law. Spokesperson for the Federation of Hong Kong Filmmakers Tin Kai-man told HKFP that the proposed amendments would provide clearer and more specific guidelines, but the industry would need some time to process the amendments. "There will be a sense of vigilance [within the industry], people will be more careful about potential problems, and have considerations that they might accidentally violate the law," said Tin. The spokesperson also said that he guessed that the chief secretary's powers to revoke permits was the government's attempt to "fill a loophole." "Permits issued in the past do not have an expiry date, meaning that a movie can be screened again after its first screening, but the permit was approved before national security law exists," said Tin. "There might be a situation where someone will try to screen an old movie that might be in violation of the national security law, making the government passive and embarrassed in the matter." When challenged by HKFP in June, Hong Kong's Chief Executive Carrie Lam defended the decision to censor films and said the move will not stifle creativity among moviemakers. Lam said Hong Kong enjoys free speech but guidelines on national security were unclear since the security law "was not being fully implemented" with regard to movies. ^ top ^



Gambling Stocks Surge as Macau Eases Covid Test Rules (Caixin)
Gambling stocks jumped Tuesday after Macau eased Covid-19 test requirements for travelers entering from Guangdong province. Starting at midnight Wednesday, people entering Macau from Guangdong must hold negative nucleic acid test results issued within seven days, a relaxation from the 48-hour requirement in place since Aug. 9. People entering Macau from other ports of entry still must have test results issued within 48 hours, according to health authorities. Macau declared a "state of prevention" and tightened cross-border travel rules Aug. 3 after a family of four was confirmed infected with the delta variant of Covid-19. Local health authorities said Monday that the family was still in a hospital in Macau and in good condition. The city has reported no new cases for 20 days since then. Hong Kong-listed gambling stocks including Wynn Macau, SJM Holdings Ltd., Sands China Ltd., Galaxy Entertainment Group and Melco International Development Ltd., surged 7.3% to 10.5% Tuesday. As the only part of China where casino gambling is legal, Macao has relied on mainland visitors to drive its gambling business. Since February, the city's gambling revenue has rebounded from pandemic-led downturn. ^ top ^



US-China trade growth has Australia asking whether WTO can stop 'economic coercion' (SCMP)
Despite vowing to support its ally, Australia, and take a stand against China for perceived economic coercion, the United States has done little to advance its commitment amid a lack of formal mechanisms and international trade rules to facilitate this strategy. Instead, America is even reaping the benefits of Australia's prolonged trade and political dispute with China by capitalising on an increase in Chinese demand for goods that Beijing has banned from down under. The list of Australian goods that China has declared non grata includes wine and coal, and Beijing's unofficial bans of those products, as well as constraints in Australian frozen beef supply, have allowed US exporters to slide in and begin to fill the void. The latest data released by China's customs administration, for July, shows that Australia did not export any coal to China for the eighth month in a row, while the US sold 636,000 tonnes of coal worth US$117 million. Although the US's July exports of coal were less than in June, overall US exports to China remained on an upward trajectory. American exporters have also been selling much more bottled wine to China than Australia has. In July, the US sold China nearly US$3.5 million worth of wine in containers of up to two litres, while Australia sold about US$400,000 worth of the product. Australian wine exports have been suffering from both Chinese anti-dumping duties formally imposed earlier this year – rendering Australia's wine less competitive against other wine exports – along with an unofficial ban imposed by Beijing in November. Beef is the latest to join the list of exports the US taking a lead on at the expense of Australia. Monthly beef exports from the US to China have more than doubled this year, in line with commitments made under the phase-one trade deal signed between Beijing and Washington early last year. This has coincided with a drop in Australian beef exports to China due to lower production. The US surpassed Australia in exports of frozen beef – a trade dominated by Australia for years. American frozen beef exports to China shot past Australia's in May and have continued to climb. China-Australia observers have suggested that Washington is prioritising its own economic interests over those of its ally, despite repeated promises by US politicians to stand with Australia against economic coercion from Beijing. During a visit to the US last month to promote Australian trade amid Australia's coronavirus Delta variant crisis, Australian trade minister Dan Tehan said Canberra and Washington were working together to create new rules for how trading countries should behave with each other. "The US administration has been very clear that they won't leave us on the playing field alone, so we're looking at examining ways that they can help and support us," he said during an interview with Bloomberg on July 23. Ask what, specifically, Tehan is asking the US to do, he said: "Well, for instance, be part of setting new rules in new areas, like when it comes to digital trade; look at how we can cooperate in the World Trade Organization (WTO) to deal with economic coercion … Also making sure that, in the committees of the WTO, we call out economic coercion when we see it, because we're not the only country that's been on the receiving end of economic coercion." When asked if he had broached the subject of the US overtaking Australia in exports to China, Tehan conceded that "one of the difficulties of dealing with economic coercion is when one country is penalised, another country will benefit from that". "So, that's why we very much need to take a collective approach in calling it out – make sure that there are reputational issues at stake when countries use economic coercion," Tehan said. While Tehan did not outline how "collective action" could happen at the WTO, trade lawyers said there had not been any precedence of such an initiative, and that it could be tricky to get it going. "Given that the WTO operates by consensus – that is, that all countries must agree to each and every change – it will be virtually impossible for the members to negotiate meaningful rules to counter economic coercion," said Bryan Mercurio, an international trade law professor at Chinese University of Hong Kong. "I do not even think they would agree on a definition of 'economic coercion', much less when it is being utilised." And WTO expert Julien Chaisse, who is also a trade law professor at City University, also noted that there are no existing mechanisms or provisions within the WTO to impose "collective sanctions". The only form of "sanctions" are WTO rulings against a losing member country in a dispute brought before the WTO arbitration court or appellate body. Both Australia and China already have standing complaints against each other. Alternatively, countries could team up and make multiple and simultaneous complaints against China at the WTO, or third-party countries could form "counter-coercion coalitions" in Australia's disputes against China, Chaisse said. The latter has taken some form recently. In Australia's barley anti-dumping complaint against China, countries such as New Zealand joined as a third party, which is allowed. Mercurio said a group of "like-minded" countries could start a debate about "economic coercion" by drafting a position paper that defines it and outlines the problems it has caused. "The minister [Tehan] is perhaps right in saying that groups of countries can get together and ensure that economic coercion is raised and discussed at the committee levels," he said. "While this would not lead to hard [legal] rules on economic coercion, it would be a 'soft' approach highlighting concerns in a formal setting and attempting to change member behaviour." On how the US could step up to support Australia more directly, the director of the Australia-China Relations Institute, James Laurenceson, put it simpler: "How about simply stop blocking the appointment of new judges to the WTO's appeals body? How about rescinding the preferential trade deal it coerced China into signing?" The US's prevention of new members to the WTO Appellate Body has rendered it defunct, making it hard for disputes such as Australia's and China's to be quickly resolved. And some analysts have said that the US-China trade war came at an opportune time to lift US exports to China, as the China-Australia conflict erupted shortly thereafter. Until meaningful steps are taken by the US, "any support being offered is just something the US wanted to do anyway", Laurenceson said. "There's nothing wrong with two countries acting in their common interests, but don't spin it as the US coming to Australia's aid." ^ top ^

Amid 'Uneven' Recovery, PBOC Urges Banks to Lend More (Caixin)
China's central bank has called on lenders to boost credit support to the real economy, especially to micro, small and midsize enterprises (MSMEs) in the face of an "unstable and uneven" domestic economic recovery and a "more severe and complex" external environment. People's Bank of China (PBOC) Governor Yi Gang told some of the country's biggest lenders that the structure of credit needs to be improved so that more capital is directed to science and technology innovation, green development, MSMEs, and sole traders. Interest rates need to come down, especially for MSMEs, and banks need to strengthen their balance sheets so that they can increase lending. Yi delivered the message at an annual symposium held Monday to analyze monetary and credit conditions, according to a PBOC statement. It was attended by central bank officials and financial institutions including China Development Bank, Industrial and Commercial Bank of China Ltd. (601398.SH -0.43%) and China Construction Bank Corp. (601939.SH 0.00%). The symposium took place in November in 2018 and 2019. No information has been released about whether there was such a meeting in 2020. The timing of this year's event, some three months earlier than usual, has led to speculation that the government is becoming increasingly concerned that demand for credit is softening and that this could contribute to a slowdown in economic growth. Central bank data released earlier in August showed weakening momentum in new loans and other funds raised by non-state entities in July. New total social financing, a broad measure of credit and liquidity in the economy, was the lowest since February 2020, falling to 1.06 trillion yuan ($163.7 billion) from 1.7 trillion yuan in July 2020. Data released by the National Bureau of Statistics also showed slowing economic activity in July, with growth in consumption and the services sector moderating. "One of the central bank's policy targets is to broaden credit and stabilize growth," said Zhong Linnan, a senior macroeconomic analyst at GF Securities Co. Ltd. The central bank is urging banks to lend in a timely manner, smooth the pace of credit dispersal, and provide credit support for businesses as soon as possible, he said. The PBOC statement said banks need to link their lending in the second half of this year with the first half of 2022. Zhong said this indicates that the central bank doesn't want them to hold back loan approvals in the fourth quarter and push them out in the first quarter of 2022, as they usually do, to get a strong start to the new year. "We believe the meeting indicates that the PBOC intends to improve banks' willingness to lend and does not want credit growth to decline too quickly," UBS Securities Co. Ltd. strategist Mary Xia wrote in a report Tuesday, noting that the latest central bank quarterly survey of bankers showed loan approvals and demand declining, while growth in outstanding loans to small and micro businesses fell in the second quarter, the first quarter-on-quarter drop since 2019. "At the same time, the PBOC still emphasizes the importance of structural credit adjustment, and a largely matched social financing and nominal GDP growth," she said. "Therefore, we believe that the PBOC will not make substantial liquidity injection, but may take some measures to keep liquidity conditions stable and lower the funding costs of banks." Lowering interest rates should help increase demand for loans and boost the willingness of manufacturers and MSMEs to invest, GF Securities' Zhong said, adding that to bring rates down, the PBOC may take measures such as reducing banks' own cost of capital and implementing reforms to reduce the risk premium banks need to lend to MSMEs. To strengthen balance sheets, the PBOC may encourage banks to issue Tier-2 bonds and may expand the use of local government special-purpose bonds to recapitalize small and midsize banks. Cutting the reserve requirement ratio (RRR) will also provide more funds for banks to lend, he said. The PBOC cut the RRR in July, the first reduction in 15 months, releasing around 1 trillion yuan for financial institutions to lend to businesses and help them cope with rising commodity prices. On Aug. 16, a meeting of the State Council chaired by Premier Li Keqiang discussed the need to guide financial institutions to use the RRR cut to support small and midsize companies. The PBOC hasn't changed the interest rate on its medium-term lending facility, which provides funds to major commercial banks, since April 2020 and the loan prime rate, the interest rate benchmark banks use to price their loans, has also been unchanged since then. But Wang Yifeng, chief banking analyst of Everbright Securities Co. Ltd., said there is no need for either rate to come down. Interest rates will naturally fall as a result of downward pressure on the macro economy and the difference between credit demand and supply, he said. ^ top ^

China's Regulators Set Out Plan to Overhaul Scandal-Hit Corporate Bond Market (Caixin)
China's economic and financial authorities have issued new guidelines for corporate bonds to clear up confusion over issues such as whether the updated Securities Law covers the interbank bond market, reiterate their commitment to unifying rules for different bond markets, and reinforce the need to obey laws and regulations in the wake of a series of scandals and defaults. A set of "Guiding Opinions" (指导意见) on the opening-up, reform and development of the nonfinancial corporate bond market were jointly announced by the People's Bank of China (PBOC), the China Securities Regulatory Commission (CSRC) and four other regulatory bodies on Aug. 18. China's bond market is the world's second largest, with the value of outstanding bonds, including government and corporate debt, standing at 124.6 trillion yuan ($19.2 trillion) at the end of July, PBOC data show. The nonfinancial corporate bond market was worth around 29.5 trillion yuan. Aimed at "establishing a multi-layered bond market with a sound system, orderly competition, transparency and openness," the guiding opinions represent a renewed effort by the government to unify rules for the country's separate bond markets and curb violations. Guiding opinions are high level documents issued by central government authorities to communicate policies and put forward views and solutions on issues of importance. They do not offer detailed implementation policies. The document consists of 32 articles and covers a range of issues such as preventing regulatory arbitrage, restricting bond sales by highly leveraged companies, banning companies from buying their own bonds, promoting convergence of the interbank bond market and the exchange bond market in terms of standards, punishment and infrastructure, improving information disclosure standards and effectiveness, strengthening supervision and law enforcement, and improving oversight of credit ratings agencies. "China's bond markets are governed by multiple regulators with different sets of requirements, which could lead to regulatory arbitrage," said Danny Chen, CEO of Fitch (China) Bohua Credit Ratings Ltd., a wholly owned subsidiary of Fitch Ratings Ltd. "Now the unified application of the securities law to bond issuance will help streamline the process and eliminate the difference in regulations. This is a positive step for the development of the industry." One of the key issues the opinions seek to clarify is whether the amended Securities Law (证券法), which went into effect on March 1, 2020, applies to nonfinancial corporate debt issued in the interbank bond market (银行间债券市场). The market accounted for 86% of China's outstanding onshore bonds at the end of last year. While the updated Securities Law and relevant documents clarify the procedure for issuing two types of nonfinancial corporate bonds, regulated respectively by the CSRC and the National Development and Reform Commission (NDRC), they appear to have omitted a third type: PBOC-regulated interbank bonds. That ambiguity led to confusion as to whether the interbank bond market had been excluded from the law. A statement in March 2020 in which PBOC and CSRC officials said that interbank nonfinancial corporate bonds are regulated by the Law on the People's Bank of China, added to the lack of clarity. The opinions make it clear that the Securities Law also applies to nonfinancial corporate bonds issued in the interbank market, people close to regulators said on condition of anonymity. The guidelines also seek to restrict excessive bond issuance by highly leveraged enterprises, although there are no details about how this will be carried out. They also reiterate a ban on what's known as structured issuance (结构化发行), where companies who are issuing bonds secretly buy some themselves or have a related party do so to artificially inflate demand. State-owned Henan Energy and Chemical Industry Group Co. Ltd. and its subsidiary Yongcheng Coal and Electricity Holding Group Co. Ltd., which shook the debt markets last year when it defaulted on a 1 billion yuan bond, had more than 13 billion yuan of bonds involving structured issuance, sources with knowledge of the matter have told Caixin. A source close to the PBOC said the opinion on structured issuance is intended to push bond market regulators to spell out in their own regulations how they will determine and punish violations. The document also calls for strict punishment of illegal conduct, such as in the sale of corporate bonds and the use of proceeds, in accordance with the Criminal Law (刑法). Deception in bond issuance was incorporated into the revision of the Criminal Law in December 2020, but serious cases of misappropriation of funds raised through bond sales and evasion of debt repayment are not yet criminalized. Regulators will seek to incorporate more bond market violations into the Criminal Law, sources with knowledge of the issue said. The guiding opinions represent Beijing's latest push to unify and tighten rules in the country's two bond markets — the interbank bond market regulated by the PBOC and the PBOC-backed National Association of Financial Market Institutional Investors (中国银行间市场交易商协会), and the exchange bond markets in Shanghai and Shenzhen overseen by the CSRC. The two markets have in the past had separate rules for registration, access, legal systems, law enforcement and information disclosure. But in 2012 a high-level inter-ministerial coordinating mechanism (协调机制) was set up to coordinate the markets. Since then, a series of measures have been announced and implemented to unify the markets. In December 2018, the PBOC, the CSRC, and the NDRC jointly announced guidelines to establish a unified bond market law enforcement mechanism which would be overseen by the securities regulator. Last year, financial regulators announced that qualified investors could trade bonds listed on both the interbank and exchange markets through a "connect" mechanism, and published measures giving the CSRC responsibility for determining and penalizing information disclosure violations of all nonfinancial corporate bonds. ^ top ^

China's coming era of 'common prosperity' – and what it means for the rich (SCMP)
When Chinese student Ding Xueliang was studying in the US city of Boston in the late 1980s, one of the biggest lessons he learned occurred outside the classroom. Ding crossed paths with a number of other Chinese students who had arrived in the United States fresh from taking part in protests that had gripped several cities in eastern China, including Shanghai, for a month from December 1986. The demonstrators took to the streets in frustration at corruption, eventually expanding their demands to political reforms. But Ding said that when he asked the other students what prompted the protests, he was surprised by the answers. In the few years that he had been studying abroad, the economic structure had changed dramatically, and people in the emerging private sector were earning more than those with fixed incomes, irrespective of their contribution to society. The people who designed missiles now made less than those who sold eggs, they told him. "Soon, [then paramount leader] Deng Xiaoping said the goal of socialism was common prosperity, and making a small number of people rich first would help to better achieve the goal," said Ding, now a member of the academic committee of the Hong Kong-based BoYuan Foundation. "But making a small number of people rich first was supposed to be transitional, which would be later adjusted by policies and laws to achieve common prosperity." Decades later, there are signs that the transition period could be ending and the focus of the leadership now is a more equitable distribution of income, with President Xi Jinping reviving the goal of common prosperity. The idea has been an underlying theme in Xi's speeches over the years and builds on the work of his predecessors, observers say. Ding said former president Hu Jintao and former premier Wen Jiabao sought to address the disparity between the rich eastern and impoverished western regions, as well as the disparity between the agricultural and industrial sectors. But the most recent – and clearest – sign of the renewed focus came on Tuesday after a meeting of China's top economic decision-makers. According to a statement released by the Communist Party's Central Committee for Financial and Economic Affairs, Xi said now was the time to give the less well off a fairer deal. "We can allow some people to get rich first and then guide and help others to get rich together... We can support wealthy entrepreneurs who work hard, operate legally, and have taken risks to start businesses … but we must also do our best to establish a 'scientific' public policy system that allows for fairer income distribution," the statement quoted Xi as saying. As part of that process, the government would alter the tax and social security regimes and make a range of fiscal transfers to allow for greater upward mobility and better access to education. The decades of economic liberalisation have delivered tremendous wealth, creating a middle class of 340 million people earning between US$15,000 and US$75,000 per year. That number is projected to reach 500 million by 2025. China also had 5.28 million "millionaires", with household wealth above US$1 million, by the end of last year. In 2020, the wealthiest 1 per cent of Chinese people held 30.6 per cent of the country's wealth, up from 20.9 per cent two decades ago, according to a Credit Suisse report. That has resulted in a widening income divide in the country. China's Gini coefficient – a measure of inequality from 0 to 1, with 0 being perfect equality – has hovered between 0.46 and 0.49 over the past two decades. A level of 0.4 is usually regarded as a red line for inequality. And some experts say that might be underestimating the problem. The wealth gap is even starker. The wealth Gini coefficient, which rose from 0.599 in 2000 to 0.711 in 2015, eased to 0.697 in 2019 before rising again to 0.704 last year, according to the report. Just last year, Premier Li Keqiang said the nation had 600 million people living on a monthly income of 1,000 yuan (US$154), which is barely enough to cover monthly rent in a mid-sized Chinese city. Cai Fang, chief expert of the National Think Tank at the Chinese Academy of Social Sciences, said last month that China's Gini coefficient indicated that there needed to be a better distribution of income. "Some of the OECD countries managed to keep the Gini coefficient under 0.4 through taxes and payment transfers. Therefore, China needs to use the redistribution tool to improve the income distribution structure," Cai said. Some Chinese academics have long warned of the risk of conflict and chaos from allowing people in certain areas to get richer faster and form a "new bourgeoisie" of millionaires or even billionaires. Most of the millionaires or billionaires, particularly in the last decade, have emerged in coastal regions and the private sector. One of those richer areas is Zhejiang, a coastal province home to a thriving private sector and the headquarters of Alibaba Group Holding, which owns the South China Morning Post. In July, the province unveiled details of its plan to build itself into a pilot zone for common prosperity by 2025. It will strive to reduce disparities in residents' incomes and regional development, and form an "olive-shaped social structure" where middle-income households are the mainstay of the economy. […] The wording of the committee's statement triggered concerns that big companies might be forced to donate money, possibly to government-backed funds or NGOs, few of which are independently operated. Ding Shuang, from Standard Chartered, said the aim of the third distribution idea was to use moral force to encourage people to give back to the community. "This is supposed to be voluntary, but I think a lot of rich people – even though they have done quite a lot of charitable work – will be under pressure and I think there may be more rich people giving money away," he said. Nevertheless, taxes would remain the biggest tool to narrow the wealth gap, he said. Some academics are already proposing on state media that the government should impose wealth taxes, including on property and inheritance. One day after the top leadership meeting, tech giant Tencent announced that it had created a 50 billion yuan "common prosperity" fund to help low-income groups, improve health coverage, boost rural economic development, and support grass-roots education. The vagueness of the "unreasonable income" had also raised concerns among businesspeople, Ding Xueliang said. "Entrepreneurs from the private sector will always say their achievements are based on the market and their hard work, but in China's business environment, the government can easily catch them out on something," he said. "That's why many entrepreneurs are worried – when the authorities can catch them out, there are more than a dozen ways to punish them." The common prosperity concept covers not only income, but also access to public services. That means that the privatisation of public services such as education, elderly care, and medical care will recede, and the government will emphasise the role of inclusiveness and affordability among these service providers, and be strict in monitoring prices, according to Yue Su, principal economist at The Economist Intelligence Unit. "Companies need to prepare for the new policy environment, with tax enforcement being stricter and making donations becoming a new norm," she said. "The government might also intervene more in wage setting and request companies safeguard labour rights for all types of workers, including gig workers." For Ding Xueliang, it is a long way from those days in Boston talking to his fellow students. "1986 was the very initial stage of the disparity of the rich and the poor, when the enrichment was small-scale and local," he said. "Deng Xiaoping had been aware of that, saying in 1985 that 'we will fail if our policies lead to rich-poor polarisation, and we will really be on an evil path if some new bourgeoisie is created [due to the wealth disparity]'. "Today it is so different, there are so many emerging industries and people get rich faster and on a much larger scale." ^ top ^



S. Korea, U.S. nuke envoys discuss humanitarian aid to DPRK (Xinhua)
Nuclear envoys of South Korea and the United States met here on Monday on humanitarian aid to the Democratic People's Republic of Korea (DPRK), urging Pyongyang to return to the dialogue table. Sung Kim, the U.S. special representative for the DPRK who arrived in Seoul on Saturday for a four-day trip, held a meeting with Noh Kyu-duk, South Korea's special representative for Korean Peninsula peace and security affairs. "We discussed possible humanitarian assistance to the DPRK," Kim was quoted by Yonhap news agency as saying in a press conference after the meeting. Kim reaffirmed U.S. support for inter-Korean dialogue and engagement, saying that the United States will continue to lend support to inter-Korean humanitarian cooperation projects. Noh told reporters that the two sides discussed ways to cooperate with the DPRK in humanitarian areas, including healthcare, quarantine against infectious diseases, drinking water and hygiene, as well as the humanitarian support for the DPRK through international organizations and non-governmental bodies. The U.S. envoy renewed his call for the resumption of dialogue with the DPRK, saying he continued to stand ready to meet with his DPRK counterparts "anywhere, at any time." During his visit to Seoul in June, Kim said the United States can meet with the DPRK "anywhere, anytime without preconditions." After the meeting with Noh, Kim reportedly met in Seoul with Russian Deputy Foreign Minister Igor Morgulov who arrived here on Saturday for a six-day trip. Morgulov will hold a meeting with his South Korean counterpart on Tuesday to discuss bilateral cooperative ways for substantive progress in the complete denuclearization of and the permanent peace settlement on the Korean Peninsula, according to the South Korean Foreign Ministry. ^ top ^



Mongolia-Japan diplomatic anniversary to be jointly celebrated (Montsame)
President of Mongolia U.Khurelsukh received Ambassador Extraordinary and Plenipotentiary of Japan to Mongolia Kobayashi Hiroyuki. Congratulating the people and government of Japan for successfully organizing the Summer Olympic Games despite the challenging times of the COVID-19 pandemic, the President expressed sincere gratitude to Japan for its all-round support provided to Mongolian athletes. The President noted the successful development of Mongolia-Japan bilateral relations and cooperation, while expressing support for further expanding the Strategic Partnership with Japan, the third neighbor, strengthening people-to-people friendship and increasing trade and economic cooperation in all fields. While congratulating the Mongolian athletes for successfully participating in the Olympic Games and winning four medals, the Ambassador expressed delight with Prime Minister L.Oyun-Erdene's attendance at the opening ceremony of the Olympic Games and meeting with Prime Minister Yoshihide Suga. President U.Khurelsukh said that he is welcoming Prime Minister Yoshihide Suga's proposal to declare 2022 the year of friendship and exchange between Mongolian and Japanese children and youth, marking the 50th anniversary of the establishment of diplomatic relations between Mongolia and Japan. He emphasized that he is in favor of organizing events involving the young people of the two countries to further strengthen people-to-people relations. In addition, he expressed expectation to receive a high ranking delegation from Japan on the occasion of the anniversary. The medium-term program to strengthen the Strategic Partnership between Mongolia and Japan for 2017-2021 is coming to an end. In this regard, he expressed confidence that the new medium-term program (2022-2025) that is currently being prepared will be a roadmap for the future cooperation, and instructed the Ministry of Foreign Affairs to make thorough preparations. The President also thanked Japan for its significant support of vaccines and medical equipment during the COVID-19 pandemic. He then expressed commitment to further develop mutually beneficial cooperation. The Ambassador reaffirmed his active support for Mongolia-Japan economic, private sector, and business cooperation during his tenure in Mongolia. ^ top ^

MCC and Mongolia break ground on USD 93 million infrastructure investment (Montsame)
The Government of Mongolia and the U.S. Government's Millennium Challenge Corporation (MCC) broke ground on August 20 on a USD 93 million Advanced Water Purification Plant (AWPP) in Mongolia's capital city of Ulaanbaatar. The President of Mongolia Ukhnaagiin Khurelsukh invited U.S. Ambassador to Mongolia Michael Klecheski, MCC's Deputy Resident Country Director Eric Guetschoff, and members of the Millennium Challenge Account-Mongolia (MCA-Mongolia) to celebrate starting the first major infrastructure project in the USD 350 million Mongolia Water Compact. "The U.S. Government is supporting Mongolia's economic growth using grant financing when possible," explained Ambassador Klecheski, "because we believe that growing democracies benefit from programs that do not lead to too much debt." The new state-of-the-art AWPP will supply up to 50 million cubic meters of water annually, boosting the bulk water supply production capacity in Ulaanbaatar by 65 percent over its lifetime. The AWPP is part of a phased, five-year compact that will ultimately increase Ulaanbaatar's water supply production capacity by 80 percent. "Today marks a new chapter in the U.S.'s partnership with the people of Mongolia," said MCC's Deputy Chief Executive Officer Alexia Latortue. "Once operational, this purification plant will help alleviate the strain on groundwater aquifers along the Tuul River and provide the critical water resources needed to support the everyday wellness and economic growth of Mongolians." Along with the AWPP, MCA-Mongolia will also construct new groundwater wells downstream from Ulaanbaatar; construct a new wastewater recycling plant and pipelines to provide high-quality treated water for industrial use; as well as increase the country's institutional capacity, and the long-term sustainability of Ulaanbaatar's water supply, through reforms and technical assistance. In less than three decades, the population of Ulaanbaatar has nearly tripled in size; however, the water supply has remained the same, creating the conditions for a severe water crisis. The MCC-Mongolia Water Compact will build the critical infrastructure necessary to sustain this limited natural resource, positively impacting more than 55% of Mongolia's population. The Millennium Challenge Corporation is an international development agency of the U.S. Government, working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants and assistance to countries that meet rigorous standards for good governance, fighting corruption and respecting democratic rights. ^ top ^

Bogdkhan railway project launched (Montsame)
The Bogdkhan railway project was launched today, on August 23. The government of Mongolia plans to begin the construction of the railway bypass line with promptitude and put it into service within three years. In his remarks during the project launch, Prime Minister L.Oyun-Erdene emphasized that the new railway line will not only contribute to the country's infrastructure and logistics development, but also is one of the key solutions to reducing congestion in Ulaanbaatar, creating new satellite cities in Tuv aimag, and alleviating traffic congestion. The Bogdkhan railway line to be built between Rashaant and Maanit stations, bypassing Bogdkhan Mountain, will stretch 135.8 km across Altanbulag and Sergelen soums of Tuv aimag, and Bagakhangai, Khan-Uul and Songinokhairkhan districts of Ulaanbaatar city. ^ top ^


Embassy of Switzerland

The Press review is a random selection of political and social related news gathered from various media and news services located in the PRC, edited or translated by the Embassy of Switzerland in Beijing and distributed among Swiss Government Offices. The Embassy does not accept responsibility for accuracy of quotes or truthfulness of content. Additionally the contents of the selected news mustn't correspond to the opinion of the Embassy.
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