Foreign Policy

• Google's YouTube suspends 210 channels alleged to have ties to the Chinese government (SCMP)
• Using China as excuse for U.S. leaving INF Treaty unacceptable: envoy (Xinhua)
• Premier Li Keqiang says a China-South Korea-Japan trade deal will safeguard peace and stability in Asia (SCMP)
• China and Russia to raise US 'threat to peace' at UN Security Council meeting (SCMP)
• China vows countermeasures if U.S. puts new tariffs on Chinese goods (Xinhua)
• China says Canada solely responsible for difficulties in relations (Xinhua)
• Rodrigo Duterte hints he will cancel talks with Xi Jinping if barred from raising arbitral ruling over disputed waters (SCMP)

Domestic Policy

• Xi highlights poverty relief, high-quality development, environmental protection (Xinhua)
• China's top legislature starts bimonthly session (Xinhua)
• China's 'unreliable entity list' imminent (Global Times)
• China holds forums to commemorate 70th anniversary of PRC founding (Xinhua)
• Draft legislation regulates human gene research (Global Times)
• Chinese human rights lawyer Chen Qiushi missing after return from Hong Kong protests trip (SCMP)

Beijing

Shanghai

Guangdong

• Cooperation to fortify Shenzhen-HK ties (China Daily)
• China to build Shenzhen into socialist demonstration area (Xinhua)

Tibet

Xinjiang

• New counter-terror force in Xinjiang (Global Times)
• White paper on Xinjiang's vocational centers hailed as 'authentic' and 'instructive' (Global Times)

Hongkong

• Britain in urgent quest for contact with Hong Kong consulate employee Simon Cheng Man-kit (SCMP)
• Hong Kong students announce two-week class boycott as protests continue (HKFP)

Taiwan

• Chinese military says Taiwan's US$8 billion deal to buy US F-16 fighter jets is a waste of money because they will be 'useless' against the PLA (SCMP)
• Don't offer Hong Kong protesters asylum, Beijing warns Taipei (SCMP)

Economy

• China needs to be prepared to cope with Libra amid yuan internationalization (Global Times)
• China's free trade zones fail to shine despite Beijing's desire to lure global investors (SCMP)

DPRK

• Kim Jong-un expresses 'great satisfaction' over North Korean weapons tests (SCMP)

Mongolia

• Fitch on Mongolia 2019 discusses Mongolia's mining and banking sector outlook (Montsame)
• High-level officials from Mongolia address Boao Forum for Asia Ulaanbaatar (Montsame)

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Google's YouTube suspends 210 channels alleged to have ties to the Chinese government (SCMP)
2019-08-23
YouTube has suspended scores of accounts alleged to be part of a Chinese government-backed campaign to influence opinion about unrest in Hong Kong, the video-sharing platform's owner Google announced on Thursday. The move follows similar measures announced by US social media platforms Facebook and Twitter earlier this week. "As part of our ongoing efforts to combat coordinated influence operations, we disabled 210 channels on YouTube when we discovered channels in this network behaved in a coordinated manner while uploading videos related to the ongoing protests in Hong Kong," Google said in a blog post. "This discovery was consistent with recent observations and actions related to China announced by Facebook and Twitter," the online search giant's director of software engineering, Shane Huntley, said in the post. "We found use of VPNs and other methods to disguise the origin of these accounts and other activity commonly associated with coordinated influence operations," Huntley added. On Monday, Twitter said that 936 accounts originating from China had been suspended for a number of violations of the company's "platform manipulation policies", including spam, coordinated activity, fake accounts and ban evasion. Facebook followed almost immediately, announcing that it had removed seven pages, three groups and five accounts involved in what the company called "coordinated inauthentic behaviour as part of a small network that originated in China and focused on Hong Kong". Twitter, Facebook and most other Western social media platforms are blocked in mainland China by the Great Firewall of censorship and filtering, but they are accessible in Hong Kong, where anti-government protests have been escalating for nearly three months. Allegations that the Chinese government is behind accounts pushing pro-Beijing viewpoints of the unrest, and the response by the US social media giants, have further exacerbated bilateral tensions. The two countries have been locked in a trade war that has escalated for more than a year, and Washington has put sanctions in place against Chinese telecoms equipment makers including Huawei Technologies. China's foreign ministry has objected to the closing of the social media accounts, and several US lawmakers have said the alleged state-supported disinformation campaign was another example of Beijing's threat to national security. "I believe people around the world will come to their own judgment about what happens in Hong Kong and what is the truth," China's foreign ministry spokesman Geng Shuang said on Tuesday in response to the moves by Twitter and Facebook. "Why do you think what is described by the Chinese state-run media outlets must be negative or wrong?" Meanwhile, the vice-chairman of the US Senate Intelligence Committee, Senator Mark Warner, said China was trying to engineer "social control" beyond its borders. "As I've emphasised previously, China has long been a pioneer in harnessing communications technologies for social control, censorship and surveillance," Warner said on Thursday, shortly before the announcement by Google. "The Chinese government has built an entire infrastructure to support its efforts at information control, through a combination of censorship and disinformation," added the Democrat from Virginia. "And it's exporting both the technology and ideas information control to authoritarian regimes around the world." House Intelligence Committee Chairman Adam Schiff weighed in earlier this week with a similar sentiment. "Social media platforms and the US government must continue to identify and combat state-backed information operations online, whether they're aimed at disrupting our elections or undermining peaceful protesters who seek freedom and democracy," the Democratic representative from California said in a Twitter post on Tuesday. ^ top ^

Using China as excuse for U.S. leaving INF Treaty unacceptable: envoy (Xinhua)
2019-08-23
A Chinese envoy said Thursday that it is unacceptable to use China as an excuse for the United States to leave the Intermediate-Range Nuclear Forces (INF) Treaty, which ended on Aug. 2 after the United States formally withdrew from it. "It is unacceptable to use China as an excuse for leaving the treaty, and China rejects the baseless accusation by the United States," Zhang Jun, China's permanent representative to the United Nations, told the Security Council emergency session under the agenda item "threats to international peace and security." "China unswervingly pursues a national defense policy that is defensive in nature," he said. "China's nuclear strategy for self-defense is completely transparent and its nuclear policy is highly responsible." "China's nuclear arsenal is extremely limited in scale, and poses no threat to international peace and security," he noted. For decades, China has actively participated in arms control consultations and negotiations "under multilateral mechanisms and frameworks" including those of the United Nations and Conference on Disarmament, said the ambassador. "China opposes arms race and works to safeguard global strategic balance and stability," Zhang noted. "Moving forward, China will continue to firmly uphold multilateralism, and actively participate in multilateral arms control processes to contribute to the maintenance of international peace and security," he said. In response to the U.S. criticism of China's development of intermediate range missiles, Zhang stressed that the U.S. withdrawal from the INF Treaty is yet "another act of unilateralism and escape from international obligations by the United States." "It is aimed at relieving restrictions and seeking absolute military advantage," the envoy noted. "China pursues a national defense policy that is defensive in nature. China's land-based intermediate range missiles are all deployed within the Chinese territory," Zhang said. "It is for defense purposes and poses no threat to any country." "China firmly opposes U.S. deployment of intermediate range missiles in the Asia-Pacific and looks to the United States to be cool-headed and exercise restraint," said the envoy. The unilateral withdrawal of the United States "led to the demise" of the treaty, which will have a far-reaching negative impact on global strategic balance and stability, regional security in Europe and Asia, as well as international arms control regime, the ambassador said, urging the international community to be clearheaded about this impact. "China strongly urges the relevant country to take a highly responsible attitude, exercise restraint and earnestly preserve the existing arms control regime in an effort to safeguard global strategic balance and stability, and international and regional peace and security," the envoy said. "This is the shared message from the international community." "Multilateralism is the effective means to address common challenges," Zhang said. "All countries should resolutely safeguard the international order with international law and the purposes and principles of the UN Charter at its core, embrace a concept of common, comprehensive, cooperative and sustainable security, fully respect the legitimate security concerns of all countries, work hard for a peaceful and stable international security environment and promote a community of a shared future for mankind." Russia, with support from China, requested the meeting, citing the destabilizing effects of recent U.S. cruise missile test. The U.S. Department of Defense confirmed on Monday that it had conducted a flight test of a ground-launched cruise missile which hit its intended target after traveling for more than 500 kilometers. It marked the first time the United States conducted an intermediate-range cruise missile test after it withdrew from the INF Treaty three weeks ago. The United States and former Soviet Union signed the INF Treaty in 1987 and ratified it the following year. The treaty prohibited possessing, development and testing of ground-launched missiles with a range of 500 to 5,500 kilometers. ^ top ^

Premier Li Keqiang says a China-South Korea-Japan trade deal will safeguard peace and stability in Asia (SCMP)
2019-08-22
China, South Korea and Japan ended three days of foreign ministers' talks in Beijing on Thursday with a promise to work towards greater economic cooperation, but there was no joint statement on the possibility of new US missiles in Asia or denuclearisation of the Korean peninsula. Chinese Foreign Minister Wang Yi, along with his South Korean and Japanese counterparts Kang Kyung-wha and Taro Kono, met Chinese Premier Li Keqiang at the Great Hall of the People. "There is certainly political will from the three parties to speed the negotiations on a free-trade agreement," said Jun Saito, deputy press secretary of Japan's ministry of foreign affairs, adding that any agreement had to uphold higher standards (more open markets) than the proposed 10-nation Regional Comprehensive Economic Partnership. Li called for Seoul and Tokyo's support in promoting multilateralism, and he reiterated China's commitment to speeding up their negotiations. "China-South Korea-Japan cooperation is an important safeguard and catalyst for the region and the world. We must defend regional peace and stability, the multilateral trading system and [the principles] of free trade," Li said. The premier continued that a free trade deal would enable fairer competition and that China should play an important role in promoting cooperation between the three countries and throughout East Asia. His remarks were particularly pointed as South Korea and Japan, two of the biggest US allies in East Asia, are currently embroiled in a trade conflict, which has seen Japan remove South Korea from its list preferred trade partners – a measure that takes effect next week. Wei Jianguo, a former Chinese vice commerce minister, said a three-way agreement would provide a platform for South Korea and Japan to settle their current dispute, which has its roots in Japan's colonial history. Tokyo insists it has fulfilled its obligations under a 1965 treaty, but a South Korean court recently ruled that Japanese firms must compensate victims of wartime forced labour. "The current global system is under the heavy influence of US protectionism and unilateralism, and no country can remain undamaged," Wei said. "It is necessary to promote the trilateral FTA and move towards a rules-based system, rather than being victims of the unilateral trade protectionism." Li also alluded to Beijing's concerns about the possibility of new US intermediate-range missiles being stationed in neighbouring countries, and he called on Seoul and Tokyo to think hard about any such proposal. "We should also have a corresponding role in safeguarding regional and global peace … We should deal with sensitive issues appropriately so that [trilateral] cooperation can be taken to a higher level," Li said. Beijing has warned that the presence of US missiles in South Korea and Japan may complicate their relationship. China recently threatened unspecified countermeasures if its neighbours allowed the US weapons on their territory. Kang said that South Korea and China must continue to work together towards greater economic cooperation, a statement from the foreign ministry in Seoul said, without referring to security matters. The three countries did not reveal how the denuclearisation of North Korea might be achieved, but Japan's foreign ministry said it remained a common goal. A source familiar with China-Japan relations said that the two countries were "not in the same boat" on North Korea. Tokyo demands the complete, verifiable and irreversible dismantling of Pyongyang's nuclear programme, but Beijing wants economic cooperation with North Korea by easing sanctions, the source said. ^ top ^

China and Russia to raise US 'threat to peace' at UN Security Council meeting (SCMP)
2019-08-22
China and Russia have called on the United Nations Security Council to address US withdrawal from a landmark cold war-era nuclear treaty, citing "threats to international peace and security". In a rare move, Beijing and Moscow requested that a meeting on Thursday of the 15-member council discuss "statements by US officials on their plans to develop and deploy medium-range missiles" in the wake of Washington's withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty. UN undersecretary general and high representative for disarmament affairs Izumi Nakamitsu will brief the meeting, which follows Sunday's intermediate-range cruise missile test by the United States, its first since pulling out of the treaty which it signed with the former Soviet Union in 1987. For China and Russia, the missile test was the latest in a series of provocative moves by the US, which has also pledged to deploy new missiles in the Asia-Pacific region. Observers said it was unusual for China and Russia to openly attack the US – a fellow permanent member of the Security Council – and the move was intended to send a message to other nations, especially in Asia, that they should not host any new US missile system. "What Washington has done to the INF is a devastating blow to one of the last pillars of the international arms control regime and it will disrupt the delicate balance of military power between the US, China and Russia in the post-cold war era and inevitably lead to another round of the arms race," said Yue Gang, a retired People's Liberation Army colonel. Yue and other Chinese analysts noted that Beijing and Moscow had been pushed closer together by the Trump administration's classification of the two cold war adversaries as primary threats and top rivals to US global dominance. Both countries have also been on high alert in response to Washington's "America first" national security strategy. "Apparently, the US' maximum pressure campaign is not only about tariffs and trade rifts. It is an all-round game to curb China economically, politically and militarily," Yue said. US Defence Secretary Mark Esper indicated on Wednesday in a Fox News Channel interview that Sunday's missile test was aimed at sending a message to China, rather than North Korea or Russia. "We want to make sure that we, as we need to, have the capability to deter Chinese bad behaviour by having our own capability to be able to strike at intermediate ranges," he said. The test followed a robust statement by Esper immediately after US withdrawal from the INF treaty, in which he said he wanted to see ground-launched, intermediate-range missiles in Asia "sooner rather than later". China immediately warned potential hosts of US missiles, such as Japan, South Korea and Australia, to "exercise prudence" and not allow such weapons on their territory. Fu Cong, a senior arms control official at the Chinese foreign ministry, also urged the US to exercise restraint and said Beijing would be forced to take countermeasures if Washington went ahead with its missile plans in the region. Zhu Feng, dean of the international relations school at Nanjing University, noted that it was quite unusual for two members of the Security Council to openly attack another permanent member over its military strategy and developments. "That's something really rare since the end of the cold war, which underlines the significance of the move. Considering the grave consequences of what Washington has done, it deserves greater international attention, especially from countries in the Asia-Pacific region," he said. But Zhu cautioned that the meeting would be unlikely to yield any statement or concrete results, given Washington's veto power. Both Zhu and Yue said China would have to tread carefully to avoid being drawn into a costly and dangerous arms race with tensions between Beijing and Washington already boiling over a trade war and a slew of technology and geopolitical differences. "With the demise of the INF, the global arms control regime is tumbling down and we might see a repeat of the explosive tensions in Europe at the height of the cold war in the 1960s," Zhu said. Compounding matters, the Trump administration was ramping up the pressure on China with its updated Indo-Pacific strategy, which promised to shift its military capabilities increasingly towards Asia, he noted. "Along with Russia, China should remain sober-minded before responding to Washington's offensive moves. With almost every country in the region being affected by US provocations and the likely subsequent arms race, China should seek understanding and rally support from other players to deal with the imminent challenges," Zhu said. ^ top ^

China vows countermeasures if U.S. puts new tariffs on Chinese goods (Xinhua)
2019-08-22
China's Commerce Ministry said Thursday that the country would have to take countermeasures if the United States imposes new additional tariffs on Chinese goods. This came after the United States threatened an additional tariff of 10 percent on about 300 billion U.S. dollars of Chinese imports. China's position is consistent and clear. "Trade wars produce no winners. China does not want a trade war, but it is not afraid of one, and it will fight one if necessary," Ministry of Commerce spokesman Gao Feng told a press conference. Although the United States announced a plan to postpone the tariff hike on some Chinese goods, any new U.S. tariff hike will lead to an escalation of trade frictions unilaterally, Gao said. "If the United States acts arbitrarily, China will have to take countermeasures," he said. The tariff measures will damage the interests of both China and the United States, and may also have a recessionary impact on the global economy, Gao said. "If the United States goes ahead willfully, it will have a serious negative impact on U.S. businesses and consumers," Gao said. "Some U.S. financial institutions have predicted that the tariffs would cost an ordinary U.S. family 1,000 U.S. dollars a year on average." "At the same time, the delay in imposing tariffs on some goods fully demonstrate that there are no winners in a trade war," he said. "If the trade frictions escalate, U.S. consumers and businesses will suffer heavy losses." Gao expressed the hope that the U.S. side would stop its erroneous practice of imposing tariffs, meet halfway with China, and find a solution to the problem based on equality and mutual respect. He said that the U.S. move would pose certain challenges to China's exports and economy, but the impact is fully controllable in general. "The Chinese side is confident, determined and capable of meeting various challenges and maintaining the sound and stable development of its economy and foreign trade," he added. Chinese and U.S. chief trade negotiators held a phone conversation on Aug. 13 and agreed to hold another phone conversation in two weeks. "The two negotiating teams have maintained communication," Gao said. ^ top ^

China says Canada solely responsible for difficulties in relations (Xinhua)
2019-08-22
China-Canada relations have met serious difficulties, and the Canadian side is solely responsible for this, a Chinese Foreign Ministry spokesperson said Thursday. Geng Shuang made the comment at a press briefing when asked about Canadian Prime Minister Justin Trudeau's remarks that the Canadian government would not "back down" in disputes with China. Urging the Canadian side to reflect upon its mistakes, Geng said Canada should treat China's solemn position and concerns seriously and immediately release Meng Wanzhou, the chief financial officer of Huawei. Geng also criticized Canada's series of wrong comments on Hong Kong, saying that Hong Kong affairs are China's internal affairs and brook no interference from any country, organization or individual. "We hope that the Canadian side could abide by the international law and the basic norms of international relations, and stop meddling in China's internal affairs," he said. ^ top ^

Rodrigo Duterte hints he will cancel talks with Xi Jinping if barred from raising arbitral ruling over disputed waters (SCMP)
2019-08-22
Philippine President Rodrigo Duterte hinted on Wednesday that he would rather cancel next week's talks with Chinese President Xi Jinping if he is barred from raising the country's arbitral victory in the South China Sea dispute. Speaking during the inauguration of a solar power plant in Romblon province in central Philippines, Duterte said: "They said it won't be talked about. I said no. If I'm not allowed as a president of a sovereign nation to talk whatever I want to talk about, then let us not rather talk altogether." "Never mind," he added. "Do not control my mouth because that is a gift from God." The president did not specify who "they" referred to. He is expected to make his fifth visit to China on August 28. A copy of Duterte's speech was obtained by the South China Morning Post late Wednesday evening. In his speech, the president said, seemingly addressing someone in the Chinese government: "So whether you like it or not, will it make you happy or not, angry or otherwise, I'm sorry." "But we have to talk the arbitral ruling, then what we get if there is a start in the exploration and in the extraction of whatever worth there is in the bowels of the earth," he added, referring to China's offer to do a joint venture in the exploration and extraction of oil and gas deposits in the part of the South China Sea within the Philippines' exclusive economic zone (EEZ). China had offered to do a 60-40 sharing in the joint venture but neither country has explained whether this refers to ownership, costs or profits. "The proposal of 60-40 in our favour would be a good start," Duterte said in his speech, though he did not clarify what the numbers referred to. "I hope that it would graduate into something like towards how do we solve the arbitral ruling peacefully." He also said that "any other adventures or expeditions in the marine oceans of our exclusive zones, economic zones will have a direct bearing on that arbitral ruling. I won't agree to only a 'thank you' agreement [without the Philippines getting anything out of it]. But I also won't get into a fight because of it." Manila and Beijing have overlapping claims in the South China Sea. In 2016, an arbitral tribunal in The Hague rejected Beijing's territorial claims in the area, ruling that it ran counter to principles of the United Nations Convention on the Law of the Sea, to which China is also a signatory. It also ruled that China had violated the Philippines' sovereign rights by interfering with its fishing and petroleum exploration and constructing artificial islands in its EEZ. China has refused to recognise the ruling. Duterte changed his tune about the arbitral ruling only this month. He previously said enforcing the ruling would result in war and he preferred diplomatic negotiations. On August 6, however, his spokesman Salvador Panelo quoted him as saying that "the time has come" to raise the ruling. Duterte's statements came after China urged Manila to ban all online gambling. The Philippine government was looking to collect at least 22 billion pesos (US$420 million) in income taxes yearly from online gambling workers coming mainly from China. This is on top of the expected eight billion pesos expected to be collected this year from the online gaming companies. China recently showed its displeasure over moves by the Philippine Amusement and Gaming Corporation, Manila's state gaming regulator, to confine mainlanders to "hubs", ostensibly to protect them. ^ top ^

Xi highlights poverty relief, high-quality development, environmental protection (Xinhua)
2019-08-23
Chinese President Xi Jinping has underscored efforts to push forward poverty alleviation, promote high-quality development, enhance environmental protection, and ensure and improve people's well-being. Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, made the remarks during his inspection tour of northwest China's Gansu Province from Monday to Thursday. During the tour, Xi called for confidence, innovation, concrete actions and solidarity in building a beautiful and prosperous Gansu. Touring the Mogao Grottoes in Dunhuang Monday morning, Xi stressed efforts to pass on the world cultural heritage through generations. At the Dunhuang Academy, Xi hailed the Dunhuang culture as a result of the long-term cultural exchanges and mutual learning between Chinese civilization and other civilizations, and called for more efforts in cultural exchanges. Xi emphasized the need for the study of Dunhuang culture to serve the Belt and Road Initiative and further promote cultural exchanges between China and countries along the Belt and Road. Visiting the Jiayu Pass Tuesday morning, Xi said the Great Wall is an important symbol of the Chinese nation and the Chinese civilization. Efforts should be made to better explore the cultural value of the Great Wall and enhance preservation, he said. At a revolutionary memorial site in Gaotai County, Xi hailed the Red Army's heroism and the spirit of dedication to the Party and the people, which he said are the CPC's tradition that must be carried on. Visiting a vocational school in Shandan County, Xi said vocational education has a great prospect and called for training of more skilled personnel for the development of China's western region. At a horse ranch in Shandan, Xi observed the pasture and horse herding and heard a report on the ecological protection of the Qilian Mountains. Xi emphasized the role of environmental protection in high-quality development, urging proper balance of the relationship between production and environment, active development of eco-friendly and sustainable industries, and better protection of the grassland resources. Visiting Gulang County on Wednesday, Xi went to a community of rural residents relocated from environmentally vulnerable and impoverished areas. He noted that the CPC serves the people and works for the people, and the happiness of the people is what the CPC pursues. While lifting people out of poverty was the first step, efforts should be made to ensure the relocated residents can settle down, have jobs, earn money and lead better lives, he said. Xi then visited an afforestation area and learned about the efforts and progress in desertification control. He called for the promotion of the spirit of turning a desert into an oasis, as well as perseverance and sustained efforts in building a beautiful China. In provincial capital Lanzhou, Xi heard a briefing on the protection of the Yellow River and urged Gansu to shoulder its key task of ecological restoration, water and soil conservation, and pollution control at the upper reaches of the river. After hearing a work report by provincial officials on Thursday, Xi stressed the need to intensify the fight against poverty and shift the focus to areas of extreme poverty. He said problems must be solved village by village and person by person to break the last bastion of poverty. Xi also spoke of the need to advance supply-side structural reform, strengthen infrastructure networks, transform traditional industries, foster emerging industries, among others, to consolidate the foundation for high-quality development. He demanded stepped-up efforts to protect the environment, properly balance the relationship between development and environmental protection, accelerate development of ecological industries to build west China's ecological security shields. Xi underlined the need to ensure and improve people's well-being and address issues people are strongly concerned about, in the areas such as education, healthcare and transportation. Calling Gansu a piece of "Red Land," Xi urged the province to use its revolutionary resources to strengthen Party building. He called for efforts to build a strong team of cadres, fight corruption, improve conduct, and resist the practices of formalities for formalities' sake and bureaucratism. ^ top ^

China's top legislature starts bimonthly session (Xinhua)
2019-08-22
China's top legislature started its bimonthly session Thursday to review multiple draft laws and revisions to laws. Li Zhanshu, chairman of the Standing Committee of the National People's Congress (NPC), presided over the first plenary meeting of the session Thursday morning. A total of 166 members of the NPC Standing Committee attended the meeting. Bills presented to the legislature include a draft revision of the drug administration law, draft amendments to the laws on land administration and urban real estate administration, and the draft resource taxes law. The Constitution and Law Committee of the NPC suggested the above drafts be submitted to a vote for adoption at the session. Also on the lawmakers' table is a draft law on promoting basic medical and health care, which requires efforts to prioritize the development of medical and health institutions below the county level. Draft sections on personality rights and torts of the civil code were submitted for a third reading. The draft section of personality rights encourages body donation and further regulates studies related to human genes or embryos. Lawmakers began reviewing a draft law on administrative discipline which aims to strengthen supervision over everyone working in the public sector who exercises public power. Lawmakers also heard a report on ratifying extradition treaties with Sri Lanka and Vietnam respectively. Minister of Education Chen Baosheng gave a report on preschool education to the legislators. ^ top ^

China's 'unreliable entity list' imminent (Global Times)
2019-08-22
China is preparing to launch a widely anticipated "unreliable entity list," the Ministry of Commerce (MOFCOM) said Thursday, as expectations for the mechanism to severely punish companies that have undermined China's national interests continue to grow. While initiated as a response to the US crackdown on Chinese tech companies, the mechanism, once launched, could also be deployed to punish companies that hurt China's sovereignty regarding Taiwan and Hong Kong, and the punishment could be crippling given China's massive economic power, Chinese analysts noted. The "unreliable entity list" mechanism is currently going through internal deliberations and "will be announced in the near future," Gao Feng, a spokesperson for MOFCOM, told a press briefing on Thursday. Gao did not provide a timetable for the release of the list, first announced in May and widely viewed as China's response to the US "entity list." The US has used the list to crack down on Chinese companies such as Chinese tech giant Huawei Technologies. Aiming to increase pressure on Huawei, the US Commerce Department Monday added 46 affiliates of the Chinese telecom giant to its "entity list." Gao reiterated Thursday China's firm opposition to the US move to "deploy" its state power to crack down on Chinese companies "without any justification." Gao's comment comes as an increasing number of foreign companies have drawn Beijing's ire for allegedly conspiring with the US government to undermine China's national interests. The latest case is US courier delivery company FedEx, under investigation in China after a package that FedEx delivered was found to contain a handgun. The company has also been accused of helping the US crack down on Huawei after it misrouted packages belonging to the Chinese company. Asked whether FedEx will be included in the "unreliable entity list," Gao said that officials will consider four factors which have been previously disclosed. The factors include whether the entity is engaged in other discriminative actions such as cutting supplies, whether the entity violates market rules and breaches contracts for non-commercial reasons, whether the entity damages Chinese companies and whether the entity threatens China's national security. Many companies, including US suppliers of Huawei, meet those standards. UK-listed bank HSBC has also been floated as a potential target after it was reported that the bank had conspired with US officials in the case against Huawei. Standard Chartered, Citigroup and French Bank BNP have also been reported as playing a role in the case. The scope of the "unreliable entity list" will not be limited to the Huawei case as other foreign companies have also been accused of undermining China's national security regarding "secessionist actions" in Hong Kong and arms sales to Taiwan, Bai Ming, a research fellow at MOFCOM's Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Thursday. "Those who ignore or challenge the one-China principle will all fall under its scope," Bai said. Companies in Hong Kong including airline Cathay Pacific, as well as Amazon, Facebook and Twitter, have all been criticized for supporting violent protesters in Hong Kong. The Ministry of Foreign Affairs on Wednesday said that China could impose sanctions on US companies involved in arms sales to Taiwan. Companies included in the "unreliable entity list" could face a potentially crippling punishment from China, which wields great power in the global economy, Chinese analysts said. "Being added to the list will make a big dent on their businesses development not only in China but also in other markets where they have operations. For example, fundraising in local markets will be impacted," said Gao Lingyun, an expert with the Chinese Academy of Social Sciences in Beijing. Punitive measures could include hefty penalties, cancellation of business licenses that are compulsory to do business in China, and a temporary or permanent ban from the Chinese market, Gao said. The ban from doing business in the massive Chinese market alone could mean huge losses for many of the companies that rely heavily on revenues from China, Gao noted. Chinese officials stressed the move was not aimed at those that operate within the law, and China still welcomes foreign companies to conduct business. The delay in the launch of the mechanism could also mean Chinese officials are trying to take a balanced approach and minimize collateral damage, analysts said. "According to my observation, the MOFCOM is soliciting inputs among related departments on the list. The ministry will revise it based on the advice and launch it soon," said Gao Lingyun. Gao noted that China will likely launch the mechanism first instead of listing the companies. "The list is not that difficult to generate but we need to take multiple factors into consideration," Huo Jianguo, a vice chairman of the China Society for World Trade Organization Studies, told the Global Times. China is likely waiting for an appropriate time to unveil the list, Huo said. ^ top ^

China holds forums to commemorate 70th anniversary of PRC founding (Xinhua)
2019-08-22
Leaders of five centrally-administered state-owned companies and leading private firms on Thursday gathered in Beijing to share the development of China in relevant sectors. At a forum held Thursday, Chen Derong, president of China Baowu Steel Group Corporation Limited, a state-owned company, reviewed the achievements of China's steel industry over the past seven decades, especially since the reform and opening-up, saying that the country's output of crude steel reached 928 million tonnes in 2018. China's economy has turned to high-quality development, said Li Dongsheng, founder and president of the privately-owned home appliance maker TCL Corp., who added that the innovation-driven development and industrial transformation and upgrading have generated stronger vitality in the private sector. Lei Jun, founder and president of China's tech giant Xiaomi, called on private entrepreneurs to undertake more missions of historic importance and commit to building first-class enterprises with global competitiveness. The forum, jointly hosted by several units including the Publicity Department of the Communist Party of China Central Committee, is the second of six forums planned to celebrate the 70th anniversary of the founding of the People's Republic of China (PRC). At the forum, the participants also interacted with viewers online. Four other forums will be held on Aug. 29, Sept. 4, 11 and 19, respectively. ^ top ^

Draft legislation regulates human gene research (Global Times)
2019-08-22
Medical and scientific studies related to human genes and embryos "must not infringe on public interests," according to a new provision in the draft civil code submitted to China's top legislature for a third review on Thursday. In the second review stage in April, the clause, as part of the personality rights section under the law governing legal disputes, states that such medical or scientific practices "shall abide by laws, administrative rules and relevant regulations, shall not harm human health and violate moral ethnics," China News Service reported on Thursday. The regulations specific to genes and embryos come months after Chinese scientist He Jiankui claimed that he had successfully created the world's first gene-edited twins immune to HIV, which stirred a global storm of condemnation on ethical grounds. Analysts hailed the section, saying China has made a fundamental regulation concerning such issues in its legislation, while some legislators and legal professionals maintained that the provision's wording should be more definite and stringent to prevent similar cases from happening again. "Germ cell editing is considered illegal in many countries. However, the personality rights bill in the draft civil code fails to draw a legal line for such matters, and the punishment mentioned in the bill was vague," said Zhou Youjun, a professor at the Law School of the Beihang University in Beijing. Zhou, who also heads the university's civil code research center, suggested a clear and total ban over human gene-editing practices. But Liu Changqiu, a health law expert and research fellow at the Shanghai Academy of Social Sciences, told the Global Times on Thursday that since human gene editing technology could be the future of medical practices for the sake of human health, a permanent ban might hinder relevant developments. However, Liu supports the legal regulations of human gene studies, noting that since the civil code addresses disputes, China should use more powerful criminal and administrative laws, instead of only relying on the civil code, to curb the practice. Gene-editing technologies should only be applied to human cells when the technology is mature enough and security is warranted. It is far from that, Liu said.  ^ top ^

Chinese human rights lawyer Chen Qiushi missing after return from Hong Kong protests trip (SCMP)
2019-08-21
Human rights watchers and activists have expressed concerns for the safety of a mainland Chinese lawyer who went missing after visiting Hong Kong on the weekend to observe protests in the city. Chen Qiushi, 33, a Beijing-based lawyer and public commentator, arrived in Hong Kong on Saturday as a tourist. He attended a rally organised by pro-government supporters that day and also observed Sunday's demonstration involving hundreds of thousands of anti-government protesters. While in Hong Kong, Chen uploaded several video diaries and observations about the protests to his Twitter-like Weibo account, which has more than 770,000 followers. The diaries have since been deleted from his Weibo account but are still available on YouTube. In his last video filmed at Hong Kong International Airport on Tuesday night, Chen said he was forced to cut his trip short and return to the mainland because of pressure from mainland police and lawyers associations. He said he could be disqualified from practising law because of his visit. "I'm showing everyone my lawyer's licence here. Why? Because it may not be mine any more after I return," he said. "I studied for three years for this 'toy' … If you asked me whether destroying three years of hard work in three days was worth it, I would say of course not. But there is nothing that I can do; I am who I am … I alone bear the consequences of my actions." Doriane Lau, a China researcher at Amnesty International Hong Kong, said she was very worried for Chen since he returned to the mainland. "Although Chen did not publicly support the Hong Kong protesters, in the past there have been cases of mainlanders harassed or taken away by the authorities after attending protests in Hong Kong," Lau said. "It is surely rare to see a [mainland] human rights lawyer attending public protests in Hong Kong, especially when the crackdown on human rights lawyers in China has been increasingly harsh." While in the city, Chen said he did not take state media reports at face value and came to see what was happening for himself. Beijing's state-run media has aggressively criticised the protesters in recent weeks, warning that further chaos and violence would destroy Hong Kong. Xu Zhihan, a human-rights activist on the mainland, posted a message on Weibo on Wednesday saying Chen had arrived back but he had not been able to get in touch with him. Chen became widely known on the mainland after winning second place in a nationwide televised public speaking competition in 2014. He regularly posts social commentary videos on his Weibo account. Attempts to contact both Chen and Xu on Wednesday were unsuccessful. Wang Yaqiu of Human Rights Watch said she "wouldn't be surprised" if Chen was punished for observing the protests, which have plunged Hong Kong into its biggest political crisis since the 1997 handover over a now-abandoned extradition bill. "The Chinese authorities have for a long time used disqualification to silence human rights lawyers. Particularly after the '709' crackdown in 2015, authorities have systematically used the suspension of licensees to muzzle human rights lawyers," Wang said. She said other mainlanders had joined the Hong Kong protests but had maintained a low profile. ^ top ^

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Cooperation to fortify Shenzhen-HK ties (China Daily)
2019-08-23
In order to develop into a demonstration pilot zone for socialism with Chinese characteristics that would strengthen democracy and rule of law, facilitate the flow of foreign talents and nurture an international financial hub, Shenzhen has to expand cooperation with the Hong Kong Special Administrative Region. The Communist Party of China Central Committee and the State Council, China's Cabinet, recently issued a guidance on supporting Shenzhen in building the demonstration pilot zone for socialism with Chinese characteristics. Shenzhen's expanded cooperation with Hong Kong will also lay a solid foundation for the overall development of the Guangdong-Hong Kong-Macao Greater Bay Area. The demonstration pilot zone is also projected to play a leading role in the Greater Bay Area. Just more than 30 years ago, Hong Kong residents used to be reluctant to visit neighboring Shenzhen. It was not only the complicated clearance procedure at the border, which took at least two to three hours, but also the backwardness of the then small fishing village which dissuaded the Hong Kong residents from visiting Shenzhen. Today, Hong Kong residents marvel at the pace and ease with which Shenzhen has transformed into a global innovation center, offering more opportunities and oozing more vitality than Hong Kong. To further promote the flow of economic factors, build a more favorable business atmosphere and expand spatial development, the city authorities will exacerbate the two-way flow of talents between Shenzhen and Hong Kong, and attract more foreign talents to work, live and invest in the city by offering them a more attractive household registration policy. Obviously, Shenzhen will not develop in isolation but in collaboration with Hong Kong, which played a vital role in its transformation into a high-tech and innovation hub. Shenzhen will also take the lead in fostering a democratic environment promoting the rule of law, equity and justice, and accord priority to optimizing the relationship between the government and the market. For this, however, Shenzhen needs to learn from and strengthen its cooperation with Hong Kong, which has been ranked fourth in terms of business climate by the World Bank. On the finance front, too, Shenzhen will deepen collaboration with Hong Kong and improve the two cities' interconnectivity, particularly in financial technology (fintech) and green finance. Given the new situation, transaction modes and market rules, Shenzhen will improve coordination with other international financial centers, too, including Hong Kong to strengthen the supervision and guidance for fintech and green finance through a financial regulatory system and legal framework, so as to promote global financial development and improve global financial governance. Apart from shouldering part of Hong Kong's burden of financial functions, this will also help develop Shenzhen into a new type of global financial center. Besides, to facilitate the yuan's internationalization, too, Shenzhen needs to deepen cooperation with Hong Kong, a prominent offshore yuan center. The global status of the yuan remains discordant with China's share of global trade, although the Chinese currency's internationalization process has progressed steadily and more than 60 countries and regions have included the yuan in their foreign exchange reserves. China accounts for about 15 percent of global GDP, but the yuan's share of global foreign exchange transactions is only 4 percent, ranking eighth in the world and lagging far behind major reserve currencies such as the dollar, euro, pound and the yen. Thus Shenzhen needs to ease restrictions properly on capital account flow on a trial basis and, if it proves successful, explore reasonable methods and measures for supervision, while developing more yuan-denominated investment instruments and stocks with the help of Hong Kong's built-in advantages. This will promote the internationalization of the yuan and give other countries and regions more choices in terms of international currencies, as well as better safeguard the stability of the global financial market and the security of China's foreign exchange reserves. Along the way, the foundation for Shenzhen to become a global financial center would also be strengthened. As such, Shenzhen, with the support of a new round of policies from the central government, will expedite its development and become the leading city in the Guangdong-Hong Kong-Macao Greater Bay Area and help build a brighter future for the area. ^ top ^

China to build Shenzhen into socialist demonstration area (Xinhua)
2019-08-18
China will build the southern city of Shenzhen into a pilot demonstration area of socialism with Chinese characteristics, a document said Sunday. The building of the demonstration area will help deepen reform and expand opening-up comprehensively, according to the document issued by the Communist Party of China Central Committee and the State Council. It is also conducive to the implementation of the Guangdong-Hong Kong-Macao Greater Bay Area plan and the fulfillment of the Chinese dream of national rejuvenation. By 2025, Shenzhen will become one of the leading cities in the world in terms of economic strength and quality of development. Its research and development input, industrial innovation capacity, and the quality of its public services and ecological environment will be first-rate in the world, according to the document. By 2035, Shenzhen will become a national model of high-quality development, as well as a hub of innovation, entrepreneurship and creativity with international influence. By mid-21st century, the city will become one of the top cosmopolis in the world and a global pacesetter with outstanding competitiveness, innovative capacity and influence, said the document. International talents with Chinese permanent residence permits will be allowed to set up sci-tech companies and act as legal representatives of scientific research institutions in Shenzhen. Great efforts will be made to promote the development of emerging industries with strategic importance, and set up a prudent and inclusive supervision system with greater flexibility, the document said. Shenzhen will also vigorously develop new industries including the intelligent economy and the health care industry, and support the research on digital currency and the application of innovations such as mobile payment. The city will establish a maritime university and a national deep sea research center, and explore the establishment of a maritime development bank. Shenzhen, a major city in south China's Guangdong Province, is the country's first special economic zone. It has a population of about 13 million and its gross domestic product hit 2.42 trillion yuan (about 346 billion U.S. dollars) in 2018, up 7.6 percent year on year. ^ top ^

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New counter-terror force in Xinjiang (Global Times)
2019-08-20
The Chinese People's Armed Police have established a new counter-terror special operations unit in Northwest China's Xinjiang Uyghur Autonomous Region to adapt to the needs of counter-terrorism missions there, media reported on Tuesday. The unit, called Mountain Eagle Commando, was revealed to the public for the first time, Chinese newspaper Cankao Xiaoxi reported on Tuesday. It was formed under the military reform and aims to deal with counter-terror missions in Xinjiang and other places in China. The name "Mountain Eagle" came from the unit's designated battlefield: mountains and plateaus. The unit's insignia is a flying mountain eagle with its beak pointed to the ground and claws open. The report did not reveal when the Mountain Eagle Commando was established. It it said the unit has begun to take shape, has passed a strict evaluation process and is now capable of conducting combat missions. In 2018, the amount of ammunition used by the new commando unit was equal to all of the other Armed Police units in Xinjiang in the past three years, said Peng Jingtang, chief of staff of Armed Police Force in Xinjiang. The leader of the Mountain Eagle Commando Unit is Wang Gang, who fought in Xinjiang's counter-terror efforts and participated in dealing with more than a dozen of serious terrorist incidents. Zhang Xiaoqi, director of the intelligence bureau of the People's Armed Police staff department, told the Xinhua News Agency previously that the expansion of China's security interests in the new era has placed a higher demand on the Armed Police special operation forces. The scope of missions for these units has expanded from land to sea, from within borders to beyond borders, from stability maintenance to safeguarding rights and interests, Zhang said. He noted that special operation forces need to focus on key locations but also cover the whole country. China has two other counter-terror ism commandos - the Guangzhou-based Snow Leopard Unit, which was established in 2002, and the Beijing-based Falcon Unit, established in 1982, according to media reports. This means the Armed Police now operate three special units each in the south, center and west, which reflects Zhang's vision. The Armed Police aims to build commando forces capable of conducting missions at any time, in any place, under all weather conditions, and to deal with all factors, Cankao Xiaoxi said in a separate report in June. ^ top ^

White paper on Xinjiang's vocational centers hailed as 'authentic' and 'instructive' (Global Times)
2019-08-18
The publication of a white paper on vocational education and training in Northwest China's Xinjiang Uyghur Autonomous Region on Friday immediately drew heated discussions both inside and outside China, with many hailing the counter-terrorism methods China has used in the region. "I have taken the general picture [of Xinjiang]. I think the white paper reflects the true picture of Xinjiang as far as I have witnessed," Daily Outlook Afghanistan's Hujjatullah Zia told the Global Times. Zia visited two vocational education and training centers in Aksu Prefecture in southern Xinjiang this April and conducted in-depth interviews there. "I think establishing education and vocational centers is one of the best ways to be copied from Xinjiang and applied in Afghanistan [to combat terrorism]," Zia said. The white paper, published by the State Council Information Office, includes six chapters: urgent needs for education and training, law-based education and training, content of education and training, protection of trainees' basic rights, remarkable results in education and training, and experience in countering extremism. Erkin Oncan, an Istanbul-based journalist who focuses on extremist movements in China and the Middle East, told the Global Times that the white paper "is one of the key documents for understanding China's policies in Xinjiang." "This kind of document is important and instructive for other countries. Besides, being aware of the arguments and criticism against China, this white paper is the proper answer to the question 'What is China doing there?'" he said. According to Oncan, the paper presents the facts, in sharp contrast to the accusations targeted at China by the West, which are based on rumors such as "unnamed" witnesses and unreliable satellite images. "With the vocational education centers, China is separating the terrorists and the victims of terrorism and extremism. After this separation, China gives new lives to victims of terrorism and radical Islamism," Oncan said. "It should be understood that China's education centers are not a punishment system, it is a conversion system." Zia said he had spoken to several individuals who had graduated from the vocational education and training centers. "They had very comfortable lives. I believe that the main objective for those centers is to protect the rights and freedoms of other citizens," he said. Oncan pointed out that the Western countries should reflect on how many innocent people have died and how many families have been separated due to their anti-terrorism efforts. "The answer is countless," he said. Li Wei, a Beijing-based anti-terrorism expert, told the Global Times that terrorism nowadays that uses religion as a disguise to spread extremism is deceptive. "Based on the national and regional law and regulations, Xinjiang's counter-terrorism and de-radicalization work meets the benefits and demands of the broad masses of the people," Li said. According to Li, China has made some outstanding achievements in de-radicalization. As the world is haunted by terrorism and extremism, some of the methods China has outlined in the white paper can provide a reference for other countries. Muhammad Zamir Assadi, a journalist from Independent News Pakistan, told the Global Times that "the white paper has shown the consistent efforts of China for eradication of terrorism and extremism in the region, which has ultimately improved the peace and stability and lives of locals, as it has provided various opportunities for growth and development." "The Chinese government is fulfilling its responsibilities in securing the dignity of ethnic groups so they can contribute to providing better lives for their families. China has made these achievements by applying effective measures," he said, adding that other countries can learn about China's policies and implement them with their own experiences and lessons. In March, the 46th session of the Council of Foreign Ministers of the Organization of Islamic Cooperation adopted a resolution which commends the efforts China has made for Chinese Muslims. ^ top ^

Britain in urgent quest for contact with Hong Kong consulate employee Simon Cheng Man-kit (SCMP)
2019-08-22
London said on Thursday it "urgently" sought information on the detention in mainland China of a Hong Kong employee of the British consulate in the city, after Chinese state-run newspaper reported that he was being held for 15 days for "solicitation of prostitution". The British Foreign and Commonwealth Office said it was "our priority" to make contact with Simon Cheng Man-kit, 28, a trade and investment officer at the consulate's Scottish Development International section. "Neither we nor Simon's family have been able to speak to him since his detention," the office said in a statement. "That is our priority and we continue to raise Simon's case repeatedly in China, Hong Kong and London and have sought to make contact with Simon himself." Chinese state-run tabloid Global Times reported earlier in the day that Cheng was being held in administrative detention for 15 days for visiting a prostitute – a violation of Chinese law. The penalty for the offence is between 10 and 15 days in detention and a possible fine of 5,000 yuan (US$705). The Chinese foreign ministry confirmed on Wednesday that Cheng had been held under administrative detention in Shenzhen for violating "public security management regulations", adding that his detention was purely a matter for China. "I also want to stress that this worker is a Hong Kong citizen – not a British citizen – and he is Chinese. And this is entirely a matter of China's internal affairs," ministry spokesman Geng Shuang said. The Global Times report comes two weeks after Cheng disappeared while returning to Hong Kong from a business trip to Shenzhen via the cross-border high-speed railway. It also comes amid anti-government protests in Hong Kong triggered by a now-suspended extradition bill. Beijing has also hit out at London for its comments on the Hong Kong protests, accusing it of interfering in China's internal affairs. According to the report, Shenzhen police said Cheng asked police to not tell his family of his detention. The newspaper's editor-in-chief, Hu Xijin, tweeted on Thursday afternoon that local police wanted to "help reduce damage to [Cheng's] reputation". But an earlier Global Times article attacked Cheng for political posts reportedly found on his social media accounts. The article suggested that Cheng did not support "one country, two systems" in Hong Kong and was sympathetic to independence for the special administrative region and Taiwan. It also included an image of a person being slapped in the face, captioned: "I am hitting you on behalf of the Chinese Communist Party." The article also suggested that Cheng was featured in a video circulating on China's Twitter-like Weibo platform, apparently showing a bespectacled Hong Kong man arguing with a mainland man on a high-speed train. But the video published by Zhong Hong Wang – a site under China's top economic planner, the National Development and Reform Commission – stated the incident happened on August 16, over a week after Cheng's scheduled return and disappearance. On Facebook, a page called "Release Simon Cheng" responded to the solicitation allegations in the Global Times report by saying: "Visiting a prostitute? Everyone can continue to treat this as a joke. Ha." Dozens of Hongkongers rallied outside the British consulate for Cheng's release on Wednesday. One of the rally's organisers, Michael Mo Kawn-tai, said Cheng held a British National (Overseas) passport, which is not equivalent to British citizenship but does grant consular help outside China. Cheng's family said they hired a mainland lawyer, who was unable to find him in various detention centres in Shenzhen. Calls and messages to the Shenzhen police department at Luohu district after hours went unanswered. ^ top ^

Hong Kong students announce two-week class boycott as protests continue (HKFP)
2019-08-22
Hong Kong student leaders on Thursday announced a two-week boycott of lectures from the upcoming start of term, as they seek to keep protesters on the streets and pressure on the government. The financial hub has been rocked by three months of unrest, with students making up a large number of the pro-democracy protesters taking to the streets almost daily. Student leaders representing most of the city's major universities said students will miss lectures between September 2 — the planned start of the new term — and September 13. They threatened further action if the government does not adequately respond to the protesters' five demands, which include spiking a controversial extradition bill, universal suffrage and an independent inquiry into alleged police abuses during the protests. "Two weeks should be enough for the government to really think through how to respond," said Davin Wong, acting president of the Hong Kong University Students' Union. "As the situation has gotten more intense, we believe the social situation will bring more students into the boycott." Wong said students will be encouraged to take time to "understand what happened in our society… what we can do for our city's future." Students have featured prominently in the weeks of protests that have rocked Hong Kong. The demonstrations were sparked by an attempt by the city's government to bring in a bill that would have allowed for extradition to China. But they quickly morphed into a wider pro-democracy campaign, in a city where young people are boxed in by the soaring cost of living and worsening job prospects. ^ top ^

Chinese military says Taiwan's US$8 billion deal to buy US F-16 fighter jets is a waste of money because they will be 'useless' against the PLA (SCMP)
2019-08-22
A mainland Chinese military official has said Taiwan's purchase of American warplanes will not help the island defend itself and will only be a financial burden. Beijing responded with fury this week after US President Donald Trump approved the sale of 66 F-16V, or "Viper", jets to Taiwan in a US$8 billion deal, threatening to retaliate without saying what action it would take. Senior Colonel Cao Yanzhong, a researcher at the PLA Academy of Military Science, said the fighters would be "useless" in improving the island's combat strength against the mainland's military. "This deal just places an extra financial burden on the Taiwanese people and only benefits the American arms dealers … It is essentially Taiwan paying a fee to the Americans to buy protection, but this will not work and cannot protect them," Cao said. "No one shall doubt the PLA's determination and ability to ensure our national security, reunification and sovereignty." Beijing regards Taiwan as a breakaway province that must eventually be reunified with the mainland, by force if necessary. Major General Chen Rongdi, head of war studies at the PLA Academy of Military Science, warned that China would not "sit by and do nothing" about the deal. "As far as I know, China will sanction those companies involved in this sale. And, of course, we do not exclude the option of taking other measures," Chen said in Beijing. But he did not elaborate on what these measures might be. The plane's manufacturer, Lockheed Martin, does little business in China, thereby limiting the effectiveness of any sanctions. The F-16 deal still needs to be ratified by the US House and Senate, but both chambers are expected to give their approval. Taiwan welcomed the move, saying it would help it to defend itself against the military threat from the mainland. Beijing has repeatedly condemned American arms sales to Taiwan as harmful to China's sovereignty and national security. In July, when the US announced that US$2.2 billion worth of tanks, missiles and related equipment would be sold to Taiwan, Beijing also said it would sanction the relevant US firms, which included General Dynamics and Raytheon. Chen said the latest arms sale would be a "betrayal" of a 1982 US promise to gradually reduce arms sales to Taiwan, adding that it would only damage bilateral relations, raise tensions and harm regional peace and stability. ^ top ^

Don't offer Hong Kong protesters asylum, Beijing warns Taipei (SCMP)
2019-08-19
Beijing has warned Taiwan against offering asylum to Hong Kong protesters, saying it will not tolerate any attempt by Taipei to meddle in the city's affairs. Ma Xiaoguang, spokesman for Beijing's Taiwan Affairs Office, said on Monday that Taiwanese President Tsai Ing-wen's offer to shelter activists "would not only make Taiwan a haven for criminals but would also put the well-being of the Taiwanese public at stake". Ma accused Tsai's Democratic Progressive Party (DPP) of being "blind to the criminal acts of certain violent activists" and of trying to "cover up their crimes by fanning further fiery action in Hong Kong". Ma said Beijing would not tolerate attempts by the island to protect criminal elements, adding that all people in Hong Kong were bound by the rule of law. Last week, after Hong Kong police fired tear gas inside one of the city's subway stations, the DPP said Tsai had asked her government to offer "humanitarian assistance to Hong Kong people in need of help". Ma then lashed out at Tsai and her government for "playing an extremely disgraceful role" in Hong Kong's unrest, demanding they "withdraw their black hands from Hong Kong". In a meeting with former Australian defence minister Christopher Pyne on Monday, Tsai said Taiwan would not "intervene in their affairs" but it was natural for Taipei to be concerned about the worsening situation in Hong Kong and support Hong Kong people seeking freedom and democracy. She said she hoped the Hong Kong authorities could resolve the unrest without trying to blame the situation on a "non-existing external force". "Don't refuse to talk to the people and don't make any misjudgment and create regrets in the future," Tsai said. According to Taiwan's National Immigration Agency, the number of people from Hong Kong applying for residency in Taiwan has risen in the past two months as the protests have intensified. Taiwan's Mainland Affairs Council said it would help Hongkongers in need of sanctuary on a case-by-case basis. But more than 30 Hongkongers were reported to have sought help in Taiwan in July only to find that the island did not have a refugee law. Tsai has also said that the situation in Hong Kong proved that the "one country, two systems" model was unacceptable and would not win the support of most people in Taiwan. Beijing considers Taiwan a wayward province that must be brought back to the mainland's fold by force if necessary. It has suspended official exchanges with Taiwan since Tsai became president in 2016 and refused to accept the one-China principle. ^ top ^

China needs to be prepared to cope with Libra amid yuan internationalization (Global Times)
2019-08-22
Facebook recently released a white paper for Libra, its newly created cryptocurrency, and co-founded the Libra Association. Given that Facebook already has over 2 billion monthly users, the launch of Libra will bring challenges to the current monetary system, macroeconomic management and financial supervision. Libra, unlike other cryptocurrencies, has a stable currency value and is convenient and safe to use in cross-border transactions. In fact, Libra is in many ways the same as Alipay and WeChat Pay. The difference is that Alipay and WeChat Pay are directly pegged with the yuan - 1 yuan in an Alipay or WeChat Pay account equals 1 yuan of fiat money - while Libra is pegged with a basket of currencies. This difference indicates Libra is an independent currency, and one that could very well grow into an important super-sovereign currency. Libra is based on other major currencies around the world. So far, Facebook's money move has not triggered hostility from central banks, yet there is a possibility that the management of Libra will become a complicated geopolitical issue under specific circumstances. It is possible that, in some cases, powerful countries may force Facebook to intervene in the transactions of other countries, or even freeze or confiscate Libra accounts based in those countries. Alternatively, considering Facebook's current ability to influence public opinion, the giant could perhaps use Libra to paralyze a country's economy. Another issue worth noting is that once a growing number of financial companies start to use Libra in their transactions, more financial assets will be priced in terms of Libra. It is not hard to imagine that, when the world's economic and financial systems face fluctuations, major countries around the world may require Libra to adjust the rules of Libra's circulation and transactions in order to expand or shrink the cryptocurrency's issuance. The Libra association would, in this case, become a super central bank with its own independent monetary policy, and Libra would become an independent currency. Central banks worldwide are well aware that Libra has this potential. Suppose the Libra Association and Libra run like a central bank and an independent currency. Who will determinate a monetary policy? What will the goal of this monetary policy be? Which country's or region's economic situation will be Libra's reference? There are two fields in which Libra has the most potential for success. The first is in countries with fragile economies, where the people do not believe in their currencies. People in such countries may rather use Libra to save and as a measurement of value. Libra is expected to become a daily-use currency in these countries. On the contrary, in developed regions such as the EU and the US, Libra is unlikely to replace existing currencies. This is down to the fact that Libra does not represent an equivalent domestic currency, and will create issues for users who are confident in, and refer to, the value of the currency regulated by their own central banks. The second field that Libra will likely see success in is cross-border transactions. Libra has found a way out of the current complexity of such transactions via the convenience of the internet. For this reason, many financial companies have filed requests to join the Libra Association. In this sense, Libra is expected to have an edge in pushing forward economic and financial globalization. As the birth of super-sovereign currencies is at this point inevitable, China should take advantage of WeChat Pay and Alipay, among other technological innovations, to increase the cross-border use of the yuan and accelerate the yuan's internationalization. The nation should also take an active role in the operation and management of Libra, to establish a foothold in the future international currency battlefield. China should stick to the principle that Libra is not allowed to be used in domestic trade so as to maintain sovereign currencies' unrivalled positions. Chinese regulatory authorities should also declare in advance that cross-border trade of Libra can be limited in emergencies, in order to prevent capital flight and economic crises. In addition, as a great power, China must consider permitting its major firms to join Libra's governing body. Instead of rejecting Libra's potential, China might as well join it and participate in its rule setting. There is a small chance that Libra will evolve into a new currency similar to the IMF's Special Drawing Rights (SDR). Since China has taken an active role in IMF and SDR operations, why can't it join Libra's governing body? They are essentially the same. On top of that, China has supersized social networking and e-commerce platforms, which should be encouraged to push for their own digital payment tools as part of their internationalization drive, so as to increase the yuan's clout in international trade. It is only once the home currency is strong enough that the nation will be capable of getting involved in the future issuance of international currencies. China should be sober-minded and realize that the yuan, however globalized it becomes, will remain the sovereign currency, while the creation of super-sovereign currencies is inevitable. The odds are low that China's local financial institutions and businesses will launch super-sovereign currencies, taking into account restraints on online transactions and cross-border trade. Therefore, China ought to cope with super-sovereign currencies in an active and pragmatic manner, amid its push for the yuan's internationalization. ^ top ^

China's free trade zones fail to shine despite Beijing's desire to lure global investors (SCMP)
2019-08-22
Dalian's determination to woo foreign investors to the port city in northern China is spelt out clearly by a sign saying "you can only say yes and you are not allowed to say no" that hangs in a local governments business service centre. Staff are encouraged to process business registration applications to help the local government's efforts to translate its status as a free trade pilot zone, which was granted by Beijing in March 2017, into a pro-business and investor-friendly international port that can play a central role in the regional economy. "Whatever the other [free trade] zones are offering, we can do it better here for sure," said Zhang Hongguang, a deputy with the Dalian free-trade zone management committee. But the results have not been encouraging as foreign direct investment in Dalian plunged 17.6 per cent in 2018, according to official data. Zhang, though, insists the free trade pilot zone is not only about granting market access for foreign investors, but also testing the limits of what China can do to help businesses. "Our goal is to be the leader in the Northeastern region in reforms," she added. The Dalian free trade area is one of three areas designated in Liaoning to test free trade practices, with the province one of the 12 regions containing such zones after the programme started in Shanghai in 2013. But as Dalian's experience shows, the success of China's free-trade zone in attracting foreign business has been less than hoped. Most of the zones have an area of about 120 sq km, or the combined size of Hong Kong Island and Kowloon, and are intended to make life easier for foreign investors compared to the rest of mainland China. For instance, the negative list of sectors in which foreign investment is restricted or prohibited is shorter, while making cross-border payments is easier. The province of Hainan is an exception in terms of size as the entire island of nearly 34,000 sq km has been designated as a free-trade zone. The idea behind the zones came from China's own success having designated four special economic zones, including Shenzhen, in early 1980. Some of the trials first implemented within the zones, including accommodating foreign investors and selling land use rights, later became nationwide policies. China's development of the Pudong area of Shanghai into a financial hub is seen as another success. However, most of the free trade zones have achieved only mixed results, partly because the autonomy of local authorities to run the zones has been greatly reduced under Beijing's centralised control. China's draconian controls over the capital flows, for instance, has thwarted the dream of the Shanghai free-trade zone to become "an international financial centre by 2020". The United States government, in particular, has complained about China's restrictions on foreign firms and state dominance in some industries. The European Chamber of Commerce in China, a business lobby group representing companies in the European Union, also said that a survey of member companies published in May showed the relevance of free trade zones remained "limited" because of the extensive list of off-limit sectors on China's negative list. "[Businesses] prefer their operations to be determined by market factors, such as pricing, costs and proximity to suppliers and customers, rather than gaining access to preferential policies restricted to a certain zone," the report said. In the Shanghai free-trade zone, the country's first, foreign investment growth has declined in each of the last three years. According to Shanghai government data, foreign investment growth in its free-trade zone fell 3.5 per cent to US$6.77 billion in 2018, compared with a 13.5 per cent rise to US$7.02 billion in 2017. In 2016, foreign investment amounted to US$6.18 billion, a rise of 28.2 per cent from 2015. Overall in Liaoning, foreign direct investment plunged more than 80 per cent from US$27.42 billion in 2014 to US$4.9 billion in 2018, due in large part to cuts from Japanese and South Korean firms. The mediocre performance of the free trade zones, though, has prompted Beijing into action, with new policy guidelines for Shenzhen issued by the central Chinese government last week addressing areas such as immigration of talent, health care and greater autonomy in making local laws. The Shanghai free trade pilot zone also doubled in size this month and received an upgrade, including better tax incentives and import duty exemptions. China's State Council also decided on Wednesday that all designated free trade zones would start to roll out a campaign to cut business red tape from December 1. In Dalian, the local government last week promised generous rewards for those who provided ideas and proposals on how the free-trade zone could "innovate". If the proposal is endorsed by the Liaoning government, the reward would be 100,000 yuan (US$14,200), while a proposal endorsed by the central government that becomes a nationwide policy would be worth 200,000 yuan, according to an announcement published on the Dalian free-trade zone website. But China has yet to fully relax capital control within the free trade zones, and many foreign businesses believe such restriction will continue to hamper appetite for expansion. In a response to the Greater Bay Area development plan, the Chinese government's scheme to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub, the American Chamber of Commerce in Hong Kong said authorities should ease capital controls to allow more cross-border investment. The US business lobby group based in Hong Kong also pressed the Chinese government to "clearly define the meaning of opening and related policy measures to achieve breakthroughs". ^ top ^

Kim Jong-un expresses 'great satisfaction' over North Korean weapons tests (SCMP)
2019-08-17
North Korea on Saturday said its leader Kim Jong-un had supervised another test-firing of an unspecified new weapon that extended a streak of weapons demonstrations seen as an attempt to pressure Washington and Seoul over slow nuclear negotiations and their joint military exercises. Pyongyang's Korean Central News Agency on Saturday said Kim following Friday's launches expressed "great satisfaction" over his military's "mysterious and amazing success rates" in recent testing activity and vowed to build up "invincible military capabilities no one dare provoke". The report did not mention any specific comment on the United States or South Korea. Friday's launches were North Korea's sixth round of tests since late July that revealed developments of a new rocket artillery system and two separate short-range mobile ballistic missile systems that experts say would expand the North's ability to strike targets throughout South Korea, including US bases there. KCNA did not describe what Friday's weapons were or how they performed, but it said that the tests were successful and strengthened the military's confidence in the reliability of the system. Pyongyang's official Rodong Sinmun published photos that showed what appeared to be a missile soaring from a launcher installed on a vehicle and striking what appeared to be a coastal target and Kim jubilantly raising his fist while celebrating with military officials. "[Kim] said everyone should remember that it is the [ruling] party's core plan and unwavering determination to build a powerful force strong enough to discourage any forces from daring to provoke us and to leave any opponent defenceless against our Juche weapons of absolute power even in situations of physical clashes," the agency said, referring to the North's national ideology of self-reliance. South Korea's military says two projectiles launched from the North's eastern coast flew about 230km (143 miles) before landing in waters between the Korean peninsula and Japan. Seoul's Joint Chiefs of Staff said the US and South Korean militaries were analysing the launches but did not immediately say whether the weapons were ballistic missiles or rocket artillery. Experts say US President Donald Trump's repeated downplaying of the North's launches allowed the country more room to intensify its testing activity and advance its short-range weaponry while it seeks to build leverage ahead of nuclear negotiations with Washington, which could resume after the end of ongoing allied military drills later this month. North Korea has also ignored South Korean calls for dialogue recently and is seen as trying to force Seoul to make stronger efforts to coax major concessions from Washington on its behalf. South Korea's military alerted reporters to the launches hours after an unidentified North Korean government spokesperson used unusually blunt language to criticise South Korean President Moon Jae-in for continuing to hold military exercises with the US and over his rosy comments on inter-Korean diplomacy, and said Pyongyang has no current plans to talk with Seoul. Moon, in a televised speech on Thursday, said a momentum for dialogue remains alive despite the series of "worrying actions taken by North Korea recently" and called for Pyongyang to choose "economic prosperity over its nuclear programme". The spokesperson of the North's Committee for the Peaceful Reunification of the Country said Moon's comments would make a "boiled head of a cow (fall into) a side-splitting laughter." The spokesperson also criticised South Korea's recent acquisition of advanced US-made fighter planes and said it would be "senseless" for Moon to believe that inter-Korean dialogue will automatically begin after the end of the ongoing US-South Korean drills. The North had recently said it would talk only with Washington and not Seoul, and that inter-Korean dialogue will not resume unless the South offers a "plausible excuse" on why it keeps hosting military drills with the United States. Seoul's Unification Ministry, which deals with inter-Korean affairs, criticised the North Korean statement, saying it would not help efforts to improve relations. ^ top ^

Fitch on Mongolia 2019 discusses Mongolia's mining and banking sector outlook (Montsame)
2019-08-22
International credit rating agency Fitch ratings organized "Fitch on Mongolia 2019" forum in Ulaanbaatar on August 21. Being hosted for the third year, the forum brought together analysts and guests from leading institutions to discuss about opportunities and challenges the Mongolian economy faces today. This year, the Fitch on Mongolia 2019 focused on the Mongolia's economic and banking sector, its policy challenges as well as mining industry of the country. Apart from analysts from the Fitch Ratings, delegates from the financial and banking institutions of Mongolia, such as Bank of Mongolia, Development Bank of Mongolia, Khan Bank, Trade and Development Bank of Mongolia, Ministry of Finance, Ministry of Mining and Heavy Industries took part in the event to introduce about the policy environment of the economic and financial fields of Mongolia and challenges and opportunities of doing business in Mongolia. At the panel discussion under the theme "Views on Mongolia's economic and banking sector outlook, and policy challenges", guests touched on several issues, including macroeconomic developments and policy priorities, external financing challenges for the sovereign and banks, bank asset quality trends, banking sector capital needs and banks' growth strategy and challenges. Speakers and guests of the discussion agreed that the Mongolian economy is still dependent on investment and funding from the outside market, which makes the country's financial environment vulnerable to exchange rate changes. In addition, the developing vibrant democracy sometimes can be too vibrant because of its political instability. Another discussion was held to weigh on the developments and challenges of the Mongolian mining sector, policy framework for mining and non-financial corporates in Mongolia and capital market access for Mongolian corporates. As the government of Mongolia has long announced the sectors of mining, agriculture and tourism are the three crucial areas to focus on towards the economy development, the participating analysts noted that the country's potential of export is great. For instance, the renewable energy field of Mongolia has big opportunities for further growth, which includes its ambition to export energy produced from renewable sources to China. Moreover, the ongoing development of the road and transportation of Mongolia is helping to tackle the challenges of the high cost of transportation, which is a disadvantage during price downturns of the mining commodities. Another promising opportunity for export of Mongolia exists with the US bill "Third Neighbor Trade Act", which allows duty-free export of the cashmere and other light industry products. While the participants of the forum acknowledged that domestic political stability and policy certainty would contribute most to attracting investment in Mongolia, government officials also presented about the government policy and measures being taken in order to build the economic development and reduce the impacts of the global commodity price on the export products of Mongolia. Also at the event, Andrew Fennell, Director of Asia Pacific Sovereigns of the Fitch Ratings introduced about some key rating drivers for Mongolia. As the Fitch Ratings has recently affirmed Mongolia's long-term foreign-currency issuer default rating (IDR) at 'B' with a stable outlook, the key influencing factors were the country's robust growth outlook, improving fiscal metrics and strong governance indicators as well as its narrow economic base and a volatile political landscape. ^ top ^

High-level officials from Mongolia address Boao Forum for Asia Ulaanbaatar (Montsame)
2019-08-21
On August 20-21, Mongolia is hosting the Boao Forum for Asia in Ulaanbaatar for the first time. The participants of the conference agreed that cooperation of culture and education plays a significant role in the regional development. Discussing the wide ranges of issues concerning the economic growth of the Asian countries, the conference also touched upon investment environment and economic prospects of Mongolia and corresponding government ministries of Mongolia delivered presentations at the parallel sessions. Addressing the guests of the forum, Prime Minister of Mongolia, U.Khurelsukh underlined that Mongolia has always been aiming to develop mutually beneficial cooperation, actively participate in the regional integration and make its contribution to tackle issues faced by regional and global people. "Moreover, we highly value that China is sharing its development benefits with its neighboring country and implementing a policy to develop together". He then noted about the growing economy of Mongolia within the scope of its cooperation with its partner countries and international organizations and Mongolia will continue to take measures to stabilize its economic growth, improve investment environment, enhancing investors' trust and protecting their legal rights. During the first day of the conference. Minister of Foreign Affairs D.Tsogtbaatar informed that the international Boao conference is one of many events planned to be organized by Mongolia on the 70th anniversary of the diplomatic relations between Mongolia and China. "As major business leaders and entrepreneurs and investors convene at the Boao forum with some weighty business ideas and looking for regional trade collaboration and investment opportunities. Delegates from Pakistan, Malaysia, Hungary and South Korea arrived in Ulaanbaatar" he said. Mongolia hosting the Boao conference is attracting the attention not only of the regional countries concerned, but also at a global level". He further noted that, "First, Mongolia is aiming to find new markets for products exporting from Mongolia during the current period of smooth operation of business entities' thanks to the economic revival. In order to that, Mongolia has invited investors and business entrepreneurs to Mongolia to connect them with Mongolian companies. A whole day is dedicated to the talks between Mongolian and foreign business entities on the sidelines of the conference. Secondly, this forum has crucial advantages for the economy, trade, investment and technology industry of the country, providing us with a chance to introduce Mongolia's policy implementation and business development situations. ^ top ^

Jennia Jin
Embassy of Switzerland