Switzerland

• Investment high on Sino-Swiss agenda (China Daily)
• Xi holds talks with Swiss Confederation president (Global Times)

Foreign Policy

• Sino-US talks on trade seen as productive (Xinhua)
• FBI director Christopher Wray making his mark as a loud and insistent China critic (SCMP)
• US seeks to disqualify Huawei lead defence lawyer James Cole in bank fraud and sanctions violations case (SCMP)
• China and Nepal sign off on ports deal to ease Kathmandu's dependence on India for trade (SCMP)
• New approaches needed to improve China-Australia relations (Global Times)
• China ends sanctions on Lotte two years after South Korean retailer cedes land to US missile defences (SCMP)
• For a growing number of Chinese students, the doors to America are closing (SCMP)

Domestic Policy

• China's new opening-up measures to further vitalize banking, insurance sectors (Xinhua)
• China improves IPR protection of cultural heritage (Xinhua)
• Extended holiday shows China's socio-economic advancement (Global Times)
• Corporate China hit by worst earnings on record in 2018, as trade war bites (SCMP)
• Xi's speech on opening-up is well received (China Daily)
• Xi urges patriotism among youth, striving for brighter China (Xinhua)
• Xi leads green development as world's largest horticultural expo opens (Xinhua)

Tibet

Xinjiang

• China uses mobile surveillance app to jail Xinjiang Muslims over lawful behaviour, Human Rights Watch says (HKFP)
• China's Xinjiang crackdown on its Muslim minority is at the heart its Belt and Road project (HKFP)

Hongkong

• Hong Kong resident Jerry Chun Shing Lee, an ex-CIA officer, pleads guilty to spying for China (SCMP)

Taiwan

• US warships made 92 trips through the Taiwan Strait since 2007 (SCMP)

Economy

• Investors hunt for gold ahead of debut of China's Nasdaq-like technology board (SCMP)
• China mulls further opening up financial markets (Xinhua)

DPRK

• Japanese Prime Minister Shinzo Abe reportedly willing to meet North Korean leader Kim Jong-un 'unconditionally and with an open mind' (SCMP)
• US urges Beijing to stick to hard line on North Korea sanctions as spotlight falls on three Chinese banks (SCMP)
• Multilateral talks help DPRK denuclearization (China Daily)
• Kim Jong-un, Vladimir Putin and the exploiting of great power politics (SCMP)

Mongolia

• Cabinet meeting in brief (Montsame)
• Development Bank to finance major projects and programs only (Montsame)

^ top ^

Investment high on Sino-Swiss agenda (China Daily)
2019-04-30
China and Switzerland should make joint building of the Belt and Road into a new highlight of bilateral cooperation and firmly safeguard economic globalization and trade liberalization, President Xi Jinping said on Monday. Xi spoke during a meeting with Swiss Confederation President Ueli Maurer, who is to conclude his eight-day state visit to China on Tuesday. Noting that China's establishment of a bilateral innovative strategic partnership in 2016 with Switzerland was the first ever created with another country, Xi said that China is ready to work with the European country to further strategic cooperation. Xi also underscored the importance of following a pioneering spirit, recalling that Swiss businesses began to explore the Chinese market soon after the country's reform and opening-up began. Those businesses have become the first beneficiaries in China's new round of opening-up, Xi said, adding that Switzerland has also led European Union nations by signing a free-trade agreement with China. He called upon both sides to give play to the opening-up spirit, which features cooperation and win-win outcomes. He also pledged that China will continue to create an open and fair business environment for foreign enterprises, including those from Switzerland. Maurer said both the Chinese and the Swiss are endowed with a hardworking, reliable and innovative character. He said Switzerland welcomes investment from Chinese businesses and will not impose restrictions. Switzerland is ready to enhance exchanges with China in winter sports, he added. Maurer also said he is greatly in agreement with speeches delivered by Xi during the Second Belt and Road Forum for International Cooperation. He described the Belt and Road as a grand and peaceful initiative, and credited the initiative for connecting countries from different regions, with different nationalities and cultures. The BRI will provide a strong impetus for global economic growth and prosperity, he added. Switzerland supports the BRI and commits to promoting the initiative in Europe, Maurer said. He added that the country hopes to deepen bilateral cooperation in trade, investment and innovation with the initiative's framework. ^ top ^

Xi holds talks with Swiss Confederation president (Global Times)
2019-04-29
Chinese President Xi Jinping held talks with Swiss Confederation President Ueli Maurer at the Great Hall of the People in Beijing on Monday. Since establishing diplomatic ties nearly 70 years ago, China and Switzerland have always kept bilateral relations at the forefront of China-European relations, Xi said. He stressed that the innovative strategic partnership between the two countries is the first of its kind between China and a foreign country, and that the China-Switzerland free trade agreement also took the lead among European countries. "We shall make the joint building of the Belt and Road a new highlight for China-Switzerland cooperation," Xi added. China will continue to create an open and fair business environment for foreign-funded enterprises including Swiss companies, Xi said. The Belt and Road Initiative (BRI) will vigorously promote the growth and prosperity of the global economy, Maurer said, adding that Switzerland supports the BRI and is dedicated to pushing the joint construction of the Belt and Road in Europe. Switzerland hopes to deepen cooperation with China in trade, investment and innovation under the BRI framework, and welcomes the investment of Chinese enterprises, he said, stressing that no restrictions will be imposed on Chinese firms. Xi and Maurer attended a ceremony for the signing of cooperation documents after their talks. ^ top ^

Sino-US talks on trade seen as productive (Xinhua)
2019-05-03
Vice-Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin met in Beijing from Tuesday to Wednesday for the 10th round of trade talks between China and the United States. The two sides are working on putting bilateral trade on a stronger footing, and the latest meetings were productive, Mnuchin wrote on his Twitter account, without giving details. A Chinese team is scheduled to visit Washington next week for another round of talks, Xinhua News Agency reported. Liu is also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-US comprehensive economic dialogue. China and the US have been expediting their economic and trade consultations, with a goal of implementing the consensuses President Xi Jinping and US President Donald Trump reached in December, said Xue Rongjiu, deputy director of the China Society for WTO Studies in Beijing. China has made various moves recently to expand the new round of reform and opening-up — such as the approval of the Foreign Investment Law in March and further facilitating trade connectivity under the Belt and Road Initiative. It will continue opening its market in a proactive, steady and orderly manner, in accordance with its own development needs and its own pace and timetable, to benefit Chinese and global consumers across the world, said Tu Xinquan, a professor of international trade at the University of International Business and Economics in Beijing. James Collins, CEO of Corteva Agriscience, the agricultural division of US-based DowDuPont, said he hopes the two countries will reach a positive resolution, to benefit both countries and the rest of the world. Collins said his firm was "not so much affected" in the short term by China-US trade tensions. The company will consider adding employees, research and field development resources to expand in the Chinese market over the coming years, he said. Ministry of Commerce spokesman Gao Feng said last month that the two countries' negotiating teams are hashing out the text of a deal, including an enforcement mechanism, based on mutual respect and benefit. Both countries, the world's two biggest economies, have been intensifying their consultations and aiming to break the deadlock in a timely manner. In the ninth round of trade consultations, negotiators discussed technology transfers, protection of intellectual property rights, non-tariff measures, the service sector, agriculture, trade imbalances and enforcement mechanisms. Trade between China and the US amounted to 815.86 billion yuan ($121.7 billion) in the first quarter of the year, an 11 percent year-on-year decline, according to the General Administration of Customs. In March, Sino-US trade climbed 0.1 percent to 291.35 billion yuan, according to the administration. ^ top ^

FBI director Christopher Wray making his mark as a loud and insistent China critic (SCMP)
2019-05-03
"Vulgar", "arrogant", "mentally challenged", a "low-life". Ask Chinese state media for an assessment of the US Federal Bureau of Investigation's director Christopher Wray, and the response will be less than flattering. Wray's scathing critique last week of what he called China's attempts to "steal its way up the economic ladder" at the United States' expense, – "stealing innovation in any way it can, from a wide array of businesses, universities and organisations" – quickly drew fire from nationalist voices across the Pacific. An editorial by the reliably provocative Global Times, which is published by Chinese Communist Party mouthpiece People's Daily, led the charge. Wray's accusation, made at the Council on Foreign Relations (CFR) in Washington on April 26, displayed an "undisguised contempt for the whole of Chinese society" and threatened to lead US understanding of China "into the gutter", the editorial said. "People like Wray emanate the kind of vulgarity shown by history's career low-lifes. That vulgarity floods the US administration today." The FBI director now joins a growing list of figures in US President Donald Trump's orbit to draw attacks from Chinese state media, as Washington takes a harsher stance towards Beijing amid a rapid downturn of relations. However, unlike divisive characters like Trump's former chief strategist Steve Bannon, National Security Adviser John Bolton, economic adviser Peter Navarro and even Trump himself, Wray could prove a tough target to discredit, given his bipartisan support and standing within the national security community. The FBI did not respond to South China Morning Post requests for comment or an interview with Wray. But former FBI agents call Wray a "principled" figure not easily swayed by political interference. If he is taking China to task, they said, he is doing it on the evidence alone. Jeff Lanza, a former FBI official with experience on economic espionage cases relating to China, said that Wray's statements was "more likely based on actual FBI investigations and cases – some of them have borne out in the news as well – [and] indictments that have been made public regarding Chinese attempts to steal information". Wray's CFR comments were only the latest in a series of blistering public remarks he has made about China since the 52-year-old native New Yorker took over the reins at the FBI in August 2017. Having served as an assistant attorney general in the George W. Bush administration, he was working as a litigation partner for the King & Spalding corporate law firm when Trump nominated him to replace James Comey, whom Trump had fired in May. (Comey had been leading an investigation into whether Trump's campaign colluded with Russia in meddling with the 2016 presidential election.) It didn't take Wray long to find a place of note among the administration's China critics. Six months into his tenure, he accused Beijing of increasing its use of "non-traditional collectors" – such as professors, scientists, students – for its intelligence gathering. "One of the things we're trying to do is view the China threat as not just a whole-of-government threat but a whole-of-society threat on their end, and I think it's going to take a whole-of-society response by us," Wray testified at a Senate hearing in February 2018. Eight months later at another hearing, Wray escalated his rhetoric by declaring China "the broadest, most complicated, most long-term" counter-intelligence threat confronting the US – surpassing even Russia, whose interference in the 2016 election dominated headlines for more than two years and continues to roil the country. To Wray's way of thinking, though, "Russia is in many ways fighting to stay relevant after the fall of the Soviet Union. They're fighting today's fight. "China is fighting tomorrow's fight, and the day after tomorrow, and the day after that," he stressed. "And it affects every sector of our economy, every state in the country, and just about every aspect of what we hold dear." Under Wray's watch, the FBI has heightened scrutiny of Chinese academics visiting the US – a notable departure from the four decades since the two countries normalised relations, during which the US has generally welcomed Chinese scholars and researchers. The FBI initiated a counter-intelligence operation to bar Chinese academics suspected of links to Chinese intelligence agencies from the US. Nearly 30 Chinese professors have had their US visas cancelled or put on administrative review in the past year, according to report last month by The New York Times. To some former FBI officials, Wray is simply taking necessary steps. Closer scrutiny of Chinese espionage activities was long overdue, according to FBI veteran James Wedick, who served in the bureau from 1969 to 2004. Following the September 11 attacks, he said, the FBI concentrated resources on counterterrorism programmes, creating a "void" that China took advantage of. Wray, Wedik said, is "just saying this is an area we need to be conscious about". "The pendulum has to swing back. We took agents away from [China-related] programmes." While the Global Times thundered at Wray, Beijing has so far officially refrained from directly hitting back. Asked at a Chinese Foreign Ministry press briefing in October about Wray's assessment of the threat China poses, spokesman Lu Kang only gave a vague statement urging the US to make more comments that "serve to promote US-China relations, but not the opposite". And Wray's most recent remarks also came just ahead of the latest round of trade talks in Beijing that both sides have been characterising as constructive and productive. Even so, Wray has taken the helm at the FBI at a time when US hawkishness towards China is arguably at its fiercest – and playing out across a "whole-of-government" landscape – so it is not surprising he has been accused of trying to sabotage US-China relations. In the mind of Global Times' Saturday editorial, Wray represents senior elements of the Trump administration who have fallen prey to "Bannon-isation", an affliction presenting itself with symptoms of heightened self-importance, intellectual ossification and mental deficiency. Yet Wray's track record in his capacity of both director of the FBI and previous governmental positions paints a picture of a civil servant who has made resisting the politicisation of US national security policy a priority. To former FBI agents like Wedick, Wray is a principled and apolitical figure who "is not in bed with the hawks at all". Praised by Trump for his "impeccable credentials", Wray and his nominations were welcomed by both Democrats and Republicans, given that the president had been considering ex-lawmakers – including former senator Joe Lieberman and former Oklahoma governor Frank Keating – for a role traditionally filled by non-politicians from legal and law enforcement backgrounds. "I will never allow the FBI's work to be driven by anything other than the facts, the law and the impartial pursuit of justice," Wray told senators during his nomination hearing. "Period. Full stop." That commitment to ensuring that the agency remains sheltered from political winds is all the more pressing given "what happened under our previous director," said Lanza, referring to Comey's handling of a probe into then-secretary of state Hillary Clinton's use of a private email server. "That's not to say that our current president won't put political pressure on someone in [Wray's] position, I just don't think that he would respond in this way," Lanza said. Indeed, defending his agency has at times placed Wray at odds with Trump, who in late 2017 said that Comey had left the agency's reputation "in tatters". Days later, asked at a congressional hearing about Trump's remarks, Wray said that the FBI he saw was "tens of thousands of brave men and women who are working as hard as they can to keep people that they will never know safe from harm". Apparent tension between Wray and Trump deepened last year when Wray reportedly threatened to resign over pressure from then-Attorney General Jeff Sessions to fire the FBI's deputy director Andrew McCabe, a colleague of Comey's and a long-time target of Trump's ire. Asked by NBC News to confirm the threat, Wray said, "I'm a low-key, understated guy, but that should not be mistaken for what my spine is made out of. Let's just leave it at that." To Wedick, such responses show that "Wray has a blue line, he tells the administration this is what my position is, and he's going to stick to it". "And I think that has caused him to gain some respect that we lost under Comey and McCabe and what have you." Wray has also appeared reluctant to lump together every complaint from Congress. For example, his position on China's Confucius Institute – Chinese language-learning centres outside of China operating under the auspices of the Ministry of Education – suggests efforts to distinguish between Beijing's "soft power" initiatives and more serious security threats. The institutes have drawn US scrutiny for operating with what critics contend is a lack of oversight by the colleges and universities that host them. "The Confucius Institutes are something that we view as part of a sort of soft-power strategy that the Chinese government has, and certainly something we're concerned about," Wray said at his Council on Foreign Relations talk, which he opened by discussing Beijing's cyber-efforts to steal American critical technologies. "In many ways, a lot of the things that I talked about in my opening comments are things we're more concerned about even than the Confucius Institutes, though." His remarks reflected the findings of a recent paper commissioned for Congress by the Government Accountability Office, investigating agreements between American universities and Confucius Institutes. The February report acknowledged that the institutes are a soft-power exercise by Beijing, but did not find any evidence that these arrangements constitute any kind of national security threat. Despite accusing China of posing a "whole-of-society" threat to the US, Wray has drawn a line between the Chinese government and the Chinese people. "China's goal, simply put, is to replace the US as the world's leading superpower – and they're breaking the law to get there," he said in December, announcing the indictment of two Chinese hackers associated with China's Ministry of State Security, the country's main civilian spy agency. "Now, we're not talking about the Chinese people as a whole," he stressed. "We're focused on state-sponsored actors engaged in illegal behaviour." But it could be difficult for most mainland Chinese to get a more complete picture of Wray beyond the damning profile drawn by state media – even those digital users who can manage to circumvent the country's notorious Great Firewall. Wray, a key government official in maintaining the nation's cybersecurity, is determined to remain absent from major social media platforms, telling an amused CFR audience that he is not on Facebook or Twitter. Would he consider joining the networks after his tenure at the FBI ends? "Nope." ^ top ^

US seeks to disqualify Huawei lead defence lawyer James Cole in bank fraud and sanctions violations case (SCMP)
2019-05-03
US prosecutors on Thursday filed a motion to disqualify the lead defence lawyer for Huawei Technologies Co Ltd from the case against the Chinese company for alleged bank fraud and sanctions violations, according to a filing in US District Court in Brooklyn, New York. The lawyer, James Cole, is a former deputy attorney general of the United States. The government did not make public why it is seeking to remove Cole from the case. In a letter to the court, prosecutors said they had filed a sealed, classified motion to disqualify Cole and expected to file a public version by May 10. Cole did not immediately return a call for comment. Huawei pleaded not guilty in March to a 13-count indictment that alleged the world's largest telecoms equipment maker defrauded US banks by concealing business dealings with Iran in violation of US sanctions. The company, based in southeastern China in Shenzhen, Guangdong province, and its US unit also are accused of defrauding HSBC and other banks by misrepresenting Huawei's relationship with the suspected front company, Skycom Tech Co Limited, in Iran. The lawsuit gained public attention in December with the arrest of Huawei CFO Meng Wanzhou by Canadian authorities in Vancouver, Canada in response to a US request for Meng's extradition. Multiple charges were announced against Huawei, Meng and affiliated companies. A federal grand jury in Brooklyn charged Huawei and Meng with money laundering, bank fraud, wire fraud and conspiracy. Huawei was also charged with conspiracy to obstruct justice. A separate indictment from Washington state accused Huawei, Skycom and Meng of stealing trade secrets from the telecommunications company T-Mobile. The charges stemmed from a civil lawsuit filed by T-Mobile USA in 2014 over a robot nicknamed Tappy that was used in testing smartphones. ^ top ^

China and Nepal sign off on ports deal to ease Kathmandu's dependence on India for trade (SCMP)
2019-05-02
China and Nepal have signed a deal sealing a 2016 agreement to grant the landlocked Himalayan country access to Chinese seaports and land facilities for trade. In Beijing on Monday, Nepalese President Bidya Devi Bhandari and Chinese President Xi Jinping witnessed the signing of a protocol to allow Nepal access to seaports at Tianjin, Shenzhen, Lianyungang and Zhanjiang and road and rail facilities at Lanzhou, Lhasa and Shigatse for third-country import, Nepal's Kathmandu Post reported on Tuesday. It would also allow Nepal to export goods through China at six other, unspecified points, the report said, reducing Nepal's dependence upon India for access to international markets. The Nepalese leader's nine-day trip to China included talks with Xi and attendance at the second Belt and Road Forum to discuss China's New Silk Road infrastructure plan. The protocol has been in the pipeline since Beijing and Kathmandu signed the Transit and Transportation Agreement in March 2016, months after an Indian border blockade was lifted. The report quoted officials and experts as saying that the agreement did not mean that China would supplant India – Nepali businesses would not able to use Chinese ports until infrastructure in the Himalayan nation improved, they said. Long Xingchun, director of Centre of India Studies at China West Normal University, said the protocol was "largely symbolic since most of Nepal's external trade will still rely on passing through India, but it does help Nepal's bargaining power when dealing with India". Nepal, a nation of nearly 30 million people, is the focus of rivalry between the two Asian powers, with a surge of Chinese investment and infrastructure development reshaping a region long considered to be India's backyard. India is Nepal's biggest trading partner, accounting for about two-thirds of Nepal's exports and most of its consumer goods. India has had a monopoly on Nepal's fuel supplies for decades, but tensions over a five-month blockade in 2015 prompted Kathmandu to turn to Beijing. "China knows that it cannot replace India's role in Nepal," Long said. "China also does not demand Nepal side with it, which is different from India's attitude which actually pushes Nepal even further away. For China, it's fine as long as Nepal remains neutral." ^ top ^

New approaches needed to improve China-Australia relations (Global Times)
2019-05-02
During a reception held at the Australian Embassy in Beijing, Frances Adamson, Australia's top representative at the second Belt and Road Forum for International Cooperation, discussed her country's outlook and position regarding the relationship with China, as Australia her country heads into their national elections next month. As Australia's former ambassador to China and current Secretary of the Department of Foreign Affairs and Trade, Adamson is au fait with the history and reality of the bilateral relationship, which has experienced a few ups and downs in the last two years. The veteran diplomat is aware of the changes that need to happen to strengthen diplomatic relations. Adamson pointed out that "whatever the outcome of the election, Australia's national interest lies in a constructive relationship with China." Adamson stressed the importance of more frequent and smooth communication and idea exchanges at various levels to clarify misinformation and prevent misunderstandings. When Premier Li Keqiang met with Australian Prime Minister Scott Morrison in Singapore at the sixth annual meeting between the heads of government of the two countries in November 2018. During the meeting, Li noted there are far more common interests than differences between China and Australia, calling on both sides to see the bilateral ties from a perspective of win-win cooperation. As comprehensive strategic partners, China and Australia have common interests and shared prospects. In today's global marketplace, both countries are indispensable to one another. China's reform and opening-up have benefited from its cooperation with Australia. And yet for Australia, China's economic emergence has served as the catalyst for uninterrupted development and prosperity. China continues to be Australia's top trading partner and biggest source of international students and tourists. Adamson recalled in 2011 when Australia announced it would attract 1 million Chinese tourists by 2020. Last year, the country surpassed that mark with 1.43 million Chinese visitors. Customs data show that China imported 28.26 million tons of coking coal from Australia in 2018, accounting for 43.5 percent of this country's total import of the fuel. The two countries have been proactively working in conjunction to tap their complementary strengths, promoting further and more rigorous cooperation and elevating the two-way investment and trade. China and Australia do not have a history of conflict or territorial disputes between each other and have enjoyed longstanding government and people-to-people collaboration, communication, and exchanges that have generated significant profits for both sides. The positive development of bilateral ties has been conducive to peace, stability, and prosperity of the Asia-Pacific region and the world. China respects Australia's traditional alliances with other countries and would never impose its values or systems on any other country within the country or in any other nation. We agree with Adamson, the positive relationship relies on mutual respect and trust, as it is the cornerstone of practical and fruitful relations. As Australia's envoy to the second Belt and Road Forum for International Cooperation, Adamson indicated that Australia welcomes China's contribution to infrastructure development through BRI. Indeed, China is engaged in mutually beneficial efforts with nations in the Pacific region to improve infrastructure and provide a higher quality of life and well-being. We do share the understanding that all countries need to observe the rules of transparency and international governance, crucial for world order and international cooperation. China is open to constructive feedback and comments from any country, including Australia, regarding BRI projects. China also welcomes Australia to become more involved with BRI at various levels and in multiple forms. The changing world calls for new methods and ways of thinking. Mahatma Gandhi, leader of the Indian independence movement against British colonial rule, once said, "Be the change that you wish to see in the world." China and Australia need to find innovative and proactive ways to steer bilateral relations on the right course. The Australian government's recent initiative to create a new National Foundation for Australia China Relations aims at strengthening "one of Australia's most significant bilateral relationships." The Foundation can serve as a conduit for increased mutual understanding that will lead to trust and positive relations. We hope the new steps taken by Australia to thaw and improve bilateral relations are sincere and deliberately long-term.  ^ top ^

China ends sanctions on Lotte two years after South Korean retailer cedes land to US missile defences (SCMP)
2019-05-02
China lifted its economic sanctions on South Korean retailer Lotte last month, more than two years after the company angered Beijing by yielding land for the deployment of a US anti-missile defence system in South Korea. The municipal government of Shenyang, the capital of northeastern Liaoning province, gave the company permission last month to resume work on the US$2.6 billion Lotte Town shopping and leisure development, a spokesman for South Korea's biggest retailer said on Thursday. A final decision on whether construction would restart had yet to be made, the spokesman said. "We will closely observe the recent developments and will make the decision accordingly." The Shenyang government did not respond to requests for comment. Lotte completed the first phase – a department store and a cinema – in 2014. The second phase – which included a theme park, flats and a hotel – stalled after Seoul agreed in 2016 to a long-standing US request to allow the Terminal High Altitude Area Defence system (THAAD) to be deployed on South Korean soil. The system's radar and interceptor missiles were set up on land in Seongju county that Lotte sold to the South Korean government. Seoul and Washington said the system was meant to deter threats from North Korea, but Beijing saw THAAD as a security threat because it could monitor China's military facilities. The system went into operation in 2017, prompting protests from Beijing. The construction of Lotte Town ground to a halt in December 2016, when Shenyang said the development had "not adequately following administrative procedures". After taking losses, Lotte announced plans to withdraw from mainland China last year. The retailer has outlets in Chengdu, Tianjin, Weihai and Shenyang, and said in July that it considered closing some of its stores in the country. On Thursday, Lotte did not say if the Shenyang decision had swayed it against pulling out of China. "We have only considered pulling some of our businesses out of China … No final decision has been made," the group said, without elaborating. The decision came weeks before South Korea's defence minister was expected in China, when THAAD was likely to be discussed with Beijing. Seoul said in March that Jeong Kyeong-doo would meet his counterpart, Wei Fenghe, to "fully normalise bilateral defence cooperation". A South Korean military source said Jeong "would visit China in mid-May" to discuss "problems surrounding THAAD, as well as ways to strengthen communication channels for crisis management". One analyst said the Shenyang decision might be a response to the economic slowdown in China. "China's overall macroeconomic situation has seen a decline in GDP over the last year or so," James Floyd Downes, a lecturer in comparative politics at the Chinese University of Hong Kong, said. "At the same time, China's northeastern region has suffered an economic slump. "From a strategic economic perspective, China is most likely trying to boost its overall economy in Dongbei by allowing more foreign investment and [that] is likely to be part of a long-term economic strategy in the region," Downes said, referring to the country's northeast. "China is also attempting to strengthen its ties with South Korea, in light of the trade dispute with the United States. Such a move could be a 'strategic' business asset for the Chinese government." ^ top ^

For a growing number of Chinese students, the doors to America are closing (SCMP)
2019-04-30
Like millions of China's brightest before him, David Yu flew across 12 time zones some seven years ago from his native Beijing to pursue postgraduate studies in the US. The plan was to get his doctorate in advanced materials engineering, work for a top US multinational company and eventually return home, where his "gold-plated" resume would open the doors to plum jobs. That was the plan, anyway. Months after receiving his PhD last year, the 30-year-old specialist in alloys used in airframes and jet engines has yet to land a job in the aerospace industry. At companies like Boeing, many jobs require a government security clearance granted only to US citizens. Boeing representatives did not respond to a request for comment. As the rejections piled up, Yu changed tack and looked to other industries. He has missed two Lunar New Year family reunions in a row because he fears not being allowed to return, such were horror visa stories circulating among Chinese students in the US. Under existing law, Yu has three years to find a job that would sponsor a visa. International students who hold degrees in any of the STEM fields – science, technology, engineering and mathematics – can remain in the US for up to three years under what is officially known as "optional practical training". "Being Chinese with a degree in sensitive areas in the US almost equals to being rejected even before application," Yu said at a recent job fair at Harvard University. "I have already given up hope of finding jobs in the US that match my skills." Four decades after Washington and Beijing re-established diplomatic ties, the doors on scientific and technological engagement appear to be closing fast. A wary US has accused its biggest trading partner of getting ahead by unfair means, from forced technology transfers to intellectual property theft and industrial espionage. An ongoing trade war has masked a deeper, more protracted competition for superiority in advanced technologies that could hand the leader a significant military and economic edge. Yu is collateral damage in this contest, but he is not alone. Chinese nationals make up a third of the 1.1 million international students in the US, according to New York-based Institute of International Education. About 36 per cent of the 363,341 Chinese students study in the fields of STEM. Since last summer, Chinese students involved in robotics, aviation, engineering and hi-tech manufacturing – priority areas in Beijing's "Made in China 2025" industrial policy – faced tighter visa controls. The Trump administration has rolled back an Obama-era policy that allowed Chinese citizens to secure five-year student visas. Chinese students in so-called "sensitive fields" could also face additional screening from US embassies and consulates, a senior State Department official confirmed at a Senate hearing in June last year. Students interviewed by the South China Morning Post described delays in visa approvals as a result of additional reviews, which have put their academic and professional career prospects at risk. The visa clampdown appeared to have caught the attention of China's top leadership. Chinese President Xi Jinping, speaking at the second Belt and Road Forum in Beijing on April 26, urged countries around the globe to offer Chinese entrepreneurs, students and scholars fair treatment and friendly environments so that they can carry out regular business, study and research. "The great rivers and oceans are deep because they are open to all trickles. If inflows of streams and rivers are cut off, even a big sea will dry sooner or later," he said. In March, Chinese student associations at several American universities, including the University of Illinois at Urbana-Champaign, University of California, Berkeley, and Cornell University, published an open letter appealing to Chinese students to support a petition against the US visa policy. In one case, a student who returned to China to renew his visa was subjected to "administrative processing" for as long as 18 months, forcing him to drop out of university, according to the petition. In a written response to the Post, a State Department spokeswoman said that all visa cases are adjudicated on a case-by-case basis according to US law and applicable regulations. As every visa decision is a national security decision, some applications are required to undergo additional administrative processing, the spokeswoman said. One Harvard engineering PhD holder, who now works for a Boston-based tech start-up, said one of his colleagues, an engineering graduate from the Massachusetts Institute of Technology (MIT), is still stuck in China after going back for the Lunar New Year reunion in early February. "He is now working in our company's Shenzhen office, while his wife is still in Boston. We have no idea when he will be able to return to the US," said the Harvard PhD holder, who asked not to be named for fear of jeopardising his colleague's visa review. The uncertainty of securing visas is putting a chilling effect on the employment prospects for skilled Chinese graduates in the US. Time is running out for Bu Min, who has worked as a programmer for two-and-a-half years after getting her master's degree in computer science from Tufts University. With the chances of landing an H-1B visa looking slim, she has decided to return to China for good. That visa allows US employers to temporarily hire foreign workers in specialist occupations. "Some employers shun Chinese because of our high risks of encountering visa problems," Bu said. One of her classmates was unable to get back to the US due to a three-month administrative processing for his visa application. "It was unfortunate but understandable, what kind of employer would want an employee who cannot show up for work for three months?" she said. Even Chinese-Americans have not been spared from suspicion. The Committee of 100 (C100) – a non-partisan leadership organisation of prominent Chinese-Americans in business, government, academia, and the arts – has condemned the racial profiling in the US where Chinese-Americans are being targeted as potential traitors, spies and agents of foreign influence. "Such targeting of individuals based on their ethnic heritage or national origin violates our shared American ideals. It simply has to stop," said the open letter of C100, which was co-founded 30 years ago by world-renowned architect I M Pei and acclaimed cellist Yo-Yo Ma, among others. The organisation's other prominent members include BlackBerry chief executive John Chen, Baidu president Zhang Yaqin and politician Gary Locke, a former US ambassador to China. Ultimately, cutting the free flow of ideas and people in science is detrimental to both the US and China, as "our research showed that all of the best scientific research done collaboratively", said Huang Yasheng, a Beijing-born, Harvard-educated professor and China expert at MIT's Sloan School of Management. "It has become almost impossible for US scientists with Chinese background to leverage the resources from both countries to do research. They have to choose sides now," Huang said on the sidelines of the three-day Harvard College China Forum, the world's largest student-run China conference, at the event's conclusion on April 14. "The move is reducing technological collaboration, damaging tech development in both the US and China." Hours later on the same day at the Batten Hall of Harvard Business School, hundreds of Chinese students, many from other top US universities, flocked to the 20 or so companies which took part at a two-hour career fair for "overseas talent". Yu, the aerospace materials PhD graduate, wore a navy blue suit and carried a black backpack as he walked around the hall looking at the companies. He eventually applied to two companies offering US-based positions, state-owned telecommunications operator China Unicom and Microport, a Shanghai-based medical equipment maker. Outside the hall, it was a crisp and sunny day. Pink magnolias were in riotous bloom across one of the oldest seats of higher learning in America. But Yu was not really in the mood. "At this point, I just want to have some work experience here to give myself a boost for my future career in China. Any jobs that have some prospects would do." ^ top ^

China's new opening-up measures to further vitalize banking, insurance sectors (Xinhua)
2019-05-02
China expects to further optimize the investment and operation environment for foreign investors in its financial sector with new measures to open the field wider, according to the country's top banking and insurance regulator. A total of 12 new rules will be released soon on the basis of profound research and evaluation, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission (CBIRC) said Wednesday. "These measures will also encourage stronger presence of foreign investment in the development of China's financial sector," the CBIRC spokesperson Xiao Yuanqi told Xinhua in an interview. Detailed rules in regulations for foreign banks and foreign insurance companies have been revised in accordance with the new rules and will soon be released, Xiao said. The playing field for foreign and domestic companies will be further leveled, said the spokesperson, citing the simultaneous abolishment of upper shareholding limits for a single Chinese-funded bank and a single foreign-funded bank in a Chinese commercial bank, as an example. At present, the shares of foreign-funded banks and insurance companies' total assets have reached 1.64 percent and 6.36 percent, respectively, in China. According to the new measures, asset requirement for foreign banks to set up foreign-funded legal person banks or branches will also be removed in a bid to further diversify the structure of banking institutions in China. "This does not imply a lower standard of supervision, but rather an emphasis on the foreign banks' capability, quality and benefits," said Xiao. The top regulator also expects to encourage quality firms with latecomer advantages into the Chinese market and increase global conversation and cooperation. While allowing overseas financial institutions to hold stakes in foreign-funded insurance companies operating in China, the regulator also plans to remove requirements for foreign-funded insurance brokerage firms regarding business and total assets. "We believe that this round of new measures will significantly enhance the openness and marketization of the banking and insurance sectors," Xiao said. ^ top ^

China improves IPR protection of cultural heritage (Xinhua)
2019-05-02
China has strengthened the intellectual property rights (IPR) protection of traditional culture, crafts and intangible cultural heritage, according to a report from the Ministry of Culture and Tourism. The report recalled the inscription of China's Lum medicinal bathing of Sowa Rigpa on the Representative List of the Intangible Cultural Heritage of Humanity by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 2018. During the same year, a total of 1,082 individuals were newly recognized as representative inheritors of national intangible cultural heritage. In addition, IPR protection courses were emphasized in the training plan for inheritors of intangible cultural heritage, and 10 workshops for traditional crafts have been set up to provide assistance to local enterprises and workers, said the report. On IPR policy, the ministry has pushed forward the drafting and researching of a proposed law on promoting cultural industries, which contains special provisions on IPR protection, and advanced the study of promulgating IPR guidelines for respective fields, including intangible cultural heritage and performing arts. It also pledged to put forward more suggestions on the subject to the ongoing revision to the country's copyright law, according to the report. ^ top ^

Extended holiday shows China's socio-economic advancement (Global Times)
2019-05-02
For those living in the world's second-largest economy, one significant change for 2019 is the May Day holiday which has been extended from one to four days, a favorable move attesting to China's socio-economic advancement. It's thrilling to read data and news reports over the holidays regarding overbooked trains, flights and hotels, along with tourist attractions filled with domestic travelers. The amount of passion suggests greater efforts are needed to ensure everyone is entitled to annual leave and holidays, and to improve travel services. Hard work and diligence over the past four decades have played a role in building the economic miracle that China is today. However, along with the shift to innovation-based quality growth, there has been a demand for leisure travel that indicates a higher living standards. Domestic tourists made a total of 5.54 billion trips in 2018, up from 1.71 billion in 2008, according to data from the National Bureau of Statistics. Additionally, trips made by domestic travelers on public holidays continue to rise, unaffected by China growth woes. During the three-day Qingming Festival, domestic travelers completed 112 million trips, up 10.9 percent, according to figures from the Ministry of Culture and Tourism. Tourism revenue during this period rose by 13.7 percent to 47.9 billion yuan ($7.12 billion). An economic slowdown suggests a more nuanced and sophisticated approach to growth, which actually compliments the evolution, emotionally and psychologically, of leading a more relaxed life. Recent contention over "996" culture, a work schedule that starts at 9 am and finishes at 9 pm, six days a week, and has thwarted Chinese techies is arguably a sign that work-life balance is becoming a higher priority for the well-educated and higher paid sectors of China's workforce. After years of economic growth, demand for a better life balance is justified. The May Day extension is another step toward sustainable growth. A solution-oriented mindset, as shown by the government decision to extend the holiday, needs to be applied to fundamental life issues. The enthusiasm for leisure travel during public holidays bears testimony to huge tourism potential yet to be tapped. It also sheds light on the right to paid annual leave, among various employment rights, something that is often neglected in the lesser-educated parts of the country's workforce. Ten years after regulations on paid annual leave for employees went into effect on January 1, 2008, it remains difficult for many to enjoy their holidays, according to a 2018 report by workercn.cn, a website run by the All-China Federation of Trade Unions. The regulations stipulate that employees are entitled to at least five days of paid annual holiday leave and for each day that isn't used employees should be compensated 300 percent of their daily salary. The report said nearly 30 percent of the country's white-collar workers feel the vacation is not entirely theirs to decide and more than 80 percent aren't able to disconnect entirely from work while on vacation. Foreign-invested businesses and joint ventures between Chinese and foreign companies are ranked highest in terms of employee satisfaction with paid time off, followed by state-owned enterprises and government agencies. Meanwhile, privately owned businesses are ranked lowest, according to the report. A few reasons include the weak position employees find themselves in against their employers. Although holiday entitlements are statutory, whether employees can enjoy their holidays is discretionary. Action needs to be taken to avoid dysfunction within the legal and regulatory framework. The outcry against extended working hours within China's tech sector, compounded with complaints for not being paid overtime should serve as wake-up calls for efforts aimed at protecting employee rights. Such action would help establish a foundation for the domestic travel boom and strengthen growth models. Criticism generated from poor travel experiences, such as being ripped off, should be taken seriously. Instead of locking the stable door after the horse has been stolen, a meticulously designed regulatory system with penalties for different travel scams, among other irregularities, should be implemented. Travelers, or better yet, consumers, should have access to easier and plausible ways to protect their rights, avoiding a scenario whereby the pursuit for a better life is an exhausting farce. Not until Chinese citizens can devote themselves to enjoying their holidays can the economy claim a sweeping victory. ^ top ^

Corporate China hit by worst earnings on record in 2018, as trade war bites (SCMP)
2019-05-02
This is the worst annual earnings season ever for China's corporate sector, with a record 452 out of 3,602 public companies incurring annual losses, as the effects of the year-long US-China trade war seep into corporate earnings. By the end of April, the number of loss-making companies had doubled from 2017, while the proportion of such companies also hit an all-time high of 12.5 per cent, according to data provider Wind. The combined net profit of companies listed on the Shanghai and Shenzhen stock exchanges reached 3.383 trillion yuan (US$502 billion) for 2018, down 1.7 per cent from the previous year. Losses related to goodwill – the intangible asset that arises when a company acquires another business – also soared to a record level of 166 billion yuan (US$24.65 billion), tripling the amount from the previous 11 years combined, at 871 companies. This is because a record number of companies that were ambitious and pushed up the goodwill value of acquired assets during the boom years, are now rushing to write down these values, as the trade war and a government deleveraging crackdown bite into their profitability and worsen their financial woes, according to analysts. And the worst may not be over. "We don't know if it's the bottom of corporate earnings yet, as the final result of the trade war is pending and the macroeconomy is still in a downward trend," said Chen Xikai, an analyst with Shanghai-listed Industrial Securities. "It also takes time for the intended effects of liquidity easing to reach the real economy. Don't feel happy too soon about the short-term rebound," he added. The trade war has added to China's slowest economic growth rate in three decades, hurting the bottom lines at more Chinese companies. This puts pressure on the government to ease the tax burden and pour in fiscal stimulus to keep businesses running and employment humming. Zhao Guang, an analyst with Beijing-based Capital Securities, said investors should be cautious until an overall improvement in corporate earnings is achieved, as it takes time for stimulus measures to filter down. "The turning point [in corporate earnings] could occur in the third quarter. It will support a comprehensive and solid rebound in the stock market. Still, before that happens, the possible launch of the Shanghai Technology Board around June might preheat the market," he said. The technology, media and telecoms (TMT) sector was worst hit. Profits declined by 140 per cent, as technology and telecoms companies bore the brunt of US export controls on a wide range of technologies and restrictions on Chinese imports. ZTE, the world's fourth-largest telecoms equipment maker, posted a record 6.98 billion yuan loss for 2018, due to a fine it paid to the US authorities for violating US sanctions against Iran and North Korea, and a brief ban on doing business with US companies. China's technology sector is heavily reliant on American technology, especially semiconductors. Goodwill impairments were another drag on earnings, besides the trade war. Goodwill had soared 15-fold in the past decade, from 99.3 billion yuan in 2010 to 1.45 trillion yuan by last September. It rose more quickly during the boom years of mergers and acquisitions in 2014-15, as companies pushed up the values of acquired assets as capital in their books. Things took a sharp turn for the worse in 2018. Companies that overpaid for acquired assets faced significant writedowns, as an economic slowdown and the government's deleveraging campaign bit into their profitability, and the government tightened accounting regulations, said Chen Letian, an analyst with BOC International. TMT was the most acquisitive sector during the boom years, thus, it was hit hard. Dalian Zeus Entertainment, which has acquired 12 companies since its 2014 IPO, said it would write off 4.9 billion yuan in goodwill, three quarters of its total goodwill value, in its 2018 results. Macroeconomic risks, tightened regulation in the gaming sector and worsening competitive environment were the major reasons, it said. Industrial conglomerates were the second-worst hit industry, with profit down 112 per cent from the previous year. But not every company had been losing out. The construction materials sector outshone all others, with 60 per cent growth in profit for 2018, according to Wind. Cement makers were the biggest stars, generating an all-time high of 154.6 billion yuan in profit, more than doubling from 2017. Anhui Conch Cement, the largest cement manufacturer in Asia, recorded a 88 per cent increase in profit. The growth in profit was mainly down to rising cement prices, after the government's supply-side reform to reduce excess capacity eliminated many smaller companies, leaving the bigger players to benefit, according to Li Huafeng, an analyst with Industrial Securities. Demand is also growing for building materials, as infrastructure investment has rebounded since last year. Military enterprises were also booming, with the industry's profit rising 20 per cent in 2018. China's defence budget for 2019 increased by 82.9 billion yuan to 1.19 trillion yuan, an acceleration over the 62.6 billion yuan increase in 2018. Analysts said they expected the sector to benefit from a relaxation in regulation by Beijing meant to spur private investment in defence and deepen reforms in state-owned enterprises. "Mobilising private capital to develop advanced technologies for potential military use can help modernise the sector, " said Shen Fancheng, an analyst with Shenzhen-listed China Great Wall Securities. "Developing military technology with self-owned intellectual property rights has a particular significance against the backdrop of the US-China trade war," he said, recommending that investors focus on Changsha Jingjia Microelectronics, which manufactures graphics chips for military use, and Shenzhen H&T Intelligent Control, which produces intelligent controller products. ^ top ^

Xi's speech on opening-up is well received (China Daily)
2019-05-02
The measures that President Xi Jinping recently proposed to encourage foreign investment and further opening-up in China are welcome developments that address the international community's concerns, according to experts. "The promises made are very positive, and all of them are helpful," William Overholt, senior research fellow at Harvard's Kennedy School of Government, said of Xi's keynote speech at the opening of the Second Belt and Road Forum for International Cooperation in Beijing. Xi brought up a series of reform and opening-up measures, including expanding market access for foreign investment in more areas and working harder to ensure the implementation of opening-up policies. China's pledges included shortening its negative list for foreign investments, opening up more sectors to foreign businesses, guaranteeing fair competition and planning new free-trade zones and ports. Sourabh Gupta, resident senior fellow at the Washington-based Institute for China-American Studies, specifically praised the new Foreign Investment Law－passed in March by China's national legislature and effective in 2020－which he said is "a farsighted piece of legislation" that "will firmly usher in a new round of reform and opening-up". "Strong measures to deal with political, regulatory and administrative noncompliance are envisaged. A robust working mechanism to promptly address foreign businesses' complaints is also envisaged," said Gupta, who believes the provisions are a big step in assuring foreign businesses that the playing field is leveled in China. "It is the predictability, transparency and nondiscrimination bent of the law which, in my view, will lead to a significant inward flow of foreign capital in key services and advanced manufacturing sectors," he said. Overholt said "the list of issues that President Xi has addressed are the issues that the business community is concerned about". "It is excellent that President Xi recognized some problems," especially those associated with its Belt and Road Initiative, such as transparency and corruption, said Craig Allen, president of the US-China Business Council. Experts also were interested in how the reform policies and laws would be implemented, something Xi addressed in his speech. "People are very positive about the direction, but they need to know the details" of how the promises would be delivered, Overholt said. Xi, citing the old Chinese saying "honoring a promise carries the weight of gold", pledged to install a binding mechanism for international agreements, to make sure governments at all levels operate in well-regulated ways, and to update laws and regulations to abolish unjustified practices, keeping in line with the needs of opening-up. "It is welcome news to hear that the National People's Congress has already taken steps to lay the groundwork" for implementing the new Foreign Investment Law, said Gupta, who brought up the possibility of China establishing "an ombudsperson's desk" in related government agencies to address foreign businesses' legal concerns. Gupta said China's Foreign Investment Law could be a model for others looking to liberalize their foreign investment regimes, as China's BRI is already delivering capital and know-how to other developing countries. Overholt said that China's past opening-up has been "extremely positive" globally, and the BRI is a "very positive" vision that is good for China and the world. "The key will be the implementation," he said. "If the implementation is improved, it would be good for everyone." ^ top ^

Xi urges patriotism among youth, striving for brighter China (Xinhua)
2019-04-30
Chinese President Xi Jinping on Tuesday called on the country's young people to be patriotic and strive for the bright prospect of national rejuvenation. Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, made the remarks at a gathering held at the Great Hall of the People to mark the centenary of the May Fourth Movement. The May Fourth Movement started with mass student protests on May 4, 1919 against the government's response to the Treaty of Versailles that imposed unfair treaties on China and undermined the country's sovereignty after the World War I. It then triggered a national campaign to overthrow the old society and promote new ideas, including science, democracy and Marxism. Wang Huning presided over the gathering. Other Chinese leaders Li Keqiang, Li Zhanshu, Wang Yang, Zhao Leji, Han Zheng, and Wang Qishan were also present. Xi said the May Fourth Movement was a great patriotic and revolutionary campaign pioneered by advanced young intellectuals and joined by the people from all walks of life to resolutely fight imperialism and feudalism. With its mighty force, the movement inspired the ambition and confidence of the Chinese people and nation to realize national rejuvenation, Xi added. Xi said the May Fourth Movement gave birth to the great spirit centered on patriotism, progress, democracy and science, with patriotism at the core. "As long as the banner of patriotism is being held high, the Chinese people can unleash great powers in the endeavors to transform China and the world," Xi said. The essence of patriotism is having unified love for the country, the Party and socialism, Xi added, urging young Chinese to follow the instructions and guidance of the Party, and remain dedicated to the country and the people. Young people are also urged to establish belief in Marxism, faith in socialism with Chinese characteristics, as well as confidence in the Chinese Dream of national rejuvenation. Xi said young people always play a vanguard role in realizing national rejuvenation. In the new era, the theme and direction of Chinese youth movement and the mission of Chinese young people, Xi said, are to uphold the leadership of the CPC, and work along with the people to realize the two centenary goals and the Chinese Dream of national rejuvenation. Xi said Chinese youth of the new era should bear their responsibilities of the times and carry on the spirit of arduous struggle. He urged them to hone abilities and nurture fine morality. Xi also encouraged young people to not only care about their family and country, but also have concerns for humanity. Xi said nurturing the young generation is the whole Party's political responsibility. "We should listen to young people's views on social issues and phenomena, as well as their opinions and advices on the work of the Party and the government," Xi said. "Even if they express harsh or partial criticism, we should correct our mistakes when we have made any and guard against them when we have not," he added. Xi called on the Party to address young people's concerns and asked the Communist Youth League of China to unite and lead the young people to strive for the national rejuvenation. "Young friends," Xi said near the end of his speech. "Let your youth shine even more in the sacrifice for the country, the people, the Chinese nation and humanity." ^ top ^

Xi leads green development as world's largest horticultural expo opens (Xinhua)
2019-04-29
Declaring the opening of the world's largest international horticultural exhibition in Beijing Sunday, Chinese President Xi Jinping expressed his hope that the green development concept embodied by the expo park would be spread to "every corner of the world." The International Horticultural Exhibition 2019 Beijing is the highest-level and largest international fair held in China after the International Horticultural Exhibition held in the southwestern city of Kunming in 1999, the 2010 Shanghai World Expo and the first China International Import Expo in 2018. The 2019 Beijing expo indicates that China has changed from a participant in global green development to a contributor and leader, said Wu Shunze, an expert with the Ministry of Ecology and Environment. "The development model of 'killing the hens for eggs' and 'draining the lake for fish' is at a dead end," Xi said in his speech at the opening ceremony of the expo. "The future will be illuminated by eco-friendly development that is in accordance with the rules of nature." The State Council approved Beijing's bid to host the 2019 expo in 2012, the same year when the 18th National Congress of the Communist Party of China first raised the vision of building a "Beautiful China." Since that congress, ecological civilization has been placed in the country's "five-sphere" integrated plan and "four-pronged" comprehensive strategy, with pollution control carried out with unprecedented scale, institutions introduced with unprecedented intensity, environment laws enforced with unprecedented severity and the environment improved at unprecedented speed. "China's ecological civilization development is on fast track. People will live in a better environment with blue sky, green mountains and clear water," Xi said. "We should protect the ecological environment like protecting our eyes and value it in the same way we value our lives." "Only with concerted efforts can we effectively deal with global environmental issues such as climate change, marine pollution and biological protection and achieve the United Nations 2030 Agenda for Sustainable Development goals," he said. He put forward a five-point initiative: pursuing harmony between human and nature, prosperity based on green development, a passion for nature-caring lifestyles, a scientific spirit in ecological governance and joint efforts to tackle environmental challenges. The Beijing expo brings together more countries than any past expo in the horticultural industry, said Bernard Oosterom, president of the International Association of Horticultural Producers, at the opening ceremony. "China has led the way in promoting green development. It is clear that the Chinese government supports ecologically sensitive development in order to create a 'Beautiful China,'" he said. A study published in February using data from NASA satellites showed that of all the newly-added green leaf areas between 2000 and 2017, about 25 percent was in China, the largest contribution. China also contributed the biggest share to the global reduction of the use of ozone-depleting substances, accounting for more than half of the total reduction by developing countries. The Beijing horticultural expo, themed "Live Green, Live Better," is one of the major international events hosted by China in 2019, which marks the 70th anniversary of the founding of the People's Republic of China. A total of 110 countries and international organizations will attend the 162-day event. ^ top ^

 ^ top ^

China uses mobile surveillance app to jail Xinjiang Muslims over lawful behaviour, Human Rights Watch says (HKFP)
2019-05-02
Chinese authorities are using a mobile app designed for mass surveillance to profile, investigate and detain Muslims in Xinjiang by labelling "completely lawful" behaviour as suspicious, a Human Rights Watch report said Thursday. Beijing has come under international criticism over its policies in the northwest region of Xinjiang, where as many as one million Uighurs and other mostly Muslim minorities are being held in internment camps, according to a group of experts cited by the UN. Human Rights Watch has previously reported that Xinjiang authorities use a mass surveillance system called the Integrated Joint Operations Platform (IJOP) to gather information from multiple sources, such as facial-recognition cameras, wifi sniffers, police checkpoints, banking records and home visits. But the new study, entitled "China's Algorithms of Repression," worked with a Berlin-based security company to analyse an app connected to the IJOP, showing specific acts targeted by the system. Xinjiang authorities closely watch 36 categories of behaviour, including those who do not socialise with neighbours, often avoid using the front door, don't use a smartphone, donate to mosques "enthusiastically", and use an "abnormal" amount of electricity, the group found. The app also instructs officers to investigate those related to someone who got a new phone number, or related to others who left the country and have not returned after 30 days. "Our research shows, for the first time, that Xinjiang police are using illegally gathered information about people's completely lawful behavior -– and using it against them," said Maya Wang, senior China researcher at Human Rights Watch. "The Chinese government is monitoring every aspect of people's lives in Xinjiang, picking out those it mistrusts, and subjecting them to extra scrutiny." The rights group obtained a copy of the app and enlisted cybersecurity firm Cure53 to "reverse-engineer" it – to disassemble it and look at its design and data – and examined its source code. Along with collecting personal information the app prompts officials to file reports about people, vehicles and events they find suspect — and sends out "investigative missions" for police to follow up. Officers are also asked to check whether suspects use any of the 51 internet tools that are deemed suspicious, including foreign messaging platforms popular outside China like WhatsApp, LINE and Telegram. A number of people said they or their family members have been detained for having software such as WhatsApp or a Virtual Private Network (VPN) installed on their phones during checks by authorities, according to the report. The rights group said its findings suggest the IJOP system tracks data of everyone in Xinjiang by monitoring location data from their phones, ID cards and vehicles, plus electricity and gas station usage. "Psychologically, the more people are sure that their actions are monitored and that they, at anytime, can be judged for moving outside of a safe grey-space, the more likely they are to do everything to avoid coming close to crossing a moving red- line," Samantha Hoffman, an analyst at the Australian Strategic Policy Institute's International Cyber Policy Centre, told AFP. "There is no rule of law in China, the Party ultimately decides what is legal and illegal behaviour, and it doesn't have to be written down." The IJOP app was developed by Hebei Far East Communication System Engineering Company (HBFEC), which at the time of the app's development was fully-owned by China Electronics Technology Group Corporation, a state-owned technology giant (CETC), said Human Rights Watch. CETC could not be reached and HBFEC did not respond to requests for comment. Washington last year imposed export controls on key Chinese companies including HBFEC and other institutions under CETC, citing risks to US national security and foreign policy interests. Greg Walton, an independent cybersecurity expert who advised on the report, said while the system is a "blunt instrument that may be directly contributing to the massive numbers of people in internment camps", the data if stored could be used in the future for more advanced policing algorithms. "This means that data collected through the app today may well be analysed in a few years' time by far more sophisticated logic," he said. ^ top ^

China's Xinjiang crackdown on its Muslim minority is at the heart its Belt and Road project (HKFP)
2019-04-28
Traders travel freely through the bustling Khorgos special economic zone that straddles the Kazakhstan-China border, but signs on the Chinese side bear a blunt warning — no veils or long beards allowed. It's a stark reminder of the severe security policies that China has imposed on mostly Muslim ethnic minorities in its vast border region of Xinjiang, which it considers crucial to the success of President Xi Jinping's cherished Belt and Road Initiative (BRI). The gateway to Central Asia and key project partner Pakistan, Xinjiang is at the heart of the globe-spanning trade infrastructure programme. A series of riots, bombings and stabbings blamed on ethnic Uighurs over the years prompted authorities to launch a massive security crackdown in the far western region. "The BRI is an important factor behind the central government's urge to bring the restive region of Xinjiang once and for all under its control," said Adrian Zenz, an independent German researcher specialising in Xinjiang. The drastic measures have included placing as many as one million Uighurs and other mostly Muslim Turkic-speaking minorities, including ethnic Kazakhs and Kyrgyz, in internment camps that Beijing downplays as "vocational education centres". Uighur wives of Pakistani traders have also been swept up in the dragnet. The crackdown has put the leaders of Central Asia and Pakistan, who attended a Belt and Road summit in Beijing this week, in an awkward position. Key recipients of BRI projects, they have refrained from publicly criticising China's Xinjiang approach despite discontent within their own countries. "Frankly, I don't know much about that," Pakistani Prime Minister Imran Khan told the Financial Times in March when asked about China's treatment of Uighurs. Although Kazakhstan has stated that the wellbeing of ethnic Kazakhs in China is an "important factor" in ties with Beijing, it has also voiced support for China's battle against terrorism, extremism and separatism. Kazakh authorities are holding an activist on suspicion of inciting inter-ethnic hatred after he highlighted the treatment of ethnic Kazakhs in Xinjiang, while an escaped Chinese national who described conditions in an internment camp has been denied asylum. "Fundamentally for these countries it's quite difficult because they have this economic partner which is only going to become bigger and more powerful," said Raffaello Pantucci, director of international security studies at the Royal United Services Institute. "They need to try to manage that relationship while at the same time make sure that they are representing their people to some degree," Pantucci said. Xi picked Kazakhstan's capital to launch his pet project in 2013, a symbolic choice highlighting Central Asia's historic place on the ancient Silk Road. Projects include a highway connecting China, Kyrgyzstan and Uzbekistan, a railway tunnel in Uzbekistan and a regional natural gas pipeline. China's investments in Central Asia pre-date BRI as Beijing has long seen development in the region as key to pacifying Xinjiang, Pantucci said. "From China's perspective, the long-term answer to problems — separatism, unhappiness in Xinjiang — is basically economic prosperity," he said. Kazakhstan and China share the massive, special trade hub in Khorgos, where traders can shop for clothes, kitchenware and other goods without needing a visa to go through security checkpoints. "The goods are cheaper there. Every day we can come to the border without it (feeling) like a border," said Aida Massimzhanova, a resident of Kazakhstan's largest city Almaty. But Khorgos is also a reminder of China's tightening stance on the Muslim faith that is dominant in Kazakhstan. A Kazakh journalist on a press tour was told by Kazakh officials that she would not be able to pass through the Chinese security check if she kept her hijab. She chose to stay back. On the Chinese side, journalists were prevented from approaching a sign showing Muslim veils are prohibited — an apparent violation of an agreement on a common law governing the special trade zone. Authorities have banned a number of Muslim practices in Xinjiang, including wearing "abnormal" beards. Gaukhar Kurmanaliyeva associates the special economic zone on the border with the long arm of Beijing after her cousin Asqar Azatbek was allegedly snatched by unknown Chinese people on the Kazakh side in December 2017. The Kazakh foreign ministry raised the case with Beijing and told Kurmanaliyeva that Azatbek, a Chinese-born Kazakh passport holder, was jailed for breaking Chinese citizenship laws. "We don't know where he is (being held) or how he is," Kurmanaliyeva told AFP. In Kyrgyzstan, a committee was formed by relatives of those vanished in Xinjiang's security sweep. Marat Tagayev, who joined the committee over fears for friends living in China, said the foreign ministry reported that most Kyrgyz have left the internment camps. "But how many still remain in the camps?" Tagayev said. The Chinese foreign ministry did not respond to questions related to security or detentions in Xinjiang, but said in a statement that Belt and Road "has become the main line of cooperation between China and Central Asian countries." In Pakistan, which hosts the multi-billion dollar China-Pakistan Economic Corridor linking Xinjiang to the port of Gwadar, traders have protested over the detention of their Uighur wives in the Chinese region. Ali Ibrar, a 39-year-old trader from northern Pakistan married to a woman from Xinjiang, has been involved in a push to bring abuses there to the attention of Islamabad. "Pakistan is not only silent about the plight of Uighur Muslims but is also aiding and abetting China by forcing people like me to silence," he said. ^ top ^

Hong Kong resident Jerry Chun Shing Lee, an ex-CIA officer, pleads guilty to spying for China (SCMP)
2019-05-02
A former US intelligence officer pleaded guilty on Wednesday to charges of conspiring to deliver top secret national defence information to China and unlawful retention of classified information. Jerry Chun Shing Lee was expected to go to trial in federal court this week in Alexandria, Virginia, but a hearing to change his plea was held before US District Judge T S Ellis III, who could sentence Lee to a maximum penalty of life in prison. "I conspired to gather and send secret-level information to the government of the PRC," Lee told Ellis at the end of Wednesday's hearing, using the initials for the People's Republic of China. Lee acknowledged lying to officials of the US Central Intelligence Agency about the nature of his contacts with agents of China's Ministry of State Security, the country's CIA counterpart, during a series of interviews with his former employer between 2012 and 2018. Lee was a CIA officer between 1994 and 2007. The defendant's agreement with the government sets the recommended sentence at around 20 years in prison, although Judge Ellis is not bound to accept that advice. The deal also drops two of the three charges against Lee. Lee is one of three former intelligence officers accused of spying for China in separate case over the past two years. Former CIA and Defence Intelligence Agency (DIA) officer Kevin Mallory was found guilty at a trial last year. His sentencing is scheduled for later this month. Former DIA officer Ron Hansen, now serving a 15-year sentence, pleaded guilty in March. China is alleged to have given Hong Kong-born Lee a cash gift of US$100,000 and promised it would "take care of him for life", according to the indictment against him. In Wednesday's hearing, assistant US attorney Neil Hammerstrom described a series of false statements Lee gave to CIA officials about the nature of his contacts with Chinese agents, including details about how he met them. The evidence against Lee also included files found to have been deleted from a thumbnail drive retrieved from a hotel room Lee booked in Honolulu, Hawaii. The files included information about "sensitive CIA operations overseas", Hammerstrom said. Sentencing for Lee is scheduled for August 23.. ^ top ^

US warships made 92 trips through the Taiwan Strait since 2007 (SCMP)
2019-05-03
United States warships have made 92 trips through the Taiwan Strait in a little over a decade, figures obtained exclusively by the South China Morning Post reveal, offering an unprecedented big-picture view of Washington's movements in the sensitive waterway. The figures from the US Pacific Fleet show the extent of operations carried out in the waters between 2007 and April 2019. The US does not have formal relations with Taiwan, which Beijing considers a renegade province, but it is treaty-bound to come to its defence in the event of an attack and is its main supplier of arms. Although US President Donald Trump has signalled support for Taiwan – including taking an unprecedented phone call from Taiwanese President Tsai Ing-wen when he was president-elect – data obtained by the Post shows transits through the strait increased during the Obama administration, reaching double digits in 2012, 2013, 2015, and 2016. The number of passages through the strait peaked at 12 in 2016, the same year Tsai took power in Taiwan, straining relations with Beijing. The US did not announce the transits at the time, despite their increased frequency, and China does not appear to have reacted publicly. The People's Liberation Army did, however, make its objections known on two occasions in the past 20 years when US aircraft-carrier battle groups passed through the strait. The first, in 1996, resulted in a missile confrontation known as the Taiwan Strait Crisis. The second, in 2007, prompted Beijing to reject all requests for American warships to make port calls in Hong Kong for almost a year. The Post had sought figures from the past 10 years through a Freedom of Information Act request in November, but it was the US Pacific Fleet press office that provided the information this week. James Kraska, a professor of international maritime law at the US Naval War College in Rhode Island, said Washington intentionally avoids announcing transits and overflights so as to make them appear unexceptional and routine. "The idea is to ensure that these are considered normal operations and not antagonising," he said. The number of transits dropped to five in 2017, Trump's first year in office, and three in 2018. There have been four transits so far this year. Two destroyers, the USS Stethem and USS William P. Lawrence, were the most recent American vessels to pass through the strait on Sunday and Monday. Beijing on Monday expressed "concern" over the transits, and described the issue of Taiwan as "the most important sensitive issue in Sino-US relations". The remarks were considered a milder response than previous "stern protests", which some analysts attributed to the decision of the crews to turn on their vessels' automatic identification systems. "My view is that usually if these transits took place and were taken as just a normal passage by any ship, without any formal announcement or reporting by the press, there would have been no reason for Beijing to raise its objection," said Collin Koh, a research fellow at the Institute of Defence and Strategic Studies in Singapore. "Of course, the context is often important. Especially during the current Tsai Ing-wen administration which is at loggerheads with the mainland authorities, when such passages are announced or reported widely in the press, Beijing must have felt the obligation to respond forcefully, if not in action, but at least in words." Nate Christensen, deputy spokesman for the US Pacific Fleet, said transits through the strait were part of the "US commitment to a free and open Indo-Pacific". "All of our operations are designed in accordance with international law and demonstrate that the US will fly, sail and operate wherever international law allows," Christensen said. The US Department of Defence does not routinely disclose its movements in the strait, only producing an annual report for Congress that lists the "excessive maritime claims" that were challenged by US vessels during the previous year. Periodic disclosures of transits by US vessels by Washington and Taipei on a case-by-case basis in recent years have prompted strident protests from Beijing, which claims the entire body of water lies within its jurisdiction. Richard W. Hu, an expert in Sino-US relations at the University of Hong Kong, said Washington's decision on whether to announce the transits was potentially more significant than their frequency. "The transits occur for various reasons: some just for logistical reasons, and some for political reasons," Hu said. "If we want to make sense of the frequency of transits, we could generalise that the frequency will increase whenever the tension across the Taiwan Strait rises." Bill Hayton, an associate fellow with the Asia-Pacific Programme at Chatham House, said protests by Beijing about the presence of international vessels in the strait would likely encourage Washington to carry out more such operations. "Ironically, the more that [China] makes vague statements that suggest that it regards the strait as 'internal waters', the more likely they are going to provoke US transits through it," Hayton said. "The point is that the US regards these transits as entirely normal and unremarkable activity. Therefore it won't highlight them on principle. We usually only get to hear about them when someone else – usually [China] – makes a fuss." However, Wu Xinbo, director of the Centre for American Studies at Fudan University in Shanghai, said Washington's maritime operations were unlikely to influence Beijing's stance on key issues such as Taiwan. "Sometimes the transit is supposed to send a signal to China; especially when there is an obvious increase in the number of such transits, they are intended to exert pressure on China," Wu said. "But I don't think it works that way, i.e., the pressure doesn't really alter Beijing's behaviour either on the Taiwan issue or on other issues." ^ top ^

Investors hunt for gold ahead of debut of China's Nasdaq-like technology board (SCMP)
2019-05-02
Mainland investors are racing to buy mutual funds linked to Shanghai's new Nasdaq-style technology board, in the expectation that these funds will have privileged access to upcoming IPOs, potentially enjoying handsome returns upon public trading. As of Tuesday, the first batch of seven funds slated for the Technology Innovation Board were heavily oversubscribed by investors, raising a combined 100 billion yuan (US$14.86 billion), according to the statements by the asset management firms. "Optimism about the trading outlook for the technology firms resulted in strong sales of the funds," said Ivan Li, an asset manager with hedge fund Loyal Wealth Management. "Mainland investors have faith in IPO shares and they are convinced that the companies set to list on the new technology board will bring them handsome returns." Mainland mutual fund houses can issue new products to raise funds subject to the approval by the China Securities Regulatory Commission (CSRC). The country's largest fund management firms including China Asset Management and China Southern Asset Management were among the first institutions allowed to launch funds that focus on the new board. Six of the first seven funds were at least 10 times oversubscribed while the fund launched by China Asset Management received 25 times more orders than it was able to fulfil. The seven funds approved so far can all subscribe to the retail portion of new shares offered on the technology board, while one fund will also have access to the institutional tranche. Another 70 funds are awaiting approval from the CSRC. Beijing is expected to launch the board in the middle of this year. The new board, touted by regulators as another milestone in the country's capital markets, allows unprofitable technology firms and pre-revenue biotechnology companies to list on the Shanghai Stock Exchange. The applicants thus far are mainly engaged in microchip making, computers, robotics, new materials and life sciences. Companies listing on the new board can trade freely for the first five days and will be subject to a 20 per cent limit before trade is halted from the sixth day of trade. Companies that debut on the regular Shanghai board are allowed to trade without limit on the first day, and thereafter are allowed to rise or fall by 10 per cent before trade is halted. He Yan, a fund manager with Shanghai Shiva Investment, said the trading caps were useful in preventing excessive ramping of share prices. "There are risks of boom-to-bust cycles, as mainland investors trade the shares to lofty levels even if the fundamentals don't support the prices," he said. ^ top ^

China mulls further opening up financial markets (Xinhua)
2019-05-01
China plans to unveil a slew of new measures to further open up its financial markets in order to improve the sector's management and competitiveness, according to the country's top banking and insurance regulator. A total of 12 new rules will be released soon on the basis of profound research and evaluation, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission told Xinhua in a joint interview, adding that China's financial opening-up efforts have already drawn a positive market response. The upper shareholding limits for a single Chinese-funded bank and a single foreign-funded bank in a Chinese commercial bank will be abolished simultaneously, according to Guo. Asset requirement for foreign banks to set up foreign-funded legal person banks or branches as well as for foreign financial institutions to hold stakes in trust firms will also be removed. The financial authorities will treat all domestic and overseas entities equally, while cooperation and competition will be carried out subject to the same rule, he said. In addition, restrictions on Chinese shareholders in a Sino-foreign joint-venture bank will be eased. The requirement that the sole or major Chinese shareholders should be financial institutions will be abolished. The new rules will also allow overseas financial institutions to hold stakes in foreign-funded insurance companies operating in China. The new rules will encourage overseas financial institutions to conduct equity, business and technological cooperation with banking and insurance institutions controlled by private capital. The new opening-up measures will permit foreign-funded insurance companies to invest in or set up insurance agencies in China. Currently, the shares of foreign-funded banks and insurance companies' total assets have reached 1.64 percent and 6.36 percent, respectively, in China. "By further expanding the opening-up and forging a level playing market environment, it will help to ensure sufficient competition, optimize equity structure and regulating shareholders' behavior," Guo said. Besides, both Chinese and foreign-funded financial institutions will enjoy widened entry policies in investing in or setting up consumption financial companies. Foreign banks will no longer need approval in conducting RMB businesses and will be eligible to carry out RMB businesses upon their establishment, according to the new measures. The new rules will also allow foreign banks to engage in agency collection and payment services, remove certain requirements on foreign insurance brokers to conduct insurance brokerage business in China, and ease the terms for foreign insurance companies to set up insurance institutions in China. "Further opening up the banking and insurance sectors is not only essential for the development of Chinese economy and finance but also is conducive to enriching market entities and stimulate market vitality," Guo said. Responding to forestalling and controlling risks, the official said institutions that severely violate laws and regulations and operate in an imprudent manner will face tough punishment. Financial authorities will speed up formulating relative laws and regulations to facilitate the implementation of those opening-up measures, Guo added. ^ top ^

US urges Beijing to stick to hard line on North Korea sanctions as spotlight falls on three Chinese banks (SCMP)
2019-05-01
The United States has urged China to more strictly enforce United Nations sanctions on North Korea, demanding that three Chinese banks submit records to US officials investigating alleged sanctions busting. Beryl Howell, judge for the US District Court for the District of Columbia, ordered the banks to hand over records of their transactions with North Korea, Reuters reported on Wednesday. In a heavily redacted court opinion released by the US Justice Department on Tuesday and dated March 18, Howell said the subpoenas were for records of dealings between a now-defunct Hong Kong-based front company and a North Korean state-run business. The court document did not include the names of the organisations. The Chinese government had stakes in all three of the banks, two of which had branches in the US, it said. The order was made under the Patriot Act, which enables the US Justice Department to subpoena foreign financial institutions and cut off their access to US correspondent accounts. The sanctions have been imposed in response to North Korea's nuclear weapons programme, which Washington says must be abandoned completely before the curbs can be lifted. China is trying to balance that international pressure on the North with its concerns that a collapse in its neighbour's economy could destabilise the region. A few weeks after the US court demand was issued, China and North Korea opened a border bridge over the Yalu River connecting the Chinese city of Jian with North Korea's Manpo in a potential boost to the North's economy. Labourers and seafood products from North Korea were appearing across the border in the northeastern Chinese county of Hunchun, sources with ties to Chinese companies and North Koreans said. North Korean defectors are also another flashpoint in the China-US relationship. In April, China detained seven North Korean defectors – including a nine-year-old girl – in the northeastern province of Liaoning. Beijing, wary of allowing the flow of North Korean refugees into northeastern China to undermine either the struggling region's security or the regime of leader Kim Jong-un, has stuck to a policy of sending defectors back. Analysts at a forum for North Korea Freedom Week in Washington on Monday urged the US to implement extra sanctions against Chinese officials involved in repatriations, putting more pressure on Beijing. Last month, the US put dozens of Chinese companies and universities on a Commerce Department "unverified list" and demanded extra diligence from US businesses in dealing with those organisations. Those affected included 37 mainland Chinese companies and universities, many of which work in fields such as precision optics, electronics, machine tools or aviation. ^ top ^

Multilateral talks help DPRK denuclearization (China Daily)
2019-04-30
Kim Jong-un, leader of the Democratic People's Republic of Korea, had a one-to-one meeting with Russian President Vladimir Putin in Vladivostok on April 25, after which a high-level meeting between the DPRK's delegation and Russian officials was held. The two countries said the meeting was substantial for bilateral cooperation and peace on the Korean Peninsula. Will they realize the goals when both are under international sanctions? Denuclearization needs multilateral talks: Kim's trip is a friendly visit to review the traditional friendship with Russia as a part of the DPRK's series of neighborhood diplomacy that started last year. Russia is an important historical friend of the DPRK and they presently have much common in bilateral and regional development, such as in a need to expand economic cooperation and diplomatic communication when both are under international sanctions led by the United States. The DPRK farm labor can help Russia to develop its Far East and the DPRK needs Russia to help reinforce its security after the second DPRK-US summit broke down in late February and Washington adhered to tough stances on Pyongyang's complete denuclearization. The DPRK talking with Russia is a way to bargain with the US before the third US-DPRK summit they still hope to realize. And Russia grasped this chance to remind its role in regional issues when the DPRK turns to it. Pyongyang maintains the will to talk with Washington for it has not broken its promise with the US that to cease tests of nuclear weapons and mid-term and long-term missiles, showing respect to US President Donald Trump, though after the second Trump-Kim summit, it tried to impose pressure on Washington by restarting missile tests and asked the US to remove US State Secretary Mike Pompeo from the negotiation team. But as the nuclear issue plays a major role in the DPRK, the US and the DPRK have insisted on their own conditions so that substantial agreements can be reached. Russia reiterated the Six-Party Talks where more countries involved can mediate and promote compromises between Pyongyang and Washington so that the two countries can advance their talks for some results. Besides, only with multilateral negotiation can the results guarantee the interests of neighboring countries. The breakdown of the second US-DPRK summit raised the possibility of the restart of Six-Party Talks. Four-party talks and Six-Party talks both important: Although cooperation in economy, security and other fields can hardly be fully realized against both countries are under strict sanctions, the summit between the DPRK and Russia was important for the Peninsula denuclearization. Russia conveyed Pyongyang's requirement for security guarantee, which may be a way to make Washington treat Pyongyang more fairly and the problem should be solved in a way that balances and respects all parts' interests. Washington and Pyongyang seek different goals in the nuclear disputes as Washington wants the DPRK's complete denuclearization while Pyongyang wants a peace mechanism of the Korean Peninsula. Both goals require a first step should be whether the US easing sanctions against Pyongyang or the DPRK makes concrete efforts of complete denuclearization such as allowing supervision of its nuclear sites and a nuclear list. Such a parallel approach was proposed in 2015 by China but Pyongyang and Washington remained at a standstill that which country should take the first step. In this circumstance, multilateral mechanisms are significant for a solution, not only Six-Party Talks whose goal is to promote the DPRK to denuclearize, but also four-party talks aiming to promote peace restoration on the Korean Peninsula made up of the US, the DPRK, the Republic of Korea and China. The two mechanism are complimentary with each other. All parties' concerns need attention and discussion. The US and the DPRK still have a strong will to reach achievements on Peninsula denuclearization. Russia, China, and Japan have shown concerns on the issue vital for the development of Northeast Asia, letting that the ROK has taken a rather active role to mediate between Washington and Pyongyang. The room for multilateral talks' resumption has been enlarging. US still the key in Peninsula issue: To some extent, relations with other countries cannot impact Russia-DPRK traditional relations too much. The two countries are complementary in economic structure especially in Russia's Far East development that the DPRK can obtain foreign exchange through DPRK laborers working there who meet Russia's needs for labor forces. But Moscow and Pyongyang's agreement on bilateral cooperation for co-development will be restricted by international sanctions. It is hard to say how much will regional development advance when tensions over the DPRK nuclear get relieved. The peace restoration on the Korean Peninsula is a long-term structural problem intertwined with Korean reunion so it will take a lot of time to be resolved. Therefore, the problems currently lie in denuclearization disputes where progress stalled because Washington has charged a high price from Pyongyang. The denuclearization game will continue with great uncertainties since Washington has announced a deadline for potentials third Kim-Trump summit within 2019. Meanwhile, the DPRK is willing to continue talks and played pressure tactics including a missile test and unclear moves in nuclear sites. One thing for sure is the address of the denuclearization issue must involve other countries' joint efforts, and patient cooperation and negotiation. Some of these countries participated the signing of the Korean War Armistice Agreement, and joint efforts can guarantee better implementation of later agreements. More countries must involve the process on the basis that Washington and Pyongyang can reach an agreement and establish mutual trust in advance. However, the Six-Party talks were abandoned for about a decade and Washington and Pyongyang are so insist on their requirements that it is uncertain for multilateral talks to resume. ^ top ^

Kim Jong-un, Vladimir Putin and the exploiting of great power politics (SCMP)
2019-04-28
Who could forget the statement by the recently promoted North Korean first vice-minister of foreign affairs Choe Son-hui after the unsuccessful Hanoi summit: "I have a feeling that Chairman Kim has lost the will to continue US-DPRK exchanges." Yet, in light of the recent foreign ministry statement from Pyongyang, perhaps Kim has not lost the will to deal with US President Donald Trump, but, rather, with US Secretary of State Mike Pompeo, and National Security Adviser John Bolton. As the North Korean leader visited Russia for a summit with President Vladimir Putin, Kim himself stated his desire for a "very useful and successful" visit. Perhaps it is mere symbolic diplomacy, but nonetheless, a signal to Washington that Russo-North Korean ties are not in decline. Pyongyang did not hold back in blaming Pompeo for the stalled negotiations with the US, after two rounds of presidential-level summits. It lambasted Pompeo's "indulgence in reckless remarks" as evidence "that whenever Pompeo pokes his nose in, the talks go wrong without any results even from the point close to success". The statement, from Kwon Jong-gun, director general of the foreign ministry's American affairs department, affirmed Pyongyang's wishes to have a "dialogue counterpart … who is more careful and mature in communicating with us", should there be any "possible resumption of the dialogue with the US". This rhetoric from North Korea is likely to be a reaction to a statement made by Pompeo to the US Congress, where he branded Venezuelan President Nicolas Maduro and Kim Jong-un as "tyrants". The tit-for-tat rhetorical battles between Washington and Pyongyang have not yet abated. Yet, North Korea highlighted, once more, how relationships between Kim and Trump remain cordial. Kim said at the 14th Supreme People's Assembly that "the personal ties between me and him [Trump] are not hostile like the relations between the two countries". And Choe Son-hui reaffirmed post-Hanoi that the two leaders displayed a "chemistry" that was "mysteriously wonderful". Pyongyang seems increasingly suspicious of the Bolton and Pompeo double act, coupled with Kim Jong-un's desire to be seen as having equal status to Trump. The two leaders negotiating at the two summits have, for one thing, provided a means of justifying Kim's policies across the domestic population. Yet, Washington's all-or-nothing approach towards dealing with the North Korean nuclear issue remains at odds with the North's preferred incremental approach towards denuclearisation. Pompeo and Bolton's hawkish stance only widens the gulf between the two states' negotiating strategies. Only a few hours before the foreign ministry statement, North Korean state media announced that Kim had "guided a test-fire of a new-type [of] tactical guided weapon", with a "peculiar mode of guiding flight and the load of a powerful warhead". The last "ultra-modern tactical weapon" test was carried out in November. But the Kim regime may not have abandoned its nuclear ambitions, even during a moratorium on missile and nuclear testing (the latest missile and nuclear tests came in 2017).Kim's dual policy of "byungjin" initiated in 2013, which calls for developing nuclear weapons and the economy simultaneously, was abandoned last year in favour of a "new strategic line". Instead of pursuing simultaneous nuclear and economic development, Kim declared in his 2018 New Year speech that North Korea had accomplished "the cause of perfecting the national nuclear forces", suggesting a shift towards a closer focus on the economy.We should not come to the quick conclusion that this tactical test is accelerating the end to the Pyongyang's moratorium on missile and nuclear testing. But to dismiss the test as merely a symbol of North Korea's nuclear capabilities may also underestimate the hermit state's intentions. Putin-Kim summit can aid peace process on Korean peninsula Nuclear weapons continue to have importance for North Korea's projection of itself as a modern and scientific power in the international system.Although the days of fire and fury and of pushing nuclear buttons may – at least for now – be on hold, the US continues to be the North Korean state's enemy, being the "cause that pushed us [North Korea] into a nuclear state", as the latest foreign ministry statement said. While "byungjin" may be over, that does not mean that nuclear development is off the agenda for Kim and the Workers' Party of Korea. Indeed, satellite imagery recently highlights the presence of railcars near the notorious Uranium Enrichment Facility and Radiochemical Laboratory at the Yongbyon Nuclear Research Centre. Again, it would be highly premature to infer that nuclear developments will arise out of this, but such activity does not eliminate the possibility of the North engaging in the transport of radioactive material, or reprocessing campaigns. South Korean President Moon Jae-in's calls for a third Trump-Kim summit, and his attempts to narrow the gap between Washington and Pyongyang continue. Kim has given the US a time frame of the "end of this year" to "make a bold decision", namely, sanctions removal. While Russia remains tied by UN sanctions regarding economic relations with North Korea – and unwilling to violate its sanctions commitment – Pyongyang is making a concerted effort to keep its few international "friends" on side. Diplomacy with Russia – even if only for the visual spectacle – not only pits Russia against the US, but also puts China in the mix. Exploiting great power politics seems to be one of Pyongyang's strategies at present. Indeed, it would not be surprising if a Xi-Kim summit occurs soon, given Kim's visit to the Belt and Road Forum in Beijing, after his trip to Russia. Visiting two "friends" in the space of as many weeks is one way for Kim to show that North Korea is not leaving any options unexplored, as it continues to try to extract gains from the US. Time to take note, Mr Pompeo. ^ top ^

Cabinet meeting in brief (Montsame)
2019-05-02
At its regular meeting on May 1, the Cabinet made the following decisions: Minister of Food, Agriculture and Light Industry Ch.Ulaan was assigned to carry out preventive measures against the threat of field mice on a land of 645 thousand hectares. Minister of Mining and Heavy Industry D. Sumiyabazar obtained permission to set up a project unit responsible for developing the legal framework for exploration, mining and utilization of rare-earth elements and carrying out economic impact assessments. The World Bank estimated that Mongolia has USD 10 billion worth of rare-earth element resources. 'National Geo-Information Database' program was approved. The five-year program will be implemented with funding from the State Budget and loans and aids of foreign governments and international organizations. The Cabinet approved the proposal to open a Consulate in Manzhouli, China and the bill on ratifying the Asia-Pacific Trade Agreement thus, decided to submit them to the Parliament. The Cabinet discussed and decided to submit to the Parliament bills on granting excise tax exemptions on imports of equipment to be used for training for the 2020 Summer Olympic and Paralympic Games and hosting the Children of Asia International Sports Games 2020 and the 2023 East Asian Youth Games. Minister of Road and Transport Development B.Enkh-Amgalan was assigned to promptly carry out preventive railway maintenance works with commercial loans to prevent accidents that might occur following the increase in annual precipitation. ^ top ^

Development Bank to finance major projects and programs only (Montsame)
2019-05-02
At its regular meeting on May 1, the Cabinet assigned the Board of Directors of the Development Bank of Mongolia to immediately cease the issuance of low interest loans for commercial banks and fund major projects and programs only. Head of the Cabinet Secretariat L.Oyun-Erdene was assigned to renew a composition of the Board of Directors, change the executives, who worked irresponsible, and put an experienced international team in charge of the bank's management. The working group, set up by the Government Resolution No:76, found 63 violations in the bank's activities. Thus, the corresponding Minister and the Board of Directors were given a duty to take measures for eradicating the violations and oversee the implementation of the recommendations given during the inspection and report to the government within the third quarter of 2019. ^ top ^

Jennia JIN
Embassy of Switzerland