Foreign Policy

• China tells Donald Trump: make up your mind whether you want a trade deal (SCMP)
• China's handling of yuan backed by IMF despite Donald Trump's repeated charges of currency manipulation (SCMP)
• Duterte slams critics as he invokes Philippine-US defence pact over South China Sea dispute (SCMP)
• China urges Prague politicians not to undermine Czech relations (Global Times)
• US senators seek to lock in limits on Huawei and keep it out of trade talks (SCMP)
• Canadian police probe 'possible policy breaches' at lab after Chinese scientist removed (SCMP)
• China urges U.S. to stop wrong moves on Iran nuclear issue (Xinhua)
• AIIB reaches milestone of 100 members (China Daily)
• China and Vietnam in stand-off over Chinese survey ship mission to disputed reef in South China Sea (SCMP)

Domestic Policy

• China to further facilitate immigration, entry-exit for foreigners (Xinhua)
• Reviews of patents to be accelerated (China Daily)
• Xi meets Chinese diplomatic envoys to foreign countries (Xinhua)
• China weighs more balanced approach to growth in H2 (Global Times)
• CPC urges real action to handle problems in education campaign (Xinhua)
• Xi stresses people-centered development in Inner Mongolia inspection (Xinhua)
• China's greenhouse gas emissions soar 53 per cent in a decade, data shows (SCMP)

Shanghai

Tibet

Xinjiang

• 'Liberal' policy chief unlikely to mean a softening on Xinjiang from China (SCMP)
• As China locks up Muslims in Xinjiang, it opens its doors to tourists (HKFP)
• China highlights support to Xinjiang through pairing assistance (Xinhua)
• Refuting 22 Western nations, 37 governments laud China's human rights achievements (Global Times)

Hongkong

• Chinese officials scramble to deliver new Hong Kong strategy but military response not an option (SCMP)
• Hong Kong anti-extradition law demo set for Sunday, as pro-Beijing lawmakers urge gov't to ban protests till Sept (HKFP)
• 'No rioters, only a tyrannical regime': Thousands of Hong Kong seniors march in support of young extradition law protesters (HKFP)
• Extradition protests hammer Hong Kong economy as experts report drops in air travel, retail sales and hotel revenue (SCMP)

Taiwan

• Mainland sea bridge built with hope of linking Taiwan (Global Times)
• KMT candidate Han Kuo-yu faces uphill battle in Taiwan presidential race (SCMP)
• "No cooperation or business dealings" with U.S. companies involved in arms sales to Taiwan: spokesperson (Xinhua)

Economy

• ASEAN overtakes U.S. to become China's second-largest trading partner (People's Daily)
• Chinese SMEs benefit from tax reduction measures (People's Daily)

DPRK

• Squeezed by sanctions, North Korea experiences worst downturn since 1990s famine (SCMP)
• Chinese man who smuggled one bottle of North Korean beer into Japan charged for breaching sanctions (SCMP)

Mongolia

• President submits a Constitutional Amendment Bill (Montsame)
• Fitch affirms Mongolia at 'B'; Outlook Stable (Montsame)

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China tells Donald Trump: make up your mind whether you want a trade deal (SCMP)
2019-07-17
China on Wednesday urged the Trump administration to "make up its mind" about reaching a trade deal with Beijing, warning that additional tariffs could send negotiations further off track. Since the high-profile talks between Chinese President Xi Jinping and US counterpart Donald Trump at the G20 summit late last month in Osaka, Japan, there has been little sign that the two sides have made any progress towards ending their year-long trade war. US Treasury Secretary Steven Mnuchin said this week that he and US Trade Representative Robert Lighthizer may travel to Beijing if talks by phone this week are productive. Trump had promised to hold off on additional tariffs during his meeting with Xi last month, but on Tuesday he again raised the sceptre of fresh levies on Chinese goods. "We have a long way to go as far as tariffs where China is concerned, if we want. We have another US$325 billion [of goods] we can put a tariff on, if we want," Trump said. "So, we're talking to China about a deal, but I wish they didn't break the deal that we had." China's foreign ministry spokesperson Geng Shuang said on Wednesday that new tariffs would present "new obstacles" to any deal between the world's two largest economies. "The Chinese side has always advocated that the trade conflicts should be resolved through dialogue, and we have been sincere about the trade negotiations," said Geng during a regular press conference in Beijing. In response to Trump's remarks saying that there was still a long way to go before a deal is reached, Geng called for "determination and perseverance" from Washington. "There is a Chinese saying that a journey of a thousand miles begins with a single step – no matter how long the journey is, we will reach our destination as long as we take the first step and forge ahead," he said. "So we would like to urge the US side to make up its mind, show determination and perseverance and to work with the Chinese side … in reaching a mutually beneficial trade deal as soon as possible." Geng also said Trump's threat of additional tariffs would amount to "putting up new obstacles for the trade negotiations and to make the road to reaching a trade deal even longer". Beijing has reportedly been seeking concessions on Huawei, which has been frozen out of the US 5G networks because of security concerns, and tariffs in return for a deal that would in turn see it agreeing to significantly increase its purchases of US agricultural products. Trump has claimed that Beijing has already agreed to buy more US agriculture goods but Lu Xiang, a US specialist from the Chinese Academy of Social Sciences, said this was "wishful thinking" on the part of the president since China would only agree to the step if its own conditions were met. Trump's ability to use Huawei as a bargaining chip may also be called into doubt after a bipartisan group of senators on Tuesday proposed legislation to prevent the tech giant from doing business with US companies without congressional approval. Lu also said it was not clear what the US wanted from the trade talks, with its negotiating team reportedly unable to agree among themselves and Trump failing to provide a clear direction. He also alluded to reports that Trump wanted to replace Commerce Secretary Wilbur Ross and said: "Since May, the US administration has been on edge. Many issues – what the US wants, who will represent them in the talks and whether these officials can remain in their jobs – have become unclear. "We are at the most incomprehensible moment. The US president does not have a clear policy direction, and he has not proven to be a person who makes sense, so we need to be patient until politics in US have been stabilised," he said. A trade expert who advises the Chinese ministry of commerce said this was also a "delicate moment" because Beijing was trying to decide whether to strike a deal or let the trade war drag on. "The current situation is very fluid and complicated with a lot of internal deliberations. Things will only be clearer after the negotiations resume," said the expert, who spoke on condition of anonymity because of the sensitivity of the matter in China. ^ top ^

China's handling of yuan backed by IMF despite Donald Trump's repeated charges of currency manipulation (SCMP)
2019-07-17
Despite repeated accusations of currency manipulation from US President Donald Trump, the International Monetary Fund has found that in 2018, Beijing's handling of the Chinese yuan was "broadly in line" with the state of its economy. The Washington-based fund, which is bracing for the departure of managing director Christine Lagarde in September, also lashed out at the impact of the US-China trade war, which is "weighing on global trade and investment, without materially affecting [trade] imbalances thus far", in a new report released on Wednesday. The report estimated that "the announced and envisaged tariffs could reduce global growth by an additional 0.3 per cent in 2020", as the trade war moves into its second year. However, on currency, the International Monetary Fund (IMF) found that including its current account surplus and exchange rate, China's external position had improved compared to previous years' assessments that it was "moderately stronger" than warranted. "After many years of excess current account surpluses, China's external position moved to become more broadly in line with fundamentals in 2018," said IMF chief economist Gita Gopinath. The IMF's view contrasts sharply with Trump's, who suggested at the start of July that the United States manipulate the value of the US dollar to offset competitive devaluation by China. "China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA," Trump said on Twitter. "We should match." The value of the yuan has been a constant bone of contention for the US in its escalating trade conflict with China. Washington has demanded that any trade deal include language promising that there will be no currency devaluation to gain a competitive advantage, mirroring a section included in the recently completed United States-Mexico-Canada Agreement, a new version of the North American Free Trade Agreement. But despite Trump's complaints, the US Treasury Department's semi-annual currency report to the US Congress has never found that China met the criteria needed to be labelled a currency manipulator. The US Treasury Department is due to release a new assessment in October. The IMF found that the yuan's average real effective exchange rate, as measured against a basket of currencies, appreciated by around 1.4 per cent in 2018 and depreciated around 0.2 per cent in the first five months of 2019. "China's real effective exchange rate would be at the same level as warranted by fundamentals and desirable policies," the IMF said in its report. The report could be viewed a second rebuke of Trump's China policy from multilateral agencies in 24 hours after a ruling by the World Trade Organisation (WTO) on Tuesday. It found in China's favour in a 2012 dispute over Washington's anti-subsidy tariffs on Chinese exports of solar equipment. The WTO said that the US had not complied with its rules and that if it did not remove the tariffs, it could face sanctions from China. The Office of the United States Trade Representative (USTR) reacted furiously to the ruling, saying that it "undermines WTO rules, making them less effective to counteract Chinese state-owned enterprise subsidies that are harming US workers and businesses and distorting markets worldwide". The statement said that "the United States is determined to take all necessary steps to ensure a level playing field so that China and its [state-owned enterprises] stop injuring US workers and businesses". The yuan, meanwhile, has moved further away from the psychologically important mark of 7 to the US dollar in recent months, with the government-set midpoint of the currency's permitted daily trading range set at 6.8827 on Wednesday. The IMF did not find any indication that China intervened in the foreign exchange market last year. Its foreign exchange reserves declined by a modest US$67 billion in 2018, which was within normal range after adjusting for estimated valuation changes, returns on reserve assets and measurement margin of error, the report said. The fund, however, repeated its call for China to "move towards a flexible, market-based exchange rate". As the transition proceeds, any intervention in the foreign exchange market should be limited only to "smooth excessive volatility". The IMF urged China to continue domestic rebalancing towards consumption-based growth and to take further actions to address market distortions. "Priorities include improving the social safety net, reform of state-owned enterprises, opening markets to more competition and creating a more market-based and robust financial system," it said. China should also take steps towards attracting more inward foreign investment, while also ensuring the equal treatment of foreign and domestic investors, the fund added. ^ top ^

Duterte slams critics as he invokes Philippine-US defence pact over South China Sea dispute (SCMP)
2019-07-17
Philippine President Rodrigo Duterte lashed out at his detractors on Wednesday, accusing them of pushing him to war with Beijing over disputes in the South China Sea, as he invoked a defence treaty with the United States. "Now, I'm calling America, I am invoking the Philippine-US pact. I would like America to gather all their Seventh Fleet in front of China," Duterte said in a television interview. He added that he would go on board with his critics, including Supreme Court Senior Associate Justice Antonio Carpio and Albert del Rosario, the former foreign affairs chief. There was no immediate response from the US. Manila and Washington's 1951 Mutual Defence Treaty allows either parties to assist the other in the event of attacks on its metropolitan territory, island territories under its jurisdiction in the Pacific or on its armed forces, public vessels or aircraft in the Pacific. The US has affirmed that the scope of coverage includes the South China Sea, while at the same time maintaining that it does not take sides in territorial disputes there. Duterte's invocation of the Philippines-US accord came after officials from both nations wrapped up their two-day "strategic dialogue" on Tuesday, covering issues such as defence, security, development and global diplomatic engagement. "Both sides recognised the importance of a strong Philippines-US alliance in enhancing security cooperation and promoting regional stability and security," a joint statement issued after the meeting said. "Both sides reaffirmed their commitment to uphold freedom of navigation, overflight and other lawful uses of the South China Sea, and stressed the importance of peacefully resolving disputes in accordance with international law, as reflected in the Law of the Sea Convention," it added. Political scientist Ramon Beleno III said that while Duterte's Chinese counterpart, Xi Jinping, would not be thrilled about his sharp message, the invocation of the Philippine-US treaty was likely for show. "If he is really serious, it would hurt not only the country's diplomatic ties with China, but also the trade relations. I think he is just bluffing," said Beleno, the head of the political science and history department at Ateneo de Davao University. In the television interview on Tuesday, Duterte insisted that while Beijing had permission to fish in the areas claimed by Manila in the resource-rich waterway, the Philippines was still the "owner" of the West Philippine Sea – as it is known in the country. "As far as I'm concerned, I am the owner, and I'm just giving the fishing rights," Duterte said. "We filed a case for arbitration actually, and we won," said Duterte, adding that despite the ruling, China continued claiming rights over the territory. The president's comments came after he last week said he would use the country's State of the Nation Address on Monday to address the outrage over his claims that the Philippines could not bar China from the West Philippine Sea. While Manila has seen an improvement of ties with Beijing as a result of Duterte's conciliatory policies towards China since his election in 2016, territorial disputes remain a thorny issue between both sides. China continues to reject a 2016 ruling of an international arbitration court that invalidates its historical basis in claiming almost the entire South China Sea, including the Scarborough Shoal, a traditional fishing ground that sits within the Philippines' exclusive economic zone. Anger has been building in the Philippines over Duterte's unwillingness to get China to respect its territorial rights. Last month, Filipinos expressed outrage after the Duterte administration downplayed an incident at the Reed Bank, where a Chinese fishing boat allegedly rammed a Philippine vessel and left the crew stranded in the waters, calling it an ordinary "collision". Demonstrators in Manila burned Chinese flags in protest over what they said was a "weak" response by Duterte to the sinking. Malacanang Palace later described the incident as a "serious marine casualty", although it denied the president was walking back on labelling it an accident. Meanwhile, National Security Adviser Hermogenes Esperon expressed hope that "in the end, the international community will always be with us to see to it that the South China Sea will be a maritime area that will have freedom of navigation, overflight, and of course, undisturbed trade". "We may not be a very strong country militarily, but we can say we are able to hold on to our sovereignty and sovereign rights in the West Philippine Sea," Esperon said. ^ top ^

China urges Prague politicians not to undermine Czech relations (Global Times)
2019-07-17
China urged the Prague municipal administration of the Czech Republic and certain politicians to change course and stop undermining China-Czech relations, to avoid hurting their own interests. Chinese Foreign Ministry spokesperson Geng Shuang made the remarks Wednesday at a media briefing, in response to a question whether China has taken countermeasures against anti-China activities of the Prague government and mayor. Geng said that the Prague municipality and the mayor of Prague behaved badly on issues concerning China's core interests and sovereignty over Taiwan, Tibet Autonomous Region and others. "This seriously hurts Chinese people's feelings and sabotages the benign atmosphere of sub-national exchanges and cooperation of the two countries. This is the fundamental reason why Prague parties and certain people are not welcome by Chinese people," Geng told the media. Prague mayor Zdenek Hrib previously refused to expel a Taiwan "diplomat" and refused to recognize the one-China principle. In March, his administration flew the flag used by the 14th Dalai Lama's "government-in-exile" from Prague's town hall. Hrib also hosted head of the "government-in-exile" Lobsang Sangay, according to the South China Morning Post.  ^ top ^

US senators seek to lock in limits on Huawei and keep it out of trade talks (SCMP)
2019-07-17
A bipartisan group of US senators proposed a law on Tuesday to prevent Chinese telecommunications company Huawei Technologies from doing business with US companies without Congressional approval instead of relying solely on an executive order by President Donald Trump, thus limiting his ability to use the firm as a bargaining chip in trade talks with Beijing. Trump declared a national emergency on May 15, signing an executive order that did not name Huawei, a leader in 5G technology, but barred the use of telecommunications equipment made by companies that are deemed a threat to national security. The US Commerce Department quickly followed within minutes by putting Huawei on its "Entity List", effectively stopping the firm from doing business with US companies. Six senators introduced the legislation "to reinforce the Trump administrations's efforts to prevent the Chinese-owned telecom company Huawei from threatening America's national security", they said in a joint statement. "The Defending America's 5G Future Act would codify President Trump's recent Executive Order and would prohibit the removal of Huawei from the Commerce Department Entity List without an act of Congress," the senators said. "Huawei isn't a normal business partner for American companies, it's a front for the Chinese Communist Party. Our bill reinforces the president's decision to place Huawei on a technology blacklist. American companies shouldn't be in the business of selling our enemies the tools they'll use to spy on Americans," said Senator Tom Cotton, Republican of Arkansas, one of the sponsors of the bill, which is a companion to legislation already introduced in the House of Representatives. In addition to Cotton, the senate bill is being introduced by Republican Marco Rubio of Florida and Mitt Romney of Utah, and Democrats Chris Van Hollen of Maryland, Mark Warner of Virginia and Richard Blumenthal of Connecticut. Van Hollen added that, "by prohibiting American companies from doing business with Huawei, we finally sent an unequivocal message that we take this threat seriously and President Trump shouldn't be able to trade away those legitimate security concerns. "This legislation will make sure he doesn't by codifying the president's original executive order on Huawei and prohibiting the administration from relieving penalties on Huawei without the approval of Congress." Both the White House press office and Huawei's media office failed to respond to requests by the South China Morning Post for comment. Huawei's founder and chief executive, Ren Zhengfei, has repeatedly denied that the company poses a security risk. The US contends that Huawei's equipment could be opened to Chinese government monitoring of private networks and data. The inclusion of Huawei on the Commerce Department's Entity List started a 150-day period during which it would write the rules to back up the order, which was issued under the 1977 International Emergency Economic Powers Act. Banning the use of Chinese-made 5G, or fifth-generation, technology comes at a critical time in US-China relations, given the imposition of tariffs by both sides over the past several months on hundreds of billions of dollars worth of goods. The US is also playing catch-up when it comes to foreign rivals on developing 5G technology. In April Trump unveiled plans for the largest-ever auction of radio spectrum to support the development of 5G, a mobile communications technology predicted to revolutionise the so-called internet of things by promising speeds 100 times as fast as current standards. US defence and commerce officials at an annual Commerce Department conference in Washington on Thursday said that America's free-enterprise structure would prevail over China on the issue of 5G technology, but that the process must balance the strong cross-currents of security against essential cutting-edge technology. In April, Trump called the race to 5G "a race America must win". Jennifer Lane, senior counsel at the Commerce Department's office of the assistant general counsel for administration and transactions, said her department is coordinating with several federal agencies – including the Departments of State and Defence, as well as the US Trade Representative and the Federal Communications Commission – to determine which foreign products and companies constitute national security threats. "It's a lot to grapple with in one executive order and we only have 150 days to accomplish that," Lane said at the conference. It has been 63 days since the executive order was issued. In addition to the rules being drafted by the Commerce Department, the order also stipulated that the Director of National Intelligence deliver an initial assessment of the threats posed by foreign products and companies within 40 days. The Secretary of Homeland Security was also tasked to deliver written assessments of entities, hardware, software and services that present vulnerabilities in the United States and the impact on national security within 80 days. Both the DNI and DHS are charged with updating these assessments annually. Senator Warner noted that both "President Trump's executive order and the Department of Commerce's Entity List designation reflect the reality that companies like Huawei represent a threat to the security of US and allied communications networks. "It shouldn't be used as a bargaining chip in a larger trade negotiation. This bipartisan bill will make sure that Congress has a chance to weigh in if the President attempts to make concessions on our national security," he said. ^ top ^

Canadian police probe 'possible policy breaches' at lab after Chinese scientist removed (SCMP)
2019-07-16
The controversy over a Chinese researcher who was removed from her laboratory in Canada has deepened, with police launching an investigation into "possible policy breaches" at the facility. Qiu Xiangguo, a medical doctor and virologist and one of the first scientists to develop a treatment for Ebola, was escorted from the National Microbiology Lab in Winnipeg early this month. On Monday, the University of Manitoba said it had severed ties with her until the investigation had concluded. The case has sparked discussion of Chinese espionage in Canada, after months of turbulent relations following the nation's arrest of Huawei Technologies executive Meng Wanzhou on a US warrant. Beijing is demanding her return. Chinese-educated microbiology researcher Qiu – along with her husband and fellow researcher, Cheng Keding, and an unknown number of Chinese research students – were removed on July 5 from Canada's only level-4 virology facility at the National Microbiology Lab. Qiu's position as a non-salaried adjunct professor at the university "has ended and all students she supervised have been reassigned", pending an investigation by police, spokesman John Danakas told Canadian Broadcasting Corporation on Monday. Canada's national police force meanwhile said it was investigating a referral from the country's Public Health Agency over "possible policy breaches" at the virology facility, whose work includes research on the most dangerous human and animal pathogens, such as Ebola. "We can confirm that we have received a referral from the Public Health Agency of Canada," Julie Courchaine, spokeswoman for the Royal Canadian Mounted Police, said in a statement. "We will not speculate on the potential outcome of the investigation. In order to maintain the integrity of the investigative process, we have no further comment at this time." Qiu is head of the Vaccine Development and Antiviral Therapies section in the Special Pathogens Programme at the lab. Last year, she jointly won Canada's Governor General's Innovation Award with fellow researcher Gary Kobinger for their discovery of the Ebola treatment. Qiu is from Tianjin in northern China and moved to Canada for graduate studies in 1996. It is unclear whether Qiu, her husband or the research students at the lab are Chinese citizens, though Canadian media reports have said many of the students at Qiu's lab were from China. Qiu, who is still listed on the university's website, could not be reached for comment. The incident has prompted discussion about national security in Canada, and debate in China. State-run Chinese tabloid Global Times tweeted on Sunday that "it's the best time for China to attract top-ranking Chinese-origin researchers to work in China". Meanwhile, Nato secretary general Jens Stoltenberg said the transatlantic security alliance had stepped up coordination with Canada in response to "increased efforts by other nations to try to spy on Nato allies". Stoltenberg was responding to media queries about Qiu's case and Chinese espionage in Canada, but declined to comment specifically on Qiu and did not mention China by name. Chinese foreign ministry spokesman Geng Shuang said the embassy in Toronto had not received any notification that Chinese citizens were involved, adding that consular assistance would be provided if they were. ^ top ^

China urges U.S. to stop wrong moves on Iran nuclear issue (Xinhua)
2019-07-15
China calls on the United States to stop its wrong moves on the Iran nuclear issue and respect the legitimate rights and interests of all parties, a Foreign Ministry spokesperson said Monday. Leaders of France, Germany and Britain issued a joint statement on Sunday, saying that they were "concerned about the risk that JCPOA (nuclear deal) will collapse following sanctions imposed by the United States and as a result of Iran's decision to no longer respect key provisions of the agreement." They stressed that all parties concerned should act responsibly and look for ways to stop the escalation of tension and resume dialogue. In response, spokesperson Geng Shuang said the tension surrounding the Iran nuclear issue had continued to escalate recently, and that China was highly concerned over the current situation, maintained close communication with related parties and committed itself to helping ease the tensions. China has always believed the complete and effective implementation of the Joint Comprehensive Plan of Action (JCPOA) in accordance with the requirements of the UN Security Council resolutions was the only effective way to resolve the Iran nuclear issue and ease tensions, he said. Geng called on related parties to remain calm and restrained, adhere to resolving the issues through dialogue under the framework of the JCPOA, assume their responsibilities and ensure a balance of rights and obligations of the JCPOA. He called on the United States to stop its wrong moves on the Iran nuclear issue, respect the legitimate rights and interests of all parties, not to hinder the implementation of the JCPOA and work for a political and diplomatic resolution to the Iran nuclear issue. When answering a question on Britain intercepting an Iranian tanker on the grounds that it was suspected to deliver oil to Syria, Geng said China always advocated that a country should adhere to basic norms of international laws in its relations with other countries. "It is hoped that all parties concerned take practical measures to avoid escalating the situation, and jointly safeguard the security of the global energy supply," Geng said. ^ top ^

AIIB reaches milestone of 100 members (China Daily)
2019-07-15
Jin Liqun, president of the Asian Infrastructure Investment Bank, said he wants AIIB to become the bank that connects Asia to the world as it marked a total of 100 approved memberships during the past weekend. The AIIB Board of Governors approved on Saturday the applications of three African countries — Benin, Djibouti and Rwanda — at the bank's annual meeting in Luxembourg. This would bring the total number of AIIB members to 100, including 70 whose memberships have been ratified by their parliaments. "AIIB members collectively account for 78 percent of the world's population and 63 percent of global GDP. With the backing of all of our members, we are building a lean, clean and green institution that can help to support their sustainable development," Jin said. Finance Minister Liu Kun said at the meeting on Saturday that he hopes the AIIB will give play to its own advantage as a multilateral development bank to link its strategy with the development blueprints of its members, the Belt and Road Initiative and the Connecting Europe and Asia Strategy of the European Union. "China, an AIIB shareholder and a country that hosts AIIB's head office, will continue to support the bank's development," Liu said. Liu suggested that AIIB come up with an overall strategy based on previous operating experiences to guide its further development, its features, new trends of global growth and the diversified requirements of members. Uzziel Ndagijimana, Rwanda's minister of finance and economic planning, called AIIB "a great bank". "We are happy to join as the 100th member. We are looking forward to not only having fruitful cooperation with the bank, but also with the member countries to promote infrastructure and promote trade and investment between Asia and Africa," he said on Saturday. The three new prospective nonregional members will officially join AIIB once they complete the required domestic processes and deposit the first capital installment with the bank. At the annual meeting, the first held outside of Asia, Luxembourg Finance Minister Pierre Gramegna praised AIIB as "arguably the most modern and international financial institution in the world". "The bank has emerged as a beacon of multilateralism while surpassing expectations of growth," he said. Luxembourg was the first European nation to join the AIIB, as the United States government was trying to lobby European countries not to join the multilateral development bank initiated by China. Gramegna said membership of European members has been beneficial for both European and Asian countries, especially given the AIIB's motto of being lean, clean and green. "Looking at the results of the past three and a half years, we can all be very pleased with what has been achieved, both in terms of financial operations and the quality of the work that has been done," he said. Since January 2016, the AIIB has provided $8.5 billion in loans to 45 projects in 18 member countries, many in renewable energy and green infrastructure. It also has received the highest credit ratings from the world's three biggest rating agencies — Standard & Poor's, Moody's and Fitch Group. In May, the AIIB's five-year dollar bonds drew investors from dozens of countries. Jin said the bank has a good working relationship with other multilateral development banks such as the World Bank, Asian Development Bank and European Bank for Reconstruction and Development. "We set the bar at the par with other multilateral development institutions and other institutions, so we can work together," he said. "We are happy to see that we are recognized as such a bank." But he also said there is no room for complacency. "We are the new kid on the block, and we have a lot to learn from our sister institutions," he said. Jin said people should take a realistic view, that it takes time to help developing countries in their transition from high-carbon to low-carbon to zero-carbon economies. "So it's really a very tough job. And we are doing our very best," he said in response to criticism that AIIB is not doing enough. The two-day annual meeting had some 30 sessions, including on climate change, debt sustainability, digital connectivity and private equity for sustainability infrastructure. The bank's next annual meeting will be held in Beijing in 2020, the AIIB Board of Governors announced on Saturday. Liu, the finance minister, was elected chairman of the fifth Board of Governors. By the end of 2018, the AIIB's total investment had reached $7.5 billion, up from $4.196 billion a year earlier, according to the AIIB's annual report released on its website. Moody's affirmed the bank's rating of Aaa with a stable outlook in March. "AIIB will maintain the health of its stand-alone credit metrics beyond its initial growth phase into the next decade," the agency said. ^ top ^

China and Vietnam in stand-off over Chinese survey ship mission to disputed reef in South China Sea (SCMP)
2019-07-12
Chinese and Vietnamese coastguard vessels have been involved in a week-long confrontation over a reef in the South China Sea, risking the biggest clash between the two nations in five years. The stand-off may trigger a wave of anti-China sentiment in Vietnam not seen since 2014, when a Chinese oil rig arrived off the disputed Paracel Islands. Six heavily armed coastguards vessels – two Chinese and four Vietnamese – have been eyeing each other in patrols around Vanguard Bank in the Spratly group of islands since last week. About a dozen vessels were reported in the vicinity by marine tracking websites on Thursday. The stand-off emerged despite a pledge in May by Chinese and Vietnamese defence ministers to settle maritime disputes by negotiation. On Wednesday last week, Chinese survey ship Haiyang Dizhi 8 (Marine Geology 8) entered waters near the Vietnamese-controlled reef to conduct a seismic survey, Ryan Martinson, an assistant professor at the US Naval War College in Newport, Rhode Island, said in a tweet on Friday, citing ship tracking data. Its escorts included the 12,000-tonne armed coastguard vessel 3901, complete with helicopter, and the 2,200-tonne coastguard ship 37111. On Friday, Chinese foreign ministry spokesman Geng Shuang did not confirm a stand-off at Vanguard Bank, but he said China was determined to protect its interests in the South China Sea. "We are also committed to managing our differences through negotiations with relevant countries," Geng said. President Xi Jinping meanwhile told visiting Vietnamese National Assembly chairwoman Nguyen Thi Kim Ngan that the two countries should "safeguard maritime peace and stability with concrete actions". Earlier on Friday, National People's Congress chief Li Zhanshu told Nguyen that both sides should work together on a code of conduct for the South China Sea. Relations between China and Vietnam were at their lowest ebb in a decade in May 2014, when the China National Offshore Oil Corporation moved oil platform Hai Yang Shi You 981 into waters near the Paracels. Vietnam sent vessels to stop the rig fixing to the seabed and were met by Chinese escort ships. Beijing and Hanoi accused each other of allowing ships to ram opposing vessels. Anti-China protests swept Vietnam, and in southeastern Binh Duong province 14 factories owned by Chinese businesses were attacked. Tensions eased in July that year, when China said the rig had finished its work and was withdrawn from the disputed waters. Since then, the two countries have made efforts to improve relations. In May, Chinese Minister of National Defence General Wei Fenghe visited Hanoi, pledging with his Vietnamese counterpart that both nations would maintain stability in the South China Sea. Vanguard Bank is the westernmost reef of the Spratlys and sits within what Hanoi claims is 200 nautical miles of its exclusive economic zone. That claim is contested by Beijing and Taiwan. The Vanguard Bank basin is known to have rich oil and gas reserves, and Vietnam has dozens of oil rigs operating in the area. In 1994, armed Vietnamese vessels forced Chinese survey ship Shiyan 2 (Experiment 2) from the area after a three-day stand-off. China claims most of the South China Sea, but that is contested in places by Vietnam, the Philippines, Malaysia and Brunei. In the past few years, Beijing has built and reclaimed seven islands on reefs under its control in the Spratlys and deployed troops and weapons to strengthen its claim over natural resources and trade routes in the area. The latest stand-off came as China bolstered the role of its coastguard, which has been under military control since July last year and has been preparing for confrontations in disputed waters. Collin Koh, a research fellow at the S Rajaratnam School of International Studies at Nanyang Technological University in Singapore, said China and Vietnam were likely to refrain from "untoward actions that may escalate the situation into a clash". "Especially for China, an escalated situation may carry consequences such as a fallout in ties with Vietnam and potential difficulties that can be anticipated, especially when Hanoi takes on the chairmanship of the Association of Southeast Asian Nations (Asean) later this year," he said. "That would go against the narrative that China's been trying to shape, which is that the South China Sea is peaceful and stable and can be managed properly without needing extra-regional intervention. "So we might imagine an escalation at Vanguard will shatter that myth. Of course, this applies to Asean as well, although Beijing is more concerned about it because of its abhorrence towards external intervention in the South China Sea," Koh said. ^ top ^

China to further facilitate immigration, entry-exit for foreigners (Xinhua)
2019-07-18
China on Wednesday announced 12 measures to make immigration and entry-exit applications easier and more convenient for certain foreigners. Ministry of Public Security (MPS) said the facilitation measures were part of the first batch of 60 special policies for promoting economic and social development and benefiting the public and enterprises. From Aug. 1, the country will ease the permanent residence application for more high-level foreign talents, including foreigners with doctoral degrees, and those who have made significant contributions to the country, according to an MPS press conference in Beijing on Wednesday. Foreign spouses and children of qualified foreigners can also join the application simultaneously, according to the MPS. To improve the country's business environment, long-term visas and residence permits will be issued to foreigners doing business, working or studying in China. Those who are invited by universities, scientific research institutes and renowned enterprises for technology cooperations will be able to get visas or residence permits valid for two to five years. In recent years, China has issued 133,000 visas and residence permits to foreign entrepreneurs, investors, and technical and management specialists, said Chen Bin, an official from the National Immigration Administration (NIA), at the press conference. Foreign graduates from China's key colleges and universities or renowned foreign universities, who started businesses in China or were invited to do internships in China, will enjoy policy support and convenience in applying for visas and residence permits. China is considering setting up immigration affairs service centers or stations in areas with a large population of foreigners to make their work, study and living more convenient. Jia Tongbin, deputy director of the foreigner management division under the NIA, said the policy package is aimed at inviting management and technology specialists from overseas, who are in urgent need in China. The policies are expected to encourage foreigners who work in China to make the most of their talent and attract more outstanding foreign youth to China, Jia said. ^ top ^

Reviews of patents to be accelerated (China Daily)
2019-07-18
China will shorten the time required for reviewing applications of high-value patents and for trademark registrations as part of its effort to strengthen the protection of intellectual property rights and improve the business climate, the State Council's executive meeting, chaired by Premier Li Keqiang, decided on Wednesday. "Further enhancing the protection of intellectual property rights is crucial to improving our property rights protection system. It is required by scientific and technological innovation and essential for China's greater opening-up," Li said. Those attending the meeting on Wednesday decided to intensify law enforcement action in intellectual property rights protection and stressed that all types of market actors must be treated as equals. Efforts to formulate and improve the criteria for determining, checking and verifying infringements and counterfeiting of patents, trademarks and copyrights will be accelerated. It was decided that special campaigns against violations of IPR-related law will be carried out and severe punishment involving hefty fines will be meted out to combat all IPR infringement. International cooperation in IPR protection will be enhanced to make it easier for companies to obtain intellectual property rights and their protection overseas. The government will advance revision of the Patent Law and the Copyright Law, the new round of comprehensive revision of the Trademark Law and revision of the implementing regulations of the Patent Law. The cost for breaking the law will be significantly raised. IPR-related services will be improved, the meeting decided. Smart systems of patent examination and trademark registration will be developed at a faster pace. The goal is to shorten, by year's end, the time needed for reviewing applications of high-value patents to within 17.5 months, and the average review period for trademark registration to within five months. The quality of IPR registrations will also be improved. "Greater efficiency is needed in patent and trademark examination, and the ratio of patents in core areas and with high value shall be increased. It is particularly important to increase the patent commercialization rate, which is relatively low at the moment," Li said. China has made notable progress in IPR protection. Since 2012, the National Intellectual Property Administration has commissioned a third-party survey each year inviting the public to rate government performance in IPR protection, and the level of public satisfaction has been rising year after year. In 2018, China, for the first time, made its way into the world's top 20 in the Global Innovation Index of the World Intellectual Property Organization. ^ top ^

Xi meets Chinese diplomatic envoys to foreign countries (Xinhua)
2019-07-17
President Xi Jinping on Wednesday met with Chinese diplomatic envoys to foreign countries, who are in Beijing to attend a work conference for overseas envoys. On behalf of the Communist Party of China (CPC) Central Committee, Xi, also general secretary of the CPC Central Committee and chairman of the Central Military Commission, congratulated on the convening of the work conference and extended sincere greetings to the envoys and all diplomatic personnel for their hard work. Wang Huning, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and a member of the Secretariat of the CPC Central Committee, was also present. At the work conference, the envoys were urged to fully carry out the plans and arrangements of diplomatic work of the CPC Central Committee under the guidance of Xi Jinping Thought on Diplomacy and to keep on working with great determination. ^ top ^

China weighs more balanced approach to growth in H2 (Global Times)
2019-07-17
China is mulling a balanced approach that would help keep economic growth at a stable range in the second half of the year, while avoiding opening the floodgates of stimulus that would raise debt and create more risks, after economic growth in the first half showed stabilizing signs but also highlighted persistent downward pressure. Top policymakers have in recent days struck a calm and confident tone, pushing back against pessimistic headlines about the second-quarter growth rate, but they have also acknowledged growing pressure on the economy and vowed to keep the world's second-largest economy stable, while continuing on long-stated market reforms. After a strong start in the first quarter, the Chinese economy grew 6.2 percent year-on-year in the second quarter, the slowest quarterly growth rate in 27 years, dragging down growth for the first half of the year to 6.3 percent. "Economic operations remained stable overall on high bases," Premier Li Keqiang told a meeting on Tuesday. Noting slowing global growth, rising protectionism as well as domestic challenges, Li said that the results "did not come easily." China is battling a protracted trade war with the US, with $250 billion worth of its products facing high punitive tariffs, and challenges in a transition period for the domestic economy from low-end, unsustainable development to high-quality growth. Although growth rates in the first half of the year were low compared to previous rapid expansion, China is still one of the fastest growing economies around the world and the envy of many countries that have been struggling under slowing global growth, Chinese experts say. The US economy, for instance, contrary to what US President Donald Trump has suggested, grew 3.1 percent - half the speed of China - in the first quarter of 2019 and is expected to slow to around 2.1 percent for the full year. Li's upbeat assessment of growth in the first half year Tuesday also showed that China's top leadership remains confident that they are well positioned to reach an annual growth target of between 6 percent and 6.5 percent and that a dramatic shift in macro policies is unlikely, the analysts noted. Chinese officials have taken a slew of measures to stabilize growth, including massive cuts to taxes and fees that amount to 2 trillion yuan and what officials call "proactive" fiscal policies and a "prudent" monetary policy designed to boost investment but refrain from raising leverage. These measures "played a crucial role in stabilizing economic operation" in the first half of the year, Li said, suggesting that China will continue with them. Noting that pressures have been growing, the premier also hinted that "preventive and minor adjustments at appropriate times" are possible. As pressure continues to mount, China is likely to further cut the reserve requirement ratio (RRR), the amount of cash banks are required to take as reserve, by 100 basis points in the second half of the year and even interest rates cuts have not been ruled out, according to Liang Haiming, an economist at Hainan University. The People's Bank of China, the central bank, has made targeted cuts to the RRR for smaller banks to increase lending for smaller companies and the private sector, with the latest cut going into effect on Monday. "Regardless of what other people say, China has got to do what it's got to do. Otherwise, the economy could be worse," Liang told the Global Times on Wednesday. Liang referred to rising speculation that China could resort to a broad stimulus that would increase debt. China is also likely to increase fiscal spending in the second half to stabilize growth, Liu Dongliang, an economist at the China Merchants Bank, wrote in a research note. Proactive fiscal policy could unleash as much as 350 billion yuan ($50.9 billion) in the second half of the year and special government bonds could raise 800 billion yuan for investment in infrastructure, the note said. Chinese officials maintained they are not resorting to a "flood irrigation" stimulus, a reference to those more aggressive and wasteful pro-growth policies of the past. "We are resolute about not engaging in 'flood irrigation' and will be effective in fending off hidden risks in local government debt," Meng Wei, a spokesperson for the National Development and Reform Commission, said at a press briefing on Tuesday. Analysts said that even without raising debt to risky levels, the combination of measures are sufficient to keep growth stable in the second half and reach 6 percent or higher for the full year, despite the challenges, including the trade war with the US. As global headlines focused on the trade war with the US, Chinese officials and analysts also stressed that the biggest challenge for China is pushing forward with market reforms to generate high-quality growth. "The trade war has some impact but China's economy is not as reliant on trade as before," said Liu Ying, a research fellow with the Chongyang Institute for Financial Studies at the Renmin University of China. "Now the biggest growth driver is domestic consumption and so our focus should be how to boost consumption." ^ top ^

CPC urges real action to handle problems in education campaign (Xinhua)
2019-07-17
The leading group of the ongoing Communist Party of China education campaign themed "staying true to our founding mission" has called for "real swords and spears" in handling major problems highlighted in the campaign. The group made the urge in a newly released circular, asking all regions and departments to address problems with proactivity and courage. Handling major problems is a significant approach for the education campaign to take real effect, the circular noted. According to the circular, major problems include violation of the eight-point code on improving Party and government conduct, the practice of formalities for formalities' sake and bureaucratism at primary levels, and infringement of people's interests. It also asked local authorities and sectors to make targeted efforts to deal with other issues not listed in the education campaign in light of their actual conditions. ^ top ^

Xi stresses people-centered development in Inner Mongolia inspection (Xinhua)
2019-07-17
Chinese President Xi Jinping has stressed acting on the people-centered philosophy of development and building the country's northern border areas into a more beautiful place. Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, made the remarks during an inspection tour to north China's Inner Mongolia Autonomous Region from Monday to Tuesday. He inspected the region's work on economic and social development and building an ecological civilization. He also instructed the implementation of the CPC education campaign themed "staying true to our founding mission." The original aspiration and mission should be kept firmly in mind, he said, calling for more efforts to continuously enhance people's sense of fulfillment, happiness and security. Upon his arrival in the city of Chifeng on Monday morning, Xi visited a neighborhood in Songshan district, where people of different ethnic groups reside. Xi called for more efforts to promote ethnic unity and create a favorable environment where people of various ethnic groups can happily live and work. The president applauded Ulan Muqir, a traveling art troupe performing for herdsmen in remote areas, as "down to earth" and "loved by the people," while asking for more support and promotion of literary and artistic activities that serve the people. After watching storytellers perform the "Epic of King Gesar" at a local museum, Xi stressed the protection and inheritance of ethnic culture. He also emphasized the work to help develop an accurate understanding of history, country, ethnicity and culture among the public, so that the people of all ethnic groups can have greater sense of the Chinese national identity and sense of belonging to the motherland, as well as higher recognition of the path of socialism with Chinese characteristics. Xi is very concerned about environmental protection in the region. On Monday afternoon, he hiked into a forest zone in Chifeng under the blazing sun. Noting that China has made the world's largest contribution to man-made forest coverage, Xi called for adherence to the path of green development that puts ecology first and efforts to build a beautiful China with green mountains and fresh air. In the village of Ma'anshan, Xi said that the development of industries should focus on increasing the income of villagers. He asked the primary-level Party organizations in rural areas to be strengthened to better serve the rural people and agriculture. During his visit to a local villager's home, Xi said huge changes had taken place in the country since the founding of the People's Republic of China 70 years ago, fully proving that it is correct for China to follow the path of socialism with Chinese characteristics. Xi told local officials that by launching the "staying true to our founding mission" campaign it should be clear that the CPC must always seek happiness for the Chinese people and strive for the rejuvenation of the Chinese nation. "Only by doing so can the Party maintain long-term governance, the country enjoy enduring peace and stability and the people live better lives," he said. On Tuesday morning, Xi paid a visit to the Inner Mongolia University, his first stop in Hohhot, capital of Inner Mongolia Autonomous Region. He urged the students to study hard and contribute their wisdom and strength in the future to the rejuvenation of the Chinese nation. Xi then went to the regional department of natural resources, where he gave instructions on the Party education campaign and asked for a deeper understanding of the Party's original aspiration and mission, an accurate grasp and rectification of problems and assurance that leading cadres play exemplary roles. On Tuesday afternoon, Xi listened to reports of the regional Party committee and government on their work and their efforts in carrying out the education campaign. Noting uncertainties and challenges from the external environment as well as the arduous tasks at home, he stressed the importance of maintaining sustained and sound economic growth and social stability. Xi underlined the important strategic status of Inner Mongolia, calling on the region to promote high-quality economic development and adhere to deepening the reform and opening up. He said the region needs to promote the high-quality development of husbandry and the coordinated urban-rural development and give priority to environmental protection and green development. Xi also required efforts to concretely ensure and improve people's wellbeing and to focus the anti-poverty fight on areas of extreme poverty. He stressed ethnic unity in the region, calling for efforts to see that people of all ethnic groups rally closely around the Party and make joint efforts in safeguarding the country's border and creating better lives. During the inspection, Xi also met with senior military officers stationed in the region and extended greetings to all the soldiers there. ^ top ^

China's greenhouse gas emissions soar 53 per cent in a decade, data shows (SCMP)
2019-07-15
China's climate-warming greenhouse gas emissions hit 12.3 billion tonnes in 2014, up 53.5 per cent in just a decade, the environment ministry said on Monday, citing the country's latest carbon "inventory" submitted to the United Nations. China's carbon emissions data is notoriously opaque, but as a signatory to the United Nations Framework Convention on Climate Change, Beijing is obliged to submit an official inventory to the UN on a regular basis. It has previously released figures for 2005 and 2010. As the world's biggest greenhouse gas producer, China is aiming to bring its total emissions to a peak by "around 2030", though it has also pledged to show "the highest possible ambition" when it reviews its targets next year. The 2014 figure, based on the most recent calculations by the Chinese government, includes China's emissions of greenhouse gases such as carbon dioxide and methane, but does not make adjustments based on changes in land use or increases in forest coverage. The environment ministry said if the impact of forests and other "carbon sinks" were taken into consideration, total emissions would have stood at 11.186 billion tonnes in 2014, still up 17 per cent from 2010. Total net US emissions were measured at 5.74 billion tonnes of CO2 equivalent in 2017, down 0.5 per cent on the year, according to the country's Environmental Protection Agency. A study published by the Nature Geoscience journal last year estimated that China's total emissions hit a record 9.53 billion tonnes in 2013 and then declined over the following three years. The decline in CO2 from 2014 to 2016 came as a result of falling energy consumption, but it has since rebounded. Record production levels in carbon-intensive sectors such as steel could mean CO2 emissions are still on the rise and could hit fresh records this year, environmental group Greenpeace said. ^ top ^

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'Liberal' policy chief unlikely to mean a softening on Xinjiang from China (SCMP)
2019-07-17
A senior Chinese leader known for his relatively liberal style of governance has been named the ruling Communist Party's handler of Xinjiang policy, amid increasing international criticism over the mass detention of Muslim minorities in the far western region. Wang Yang, a member of the party's policymaking Politburo Standing Committee, attended a high-level three-day conference in Xinjiang as head of the Central Committee's Xinjiang Work Coordination Small Group, the state-run news agency Xinhua reported after the meeting ended on Tuesday. The small group, first formed in 2000, has been instrumental in shaping and implementing Beijing's Xinjiang policies. It brings together officials from across party and state apparatus to coordinate various policy fronts from security, ethnic and political issues to economic. Wang's new role was largely expected since he is chairman of the Chinese People's Political Consultative Conference (CPPCC) – China's top political advisory body. His predecessor, Yu Zhengsheng, also headed the coordination group when he was CPPCC chairman. However, analysts said the timing of the announcement suggested it was a calculated move by the leadership to assuage growing international concerns over the detention of an estimated one million or more Uygurs and other Muslim minorities in what the Chinese government calls "vocational training centres" in Xinjiang. Last week, a group of 22 Western countries issued a statement urging China to stop mass detentions in Xinjiang. The joint letter to the United Nations High Commissioner for Human Rights – signed by Britain, Japan, Canada and others – was the first concerted international effort to condemn the practice and represented an embarrassment for Beijing. Days later, a group of 37 countries – mostly from Southeast Asia, Africa and the Middle East, but also including Russia and North Korea – submitted a similar letter in defence of China's policy and expressing opposition to "politicising human rights". "Under such an external environment, the Chinese government needs to consciously make a response," said Chen Daoyin, a political analyst in Shanghai. "After all, Wang Yang represents the relatively liberal and open-minded element in Chinese officialdom, and his appointment [to the coordination group] is a way to assuage concerns expressed by the international community," he said. Wang earned his reputation as a more open-minded leader during his tenure as the party boss of inland metropolis Chongqing and the southern economic powerhouse of Guangdong. He was credited with resolving mass protests against corruption in Wukan village in Guangdong in 2011 by listening to villagers' grievances, sacking corrupt officials and allowing freer elections in the village. But, despite Wang's track record, there would not be much room for him to manoeuvre on Xinjiang policies, Chen said. "Under the current party-state structure, Wang doesn't have the power to make major changes, although he is the group leader – everyone knows that power rests in the hands of the supreme leader," he said, referring to President Xi Jinping. The changeover of another key position in the small group, meanwhile, signals anything but a softening of policy. The group's day-to-day affairs are being handled by an office now headed by United Front Work Department Deputy Director Shi Jun, a former vice-minister of public security. Until April last year, that post was held by Shi Dagang, a long-time veteran in Xinjiang who now serves on the ethnic affairs commission of the National People's Congress, the national legislature. The announcement of Wang's position also came much later than that of his predecessor. Yu was named coordinator two months after becoming CPPCC chairman, during his first inspection tour to the region as a Politburo Standing Committee member. For Wang, the announcement came 18 months after he took the helm of the CPPCC, and only on his third publicised tour to Xinjiang. According to Xinhua, Wang was in the oasis town of Hotan for the conference to review the party's long-running programme to channel financial support, technology and talent to Xinjiang from the country's more developed regions. Before his latest visit, Wang had already been on two inspection tours of Xinjiang – in March this year and in April 2018 – including to the southern part of the region, which is heavily populated by the ethnic Uygur minority. During those visits he expressed support and approval for regional party leaders' implementation of Beijing's edicts and achievement of "significant interim results" in "improving" the situation in Xinjiang. But during his April visit, Wang also said the region needed to "perfect" its stability maintenance measures. While calling for a continued crackdown on ethnic separatist forces and religious extremism, the CPPCC boss stressed that traditional ethnic culture should be protected and the normal religious needs and customs of believers should be ensured. The party has never published an official full list of members of the Xinjiang coordination group, as is the case for the party's many other leading small groups – a constellation of decision-making bodies that have seen their roles and status strengthened under Xi, who personally heads a number of them. Despite this obscurity, the names and positions of the group's leadership can be pieced together from their occasional mentions on government websites and in state media reports. The group was previously headed by the chairman of the party's Central Political and Legal Affairs Commission, including disgraced security tsar Zhou Yongkang. But the role was taken over by the chairman of the Chinese People's Political Consultative Conference after Xi came to power in 2012. Its other members have included senior officials from the party's United Front Work Department, the State Ethnic Affairs Commission, the Ministry of Public Security and the paramilitary police, as well as party leaders in Xinjiang. Xinjiang's hardline party boss Chen Quanguo – the face of the region's heavy-handed crackdown – is likely to serve under Wang as a deputy head of the group, although no such announcement has yet been made. ^ top ^

As China locks up Muslims in Xinjiang, it opens its doors to tourists (HKFP)
2019-07-16
From the expansive dunes of the Taklamakan Desert to the snow-capped peaks of Tianshan, Chinese authorities are selling troubled Xinjiang as a tourist idyll, welcoming travellers even as they send locals to internment camps. The government has rounded up an estimated one million Uighurs and other mostly Muslim Turkic-speaking minorities into re-education camps in the tightly-controlled region in China's northwest, but it has also created a parallel universe for visitors, who are only shown a carefully curated version of traditional customs and culture. In the Old Town of Kashgar, an ancient Silk Road city, smiling food vendors serve mouthwatering lamb skewers, while children play in the streets. "It didn't look to me like — unless you were picked up and put in a camp — that these Uighur communities seemed to be living in some kind of fear," said William Lee, who has taught at universities in China for 10 years and visited the region in June. "That's just my impression," he added. Xinjiang, a fraught region where flare-ups of interethnic violence have led to unprecedented levels of surveillance, is one of the fastest-growing areas for tourism in China. Armed police and frequent checkpoints have not dampened the flow of vacationers visiting the region, which in 2018 saw a 40 percent increase year-on-year of visits — mainly from domestic tourists — outstripping the national average by 25 percent, according to official figures. Business has grown steadily over the years mainly because "Xinjiang is very stable", explained Wu Yali, who runs a travel agency in the region. Though tourists are not used to the high-level of security at first, "they adapt after a few days," she told AFP. But travellers are barred from witnessing the most controversial part of Xinjiang's security apparatus: the network of internment camps spread across the vast region. Many of these facilities are outside main tourist hubs and are fenced off with razor-wired walls. On a six-day trip to the region last month, AFP reporters encountered roadblocks and were turned away by security forces upon nearing some camps. China describes the facilities as "vocational education centres" where Turkic-speaking "trainees" learn Mandarin and job skills. "The violence that is being inflicted on the bodies of Uighur and other Muslim people…has been rendered invisible," said Rachel Harris, who studies Uighur culture and music at the School of Oriental and African Studies University of London. "For a tourist who goes and travels around a designated route, it all looks nice," she told AFP. "It's all very quiet and that's because there's a regime of terror being imposed on the local people." According to Communist Party mouthpiece People's Daily, the regional government offered travellers subsidies worth 500 yuan ($73) each in 2014, after tourism plunged following a deadly knife attack blamed on Xinjiang separatists in southwestern China. By 2020, Xinjiang is aiming to hit a total of 300 million visits by tourists and rake in 600 billion yuan ($87 billion), according to the region's tourism bureau. Tourism packages to Xinjiang often feature the region's rich array of natural beauty, from the azure waters of Karakul lake to Tianshan — a UNESCO World Heritage Site. Many also offer "ethnic" experiences, often in the form of dance performances. Some tour operators even include visits to Uighur homes. Even as Chinese authorities seek to contain the region's Muslim minorities, they are monetising ethnic culture — albeit a simplified version of it, experts say. "Uighur culture is being boiled down to just song and dance," said Josh Summers, an American who lived in Xinjiang for more than a decade and wrote travel guides for the region. "What makes me sad is what ends up happening is there are only very specific parts of Uighur culture that get maintained because of the tourism," he said, citing the neglect of Uighur paper-making traditions and desert shrines. Beijing's security clampdown has also squeezed Yengisar city's artisanal knife trade, said Summers. "Ever since the management of Xinjiang became stricter, the impact on Yengisar's small knives has been very large — now there are very few shops selling small knives," agreed Li Qingwen, who runs a tourism business in Xinjiang. The government wants Uighurs to "show how they excel in singing and dancing, instead of living under religious rules and restrictions," he told AFP. But while ethnic song and dance is showcased to tourists, Uighurs are often restricted in how they express their own culture. Large, spontaneous gatherings of Uighurs — even if they involve dancing — are less frequent because of tightened security, said Summers. Night markets too are more controlled. In Hotan, what used to be an outdoor night market is now inside a white tent, where red lanterns hang from the ceiling and uniform food stalls adorned with Chinese flags sell lamb skewers, but also sushi and seafood. Over the past few years, cultural leaders in the Uighur community have disappeared, raising fears they have been detained. In February, Turkey's foreign ministry claimed that prominent Uighur musician and poet Abdurehim Heyit had died in a Chinese prison — prompting China to release a "proof-of-life" video of an inmate who identified himself as Heyit. Famous Uighur comedian Adil Mijit is also missing, according to social media posts by his son-in-law Arslan Hidayat. And though tourists are buffered from the ugliest parts of Xinjiang's security crackdown, it is not difficult to bump against the region's many red lines. A traveller from Southeast Asia, who requested anonymity due to fear of reprisals, described the barriers he faced when trying to pray at a mosque. Many places of worship were closed in Kashgar, he said, unlike mosques in other Chinese cities. At Idkah Mosque, Kashgar's central mosque, the tourist was told he couldn't pray inside — and that he had to buy a ticket to enter. "They want to separate travellers from locals," he said, adding that his visit to Xinjiang confirmed what he had read about re-education camps. He added: "There's a lot more of Xinjiang that I want to discover. But I really hope that Xinjiang will become the old Xinjiang." ^ top ^

China highlights support to Xinjiang through pairing assistance (Xinhua)
2019-07-16
Wang Yang, a senior Party official, stressed comprehensive, targeted and long-term support to Xinjiang through the "pairing assistance" program at a meeting from Sunday to Tuesday. The "pairing assistance" program should thoroughly implement the Party's policy for governing Xinjiang in the new era, said Wang, a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, at the seventh national meeting on pairing-assistance to Xinjiang held in Hotan, a city in the south of Xinjiang Uygur Autonomous Region. China has been implementing the "pairing assistance" program in Xinjiang since 1997, channeling financial support to Xinjiang from other regions of the country and sending cadres and professionals to work and hold tenures there. The program should adopt a new vision for development, contribute to economic development and people's wellbeing, and help unify people, said Wang, who is in charge of coordinating the CPC Central Committee's work on Xinjiang. Acknowledging the notable progress achieved in the new round of the pairing assistance program, Wang urged other regions in the country to send competent officials and professionals to Xinjiang and support the region in advancing local industrial development, improving people's livelihoods and alleviating poverty. Efforts should be made to promote exchanges among different ethnic groups as well as between people in Xinjiang and other regions and encourage people from ethnic minority groups in Xinjiang to seek development in other regions of the country, he said. Representatives from 19 provinces and municipalities involved in the pairing assistance to Xinjiang, together with those from local and central authorities, attended the meeting. Wang visited an exhibition on the achievements of the pairing assistance program, inspected local organizations and companies and called on needy families during his stay in Hotan.  ^ top ^

Refuting 22 Western nations, 37 governments laud China's human rights achievements (Global Times)
2019-07-13
Government of 37 countries, including Russia, Pakistan, Nigeria, Egypt, Belarus, Saudi Arabia, the Philippines and UAE, said they support China's human rights records, and China's policies of resolutely fighting terrorism and extremism in its northwestern Xinjiang region. Ambassadors of the 37 countries sent a joint letter to the UN showing their support for China on its "remarkable achievements in the field of human rights," a move that came two days after 22 Western countries criticized China's policies in Xinjiang Uyghur Autonomous Region. Among the 37 countries, many of them are developing and Muslim majority nations. Their support for China shows these countries' recognition of protecting people's right to survival and development. It also exposes Western countries' blatant attempt to politicize human rights issue in the international arena, where human rights issues should be used to push forward the progress of the human society, rather than being used as a political tool to smear other sovereign nations, experts say. "Terrorism, separatism and religious extremism have caused enormous damage to people of all ethnic groups in Xinjiang, which has seriously infringed upon human rights, including the right to life, health and development," read the letter. "Faced with the grave challenge of terrorism and extremism, China has undertaken a series of counter-terrorism and de-radicalization measures in Xinjiang, including setting up vocational education and training centers," the 37 envoys noted in the letter. The letter was sent to the President of the UN Human Rights Council and the UN High Commissioner for Human Rights. It was signed by the ambassadors to UN at Geneva from Russia, Pakistan, Saudi Arabia, Egypt, Cuba, Algeria, United Arab Emirates, Qatar, Nigeria, Angola, Togo, Tajikistan, Philippines, Belarus and a number of other countries from Asia, Africa, the Middle East and other parts of the world. "No investigation, no word. Unlike the 22 western countries, which criticized China's Xinjiang policies based on guesswork and rumors, many of the 37 countries' diplomats have paid visits to Xinjiang and have seen what is really happening in Xinjiang," Li Wei, a counter-terrorism expert at the China Institute of Contemporary International Relations in Beijing, told the Global Times. Human Rights Watch released on Wednesday a joint letter signed by 22 countries at the UN's top human rights body, urging China to "end its mass arbitrary detentions and related violations against Muslims in the Xinjiang region." The 22 countries include 18 European countries and Japan, Canada, Australia, and New Zealand, many of them are American military allies. "Many of the 37 countries also face a serious threat of terrorism and extremism and they understand that the importance of anti-terrorism lies in de-radicalization work. China's Xinjiang policies have offered an effective way to eliminate extremism and the achievements have been witnessed by all," Li said. Xinjiang has invited many foreign diplomats to visit the region and the efforts have paid off. Xinjiang always welcomes more people who are willing to see the truth about the region to pay a visit there, an official from the Xinjiang government, told the Global Times. "We commend China's remarkable achievements in the field of human rights by adhering to the people-centered development philosophy and protecting and promoting human rights through development," the joint letter said. The ambassadors expressed their "firm opposition" to relevant countries' practice of politicizing human rights issues, by naming and shaming and publicly exerting pressures on other countries. "We urge the OHCHR, Treaty Bodies and relevant Special Procedures mandate holders to conduct their work in an objective and impartial manner according to their mandate and with true and credible information, and value the communication with member states," the joint letter said. "The 37 countries' support and recognition to China's achievements on anti-terrorism and protection of human rights would benefit the current global anti-terrorism work and fits into the interests of the human society," Li said. The Associated Press said in a report on Friday that the joint letter of the 37 countries delivered to UN "was a show of the growing diplomatic clout that China can muster." Li said that "It is true that China's influence has increased in recent years. This is because many of China's initiatives including the Belt and Road Initiative will help with economic developments in countries along the route, eradicating the root of terrorism and extremism." ^ top ^

Chinese officials scramble to deliver new Hong Kong strategy but military response not an option (SCMP)
2019-07-18
Mainland Chinese officials in charge of Hong Kong affairs are working on a comprehensive strategy to solve the city's political crisis that will be presented to the top leadership for deliberation soon, according to people familiar with the discussion, but resorting to military force is not on the table. Officials are developing both an immediate strategy to handle the increasingly violent weeks-long protests in the city, as well as a long-term plan that may lead to an overhaul of Beijing's approach to managing the restless former British colony. As a measure of the seriousness of the discussions, up for immediate consideration is a risk assessment of whether Chinese President Xi Jinping should visit Macau for the 20th anniversary celebrations of its reunification with the mainland later this year. Sources say at this stage Beijing still believes the crisis is best left for the Hong Kong government to handle and it should not get directly involved. The principles of avoiding bloodshed and keeping the city "largely stable" remain unchanged. Despite speculation to the contrary, they are firm about not considering the use of the People's Liberation Army as an option. Sources say Beijing regards Hong Kong's embattled police force as a critical factor in maintaining stability. While the restraint on the use of force by police has prevented tensions from escalating, it has also had an impact on officers' morale. The key now, they say, is to strike a balance. Since the unprecedented protests broke out early last month in Hong Kong against the ill-fated extradition bill, Beijing has been dispatching a "record number of people" to the city to collect information and opinions from different sectors. The Chinese leadership has been taken aback by the scale and intensity of the protests, and is upset that its traditional intelligence channels in Hong Kong failed to accurately gauge the public mood, the sources said. "Obviously the system has not been working well. Voices that really reflect the mood of the public were not getting heard," said a government-affiliated adviser who asked to remain anonymous. "The central leadership wasn't alerted until the situation went out of control … There will surely be a revamp and overhaul of the system afterwards." The Communist Party's top unit on Hong Kong affairs – the Central Coordination Group for Hong Kong and Macau Affairs, led by Vice-Premier Han Zheng – has been collecting and consolidating reports and proposals from its frontline officers and now must formulate some options for discussion by the leadership. "The [coordination] group has been meeting to consolidate recent reports, and trying to come up with a comprehensive strategy to tackle the situation in Hong Kong," a Chinese official with knowledge of the meeting said. "The top leadership has been keeping an eye on Hong Kong." The immediate priority was to develop a strategy to keep Hong Kong stable and prevent the unrest from spreading or affecting other important national policies and agendas. Beijing would only make major adjustments to its longer-term Hong Kong strategy once the situation had stabilised, the official said. Another adviser familiar with the situation said the approach right now was to "lure the snake from its hole" – meaning to taking a defensive position and wait for the opposition to fully expose its intention and strategy. This seems to indicate that Beijing is convinced the unrest in Hong Kong is not an isolated local incident and that foreign agents are at work with an aim to destabilise China's overall development. The key response to prevent further escalation is to avoid bloodshed while uniting and strengthening the pro-establishment camp. A source who has helped prepare reports and proposals for Beijing said removing Hong Kong's embattled chief executive Carrie Lam Cheng Yuet-ngor would only create confusion, undermine the local government's authority and split the pro-establishment camp. Without a clear candidate to replace Lam, removing her would only lead to infighting among the pro-Beijing groups and distract their focus and energy, the source said. In the long run, sources said, the Hong Kong government needed to reflect on its problems and shortcomings and make improvements. In Beijing's view, more frequent exchanges and communication between Hong Kong's leader and the central government were needed and the once-a-year "duty visit" by the chief executive was no longer adequate, they said. Sources added that the Hong Kong police force was seen as critical to the mission to restore peace and stability to the city. They were "the last line of defence" that must be supported "at all costs". Another official, involved in a government policy think tank, said the central government would continue to rely on the local police rather than the PLA garrison in Hong Kong to quell the unrest – even in a worst-case scenario resembling France's "yellow vests" protests. China is about to enter a politically sensitive season. The top leadership, together with retired senior party elders, are expected to gather at their Beidaihe summer conclave around the end of this month where they will discuss national strategies and policy directions. With the 70th anniversary of the founding of the People's Republic also approaching, and an ongoing costly trade war with the US, the Chinese leadership needs to forge a consensus among themselves and make necessary adjustments. The Hong Kong issue is likely to feature in their discussions, a government scholar said. ^ top ^

Hong Kong anti-extradition law demo set for Sunday, as pro-Beijing lawmakers urge gov't to ban protests till Sept (HKFP)
2019-07-18
Hong Kong's Civil Human Rights Front has confirmed it will hold a march on Sunday calling for an independent commission of inquiry into recent anti-extradition law protests and the police use of force. The pro-democracy coalition's march will begin at Victoria Park in Causeway Bay at 3:30pm and will end at the Court of Final Appeal in Central. Front Convener Jimmy Sham said the march will be a peaceful one: "We can only move on when we uncover the truth," he said after a meeting with the police on Wednesday. Sham said the Court of Final Appeal was chosen as the endpoint because a proposed commission of inquiry would be led by a judge. Former chief justice Andrew Li has voiced support for the notion of an independent inquiry. Protesters have been urging the government to fulfil their five demands since June. The other demands include a complete withdrawal of the extradition bill, the withdrawal of the "riot" characterisation of the June 12 protests, the unconditional release of all arrested protesters, as well as universal suffrage. Sham said recent confrontations occurred because the government did not agree to any of the demands. "We urge [Chief Executive] Carrie Lam not to use the police to do her dirty work," Sham said. The extradition bill would allow the city to handle case-by-case fugitive transfers to jurisdictions with no prior arrangements, including China. Critics have said residents would be at risk of extradition to the mainland, which lacks human rights protections. Chief Executive Carrie Lam declared the bill "dead" last week, but did not enact any mechanism to withdraw it. Meanwhile, pro-Beijing lawmakers Ann Chiang and Junius Ho have urged the government to take measures to ban protests. Ho led a group of around 50 people to demonstrate outside the police headquarters on Wednesday morning, urging police not to issue a letter of no objection to the Front's march, and ban future protests until September. "They can chat with people in Victoria Park, but they cannot damage shops or occupy streets," Ho said. Sham said in response that banning protests will not resolve the conflicts in society: "Even if all protests are deemed illegal, escalation actions will still occur, because the political problems are yet to be resolved." "Some young people are willing to make sacrifices for Hong Kong's future, for democracy and freedom, even if it is illegal to do so." ^ top ^

'No rioters, only a tyrannical regime': Thousands of Hong Kong seniors march in support of young extradition law protesters (HKFP)
2019-07-17
Thousands of elderly Hongkongers marched on Wednesday in solidarity with young anti-extradition bill protesters. Billed as a march for the "silver-haired," the event drew large crowds to Chater Garden in Central. Organisers said over 9,000 people joined the rally, which ended outside the Admiralty government headquarters. Police said the event turnout was 1,500 at its peak. Marchers voiced opposition to the now-suspended extradition bill, which would allow Hong Kong to transfer fugitives to mainland China. Like other protests in recent weeks, the march also reiterated the five core demands put forward by protesters, including calls for an independent investigation into police behaviour and universal suffrage. Activist Yeung Po-hi, one of the protest organisers, read aloud a statement in support of "our youth in their struggle of no return." "In their fight against the extradition bill, our youth brave truncheons, tear gas, pepper spray, rubber bullets, violent arrest and, harsh punishment," Yeung said. "We are proud of them – their determination, mobilisation and tactics, teamwork and self-organisation." The statement also endorsed the storming of the legislature on July 1, describing it as a justifiable response by young people and a "symbolic provocation" to the Chinese Communist Party. Reverend Chu Yiu-ming, a member of the "Occupy trio" behind the 2014 pro-democracy movement, also addressed the crowd, calling on Chief Executive Carrie Lam to "repent." If Lam was "still a human being," Chu said, she would have "compassion" and stop arresting young protesters and dividing society. While the event was billed as a silent march, the elderly attendees shouted slogans along the way such as "Carrie Lam step down" and "No rioters, only a tyrannical regime." Marchers were encouraged to write their demands on a ribbon, and to tie it to a rack outside the government's headquarters. Ms. Chung, a retired civil servant who is over 70, told HKFP that the top priority for the chief executive should be to set up an independent commission of inquiry to examine the clashes over the past weeks. "[Lam] didn't agree to do anything. At least, she should first investigate and know what happened. Otherwise, this situation cannot be resolved," she said. She also criticised Hong Kong's civil service, which she said showed a wider trend of "deviating" from established practices. Mr. Wong, a 65-year-old retired repairman, told HKFP that he was deeply moved by the scene of young protesters smashing into the legislature with a metal cart. "I felt the cart was like us elderly people, we are just filled with useless cardboard. How can we break the glass? We need a push from the young," he said. Wong said that the government forced people to radicalise. "They were targeting the symbol of the regime, and not affecting the lives of normal people," he said. "I don't see a problem at all." Some seniors told HKFP that young protesters should not target frontline police officers, but many also said that the force was to blame for recent clashes – including the bloody episode in Sha Tin on Sunday. Mr. and Mrs. Lee, both retirees, said that the situation only escalated because the police surrounded protesters and did not allow them to leave via the MTR station. The Lees added that the march could correct the misconception that all senior citizens held pro-establishment views. "This is an all-encompassing movement. Elderly, middle-aged and young people all oppose [Carrie Lam]," Mr. Lee said. Another protest against the extradition law will be held by the Civil Human Rights Front on Sunday. ^ top ^

Extradition protests hammer Hong Kong economy as experts report drops in air travel, retail sales and hotel revenue (SCMP)
2019-07-17
Flight bookings from Asian countries to Hong Kong have dropped 5.4 per cent in the past month, as waves of extradition protests rocked the city and gave potential visitors reason for concern. The decrease in air travel, revealed to the Post on Wednesday, was another sign of the negative economic effects brought by the ongoing mass protests – including drops in mainland Chinese tourists, hotel occupancy and retail sales. The New Zealand government on Wednesday urged its citizens to monitor Hong Kong media for news on protests and to comply with city authorities. New Zealand advised nationals in the city to avoid rallies and demonstrations, noting "violent clashes" had taken place. "While the numbers do not look good, things are not all bad for Hong Kong's visitor economy," said Olivier Ponti, vice-president of the business intelligence group ForwardKeys. "So far, the adverse media coverage of the demonstrations has not caused an overall decline in long-haul bookings to Hong Kong and the number of Asian bookings made in [all of 2019] is still ahead of those made during the same time period in 2018 – although growth has slowed substantially since the mass protest of June 16." Data compiled by ForwardKeys showed that between June 16 and July 13 flight bookings to Hong Kong from Asian destinations – except mainland China and Taiwan – were down 5.4 per cent from the same period in 2018. That time period followed a protest on June 9 that drew a turnout of 1 million people, and violent clashes between protesters and police – who used tear gas, pepper spray and beanbag rounds – on June 12. On June 16, an estimated 2 million people joined another march against the unpopular extradition bill, which has since been suspended. From June 15 to June 29, according to ForwardKeys, bookings to Hong Kong slumped by 9 per cent. The sharp drop erased growth in the first 6½ months of the year, which saw bookings increase by 6.6 per cent from last year at the same time. ForwardKeys warned another downturn in travel bookings was possible. The extradition bill would have allowed Hong Kong to transfer suspects to jurisdictions with which it lacks official handover agreements, including mainland China. Critics feared it would remove the legal firewall between the city and the mainland, exposing suspects to opaque trials across the border. Tourism sector lawmaker Yiu Si-wing said the impact of the protests on the city's tourism industry was obvious. He said the average growth of tourist arrivals to Hong Kong was 13 per cent in the first six months of the year – but the rate in June was 8 per cent and over the first five days of July was only 4 per cent. "If the conflicts continue, the growth rate will continue to drop in the latter half of this year. The figures might even decrease," he said. Yiu said the downturn was mainly from the clashes between protesters and police – rather than the protests themselves. "Hong Kong has hundreds of peaceful protests every year. It is the conflicts and bloodshed that have made tourists feel insecure and worried about travelling to the city," he said. Hong Kong's hotel sector, meanwhile, reported the average occupancy rate dropped by 3 to 5 per cent in June compared with the same period last year, and overall revenue in June dropped 10 per cent. According to Yiu, tourist agencies had seen more people from mainland China and overseas cancelling study and business tours over fears their schedule would be affected by protests. He said some agencies charged a cancellation rate of 20 to 30 per cent. On Tuesday, HSBC cut its forecast for growth in mainland Chinese tourist arrivals into Hong Kong this year to 9 per cent, shaving off 0.7 per cent because of the citywide protests. The bank said in a report the ongoing turmoil would put off an estimated 350,000 tourists from the mainland. Last year, 51 million mainland Chinese visited Hong Kong, according to the Tourism Board. The latest figures from January to May showed growth of 17.5 per cent – or 23.5 million tourists – compared with 2018. Visitor arrivals from Asia, excluding mainland China and Macau, grew 4.3 per cent over the same period – to 3.3 million. The Hong Kong Retail Management Association said on Tuesday that a majority of its members reported single- to double-digit drops in sales revenue during the protest period including June and the first week of July. ^ top ^

Mainland sea bridge built with hope of linking Taiwan (Global Times)
2019-07-17
A cross-sea bridge from East China's Fujian Province was completely connected on Wednesday after the last phase of concrete pouring, moving Chinese mainland infrastructure a step closer to linking with the island of Taiwan. The bridge in East China's Fujian Province is regarded as a vital route which in the future might link the island of Taiwan via the Beijing-Taipei expressway, the State-Owned Assets Supervision and Administration Commission of the State Council said on Sina Weibo on Wednesday. In a short video released by the commission, a construction worker from the China Railway Construction Corporation Limited who participated in the project said, "I firmly believe this bridge will link Taiwan eventually. As an infrastructure worker, I'm ready! Taiwan will be reunited." The bridge has a six-lane expressway on top and at the bottom a railway for bullet trains traveling as fast as 200 kilometers per hour. The 16.34 kilometer bridge connects Pingtan Island and four nearby islets to the mainland and is expected to be open to traffic by the second half of next year, the Xinhua News Agency reported. The bridge will shorten the route from Fuzhou, capital of Fujian, to Pingtan - an island about 126 kilometers from Taiwan and the Chinese mainland's nearest location. People can take a boat or plane from Pingtan to Taiwan. The bridge could be an important venue in the future that helps link his home with the mainland, Cheng Po-yu, 32, from Taiwan, who works in Beijing, told the Global Times on Wednesday. Picturing a future where people could drive from Taiwan to the Chinese mainland, Cheng said, "Driving to the Chinese mainland is a totally different experience from flying. That time will mean a true integration of people from across the Straits." In March, Wu Zhiming, chairman of Fujian provincial Party committee of the China National Democratic Construction Association, suggested that a submarine tunnel from Pingtan to Taiwan could boost business and cultural relations. It could also act as a deterrent to secessionists on the island, Wu said. ^ top ^

KMT candidate Han Kuo-yu faces uphill battle in Taiwan presidential race (SCMP)
2019-07-17
After a convincing win in the opposition Kuomintang primaries, Taiwanese presidential candidate Han Kuo-yu faces challenges that could cost him the election if he fails to tackle them, according to analysts. They said that the Kaohsiung mayor – who beat his closest rival, Foxconn's billionaire founder Terry Gou Tai-ming, by 17 percentage points in the primaries – now needed to mend fences with Gou, convince his constituents and win over young voters. Gou congratulated Han on his nomination but has yet to publicly back him for the 2020 presidential race, giving rise to speculation that the tycoon could leave the KMT and run as an independent. Analysts said Han would also have to convince voters that he can improve Taiwan's economy and safeguard the self-ruled island's sovereignty. The KMT announced on Monday that 62-year-old Han would be the mainland-friendly party's candidate to challenge President Tsai Ing-wen's re-election bid in January. Han received 44.8 per cent backing in the primaries, determined by public opinion surveys. Speaking on a radio talk show on Tuesday, Gou's spokeswoman Amanda Liu said he needed time to reflect on the results but dismissed as "fake" the rumours circulating during the primaries that Gou might run as an independent. Liu said the speculation could have lost him some support, but would not comment on his next step. Late on Monday, Gou posted messages on Facebook saying he had no regrets about running in the primaries and had learned from it. "The brief experience was a precious lesson to me, which I hope may inspire others," Gou wrote. "That is, no one should lose heart but everyone should be responsible for their own choices. Even if people in the world are laughing at and ridiculing you, please don't give up your dream." He added: "It's not easy for the brave to lead a fearless life, but [you] can do it." Analysts said that without clear support from Gou, Han would have to work harder to reinforce unity within the opposition party, which had ruled Taiwan for decades in the past. "The first thing [Han] must do is to ensure unity within the party," said Chang Ruay-shiung, president of the National Taipei University of Business. Chang added that Gou's support could affect Han's election bid since the tycoon might team up with Taipei Mayor Ko Wen-je or former legislative speaker Wang Jin-pyng to run for the top post. Wang helped Han during his mayoral campaign in Kaohsiung – a pro-independence stronghold in southern Taiwan – in November. With his aid and political resources, Han achieved a landslide victory in the local government polls, helping the KMT regain control of 15 of the island's 22 cities and counties. Ko, an independent popular among young voters, has yet to announce if he will run for the presidency, but most opinion polls have shown he has at least 20 per cent support. "Han has a lot to do to explain to citizens in Kaohsiung why he broke his campaign promise [by leaving Kaohsiung and running for president]," said Liao Da-chi, a political science professor at National Sun Yat-sen University in Kaohsiung. Vowing to turn Kaohsiung into a wealthy city, Han, who has been in office for just seven months, had promised that if he became mayor he would stay put in Kaohsiung. "It will be extremely difficult for him to convince people in Kaohsiung and justify joining this presidential race," Liao said, adding that Han could face censure from the city council, public criticism and even a recall motion. A local civic group on Monday said it was seeking the endorsement of 130,000 Kaohsiung voters for the second stage of a recall motion to oust Han as mayor. If successful, there would be two more stages to remove Han from office, with the final hurdle requiring 580,000 votes – or a quarter of the electorate. Shih Cheng-feng, a political science professor at National Dong Hwa University in Hualien, said Han needed to expand his support base beyond the mostly retired teachers and government workers, as well as military veterans upset by Tsai's pension reform. "I have my doubts over whether Han can appeal to relatively neutral voters, especially young people, given his mistakes in the past seven months," Shih said, referring to criticism over his performance in council sessions and lack of familiarity with issues in the city. Shih also said Han's pro-Beijing stance was a problem for many young Taiwanese, who were concerned he would bow to pressure from mainland China. Last month, Han said he had no idea what was going on in Hong Kong when asked about the mass protests over a now-suspended extradition bill that would have allowed the transfer of criminal suspects to mainland China. ^ top ^

"No cooperation or business dealings" with U.S. companies involved in arms sales to Taiwan: spokesperson (Xinhua)
2019-07-15
The Chinese government and companies will not cooperate or have any business dealings with U.S. companies involved in arms sales to Taiwan, a Foreign Ministry spokesperson said Monday. "Chinese people always honor their words with real actions," spokesperson Geng Shuang said at a press briefing without adding any further details on the sanctions. China earlier said that it will impose sanctions on U.S. companies involved in arms sales to Taiwan following the United States' announcement of a plan to sell weapons worth 2.22 billion U.S. dollars to Taiwan. The arms sales to Taiwan by the United States severely violated the international law, the basic norms of international relations, the one-China principle and the three joint communiques between China and the United States, and undermined China's sovereignty and national security, Geng said. "In order to safeguard national interests, China will impose sanctions on U.S. companies involved in the arms sales to Taiwan," he added. ^ top ^

ASEAN overtakes U.S. to become China's second-largest trading partner (People's Daily)
2019-07-17
The Association of Southeast Asian Nations (ASEAN) became China's second-largest trading partner in the first half of 2019, overtaking the U.S. for the first time since 1997. In the first half of this year, China's trade with ASEAN rose 10.5 percent to nearly 2 trillion yuan, accounting for 13.5 percent of the country's total trade volume, according to China's customs data. During the same period, China's trade with the U.S. dropped 9 percent to 1.8 trillion yuan, accounting for 12 percent of the country's total trade volume. In June, China's exports to the U.S. fell by 8 percent year-on-year, and imports from the U.S. slumped by 31 percent, customs data showed. The shift is underpinned by China-ASEAN strategic mutual trust, expanded interests from economic and trade cooperation, and shared aspirations for safeguarding multilateralism. Meanwhile, the Belt and Road Initiative (BRI) has become a new highlight of China-ASEAN economic cooperation. The ASEAN region has witnessed the most remarkable outcomes and potential in regards to BRI, Huang Xilian, Chinese Ambassador to ASEAN said at a seminar on ASEAN-BRI relations held in Jakarta, capital of Indonesia, on June 25. ^ top ^

Chinese SMEs benefit from tax reduction measures (People's Daily)
2019-07-15
China has cut a total of 816.8 billion yuan ($119 billion) of tax in the first five months of this year, substantially contributing to the growth of its small- and medium-sized enterprises (SMEs) that account for over 99 percent of the country's total registered enterprises. The new round of measures implemented this year, including the inclusive tax deduction and exemption policies for SMEs, as well as the deepened VAT reform, have effectively cut production costs for enterprises and stimulated the passion of entrepreneurs. Anhui Hetian Electric Co., Ltd. in east China's Anhui province, with total assets of 43 million yuan, was not considered an SME. After China relaxed the qualification conditions for small and low-profit enterprises, the company can finally enjoy relevant favorable policies. Its enterprise income tax in the second quarter of this year is estimated at 14,700 yuan, down by nearly 70 percent from a year ago. "The threshold of VAT for small-scale taxpayers was raised from 30,000 yuan to 100,000, which meant we have been almost exempt from paying tax," said Wu Cong, owner of a bed & breakfast hotel in east China's Zhejiang province, adding that the cost reduction can be used to improve their services further. Li Xuhong, professor at the Beijing National Accounting Institute, noted that SMEs have high tax compliance cost, and therefore, it is a positive move to implement inclusive tax deduction and exemption policies for them. It will facilitate employment, promote social stability, and enhance scientific innovation, Li said. Affected by the current situation of global trade, some export enterprises are facing high pressure, and some entrepreneurs also find themselves in a dilemma with high costs. In a diverse market system, SMEs in different industries and with different development are facing various difficulties and challenges. Thanks to the targeted tax reduction measures introduced by China this year, most SMEs in the country can enjoy tailored favorable policies. An electronic paper producer based in northeast China's Dalian, which exports the majority of its products to South Korea, said they saved over 2.6 million yuan in purchasing raw materials after the VAT rate dropped from 16 to 13 percent. "Our company saved around 1.2 million yuan this year, which means we can invest 20 percent more in R&D and our sales volume this year could hit 70 million yuan with higher profitability," said Rong Zhijun, chairman of a Shenyang-based manufacturer of numerically-controlled machine tools. An official from China's State Taxation Administration disclosed that the taxation department would stay true to its original aspiration and keep its mission firmly in mind, to better serve the people with more concrete actions, further stimulate the energy of SMEs, and promote high-quality economic development. ^ top ^

Squeezed by sanctions, North Korea experiences worst downturn since 1990s famine (SCMP)
2019-07-17
How much are sanctions hurting Kim Jong-un ? North Korea's economy has not been in such bad shape since his father was battling floods, droughts and a famine that some estimates say killed as much as 10 per cent of the population. The South Korean central bank's annual report on its northern neighbour – due for release later this month – will provide a fresh look at the impact of US President Donald Trump's pressure campaign just as the two sides prepare to restart talks. Although North Korea's isolation, secrecy and dearth of official statistics make estimates difficult, the economy probably contracted more than 5 per cent last year, according to Kim Byung-yeon, an economics professor at Seoul National University. "As long as sanctions remain, time is on the US side," said Kim Byung-yeon, who also wrote the book Unveiling the North Korean Economy. "Sanctions are the most effective means to draw North Korea into negotiations, so they should not be lifted or eased without major progress on denuclearisation." A decline of 5 per cent would mean international curbs on North Korean trade – measures crucially backed by China – have put the country on its weakest economic footing since 1997. Back then, the isolated nation was reeling from policy missteps under Kim Jong-il and a famine so bad some defectors reported rumours of cannibalism. The Bank of Korea estimated a 3.5 per cent contraction in 2017, leaving North Korea an economy roughly the size of the US state of Vermont. Park Yung-hwan, a BOK official in charge of North Korean growth data, declined to comment on the central bank's latest calculations since the work was still underway. One thing sanctions are not doing: stopping Kim from developing the nuclear arsenal that prompted his showdown with Trump. The cost of launching the more than 30 ballistic missiles Kim Jong-un has tested since taking power in 2011 comes in at about US$100 million, according to estimates by South Korea's defence ministry. Nevertheless, Trump is counting on the economic pressure to compel Kim to compromise after the two leaders agreed in a historic meeting at the Demilitarised Zone last month to resume working-level talks. The president had earlier rejected the North Korean leader's offer to dismantle his ageing nuclear complex at Yongbyon in exchange for the removal of the toughest sanctions. "We will look forward, of course, to resuming those negotiations, and we hope to talk about all ways that we can advance progress on these commitments," US State Department spokeswoman Morgan Ortagus told a briefing on Tuesday in Washington. North Korea is heavily reliant on China, which accounts for about 90 per cent of the country's trade. Beijing's decision to support tougher international sanctions against North Korea following its sixth nuclear test in September 2017 has put severe pressure on the economy. Sanctions imposed by the UN Security Council hit everything from North Korea's exports of raw materials, minerals and clothes to the movement of manual labourers and software engineers. The drying up of hard currency due to plunging trade is potentially creating an "economic crisis" for Kim, the state-run Korea Development Institute in Sejong, said earlier this month. China's imports from North Korea have slowed to a trickle, falling about 90 per cent year on year to just US$195 million in 2018, according to the Korea International Trade Association. Meanwhile, exports of food and fuel from China to the North have also tumbled. Before sanctions were in place, North Korea imported about 3.9 million barrels of oil in 2015, according to the CIA's The World Factbook. Sanctions capped the country's imports to a 500,000 barrels of oil last year. But Kim's regime has found ways to evade the sanctions, using illicit high seas transfers to obtain oil and export its goods, the US and its allies have said. The country's ports received at least 263 tanker deliveries of refined petroleum, according to US estimates, enough to bring as much as 3.78 million barrels of fuel. The fuel crunch has exacerbated decades of economic stagnation. North Korea's oil consumption has fallen by about 80 per cent from 1991 to 2017, according to the UN World Food Programme, one of the few international bodies with access to on-the-ground reporting and statistics in the country. Less fuel has meant less diesel to run farm tractors and irrigation pumps, hitting farms already affected by droughts last summer. Last year, farmers had a little less than 90 millilitres of fuel a day to farm an area about the size of two soccer fields, according to calculations based on WFP data. The sanctions have led to shortages of other necessary agricultural items, including machinery and spare parts, and farm output has dropped in the provinces that make up North Korea's southern and western breadbaskets, the World Food Programme and Food and Agricultural Organisation of the United Nations said in a May assessment. Paddy production declined at least 17 per cent last year in South Hwanghae and North Pyongan provinces, regions that together account for half of North Korea's rice. "The unintended negative impact sanctions can have on agricultural production, through both direct and indirect impacts, cannot be ignored," the report said. In April, Kim replaced his prime minister and leading technocrat Pak Pong-ju with Kim Jae-ryong, a veteran overseer of one of North Korea's most impoverished provinces whose reputation for weathering tough times suggests leader Kim may also see a need to dig in rather than experiment should the sanctions continue. ^ top ^

Chinese man who smuggled one bottle of North Korean beer into Japan charged for breaching sanctions (SCMP)
2019-07-15
A Chinese resident of Japan has been charged with violating the foreign trade law for importing a single bottle of North Korean beer. The 19-year-old man, who has not been named because he is a youth under Japanese law, has been charged with concealing a bottle of Taedonggang beer in his luggage before boarding a flight from Shanghai to Saga Airport, in southern Japan, in October last year. According to documents filed with the Fukuoka District Public Prosecutors' Office, the man did not declare the item to authorities and failed to obtain approval from the trade ministry to bring it into Japan, the Yomiuri newspaper reported. The unemployed man, who lives in Fukuoka, reportedly told police: "I thought [North Korean beer] could be sold at a high price." Japan introduced a blanket ban on all imports from North Korea in 2009, as part of the unilateral economic sanctions imposed over Pyongyang's abduction of Japanese nationals. Those sanctions have been tightened due to subsequent nuclear tests and missile launches. The man told police that he frequently travelled between China and Japan, purchasing items in China that were expensive or difficult to obtain in Japan. He would then sell them online for many times the price he paid for them. His activities first came to the attention of the cyber unit of Fukuoka Prefectural Police, with authorities confirming he paid 200 yen (US$1.85) for the North Korean beer in China, but sold it for 16,000 yen (US$148.05) via an online auction site. Once an important money-spinner for the regime in Pyongyang, Taedonggang beer had established a firm following abroad – primarily in China and South Korea – before international sanctions halted official shipments. Despite the sanctions, the beer has remained largely available in China. While the brew has for years been popular among North Koreans, it's roots are distinctly British. The North Korean government decided in 2000 to start producing a high-quality range of beers, but lacked the experience to do so. The solution: buy a foreign brewery. After satisfying international concerns that the brewery would not be used to manufacture chemicals for weapons, Pyongyang bought a redundant facility in, previously owned by Ushers of Trowbridge, in Wiltshire, UK, for £1.5 million (US$1.8 million). The UK brewery was dismantled and shipped to Pyongyang, where it was rebuilt with the addition of German-made computerised brewing control technology. The brewery produces four different ales, including a brown ale and a Pilsner-style lager that has been described as full-bodied but a little on the sweet side, and with a slightly bitter aftertaste. ^ top ^

President submits a Constitutional Amendment Bill (Montsame)
2019-07-17
President of Mongolia Khaltmaagiin Battulga submitted a Constitutional Amendment Bill to Chairman of the State Great Khural G.Zandanshatar on July 16. Upon submitting the bill, President Battulga said, "In accordance with the provisions in Section 1 of Article 26 of the Constitution of Mongolia, Article 7 of the Law on Constitutional Amendment Procedure, and Section 6 of Article 12 of the Law on the President of Mongolia, I drafted a Constitutional Amendment Bill and hereby submit it to the State Great Khural." ^ top ^

Fitch affirms Mongolia at 'B'; Outlook Stable (Montsame)
2019-07-17
On July 4, Fitch Ratings has affirmed Mongolia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B' with a Stable Outlook. Mongolia's ratings are supported by the country's robust growth outlook, improving fiscal metrics, and strong governance indicators. The ratings are constrained by Mongolia's narrow economic base, low external buffers, and a volatile political landscape, which can lead to sharp changes in economic policy and increases the likelihood of economic shocks. The budget surplus was recorded at 2.6 percent of GDP in 2018, well above both the approved budget and Fitch's prior expectations. Budget outturns through end-May 2019 point to robust revenue and expenditure growth, even in the absence of new revenue-enhancing measures, which Fitch believes are consistent with the budget remaining broadly in balance in 2019. The prospect for continued fiscal outperformance into next year is considerably less certain amid a recent history of sharp increases in spending ahead of parliamentary elections, which are due to be held in mid-2020. Fitch forecasts the fiscal deficit to widen to 4 percent in 2020, above the authorities' projection of 2 percent, though we think there may be greater downside risks to the forecast owing to the political cycle. Strong budget outturns combined with a robust economic recovery that started in early 2017 have led to a sharp decline in gross general government debt (GGGD). Fitch forecasts GGGD will fall to 60 percent of GDP by end-2019 from 70 percent a year earlier, below a peak of 93 percent in 2016. The agency's baseline forecasts continue to point to a gradual downward path for Mongolia's public debt dynamics post-2020, but our assumption for higher fiscal deficits implies GGGD will remain above the historical 'B' median of 49 percent for the foreseeable future. The IMF has yet to conclude its sixth review of Mongolia's three-year Extended Fund Facility since late-2018 due to the outstanding completion of two prior actions pertaining to the asset quality review (AQR) of the financial sector. The IMF Article IV end-of-mission press release in June 2019 highlighted Mongolia's progress in strengthening its economic resilience, while underscoring the country's still insufficient buffers to withstand future external shocks.
External buffers have continued to strengthen, despite the delay of some IMF programme-linked disbursements. Foreign reserves were USD3.7 billion by end-May 2019, up from USD3.3 billion a year prior, and more than triple their value in early 2017. Fitch estimates foreign reserves are now equivalent to roughly 4.4x current-external payments, which puts Mongolia ahead of the 'B' median of 3.8x, and roughly on par with the 'BB' median of 4.3x, though a considerable proportion of outstanding reserves could be viewed as encumbered due to a CNY15 billion (USD2.1 billion) swap arrangement with the People's Bank of China. Real GDP growth accelerated to 8.6 percent in 1Q19 from 6.7 percent in 2018. The strong growth performance has been in large part due to capital expenditure linked to the ongoing development of the underground phase of the Oyu Tolgoi copper mine, for which sustainable first production has been delayed until late 2021 or 2022. Fitch forecasts GDP growth of 7 percent in 2019 and 6 percent in 2020, broadly in line with the authorities' Medium Term Fiscal Framework assumptions, and considerably above the 'B' median of 3 percent. ^ top ^

Jennia Jin
Embassy of Switzerland