Foreign Policy

• US and China to sign phase one trade pact in early January, Steven Mnuchin says (SCMP)
• Trudeau to Trump: Don't sign US-China trade deal until Canadians released (SCMP)
• More US goods to be exempted from tariffs (Global Times)
• China Focus: Upcoming China-Japan-ROK leaders' meeting to chart course for future cooperation (Xinhua)
• Chinese, Russian FMs hold phone conversation over bilateral coordination (Xinhua)
• Chinese Ambassador to Australia calls reports of Xinjiang mass detentions "fake news" (Global Times)
• US Senate passes US$700 billion defence act to support Taiwan and counter China and Russia (SCMP)
• Chinese Foreign Minister Wang Yi says EU investment pact is a top priority (SCMP)

Domestic Policy

• Smart technologies to help agricultural reform, upgrading (Global Times)
• China looks to standardize transparency (China Daily)
• 97 drugs of new medical insurance catalog to be available for purchase (China Daily)
• China commissions 2nd aircraft carrier (Global Times)
• China to guarantee pork supply during imminent peak season with more reserve release and import (Global Times)
• Stability, GDP get top priority for year ahead (China Daily)

Tibet 

• China urges US to halt legislation on Tibet issues (Global Times)
• First Xinjiang, then Hong Kong … now US turns human rights attention to Tibet (SCMP)

Xinjiang

• In Mahathir's Malaysia, China's PR blitz on Uygurs sparks anger among Muslims (SCMP)

Hongkong

• Police freeze HK$70 million raised by Spark Alliance for Hong Kong protesters, with group suspected of using money for personal gain and rewards (SCMP)
• Xi backs Lam in hard times (Global Times)

Macau

• Xi extols Macao's progress (Global Times)
• Macau's yuan remittance limit raised to same level as Hong Kong as Beijing starts to shift financial focus (SCMP)

Taiwan

• Beijing more confident than ever of Taiwan reunification, senior mainland official says (SCMP)
• Taiwan to team up with US to build fighter jet centre, sending another defiant message to Beijing (SCMP)

Economy

• Economic Watch: 2019 in review: China remains "gold mine" for foreign investors (Xinhua)
• GDP target range in 2020 may fall between 5.5-6%: study (Global Times)
• China's bond market stress creates US$26 billion headache as private firms face unprecedented funding squeeze (SCMP)

DPRK

• US and China vow to keep communicating on North Korea nuclear issue (SCMP)
• China says lifting some sanctions on North Korea is best way to ease tensions (SCMP)

Mongolia

• Prime Minister receives heads of Mongolian diplomatic missions (Montsame)
• Innovative product materials and ingredients to be exempted from customs duties and VAT (Montsame)
• Parliament of Mongolia and European Parliament hold 13th regular meeting (Montsame)

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US and China to sign phase one trade pact in early January, Steven Mnuchin says (SCMP)
2019-12-20
US Treasury Secretary Steven Mnuchin said on Thursday that the United States and China would sign their so-called phase one trade pact early next month, adding that it was completely finished and just undergoing a technical "scrub". Mnuchin, speaking on CNBC, said that the trade deal had already been put down on paper and translated and that it would not be subject to any renegotiation. "We are going through a technical issue now where again the agreement is translated," Mnuchin said. "I don't expect there's any changes. We'll sign the agreement in the beginning of January." He said the focus would be on implementing the first phase, which calls for US farm product exports to China to roughly double over the next two years. Overall, Mnuchin told CNBC television, increased Chinese purchases of US agricultural, manufactured goods, energy and services would add about a half percentage point to US economic growth during the next two years. ^ top ^

Trudeau to Trump: Don't sign US-China trade deal until Canadians released (SCMP)
2019-12-20
Canadian Prime Minister Justin Trudeau said on Thursday he has asked the United States to hold off on any final trade agreement with China until two Canadians detained in China have been released. Beijing detained former diplomat Michael Kovrig and businessman Michael Spavor last December in an apparent attempt to pressure Canada to release Meng Wanzhou, a top executive at Chinese tech giant Huawei. The daughter of Huawei's founder was arrested last December at the request of US authorities who want her on fraud charges. In an interview with the French-language TV network TVA that aired on Thursday, Trudeau said Canada has asked the Trump administration to use ongoing trade talks with China as leverage in securing the release of the two Canadians. "We've said that the United States should not sign a final and complete agreement with China that does not settle the question of Meng Wanzhou and the two Canadians," Trudeau said in translated remarks. No evidence has been provided in the Kovrig and Spavor cases and they have not been allowed access to family members or lawyers while in Chinese custody. China and the US are embroiled in a trade war that has at times roiled global financial markets. US Secretary of State Mike Pompeo has said Meng is not a bargaining chip in US-China trade talks. Meng is accused of lying to banks about the company's dealing with Iran in violation of US trade sanctions. She is out on bail in Vancouver and living in her multimillion-dollar mansion awaiting extradition proceedings. Meng's detention severely damaged Beijing's relations with Ottawa. China has stopped importing certain Canadian products like canola, and it also resentenced a convicted Canadian drug smuggler to death after the Meng arrest as part of an apparent campaign of intimidation and retribution against Canada. China has often retaliated against foreign governments and corporations in diplomatic disputes. ^ top ^

More US goods to be exempted from tariffs (Global Times)
2019-12-19
China on Thursday extended another goodwill gesture to the US by exempting more US products from its tariffs, as officials on both sides continued to put the final touches on the phase one trade agreement, whose text was agreed on by both last week. The decision to release a second list of US products to be excluded from China's tariffs imposed in retaliation to the US' tariffs followed recent purchases of US soybeans, highlighting China's swiftness in keeping its commitments, experts noted. Washington should also follow suit to honor their commitments. The Customs Tariff Commission of the State Council, China's cabinet, released the list of six chemical products, including white mineral oil and food grade paraffin wax, which will be exempted from a tariff of 25 percent for one year starting on December 26. The tariff was initially imposed in countering US Section 301 measures, the commission said in a statement. The exemption will benefit US companies such as Exxon Mobil and Dow Chemical, as lifting of tariffs could see more Chinese imports of those chemicals, according to media reports. The total value of these imports reached $14 billion in 2018, Reuters reported on Thursday. The move on Thursday followed announcements earlier this month that China will offer tariff waivers for some US imports, including soybeans and pork. Following the decision, Chinese companies have moved to purchase US soybeans, Zhang Xiaoping, country director for China at the US Soybean Export Council, confirmed to the Global Times. Zhang said that each Chinese company received a quota for purchasing US soybeans and pork but it is unclear who the specific buyers were and what amounts they bought. While US officials have reportedly been floating different numbers for China's purchase of US goods as part of the phase one trade agreement, Chinese officials have not released one. On Thursday, the Chinese Ministry of Commerce declined to confirm rumored amounts of China's purchase of US goods. "Regarding the specific content of the phase one agreement, I don't have more information to disclose. After the agreement is officially signed, the contents will be released," Gao Feng, a spokesperson for the ministry, told a press briefing in Beijing. Gao also did not confirm some US officials' suggestion that the deal could be signed in January, only repeating that the two sides have been keeping in close contact. "Since the trade war began, China's attitude to addressing the issue positively has been consistent. The exemption list also showed that China honors its words," Diao Daming, an associate professor at Renmin University of China, told the Global Times on Thursday, adding that he hopes the US will respond with "positive actions." As part of the phase one deal, the US called off tariffs that had been scheduled to take effect on Sunday and agreed to roll back existing tariffs in phases. Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said that so far the US has also been "implementing the agreement" in line with China's "positive attitude." It was unclear how China decided to exempt the six chemical products from tariffs and the value of those imports. But Gao Lingyun, an expert at the Chinese Academy of Social Science, said that China would consider the environment costs of producing those products and the demand in the domestic market. "Products that could cause pollution or that China cannot produce and for which there is demand, would be considered for exemptions first," Gao Lingyun told the Global Times on Thursday. Asked about the value of the new exemption list, Gao Feng, the spokesperson for the Ministry of Commerce, referred questions to the Customs Tariff Commission. ^ top ^

China Focus: Upcoming China-Japan-ROK leaders' meeting to chart course for future cooperation (Xinhua)
2019-12-19
The upcoming China-Japan-ROK leaders' meeting to be held in China next week will chart the course for future cooperation and nurture more cooperation highlights and growth areas, Chinese Vice Foreign Minister Luo Zhaohui said Thursday. Chinese Premier Li Keqiang will chair the 8th China-Japan-ROK leaders' meeting in China's southwestern city of Chengdu on Dec. 24. President of the Republic of Korea (ROK) Moon Jae-in and Japanese Prime Minister Shinzo Abe will attend the meeting, and Chinese President Xi Jinping will meet Moon and Abe respectively in Beijing, according to Luo. Leaders of the three countries will step up strategic communication and jointly chart the course for future cooperation. The vision of trilateral cooperation for the next decade will be issued at the meeting, Luo said at a press briefing. The meeting will also discuss how to deepen practical cooperation and expand common interests. "Leaders of the three countries will talk about new cooperation initiatives and ideas on such areas as science and technology, innovation, sustainable development, aging, people-to-people exchanges, and 'China-Japan-ROK+X', so as to nurture more cooperation highlights and growth areas and deepen trilateral cooperation," Luo said. China, Japan and the ROK now face an important opportunity of speeding up free trade negotiations, as the Regional Comprehensive Economic Partnership (RCEP), a mega trade pact, has made positive progress, Luo said. The three countries have signed a trilateral investment agreement and held 16 rounds of free trade agreement (FTA) negotiations so far. "They will work jointly for trade and investment liberalization and facilitation at a higher level and standard," Luo said. The three leaders will also exchange opinions and strengthen coordination on international and regional issues of common concern, including the Korean Peninsula situation, and play a positive role in realizing peace and stability of the Korean Peninsula, according to Luo. This year marks the 20th anniversary of China-Japan-ROK cooperation. "In addition to the formal leaders' meeting, the three leaders will attend the China-Japan-ROK business summit, jointly meet the press, and celebrate the 20th anniversary of trilateral cooperation," Luo said. Trilateral cooperation has yielded fruitful outcomes over the past 20 years, and an all-dimensional cooperation system with the leaders' meeting as the core and 21 ministerial-level meetings as the pillar has been established, with cooperation being carried out in over 30 fields. "A trend for future cooperation is 'China-Japan-ROK+X', that is to say, the three countries will strengthen cooperation in the fourth and fifth markets. For example, they will make use of their respective advantages and resources to promote connectivity on the Belt and Road," said Jiang Ruiping, former vice president of China Foreign Affairs University. Japan and the ROK give priority to foreign trade and investment and have notable strengths in information, big data and other high tech sectors. Meanwhile, China has a huge market and latecomer advantage in 5G and the internet. "China is willing to share the market and development opportunities with Japan and the ROK," Luo said. In terms of differences and disputes, Luo said it is natural that three countries may have disputes over history and territorial waters. What is important is that all the three countries should properly manage these differences, make the pie of cooperation bigger, and guard against the interference of external factors. "The three countries have already reached consensus on that," he said. China, Japan and the ROK account for 24 percent of the world economy. Trilateral trade exceeded 720 billion U.S. dollars last year, and over 31 million visits were recorded. Against the background of downward pressure of the world economy and rising trade protectionism and unilateralism, China, Japan and the ROK, as important Asian countries and three major economies in East Asia, shoulder important responsibilities in safeguarding regional peace and stability and promoting world development and prosperity, said Li Chenggang, assistant minister of commerce. "The 8th China-Japan-ROK leaders' meeting will further enhance the three countries' political mutual trust, lift the level of economic and trade cooperation, and promote all-round development of mutually beneficial cooperation, injecting impetus to economic growth and sustainable development of East Asia and the world," Li said. ^ top ^

Chinese, Russian FMs hold phone conversation over bilateral coordination (Xinhua)
2019-12-19
Chinese State Councilor and Foreign Minister Wang Yi on Wednesday held a phone conversation with Russian Foreign Minister Sergei Lavrov, agreeing to deepen bilateral strategic coordination. Recapping the year, Wang noted that under the guidance of the heads of state of the two countries, China and Russia have held a series of activities to celebrate the 70th anniversary of the establishment of diplomatic relations, pushing the China-Russia comprehensive strategic partnership of coordination into a new era. Wang said that mutual trust between the two sides has become increasingly unbreakable and the bilateral relations have become more solid. As many events related to bilateral ties are scheduled for next year, Wang said the two foreign ministries should coordinate sincerely to prepare for such major events as exchanges between the two heads of state, so as to add more stability and positive energy to a world that is going through changes unseen in a century. Noting that the United Nations is the most important international platform for China and Russia to carry out strategic coordination and safeguard international fairness and justice, Wang said China is ready to continue close coordination with Russia, support each other and assume the important responsibility of maintaining international peace and stability. Lavrov, for his part, congratulated Wang on the 20th anniversary of Macao's return to China. Lavrov said the Russian side highly values the important progress made in Russia-China relations this year, and is willing to work with the Chinese side to strengthen high-level exchanges and deepen strategic coordination under such multilateral frameworks as the UN. No person or force can provoke the strategic mutual trust between Russia and China, he said. The two sides also briefed each other on recent important diplomatic activities, and exchanged views and coordinated positions on UN Security Council affairs, the situation on the Korean Peninsula, as well as international and regional strategic stability. ^ top ^

Chinese Ambassador to Australia calls reports of Xinjiang mass detentions "fake news" (Global Times)
2019-12-19
The Chinese Ambassador to Australia called the reports of detention of 1 million Uyghur people "utterly fake news" at a press conference on Thursday in Canberra, Australia. Cheng Jingye, the Ambassador said that the Xinjiang-related matters are internal affairs of China when asked about Australian foreign minister Marise Payne's criticism of the "mass detention" of Muslim Uyghurs. Cheng said that reports that 1 million Uyghur people are in detention were "utterly fake news" and defended the "vocational education and training centers" in Xinjiang for eliminating radicalism, providing vocational skills, legal knowledge, Putonghua and other training. The trainees at the centers are flowing "with some coming in and some going out," Cheng said, noting that all the trainees who used to be influenced by extremism have finished the studying there by now. The measures in Xinjiang are no different from what other countries do to fight terrorism, Cheng said. Cheng also played the Chinese state broadcaster CGTN documentary Fighting Terrorism in Xinjiang to allow the audience to know the challenges and achievements the Chinese government made in its anti-terrorism efforts in the region. Cheng said the attacks and violence in the region had killed a large number of innocent people and damaged property, which were the reasons why the Chinese government cracked down on terrorism and violence. The efforts effectively curbed the terrorism in the region and there have been no single case of violent terrorist attacks in the past three years, Cheng noted. Cheng said that Chinese-Australian writer Yang Hengjun was detained in China on suspicion of espionage and his legal rights were protected, denying the allegations that Yang was handcuffed or questioned every day. Western media reported earlier this year that the Australian government has received notification from the Chinese side that Yang was detained in China. A few days before that, Western media reported Yang's "missing" in China. Cheng noted bilateral relations have experienced ups and downs this year. Both countries benefited from cooperation, but have divergences on certain issues, he said. "It is important for both sides to look at each other's development as an opportunity rather than a threat in creating mutual trust." ^ top ^

US Senate passes US$700 billion defence act to support Taiwan and counter China and Russia (SCMP)
2019-12-18
The US Senate has passed a US$738 billion defence bill that includes further support for Taiwan and assessments of Beijing's military capabilities. The final version of the National Defence Authorisation Act (NDAA), which will go to the White House for approval, provides for a 2.8 per cent increase in US military spending and outlines measures to counter US adversaries such as China and Russia. It would require reports on Beijing's military capabilities, Chinese investments in the Arctic region and Beijing's efforts to influence next month's Taiwan elections, according to the record of congressional proceedings last week. The Senate, the US Congress' upper chamber, voted to pass the legislation 86 to 8 on Tuesday, after the House of Representatives approved the bill last week 377 to 48. US President Donald Trump last Wednesday promised to "immediately" sign the bill into law. "This bipartisan document outlines the challenges we need to be prepared to meet – namely strategic competition with China and Russia," Oklahoma senator Jim Inhofe, sponsor of the bill, said on the Senate floor. "Let's use our vote to send a message as well to Russia and China that we're revitalising American power so we can win the competition for influence that will shape the kind of world our children and grandchildren are going to live in." Inhofe said that many other elements of the defence legislation – including the creation of "Space Force", a military branch for space warfare – were also aimed at the same American adversaries. Critics of the bill in the United States condemned the increase in spending for a country that already had the world's largest military budget. Beijing and Washington have escalated their strategic rivalry since last year, with a prolonged trade war, clashes over human rights, technological competition and competing interests in the Indo-Pacific. China's defence budget for 2019 rose 7.5 per cent to 1.18 trillion yuan (US$168.6 billion), and is expected to rise further next year. The US bill would require the director of US national intelligence to submit a report within 45 days of Taiwan's presidential and legislative elections on January 11 about "influence operations conducted by China" in the election and any actions by the US to "disrupt" those operations. The legislation called for senior-level government and military exchange visits between the US and Taiwan, arms sales to support Taiwan's defence strategy, and a report on cybersecurity activities between the US and Taiwan. Beijing claims the self-ruled, democratic Taiwan as part of its own territory, and has not renounced the use of force to bring the island into its fold. Although the US is not a formal diplomatic ally of Taiwan, it has long supported the island with arms sales and on the international stage. ^ top ^

Chinese Foreign Minister Wang Yi says EU investment pact is a top priority (SCMP)
2019-12-17
China is prioritising diplomatic ties with Europe and should be seen as a partner, not a competitor, Foreign Minister Wang Yi said, as Beijing seeks to broaden its foreign policy focus beyond the trade war with Washington. Wang also said negotiations on a China-EU investment agreement – which are expected to be concluded by the end of next year – "top our economic agenda". "We have heard about the theory that China has become an economic competitor to Europe, and that because of that, restrictions should be imposed on China," Wang said in a speech to the European Policy Centre think tank in Brussels on Monday. "Even though this is not the mainstream theory, we should be alert to it and not allow it to spread further," he said. "Anyone who is objective and rational can see that cooperation overrides competition between China and Europe, and consensus overrides differences." Wang's comments on his trip to Europe, which included an Asia-Europe foreign ministers' meeting in Spain on Monday, came after China and the US reached a phase one trade deal. Under the deal, the US will postpone tariffs on US$156 billion of Chinese exports that were due to take effect on Sunday and will cut by half the rate imposed on US$120 billion worth of Chinese goods, to 7.5 per cent. But 25 per cent duties on US$250 billion worth of Chinese goods will remain in place. China, for its part, promised to buy more US products. In Europe, there have been concerns that the bloc was less of a priority for Beijing amid its protracted trade dispute with Washington, but also wariness over its expanding influence – particularly Chinese investment in Central and Eastern European nations. Faced with Beijing's rising economic power and political influence, the European Union has adjusted its China policy and views the country as both a "systemic rival" and a "strategic partner". But Wang dismissed such concerns, seeking to highlight China's respect for European unity. He said Chinese investment in Central and Eastern Europe could help promote integration among EU nations, and create more balanced development. "With differences in historical and cultural backgrounds, as well as social systems and models, it is common to have divergent views," he said. China and the EU will hold their annual bilateral summit in Beijing in April, when Chinese Premier Li Keqiang will meet the new EU leadership. President Xi Jinping will travel to Leipzig, Germany in September for a summit with the 27 leaders of the bloc's member states. Wang said negotiations on the investment agreement between China and the EU were a top priority. "We also hope that the EU will keep to market economy principles and create a level playing field for Chinese enterprises, not least by upholding fairness and justice and making well-informed and independent judgments on 5G issues," he said, referring to the US campaign against Chinese technology giant Huawei. ^ top ^

Smart technologies to help agricultural reform, upgrading (Global Times)
2019-12-19
With China's pursuit of building a moderately prosperous society in all respects by 2020, agriculture, which is usually deemed as a weakness in the process, has entered a new era featuring digital and targeted technologies, an opportunity that cannot be missed, agricultural experts said on Thursday. Guan Ruijie, a research fellow at the Ministry of Agriculture and Rural Affairs, told a conference on smart agriculture that it is significant to achieve a complete industrial chain for agricultural products. "Practice has proved that smart technology has begun to be fully applied in traditional agriculture, and the direction will focus on simplicity, convenience, standardization and more societal participation," Guan noted. More participation by society in the agriculture sector - directly or indirectly - would be the key for its reform, according to Guan. He cited the example of the US, where a tiny portion - about 2 percent of its population - are directly involved in agriculture, but about 20 percent of the population are involved indirectly. A number of trends and emerging technologies such as 5G and artificial intelligence are set to radically re-shape the future of agriculture by improving efficiency, output and profitability, according to a report released by London-based consultancy firm Clear Strategy on Thursday during the conference. Digitalization along with blockchain technology will be deployed to enhance the visibility, transparency and traceability of the supply chain, the report said. As traditional agriculture has golden opportunities to transform, high-tech companies are also seeking huge potential space to grow their business in the area. Chinese agricultural dronemaker XAG, which is based in Guangzhou, capital of South China's Guangdong Province, launched a new product, the R80 agricultural utility vehicle, at the conference. The product utilizes core technologies including centimeter-level positioning, smart data records and edge computing. As of September 20, more than 42,000 XAG agriculture drones had operated for nearly 4 million hours under the guidance of 56,000 trained controllers, the company said. In November, XAG and Airbus announced the joint development of a drone cargo service. ^ top ^

China looks to standardize transparency (China Daily)
2019-12-19
China will comprehensively promote the standardization of transparency in primary-level government affairs as part of its effort to build a services-oriented government to better meet the needs of businesses and the people. A host of steps in this respect were adopted on Wednesday during the State Council's executive meeting chaired by Premier Li Keqiang. "Government affairs at the primary level are closest to the daily lives of the people," Li said. "We must do a better job in making primary-level government affairs open by promoting the standardization of the practice, making sure that the disclosure of decision-making information will be the norm, and the lack of it, the exception." Attendees of the meeting decided that building on the pilot reform, standardization will be further promoted for the transparency of affairs covering all government services in counties and city districts as well as at the township and community levels. No government information that should be made public will be withheld. More public involvement will be encouraged, the attendees further decided. Primary-level governments will clearly define the scope and format for public involvement in administrative decision-making and disclose this information to the public. They must promptly respond to and address any public concerns about policy implementation and project development. "There must be sufficient public involvement as we promote government affairs transparency. The views and suggestions of the people must be fully heeded through public hearings and discussions when it comes to issues that involve the vital interests of the public," Li said, "Our effort in promoting government affairs transparency should be compatible with the self-governance of villagers and community residents." By the end of 2020, primary-level governments will be expected to have formulated a catalog of government affairs to be made public. Governments at the primary level will release their service items as well as guidelines and processes for accessing these services both online and offline. To make it easier for businesses and people to access government services, county-level governments will open unified online portals for accessing government services, attendees decided. "In promoting the standardization of transparency in primary-level government services, we must follow a realistic approach in light of local conditions," Li said. "Given the size of our country and how much regions vary from each other, we must take into full account the realities on the ground. This will help ensure that work on this front achieves its desired results." ^ top ^

97 drugs of new medical insurance catalog to be available for purchase (China Daily)
2019-12-19
A total of 97 drugs included in China's new national medical insurance catalog will enter the purchasing process within a fixed period, according to a circular recently issued by the National Healthcare Security Administration and the National Health Commission. The drugs, including 70 new additions and 27 renewed drugs, were approved to be included in the catalog after price negotiations between the healthcare security administration and drug producers. The circular also demanded that the drugs be posted on provincial procurement platforms to enable further purchasing. The new national medical insurance catalog will take effect on Jan 1, 2020. ^ top ^

China commissions 2nd aircraft carrier (Global Times)
2019-12-17
China's second aircraft carrier, the country's first domestically built one, the Shandong (hull 17), was delivered and commissioned to the People's Liberation Army (PLA) Navy on Tuesday in Sanya, South China's Hainan Province, after refitting and sea trials since its launch in 2017. The commissioning marked China's entry into an age of double carriers, an achievement only a few countries in the world have accomplished and will enrich the Navy's tactical and strategic choices in time, space and sheer power, experts said. Overseen by President Xi Jinping, who is also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission (CMC), the aircraft carrier received a grand commissioning ceremony at a naval base in Sanya. Xi endorsed a PLA flag and naming certificate to the captain and political commissar of the carrier at the ceremony, which was held Tuesday afternoon with about 5,000 people in attendance. Construction of China's first domestically built aircraft carrier the Shandong, began in November 2013. It was launched in April 2017 at the Dalian Shipyard, Northeast China's Liaoning Province. In May 2018, the ship set out for its first sea trial. It conducted eight more sea trials, with the ninth one in November this year that saw the warship leaving Dalian, heading south, passing through the Taiwan Straits, entered the South China Sea, and finally arrived in Sanya, its mother base. Military analysts believe the Shandong was built based on the experience of China's first carrier, the Liaoning, which was an incomplete Soviet ship that China purchased and completed construction. Having a displacement of around 40,000-60,000 tons and using a similar ski-jump flight deck as the Liaoning, the conventional-powered Shandong is equipped with more advanced electronic devices and control and command system, and built with an optimized superstructure and internal layout, after gaining actual-use experiences following the Liaoning's commissioning in 2012, analysts said. Thanks to these significant improvements, the second carrier is not a copy of the first one and is much more powerful. For example, it can carry 36 J-15 fighter jets, compared to the Liaoning's 24, according to a China Central Television (CCTV) report in August. Military experts pointed out that the commissioning of the Shandong also made China the first Asian country to operate an independently developed aircraft carrier after World War II. Li Jie, a Beijing-based naval expert, told the Global Times that this shows China's comprehensive national strength, with a very high level of naval equipment and technologies applied. China's development in large ship design and construction, ship-aircraft integration and weapon system is maturing, Li said. Hundreds of institutes from multiple Chinese provinces took part in the carrier's construction, the Global Times learned. Technical aspects aside, the more imminent impact the commissioning of the Shandong has on the PLA Navy is that the Navy now has an additional aircraft carrier, which gives the Navy more tactical and strategic options in using carriers. In terms of location, the Shandong is based in Sanya near the South China Sea, while the Liaoning is based in Qingdao, East China's Shandong Province near the East China Sea, Yellow Sea and Bohai Sea. Having one carrier in the east and another in the south will ensure fast reaction time when the presence of an aircraft carrier is needed, a military expert who asked not to be named told the Global Times. The US has been frequently sending warships and aircraft into Chinese territorial waters and airspace in the South China Sea, and China could use the carrier as a deterrent, the expert said. The second aircraft carrier based in the south can effectively patrol the South China Sea, protect islands and reefs there and act as a strategic foothold at sea, Beijing-based military analyst Wei Dongxu told the Global Times. While the Liaoning could go from the East China Sea to the Pacific Ocean and train more pilots and officers, the Shandong could sail from the South China Sea into the Pacific Ocean and even go to the Indian Ocean, Wei said. One carrier could also stay near the mainland for alert missions, while the other could sail farther away into high seas for long-range missions, analysts said. In terms of time, regular maintenance is needed for a carrier to stay combat ready. When one carrier is under maintenance or repair, the other could take over its missions so China will always have a carrier to deploy, Li pointed out. Another new choice is to let the two carriers form a dual-carrier battle group for maximum combat capability. Li said a dual-carrier battle group will boost China's maritime combat capability, because a moderate or more intensive regional conflict, especially in high seas, requires at least 45 carrier-based aircraft to achieve regional air and sea superiority, which is not possible with a single Chinese aircraft carrier. Together with escorting guided missile destroyers like the Type 055 and Type 052D, frigates like Type 054A, as well as submarines and supplemental ships, the aircraft carriers could provide formidable power that China did not have in the past, the anonymous expert said. China's aircraft carriers will sail into the high seas farther away from its mainland to safeguard crucial sea lanes that are used for trade and protect China's growing overseas interests like cooperation projects, investments and overseas citizens, the anonymous expert said, noting that aircraft carriers can complete these tasks more efficiently than smaller ships like destroyers and frigates. Despite Shandong's commissioning, China's aircraft carrier development still lags far behind that of the US, which operates 11 super carriers in Nimitz and Ford-classes. They are nuclear-powered and have displacements of over 100,000 tons. China is reportedly building a third, larger and more advanced aircraft carrier. The Xinhua News Agency first reported in November 2018 that China was building a new type of aircraft carrier. Jin Yi'nan, a professor at National Defense University of the PLA, said on CCTV in November that the third carrier is under construction at Jiangnan Shipyard in Shanghai. Military experts speculate the third carrier could have a displacement of around 80,000 tons, use flat deck with electromagnetic catapults to replace the ski-jump deck, thus making it capable of carrying more aircraft in terms of both number and type, and launching fighter jets more efficiently. China could eventually operate around six carriers, as later entries could become nuclear-powered, they predicted. Chinese military enthusiasts are also hoping China would develop a next generation aircraft carrier-based fighter jet, which they believe should be stealth-capable and could rival the US' F-35B and F-35C. A modified version of the J-20, an improved version of the FC-31 and an entirely new fighter jet are all on the table, analysts said. ^ top ^

China to guarantee pork supply during imminent peak season with more reserve release and import (Global Times)
2019-12-17
China's pork supply in the upcoming peak season will remain relatively tight since the rebounding hog stock still needs time to fully restore its market supply capacity, Chinese officials said on Tuesday, noting the nation will increase releasing pork reserves and expanding import to fill the supply gap for the upcoming holidays. Hog production across China showed signs of rebounding in November, with both hog stock and sow stock recording positive growth, easing the contradiction between supply and demand of pork compared to October, Wang Junxun, an official of the Ministry of Agriculture and Rural Affairs, said at a press conference on Tuesday. China's hog stock increased 2 percent month-on-month in November, marking the first rebound since last November. The sales of replacement gilts also surged 25.9 percent month-on-month and 135 percent year-on-year in November, indicating a rise in farmers' confidence, Wang said at the conference. However, it still needs about half a year for the recovering hog stock to fully form supply capacity due to the restrictions of the natural growth of pigs, Wang said, noting that the supply in the imminent peak season - the upcoming Spring Festival in January - would still remain tight. In order to ensure the supply in the near peak season, China will increase the release of frozen pork from the central reserve at the appropriate time according to the market situation, Meng Wei, spokesperson of the National Development and Reform Commission said on Tuesday. In addition, import of pork and other meat, such as beef, will also be expanded to increase supply during the holidays, Meng said. China has become the UK's largest pork importer with an import of over 45,000 tons of pork in the first eight months of 2019, which is twice the total figure in 2018, according to media reports. ^ top ^

Stability, GDP get top priority for year ahead (China Daily)
2019-12-16
China's top priority for economic work in 2020 is to complete the building of a moderately prosperous society in all respects, as regulators lay out supportive policies, policymakers and analysts said over the weekend. One of the key economic tasks is to double 2010's GDP by the end of 2020 — the closing year of the country's 13th Five-Year Plan (2016-20) — officials said after the annual Central Economic Work Conference, which was held last week. That will require an economy operating within a reasonable range, including maintaining an appropriate growth speed, stabilizing prices, keeping unemployment low and maintaining equilibrium in the international balance of payments, the experts said. "The quantitative targets will be made clear at the National People's Congress in March," Han Wenxiu, deputy head of the office of the Central Commission for Financial and Economic Affairs, said at a forum on Saturday. The forum was hosted by the China Center for International Economic Exchanges. Because the situation in different regions varies, local authorities should set their own targets based on those conditions, Han said. "It does not require every region to double its GDP by 2020. It is a goal for the whole country." China should be fully prepared to overcome the difficulties that lead to economic downward pressure, he said, adding that the country is at a critical moment in transforming its development model, optimizing the economic structure and identifying the driving forces of growth. The "three tough battles" — poverty reduction, effective prevention and control of financial risks and environmental protection — are also key tasks for 2020 that should be carried out, Han said. To achieve next year's targets, China will make economic stability its top priority. Measures will be taken to encourage supply-side structural reform and strike a "dynamic balance" between supply and demand, said Ning Jizhe, vice-minister of the National Development and Reform Commission. "China will continue to implement its proactive fiscal policy and prudent monetary policy, and strengthen its counter-cyclical adjustments. Both industrial production and consumption should be further upgraded and boosted," Ning said. The three-day annual Central Economic Work Conference, which ended last week, concluded that the policy framework of stable macro policies and flexible micro measures must be upheld to ensure that key tasks are met next year. Vice-Premier Liu He, who heads the State Council's leading group on the development of small and medium-sized enterprises, hosted the leading group's fourth meeting on Friday to begin putting the principles outlined at the work conference into place. Governmental departments, such as the Ministry of Industry and Information Technology and the China Banking and Insurance Regulatory Commission, were urged to strengthen their services for SMEs and ease their financial difficulties, according to a statement released on Sunday. To implement the requirements of the work conference, regulators at all levels should firmly support the development of private companies and optimize a market-oriented business environment, the statement said. The meeting also emphasized that the SME financing guarantee system should be improved, and the building of an SME credit information platform should be accelerated. The meeting encouraged technology-driven SMEs to go public, as a way to reduce their financing costs. It also reinforced the principle of protecting SME property rights and intellectual property, saying those will be improved, according to the statement. Guo Shuqing, Party secretary of the People's Bank of China, the central bank, and chairman of the CBIR, chaired a meeting on Friday urging further reductions in the social financing costs for private, small and micro companies to further improve the efficiency of monetary policy. The central bank will increase medium-to long-term financing for the manufacturing industry and build a financial supportive policy system for private small and micro companies, along with improvements to the credit structure, he said. To prevent and resolve financial risks, the financial system and market expectation need to be stabilized, Guo said, adding that the macro leverage rate (the debt-to-GDP ratio) should be maintained at a stable level. "The PBOC will explore a macro prudential policy framework to supervise foreign exchange, property and bond markets to prevent systemic financial risks during further opening-up," said Chen Yulu, vice-governor of the central bank. ^ top ^

China urges US to halt legislation on Tibet issues (Global Times)
2019-12-20
The Chinese Foreign Ministry on Thursday urged the US to stop exploiting the Tibet question as a tool to interfere in the country's internal affairs after media reported that the US House of Representatives Foreign Affairs Committee had passed a Tibet-related bill. The passage of the Tibetan Policy and Support Act by the US House Foreign Affairs Committee severely violates international law and the basic principles of international relations, and sends the wrong signal to secessionist forces. China has expressed strong dissatisfaction and firm opposition to the bill and has lodged serious representations with the US side, Geng Shuang, Chinese Foreign Ministry spokesperson, said at a regular press conference on Thursday. The act states that "Chinese officials who interfere in the process of recognizing a successor or reincarnation of the Dalai Lama will be subject to targeted financial, economic and visa-related sanctions, including those in the Global Magnitsky Act," adding "there should be no new Chinese consulates in the US until the establishment of a US consulate in Lhasa." China's stance and policy over the Tibet question is constant and clear. Tibetan affairs are purely China's internal affairs and no foreign interference is allowed, Geng noted on Thursday. "China urges the US side to fully understand the high sensitivity of the Tibet question, keep its promise over the matter, stop exploiting it as a tool to interfere in China's internal affairs, and suspend pushing forward related bills." The reincarnation of living Buddhas, including the Dalai Lama, should abide by the laws and regulations of the state, religious rituals and historical conventions, Geng said in March, after the 14th Dalai Lama said his incarnation could be found in India and warned that any other successor named by China would not be respected. Chinese observers and a former senior religious affairs official said the bill reflects "extremely wicked intentions" of the US aimed at supporting secession and grossly interfering in China's domestic affairs. They called for retaliatory measures such as imposing visa restrictions on the sponsors of the bill, including US Representatives James McGovern and Senator Marco Rubio. The reincarnation of living Buddhas is a special inheritance of Tibetan Buddhism. It follows fixed rituals and procedures. The Chinese government respects and protects it. The system of reincarnation has a history of several hundred years and the title of the 14th Dalai Lama also followed religious rituals and historical conventions, and was granted by the then China central government, Geng said in March. The bill also demands support for "democratic governance in the Tibetan exile community," and authorizes ongoing US appropriations that support Tibetans in Tibet and in South Asia. Zhu Weiqun, former head of the Ethnic and Religious Affairs Committee of the National Committee of the Chinese People's Political Consultative Conference, told the Global Times on Thursday that the US House bill is laden with extremely wicked intentions aimed at supporting the Dalai clique and Tibet secessionists and challenges China's legitimate sovereignty and territorial integrity. The passage of the bill has severely undermined China-US ties, he said. Zhu urged US congresspeople to think through the consequences of the bill before enacting it, while warning that Chinese people and government would definitely oppose it and fight to the end. Li Haidong, a professor at the China Foreign Affairs University's Institute of International Relations in Beijing, viewed the series of recent bills related to China's Hong Kong, Taiwan and Xinjiang as moves to contain China. The House of Representatives is exploiting Tibet as a political tool to contain China, to pressure the Trump administration into making China-related policies which are sure to be confrontational, Li said, while noting such moves would not be in the interest of either the Chinese or US side. Zhi Zhenfeng, a legal and policy expert at the Chinese Academy of Social Sciences, said that US individuals and NGOs that hold extremely anti-China sentiments should be sanctioned, however it is difficult to impose reciprocal sanctions, considering that the current world order is still dominated by the US. Xiong Kunxin, a professor at Tibet University in Lhasa, capital of Southwest China's Tibet Autonomous Region, told the Global Times the attempts to interfere in China's internal affairs through long-arm jurisdiction and bullying will never succeed. "As long as we continue to unite the people, implement Party policies to safeguard religious freedom, the US plots are doomed to fail," Xiong said. Zhi believed that containing China has seemingly become the only consensus in the divided US political and academic circles, and the bitter hostility is likely to continue. Hong Kong-based South China Morning Post reported in late November that some 150 China-related bills are pending in the US Congress, covering cybersecurity, the fentanyl trade, political influence operations, Taiwan and the South China Sea. ^ top ^

First Xinjiang, then Hong Kong … now US turns human rights attention to Tibet (SCMP)
2019-12-19
Washington has angered Beijing in recent months with a flurry of legislation targeting China's treatment of human rights in Xinjiang and Hong Kong. Tibet is now joining the list. The US House of Representatives' foreign affairs committee on Wednesday approved a bill calling for stronger US support for religious and human rights in Tibet, a step on the way to it becoming law. Known as the Tibet Policy and Support Act of 2019, the bill is expected to go to the House for a full vote, although a date has not been set. US lawmakers have introduced legislation in recent months to allow for sanctions on individuals involved in the mass detention of at least a million members of Muslim minorities in China's Xinjiang Uygur autonomous region. And after months of anti-government protests in Hong Kong, the United States passed similar legislation targeting individuals or groups seen as impinging on human rights in the city. The main stipulation in the Tibet legislation is for the Tibetan Buddhist community to choose the next Dalai Lama spiritual leader, while Beijing says the candidate should be chosen in accordance with religious rules and customs but also endorsed by Chinese authorities. "It is an unthinkable violation of the basic principles of religious freedom that the Chinese government would choose the religious leader for the Tibetan people, rather than allowing the Tibetan people to make this decision through their ancient and sacred traditions," said the committee chairman, Representative Eliot Engel. "If Chinese officials infringe on the religious freedoms of the Tibetan people in this manner we will hold them accountable." The act says that the succession of Tibetan Buddhist leaders is an exclusively religious matter that should be made solely by the Tibetan Buddhist community. It also calls for economic and visa-related sanctions on Chinese officials who try to appoint their own Dalai Lama in the future. China hit back at the bill on Thursday, saying it violated international law and the basic norms of international relations, and "grossly interfered" in China's internal affairs, while sending "false signals" to Tibetan independence movement. "We urge the US to fully understand the high sensitivity of Tibet issues, to abide by the commitments made to China on Tibet issues, to stop using Tibet issues to interfere in China's internal affairs, and to stop promoting related bills," foreign ministry spokesman Geng Shuang said. The bill also suggests that there should be no new Chinese consulates in the US until the United States has set up one in Lhasa, the region's capital. The US government should work with other nations to support dialogue between Tibetan leaders and the Chinese government, it says. The Dalai Lama fled Tibet 60 years ago after a failed uprising, and remains in exile in India. The Tibetan Policy and Support Act would update a 2002 US law meant "to support the aspirations of the Tibetan people to safeguard their distinct identity". The new bill was prompted by concerns about the erosion of human rights in the region since then, according to the legislation's sponsors, Representative Jim McGovern and Senator Marco Rubio. The Office of Tibet in Washington said on Wednesday that the India-based Central Tibetan Administration appreciated the committee's support. ^ top ^

In Mahathir's Malaysia, China's PR blitz on Uygurs sparks anger among Muslims (SCMP)
2019-12-20
In op-eds published by several Malaysian media outlets last week, China's ambassador to the Muslim-majority country denounced "Western media reports" of Uygurs and other minorities being detained in Xinjiang province as sensationalised "half truths". Bai Tian's commentary, headlined "Truths about Xinjiang that Western politicians and media won't tell you", was carried by newspapers including the English-language The Star and Malay Mail, the Malay-language Berita Harian and Sin Chew Jit Poh, which is published in Chinese. Rights groups including the United Nations say more than a million Muslims are being held against their will in a bid to erase their culture. Bai, however, in his commentary said Beijing did protect the rights of religious minorities, citing Xinjiang's many halal restaurants and the fact that there was one mosque for every 530 people in the province – a higher ratio than in Turkey. "What minorities in China like Uygurs are facing is not torture, but policies and social welfare far more favourable than what their Han brethren are enjoying," he said. But the ambassador's public relations blitz in the media – coupled with videos on the embassy's official Facebook page highlighting "thousands of terrorist attacks" in Xinjiang – did little to reshape public opinion in Malaysia over China's internment of its Muslim minorities. Instead, the commentaries sparked anger online and among the country's leading Muslim intellectuals. On Twitter, a user named Azhar Khan with the handle @azharkhanashfar asked the Malay Mail: "How much do they pay you?", while Naga Kavin Amulthan using the handle @NKamuthan tweeted "Shame on you for this Chinese propaganda" at The Star. The Islamic Renaissance Front (IRF), a think tank for youth empowerment and the promotion of Muslim intellectual discourse, slammed the media outlets who carried the piece, saying they were "obsessed with trying to publish anything positive about China". "The Chinese authorities have been doing all sorts of public relations work to convince the people, especially the Muslims, that everything was a Western conspiracy. But what about the satellite images as published by the BBC? The fact is, an ethnic cleansing is taking place," said Dr Ahmad Farouk Musa, founder and executive director of IRF. The Malay Mail defended its decision to publish Bai's letter, saying it was for balance as its news portal had been running foreign news reports on Xinjiang, including reports of Uygur internment camps. Editor-in-chief Wong Sai Wan said "no one paid" the Malay Mail to publish the ambassador's letter. Wong said he had received Bai's commentary in an email and noted that his outlet had previously carried a Reuters story referencing a New York Times report on leaked Chinese government documents that revealed a clampdown on Muslims in Xinjiang under President Xi Jinping. Beijing has since denied that the documents are real. "I thought it was only fair we carry the other side but as a letter, as we are in no position to see for ourselves what is the real situation. It was just a matter of fair play," Wong said. Political analyst Azmi Hassan said the scepticism towards China's explanation was because most Malaysians believed the reports by Western media as "somewhat true" while the Chinese explanations were "somewhat embellished". He attributed this to anxiety over China's influence and investments in Malaysia since the watershed May 2018 election, when the Beijing-friendly Barisan Nasional administration was booted out by the Pakatan Harapan coalition led by current Prime Minister Mahathir Mohamad. Bilateral ties, at first prickly under the new administration, have since warmed after both countries renegotiated the East Coast Rail Link project, which had long faced accusations that its terms were excessive and in China's favour. Negative perceptions of China could "cloud one's thinking", Azmi said. "But again there will be groups of Malaysians who believe the ambassador's assertion that the Western media is biased and take the article [to be true]." In Malaysia, opposition towards China's treatment of Muslim minorities has been more pronounced than in Indonesia, where a mix of factors – including Jakarta's fear of offending its top trading partner and suspicions towards Western media reports – have resulted in a muted reaction. In October 2018, Mahathir released 11 Uygurs who were jailed under the previous government and sent them to Turkey, saying they had done nothing wrong and disregarding China's request to extradite them back to Beijing. This September, however, he explained to a regional news portal that he had been circumspect about commenting on the Uygur issue as China was a "powerful nation". "You don't just try and do something which would fail anyway, so it is better to find some other less violent ways not to antagonise China too much, because China is beneficial for us," he said. A month later, Malaysians heaped criticism on a comic book written by a Malaysian former politician of ethnic Chinese descent that suggested Malays who supported China's Uygurs were radicals. The comic, distributed to secondary schools for free, has since been banned. Azmi, the political analyst, pointed out that while the plight of the Uygurs had the sympathy and support of many Malaysians, it did not have the same standing as the Palestinian cause – which Mahathir has been known to speak up for. "Malaysians generally are quite well versed and, more importantly, more sympathetic to the Palestinians compared to the Uygurs," he said. "In general, Malaysians [became] aware of the Xinjiang issue only very recently and therefore to [have] the same empathy as the Palestinian issue is a tall order." The country's Muslim groups have mostly rebuffed China's attempts to engage with them, unlike in Indonesia where clerics, journalists, politicians and social media influencers have gone on tours publicly expressing that they found nothing wrong with the camps. The Muslim Youth Movement of Malaysia (ABIM), a prominent youth group, said it had rejected a Chinese embassy-organised visit to Beijing and Xinjiang's capital Urumqi. Other Muslim and civil society groups did make the trip in April. "We refuse to go there, because we know already, it is propaganda … a staged show by the [Chinese] government. And our presence there will be [seen as if] we are with the Chinese government on [Xinjiang]," said ABIM vice-president Ahmad Fahmi Mohd Samsudin. Prominent Muslim political scientist Chandra Muzaffar, president of the NGO International Movement for a Just World, called for the Malaysian government to lead an independent investigation into Xinjiang to verify the treatment of Uygurs. "The government should ask the Chinese authorities … to allow independent observers [such as] journalists, activists, and intellectuals to visit detention centres, that they be allowed to do their investigations, ask questions, for the purpose of preparing a report to be submitted to the Malaysian government," Chandra said. He said "one should not be echoing protesters" nor "take sides with the Chinese government" on Xinjiang because it was unclear what was the truth. He pointed out that Islam was not new to China and historical texts showed numerous interactions between Muslims and Confucian culture. "Muslims have been in the country since the 8th century and history has shown that Muslims have been given prominent positions in the government in the past like Admiral Zheng He," Chandra said, referring to the Ming dynasty mariner and military official. He said he was doubtful of the veracity of reports that Chinese officials had forced Muslims in Xinjiang to eat pork and consume alcohol, describing these as "outlandish" accusations. But the matter of internment camps needed to be investigated, Chandra said. Malaysia could then decide how to act according to its investigations, even choosing to not make its report public in the name of "quiet diplomacy". "But nonetheless, we want the Chinese government, as a friendly government, to act seriously upon the findings," he added. "The Chinese … they prefer that sort of quiet diplomacy rather than fanfare as it makes things difficult for them." ^ top ^

Police freeze HK$70 million raised by Spark Alliance for Hong Kong protesters, with group suspected of using money for personal gain and rewards (SCMP)
2019-12-19
Police have frozen about HK$70 million (US$9 million) raised by activists to support Hong Kong's anti-government protesters and arrested four people for money laundering. Officers suspect the funds were used for personal gain and other illegal activities, including participation rewards for young demonstrators. A police insider said that initial investigations indicated dozens of teenagers were paid thousands of dollars each through fundraising platform Spark Alliance HK to join protests, an allegation a source connected to the group strongly denied. Acting senior superintendent Chan Wai-kei of the Narcotics Bureau's financial investigation unit said the four, aged between 17 and 50, were arrested during a raid on Thursday. Officers seized HK$130,000 in cash and a receipt for HK$165,000 spent on supermarket coupons, two laser pointers, six arrows and a large amount of protest gear such as helmets and gas masks. Spark Alliance, set up after the 2016 Mong Kok riot to help arrested or jailed activists, had crowdfunded about HK$80 million over the past six months. But police said they had come across suspicious financial transactions, including large amounts spent on personal insurance products. "We also do not exclude the possibility that the funds were used as a reward to encourage teens to come out and join the civil unrest," Chan said. The suspects – three men and a woman – were identified as a student, two clerical workers and a human resources manager. Officers started investigating a shell company behind the crowdfunding effort after finding its financial transactions suspicious. One of the suspects, a 50-year-old man listed as the director of the company, was the only beneficiary of the personal insurance products bought with the donations. "Purchasing such products raises suspicions as the group did not say they were collecting funds for investments. The amount is huge as well," Chan said, adding that the shell company had not paid taxes over the past few years. The remaining three suspects were identified as core members of Spark Alliance, and the amount of money they had used to buy insurance products for the beneficiary did not match their earnings. "This could involve crimes related to money laundering," Chan said. He added that the platform had used the funds to pay some arrested protesters, and that anyone who dealt with the possible crime proceeds could be deemed to be involved in money laundering. Spark Alliance confirmed the arrests hours later, saying all "comrades" were receiving legal support. "We condemn the police attempt to use false representation to smear our platform as being involved in evil purposes like money laundering," it said in a Facebook post. In November, the group announced that HSBC had suspended its account, after the bank found its activities failed to match business purposes as originally stated. A police investigator with experience in money-laundering cases said people could easily commit an offence if they did not ask about the source of funds, or if they turned a blind eye to the source and dealt with such amounts. "If one day someone gave you HK$10 million out of the blue and asked you to transfer it into 10 bank accounts, or to buy an insurance product or even protection gear, you could be deemed as laundering money even if you did not ask where it was from," the source said. "Therefore all banks or money service operators are highly alert and will shut down some accounts as they do not want to get involved." But veteran criminal defence lawyer Christopher Morley said such arrests on the grounds of money laundering might be a "bit of a stretch". "If police want to proceed with a prosecution, they would have to establish that the persons being charged had reasonable grounds to believe that they were handling money from crime proceeds," he said. But he added the arrests might lead to investigations into whether the group was involved in inciting or aiding and abetting criminal activities. Under the Organised and Serious Crimes Ordinance, those convicted of money-laundering charges face a maximum penalty of 14 years behind bars and a HK$5 million fine. A 16-year-old frontline protester, who only gave his name as Bosco, accused police of trying to frame Spark Alliance. "Police are deliberately trying to weaken such platforms so protesters would not be able to receive any help," the high school student said. A 24-year-old construction worker and hard-core protester, who only identified himself as K, said the platform would not stop because of the police action. "It is an important platform as even the parents [of protesters] know that they should contact Spark Alliance if their children are arrested," he said. "They would become lost without help from the group." Spark Alliance is the second-largest crowdfunding platform for the protests, but it has not publicly disclosed its financial statements or amount of donations received. The largest platform is 612 Humanitarian Relief Fund, whose founders include former lawmaker Margaret Ng Ngoi-yee, Canto-pop singer Denise Ho Wan-sze, and retired cardinal Joseph Zen Ze-kiun. That fund said it had raised HK$97.1 million as of November 30 and helped 6,946 people while spending HK$23.3 million, mostly for direct economic aid or legal and medical needs involving protesters. ^ top ^

Xi backs Lam in hard times (Global Times)
2019-12-17
President Xi Jinping met Hong Kong Chief Executive Carrie Lam, who is on a duty visit to Beijing, on Monday and reaffirmed the determination to implement the "one country, two systems" principle and oppose foreign interference in Hong Kong affairs, while saying that Hong Kong faced the most severe and complicated situation this year since the 1997 return. Xi made the remarks in his meeting with Lam at Yingtai within the Zhongnanhai compound Monday afternoon. Xi heard a report from Lam on Hong Kong's current situation and the HKSAR government's work, the Xinhua News Agency reported. Experts noted that the central government is aware of the severity of the situation and will continue to provide assistance and support to the HKSAR government and the police to restore public order. As violence subsides, the main task for Hong Kong next year would be to rebuild its society and economy from the damage of turmoil, as well as push for integration with the mainland. As the election of the Legislative Council (LegCo) will take place next year, experts also noted that to make sure the city's democracy and politics stay on the right track is also an important task. Xi said 2019 has been the most grim and complex year for Hong Kong since it returned to the motherland. "In the face of various difficulties and pressures, you have stuck to the bottom line of the 'one country, two systems' principle, governed in accordance with the law, scrupulously fulfilled your duty, and done a great deal of hard work," Xi told Lam. Premier Li Keqiang met with Lam on Monday morning, saying that the turmoil has damaged Hong Kong society in many aspects, and that the central government will continue its support according to law, Hong Kong-based Ta Kung Pao reported. Xi approved Lam's work of leading the SAR government to positively respond to social concerns, carry out a series of measures to assist enterprises and the public, and adopt a serious attitude in solving deep-seated social contradictions and problems. Xi stressed that he had made clear the stance and attitude of the central government on Hong Kong's situation at the 11th BRICS summit in Brazil on Nov. 14. "We have unswerving determination to safeguard China's sovereignty, security and development interests, implement the 'one country, two systems' principle and oppose any external force interfering in Hong Kong affairs," Xi said. "We will continue to firmly support you in leading the SAR government to govern in accordance with the law, firmly support the Hong Kong police in strictly enforcing the law, firmly support all people who love China and Hong Kong, and hope Hong Kong people from all walks of life will unite and work together to bring Hong Kong's development back on track," Xi told Lam. The last meeting between Xi and Lam was in early November in Shanghai during the second China International Import Expo. During the meeting, Xi voiced the central government's high degree of trust in Lam and full acknowledgement of her and her governance team's work. Lam said at a press conference at the Office of the HKSAR Government in Beijing after the meeting with Xi on Monday that she appreciates the acknowledgements from President Xi and Premier Li on the work of the HKSAR government during the tough time and also said the report this year is very different from the past, as Hong Kong is still experiencing the most severe and complicated situation since 1997. Her report this year has focused on providing details of the latest situation and the damage that the Hong Kong economy and society had suffered from the months-long turmoil, Lam noted. Hong Kong is likely to realize the mission of stopping violence and chaos soon, as most heads behind radical violent activities were arrested, and the sanctions against foreign forces have been implemented, said Li Xiaobing, an expert on Hong Kong, Macao and Taiwan at Nankai University in Tianjin, told the Global Times on Monday. "Some minor violent incidents might remain, but the main task for Hong Kong next year should shift from stopping violence to rebuilding Hong Kong's society and economy, as the city and the people need to recover," he said. Lam said at the press conference that the Hong Kong economy's recovery needs the central government's support, such as issuing policies under the framework of Guangdong-Hong Kong-Macao Greater Bay Area. She expressed the wish during the meeting with Premier Li, and "the national leader gave a positive response," Lam noted. Li Xiaobing said the central government and the mainland always provide great financial and material support to Hong Kong, but the HKSAR also needs to change its mentality to embrace the integration with the mainland. "In the past, many Hong Kong people only emphasize autonomy but ignore or even resist integration, and this is a 'deep-seated problem' of the society. Hong Kong needs to find its position in the process of integration rather than resist the process." Hao Shinan, an expert at Shanghai International Studies University, said that the HKSAR government needs to increase support for small and medium-sized businesses and encourage the local students to study efforts to make sure the city's democratic political system returns on the right track as well. When asked whether state leaders sought to push the passage of the national security law, or legislation of Article 23 of the Basic Law, Lam said safeguarding national security is the HKSAR government's constitutional responsibility, but the matter is very sensitive and controversial, so we need a suitable social environment and condition to discuss the matter, Lam said. "Currently, the urgent mission is to stop violence and chaos." Hao noted that among next year's main challenges is the 2020 Hong Kong Legislative Council election, "as according to our simulation, the pro-establishment camp's seats will be reduced." Li Xiaobing said the central government, the Standing Committee of the National People's Congress, and the HKSAR government should pay efforts to make sure the city's democratic political system returns on the right track as well. ^ top ^

Xi extols Macao's progress (Global Times)
2019-12-20
Chinese President Xi Jinping encouraged Macao to give play to its advantages in carrying out "one country, two systems," adopt a firm stance on matters of principle and actively take part in the national development plan. The past 20 years in Macao have seen the fastest economic development and the greatest improvement in people's livelihoods. President Xi attributed this to the implementation of "one country, two systems," a united society pursuing a better life and strong support from the central government and mainland. On the second day of his Macao trip, Xi visited a school and saw the China-Portuguese-speaking Countries (PSCs) Commercial and Trade Service Platform Complex. He went to a government building complex to learn about livelihood services and met representatives from different social walks. During his visit to a premier school affiliated to Hou Kong middle school, Xi praised Macao's education system and encouraged that the school would continue conveying Chinese culture. Patriotic education is very important and the Macao Special Administrative Region government's education authorities and schools should shoulder the main responsibilities, keep up the good work and achieve more on patriotic education, Xi said, according to the Xinhua News Agency. Xi said it's believed that Macao youth will be a generation to be proud of, as they are growing into pillars of the society. Chui Sai On, the outgoing Macao Chief Executive, said on Thursday the most valuable experience of Macao's successful practice of "one country, two systems" was the comprehensive and accurate implementation of the Constitution and the Basic Law. Macao has an accurate understanding and true support for the country's political system and core national values. Observers said Xi fully affirmed the significant progress Macao has made since its return to China, showing that the "one country, two systems" principle has full vitality and conveyed a strong message that Macao could be a reference in aspects such as youth education and livelihood for Hong Kong, which has been struggling with social unrest. From a Portuguese colony to a world gambling hub, Macao is poised to overtake Qatar with the highest per capita gross domestic product on a purchasing power parity basis by 2020, based on forecast. With a land area of 32.9 square kilometers, the island has seen its economic growth skyrocket by over 700 percent over the past two decades and become a city with high-quality social welfare. During a meeting with representatives from different social spheres, Xi noted that although Macao is a small city, it could be rich, vibrant, stable and beautiful, according to media reports. He hoped that people from all circles of society could continue firmly supporting the SAR government and chief executive in rolling out polices in accordance with the law, actively connecting government and citizens and holding a firm position on matters of principle. Xi's visit to the school and his speech conveyed a clear message that Macao was on the right path and could offer lessons for Hong Kong. Former officials and experts said that although the two SARs shared some common characteristics such as a high degree of autonomy, judicial independence and press freedom, they have differences in the way they handle relations with the central government and in carrying out the "one country, two systems" principle. Local observers suggested instead of simply labeling Macao a "good student" as the city has been immune to disruptive anti-government protests spiraling in Hong Kong, it needs an examination from historical, cultural and social perspectives to find the fundamental reasons why the two cities have charted different growth path since their handover. As Hong Kong protesters identify themselves as Hongkongers instead of Chinese, Macao people believe rejecting their Chinese nationality is unacceptable, Wu Zhiliang, president of the Macau Foundation, told the Global Times on Tuesday. "Macao people have a deep understanding of the word 'return,'" Wu said. It was not about changing the national flag or shifting from governor to chief executive of the Macao government, Wu said. "It is about integrating into the country's whole governance and strategic development plans." Opposition groups in Hong Kong consider any move of the central government as intervention that erodes its high degree of autonomy, and they think the central government could not take any gesture. But it is a misunderstanding of the "one country, two systems" principle, and is not accepted by people in Macao, Wu said. "When Macao comes up with new policies, it always takes the country's development plans into consideration," Wu said. For instance, when the central government launched an anti-corruption campaign years ago, Macao imposed restrictions on cross-border financing involving Chinese funds, although it had heavily weighed on its pillar gambling industry, representatives said. Xi also encouraged representatives from different social circles on Thursday to continue playing an active role in the great rejuvenation of the Chinese nation, having the entire motherland in mind while facing the world. Macao should fully give play to its advantages of internationalization and integrate into a broad national development plan. "Compared to Hong Kong, there is no such mentality of worshiping Western political systems and social values here in Macao, though it has always been under the mixed influence of Eastern and Western cultures, and people treat those two equally," Wu said. Unlike Hong Kong, which has been heavily influenced by the West, Macao has a stronger attachment to Chinese culture and values due to its "historical genes." In the colonial period of Macao, Portuguese control had seen its influence over local communities declining, drawing a contrast with the relatively sophisticated way British authorities ruled Hong Kong before handing it over to China, he said. "There has been no strong cultural penetration of the West in Macao society, which had not been heavily affected by Western social value either," Susana Chou, former president of the Legislative Assembly of Macao, told the Global Times on Tuesday. "For example, when the Hotel of Lisboa was inaugurated years ago, many people in Macao did not know where 'Lisboa' is. Could you imagine Hong Kong people not knowing where London is?" While Hong Kong opposition lawmakers turned policy debates into political confrontations, lawmakers in Macao are not against the Constitution, the Basic Law and the Communist Party of China, the former president said, noting that they would come up with different ideas to help formulate better policies. "It's also inaccurate to say the Legislative Assembly of Macao is the SAR government's affiliate, as we also criticize our government officials a lot. And the assembly often rejects the proposals made by the government," Chou said, noting that the opposition is based on concrete arguments rather than disapproving everything because of its political stance. Considering Macao's historical ties with the mainland, there has been no room for separatism, Wu noted. "But what has happened in Hong Kong would lead us to reflect on deep-rooted questions in Macao, particularly issues concerning Macao youth," he said. Behind Hong Kong's chaos lies some deep-seated social problems, as the majority of arrested radical protesters in violation of the rule of law were youngsters. Although Macao is not facing the same issue, the problems with Hong Kong youth could be seen as a warning sign for the city, observers said. "We lack a fair and transparent mechanism for Macao young people to climb upward in social rank, and also the number of skilled job positions is limited," Wu said, noting that the local talent policy is still protective. "If Macao further opens up its market, could local youth become as competitive as talent from outside? And will talent inflow intensify social conflicts and the anxiety of local youth?" he said. While Hong Kong and Macao both share freedom of speech and an open internet, information has been circulating freely on social media and many Macao young people have been well informed about Hong Kong's months-long social unrest. When Macao students were asked about whether Hong Kong police have abused their power, many rationally discussed the matter with teachers instead of arguing with their peers and making one-sided judgments, Wu noted. "Young people could easily influence each other, which is inevitable. It's up to how teachers and parents guide them," he said. Local education representatives said Xi highlighted the importance of learning Chinese history and understanding China during his visit to the Macao school on Thursday and basic education in Macao has achieved success thanks to the "patriotic genes" of Macao people, which should be passed on to future generations. "With the support of civil associations, the Macao SAR government has also been playing an active role in enhancing patriotic education, leading to the city's stability and prosperity today, which could become experiences for Hong Kong," Cheang Hong Kuong, president of the administrative board of the Chinese Educators' Association of Macao, told the Global Times. Macao has gained a higher degree of autonomy thanks to the confidence and trust of the central government, which, observers said, creates a positive cycle. On the contrary, if Hong Kong's opposition groups continue to touch the "red line" of the central government, it might lead to reevaluation of political risks in Hong Kong by the central government and political reforms could hardly make progress in the city, the observers said. The virtuous cycle established between the central government and Macao SAR as well as between Macao and the mainland could to some extent serve as a reference for Hong Kong, they noted. ^ top ^

Macau's yuan remittance limit raised to same level as Hong Kong as Beijing starts to shift financial focus (SCMP)
2019-12-19
China has increased the daily limit of yuan remittance from Macau to the same level as Hong Kong, a move that suggests Beijing is keen to spread the financial risks away from the troubled city. The policy, announced by the People's Bank of China on Wednesday to mark the 20th anniversary of Macau's return to Chinese rule, will raise the daily limit on yuan remittance to 80,000 yuan (US$11,400) from 50,000 yuan (US$7,100). The daily yuan remittance quota for Macau residents had been kept lower than Hong Kong as Beijing was concerned about money laundering in the casino hub. But Beijing is now keen to grow Macau as an offshore yuan hub, with Hong Kong's place as the dominant offshore yuan centre under threat due to the anti-government protests. A yuan-denominated stock exchange and a bond trading centre is reported to be in the works for Macau, according to mainland media. "The measure is more symbolic in nature rather than being of practical use," said Ding Wenjie, an economist at CMB International. "Macau is aiming to differentiate itself from Hong Kong in the region." Macau's yuan base, though, is tiny compared to Hong Kong with yuan deposits in Macau totalling 39.4 billion yuan (US$5.6 billion) as of October, according to data from Monetary Authority of Macao. In comparison, Hong Kong's yuan stockpile stood at 636.4 billion yuan (US$91 billion) in the same month, according to the Hong Kong Monetary Authority. Macau recorded 1.4 billion yuan (US$200 million) of cross-border yuan trade settlement in October, compared with Hong Kong's 429.4 billion yuan (US$61 billion). "Both Macau and Hong Kong aim to develop in the region. But this would also depend on which place investors prefer," said Nathan Chow, senior economist at DBS Bank. The announcement came as Chinese President Xi Jinping embarked on a three-day visit to the casino hub, saying the city's government had been "fully and accurately" implementing the "one country, two systems" principle which allows both Hong Kong and Macau to retain their own capitalist economic and political systems. Macau, like Hong Kong, is also a key part of China's Greater Bay Area plan along with nine mainland Chinese cities – Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing. Macau is seen as a gateway to trade with Portuguese-speaking countries such as Angola, Brazil and Mozambique. Macau has already started its development in financial leasing, wealth management and yuan clearing services. It also agreed to the creation of a fund headquarters jointly set up by China and Portugal to drive forward the cooperation between large mainland e-business enterprises and non-banking payment organisations. Meanwhile, China issued 2 billion yuan (US$286 million) of bonds in July, in the first so-called lotus bond or offshore yuan-denominated issuance in the city. Macau's legal system stems from its colonial Portuguese past and largely follows the continental model which is significantly different from the common law system followed in Hong Kong. ^ top ^

Beijing more confident than ever of Taiwan reunification, senior mainland official says (SCMP)
2019-12-19
Beijing is more capable than ever of reuniting Taiwan with the mainland given the rise of its global influence, a senior official said on Thursday. "Today, we are closer than any other historical period and are more confident in achieving the goal of our grand mission of the Chinese renaissance," said Liu Jieyi, head of the State Council's Taiwan Affairs Office. "We have stronger abilities and better conditions in pushing for [Taiwan's] reunification with the motherland," he told Communist Party mouthpiece People's Daily. Liu's comments came three weeks ahead of Taiwan's presidential election – a poll seen by some Taiwanese and American analysts as a referendum on whether to distance the island further from the mainland. It also came on the eve of the 20th anniversary of Macau's return to Chinese rule. President Xi Jinping, who is visiting the former Portuguese colony this week, has heaped praise on the city as a successful example of the "one country, two systems" principle – which Beijing has said will provide a model for reunification with Taiwan. However, Taiwanese President Tsai Ing-wen, of the independence-leaning Democratic Progressive Party, has been growing in popularity since she rejected the model. Beijing considers Taiwan a wayward province that must be returned to the mainland fold, by force if necessary. It has suspended formal exchanges with the island since Tsai was elected in 2016 and refused to accept the one-China principle. Citing the rapid economic growth of the mainland in the past 40 years, Liu said Beijing had developed to a level where its multiple strengths and global influences were internationally recognised. "In comparing the strengths between the two sides of the Taiwan Strait, the mainland has a comprehensive and overwhelming advantage over Taiwan," Liu said. He added that Beijing would continue to expand its influence over the self-ruled island as it firmly advanced the process of peaceful unification. He said that the two sides of the Taiwan Strait had become an unbreakable community with a shared future. The mainland is now the island's biggest export market, investment destination and source of a trade surplus. He also said that international support for the one-China policy had also helped the unification process. "With 180 countries establishing diplomatic ties with us, our influence with our international friends has grown even bigger," Liu said, adding this had led separatist forces in Taiwan down a dead end. He also underscored Xi's proposal that the island should prepare for cross-strait unification talks under the "one country, two systems" model. However, Tsai has warned that Taiwan would become like Hong Kong if it accepted Xi's offer. "Her strategy of playing up the sense of crisis that Taiwan would end up like Hong Kong or being taken over by mainland China if she lost the race has worked well among Taiwanese people, in particular young voters," said Yen Chen-shen, a senior researcher of the Institute of International Relations at National Chengchi University in Taipei. Various opinion polls have showed Tsai is at least 20 percentage points ahead of the main opposition Kuomintang opponent Han Kuo-yu, who local media has described as Beijing's favoured candidate. Mainland Chinese analysts, however, said that Liu's interview indicated that Beijing did not care who won. "Liu's interview reflects that the mainland has gone ahead of its set path to advance [the island's] unification with the motherland, which will not be affected by the current situation," said Li Xiaobing, a Hong Kong, Macau and Taiwan specialist at Nankai University in Tianjin. ^ top ^

Taiwan to team up with US to build fighter jet centre, sending another defiant message to Beijing (SCMP)
2019-12-17
Taiwan has further bolstered its defence links with the United States with plans to build an F-16 fighter jet maintenance centre, as Taipei continues to resist Beijing's goal of unification. The self-ruled island's Aerospace Industrial Development Corporation (AIDC) and US defence contractor Lockheed Martin signed a strategic partnership agreement on Tuesday to lay the groundwork for construction of an F-16 fighter jet maintenance centre in Taiwan by 2023. It is the latest of several significant agreements with the US during Donald Trump's presidency. Trump approved a US$2.2 billion arms sale on July 8 that included 108 American-made M1A2T Abrams tanks and 250 Stinger missiles. He was quicker to approve F-16 sales than his predecessors, agreeing in August to sell the island 66 F-16V jets, which will mean Taiwan owns the most F-16s in the Asia-Pacific region. Trump also approved, in September last year, a US$330 million deal to provide spare parts and other logistics for several types of the island's military aircraft – less than a year after the US agreed to sell US$1.4 billion of missiles, torpedoes and an early warning system to Taiwan. Beijing views Taiwan as a breakaway province to be reunited with the mainland by force if necessary. Collin Koh, a research fellow at the S. Rajaratnam School of International Studies with Nanyang Technological University in Singapore, said the planned maintenance centre underlined how Taiwan-US military ties had become stronger under the more enthusiastic US administration of Trump and the Taiwanese presidency of Tsai Ing-wen. "The [F-16 fighter jet maintenance] centre, by improving the availability and readiness of the F-16 fleet, allows Taiwan to sustain its combat aviation, not only for daily operation but also for training," Koh said. "This does represent a step up. Taiwan is no longer just an end-user operating the American hardware, but will also be empowered to service it. It is designed to help Taiwan achieve better defence self-sufficiency, one of the key pledges by the Tsai administration." Tang Shaocheng, a senior researcher in international relations at Taiwan's National Chengchi University, said the increasingly close relations between Taipei and Washington made dealing with the island trickier for Beijing. "The Tsai administration cares about what the US thinks but not what Beijing thinks, paving the way for ever-closer ties," Tang said. "That definitely leaves less room for Beijing to get Taipei into its orbit, by using various economic measures." Beijing has suspended exchanges with Taipei and staged a series of war games around Taiwan to intimidate the island since Tsai, of the independence-leaning Democratic Progressive Party, became president in 2016 and refused to accept its one-China policy. Beijing has also tried to isolate internationally Taipei since Tsai took office by poaching its diplomatic allies. In addition, it has repeatedly warned Washington against seeking closer military ties with Taipei, and has protested against every arms deal the two have made. The US acknowledges the Chinese claim that it has sovereignty over Taiwan, which split from the mainland in 1949 and is self-governing. However, the US regards the status of Taiwan as unsettled and supports the island with arms sales and other measures, such as by sending warships through the Taiwan Strait, which separates the island from mainland China. ^ top ^

Economic Watch: 2019 in review: China remains "gold mine" for foreign investors (Xinhua)
2019-12-19
As 2019 draws to an end, China is set to deliver solid economic results with expanding foreign investment inflow being one of the bright spots, revealing that it remains a major magnet for investors worldwide. Since the beginning of the year, China has maintained a stable and upward trend in attracting foreign capital with more major foreign-invested projects worth billions or even tens of billions U.S. dollars, said Meng Wei, spokesperson for the top economic planner. On Wednesday, a total of 128 deals with an investment of over 560 billion yuan were signed at the Shenzhen Global Investment Promotion Conference, pointing to an upbeat outlook on the development of the southern tech hub and China at large. Amid weak global demand, foreign direct investment (FDI) into the Chinese mainland expanded 6 percent year on year to 845.9 billion yuan (about 124.4 billion dollars) in the first 11 months, showed data from the Ministry of Commerce (MOC). Of the total, 28.5 percent, or 240.7 billion yuan went to high-tech industries, surging 27.6 percent year on year. During the period, a total of 36,747 new foreign-funded enterprises were established, showed the data. Citing German chemicals giant BASF's smart Verbund project in Guangdong and Tesla's Shanghai factory, Meng said the progress of these large projects demonstrated these firms' confidence in investing in China. Amid the overall FDI growth, overseas retailers and financial investors are also navigating their strategies to tap into the market potential of the second-largest economy. Since the beginning of this year, a slew of international companies including Adidas, Nike and Lego have opened new flagship stores in major Chinese cities, while German supermarket chain ALDI entered the Chinese mainland market and Lawson convenience stores swept across third- and fourth-tier cities. Meanwhile, Walmart China plans to accelerate its expansion by opening more than 500 new stores and depots in the next five to seven years and updating 200 existing stores in three years. Similar momentum was also observed in the financial market. By the end of October, foreign-funded banks had established 41 legal-person banks, 114 branches and 976 operating institutions on the Chinese mainland, with their aggregate assets at 3.37 trillion yuan. In the wake of China's scrapping of investment quota limits for Qualified Foreign Institutional Investors and Renminbi Qualified Foreign Institutional Investors, overseas institutions have shown growing investment enthusiasm for China's financial market. The bonds and stocks owned by overseas investors were valued at 2.18 trillion yuan and 1.77 trillion yuan, respectively, both notching historical highs by the end of the third quarter. While newcomers are rushing in, China has been honoring its commitment to opening up more sectors for foreign investment. To ensure the implementation of the landmark foreign investment law, China approved a draft regulation at a State Council executive meeting last week, promising equal treatment of domestic and foreign businesses regarding government funding, land supply and tax and fee cuts. The move came after the unveiling of the 2019 negative list for market access a month ago, which further cut the number of sectors and businesses that are off-limits to foreign investors. While charting the course for economic work in 2020 at the Central Economic Work Conference earlier this month, China vowed to further facilitate and protect foreign investment as opening-up will continue to develop on a larger scale and at a deeper level. With the implementation of these measures, there will be more foreign-funded projects in China as foreign investment will see an optimized environment, Meng said. ^ top ^

GDP target range in 2020 may fall between 5.5-6%: study (Global Times)
2019-12-19
The World Bank has forecast that China's economic growth will be 6.1 percent in 2019 and 5.9 percent in 2020, which tracks with the latest assessment by a Chinese research institute. The World Bank released its China Economic Update in Beijing on Thursday, with a forecast that China's GDP will expand 5.9 percent in 2020 and 5.8 percent in 2021, given the influence of internal and external factors. The report argues that China's economy remains relatively resilient on the back of strong growth in real disposable income, with looser policy dynamics helping mitigate some pressure internally and externally. Meanwhile, the world economy still faces many challenges, with external risks to the Chinese economy stemming mainly from a larger-than-expected slowdown in major economies, particularly in Europe. The latest estimate by the World Bank is in line with that of the Institute of Economic Research of Renmin University of China on Wednesday, which predicted that the GDP growth rate in 2020 will fall within a range of 5.5-6 percent. Economic growth within that range is good enough to ensure the basic stability of employment, while 5.8 percent is an ideal state, the report said. China's GDP in the first three quarters of 2019 totaled 69.7 trillion yuan ($9.8 trillion), up 6.2 percent year-on-year, according to data released by the National Bureau of Statistics (NBS). An economic slowdown has led to discussion among Chinese economists over whether China should maintain a growth rate target of 6 percent in 2020. Tian Yun, a vice director of the Beijing Economic Operation Association, told the Global Times on Thursday that statistically speaking, it's possible to achieve the predicted target. "The total figure for 2018 was nearly 92 trillion yuan after adjustment. According to current calculations, the actual economic growth rate next year does not need to be 6 percent, but about 5.8 percent would be enough to achieve the goal of achieving a moderately prosperous society," Tian said. To achieve this target, the government must optimize the business environment for its private enterprises, which contribute a major portion of GDP growth, Tian said. By the end of 2018, private enterprises accounted for 84.1 percent of all corporate units in China, while the number of state-owned enterprises accounted for only 1.3 percent of the total, according to the fourth national economic census report released by the NBS in November. Private companies have become a major contributor to economic growth. "To me, it's not the figure of 6 percent that we should guarantee, but the confidence of private enterprises in China's economic development," he said. ^ top ^

China's bond market stress creates US$26 billion headache as private firms face unprecedented funding squeeze (SCMP)
2019-12-19
China's credit market stress is creating a 185 billion yuan (US$26.4 billion) headache for the nation's private enterprises as they face the worst funding squeeze in more than two decades amid an economic slowdown. The companies, regarded as the pillar of the world's second-largest economy, have raised 1.5 trillion yuan from onshore bond sales this year through December 18, according to data provider Wind, failing to match the 1.69 trillion yuan needed to repay maturing debt. With less than two weeks of working days to the calendar, that is likely to mark the first annual refinancing shortfall since Wind began tracking the market in 1996. That compares with surpluses of 41 billion yuan in 2018 and 652 billion yuan in 2017. The crunch reflects the fallout from years of state deleveraging campaign to pre-empt a market implosion following years of debt binge. The clampdown has fanned concerns about rising defaults when economic growth is weakening amid a costly trade war with the US. "Net fundraising by private firms began to trend downward since 2017 as Beijing started the deleveraging campaign" and tightened other funding loopholes, Citic Securities said in a note published on Monday. Companies in the property, industrial and material industries are among the worst affected, analysts Ming Ming and Li Han wrote, citing persistently high borrowing costs. China's private enterprises, which account for over 60 per cent of China's gross domestic product, have produced some shocking delinquencies this year, including those from smokestack industries in Shandong province. In a recent case, Tunghsu Optoelectronic Technology missed three bond payments in a month. Punitive refinancing costs have also forced companies into undocumented borrowings from their owners or the opaque shadow financing channels. On average, they have been paying more than 300 basis points above the cost for state-owned China Development Bank in the 12 months through September, according to Citic Securities. The spread was only around 210 basis points at the start of 2018. In contrast, state-owned enterprises have been largely insulated, according to Wind data. They have raised 16.9 trillion yuan this year, a 7 per cent increase over 2018, and more than the 13.1 trillion yuan of maturing debt. In a rare instance, however, state-owned Peking University Founder Group has missed bond payments. The financing gap may pose a problem for offshore investors who have bought some of the companies' foreign-currency debt in recent years. Chinese companies have US$145 billion of bond principals coming due in 2020, almost treble the amount this year, according to Wind data. "It will be a challenge for the companies to figure out how to ensure redemption," said Frank Zheng, head of international fixed income at China Asset Management, one of the country's biggest money managers. While some companies such as Tewoo Group and Xiwang Group have recently upset the market with non-payments, Zheng believes the risk is manageable. Following state directives in 2017 that barred offshore investments in areas such as real estate and sports clubs, Chinese companies have dialled back mergers and acquisitions in overseas markets in the past two years. The slower outbound M&A deals means their debt troubles did not grow larger at the least, Zheng said. He is overall confident that default risks are manageable as the market has priced in potential delinquencies. Looser monetary policy could also ease borrowing costs, he added. In the onshore bond market, however, the nation's private enterprises may take longer to recover. Their financing conditions have barely improved this year despite Beijing's repeated vow of support, Citic Securities said in its report. "It will be a long and tough road to relieve their (funding) troubles," it added. ^ top ^

US and China vow to keep communicating on North Korea nuclear issue (SCMP)
2019-12-20
The top US envoy for North Korea, Stephen Biegun, and his Chinese counterpart agreed on Thursday that the two countries would continue communicating on North Korean issues, with a year-end deadline set by Pyongyang for progress in denuclearisation talks looming. During their meeting in Beijing, Vice-Foreign Minister Luo Zhaohui, who is in charge of Korean peninsula affairs, also expressed hope that Washington would resume talks with Pyongyang "as soon as possible", according to the Chinese government. Biegun, who arrived in Beijing earlier in the day, is apparently aiming to bolster cooperation with China to prod the North to return to the negotiating table, observers say. China is known as North Korea's closest and most influential ally. But it is uncertain whether the two countries can really join hands over North Korea, given that China has been eager to ease sanctions against Pyongyang, while the United States favours keeping them in place. Biegun's trip to China was not initially included in his released itinerary to East Asia. But the US State Department announced on Tuesday that he would visit Beijing, as Washington has been seeking resumption of talks with Pyongyang. The department said in a press release that Biegun would travel to Beijing for two days through Friday to meet Chinese officials "to discuss the need to maintain international unity on North Korea". Biegun's five-day trip to Seoul and Tokyo began on Sunday. He confirmed with his Japanese and South Korean counterparts that the three nations will work closely together to achieve the denuclearisation of the North. Before holding talks with Biegun, Luo said at a press briefing on Thursday that the situation has become "slightly tense" with US-North Korea negotiations stalled. Luo also said issues related to the divided peninsula should be resolved "in a political manner" and "through dialogue". In South Korea, Biegun is believed to have explored the possibility of meeting with the North Korean side in the inter-Korean truce village of Panmunjom, but such contact did not materialise. North Korea has been stepping up its provocative rhetoric against the United States, warning that it will restart nuclear and intercontinental ballistic missile tests if talks with Washington fail to achieve a breakthrough by the end of the year. The United States has been calling on Pyongyang to continue to abide by its commitments to denuclearise and refrain from testing long-range ballistic missiles. At their first-ever summit in June 2018 in Singapore, US President Donald Trump promised North Korean leader Kim Jong-un that Washington would provide security guarantees to Pyongyang in return for "complete" denuclearisation of the Korean peninsula. Trump and Kim, however, fell short of bridging the gap between Washington's denuclearisation demands and Pyongyang's calls for sanctions relief at their February 27-28 summit in the Vietnamese capital, Hanoi. China, meanwhile, has recently indicated a willingness to loosen the sanctions, claiming that North Korea has already taken concrete steps toward denuclearisation, including the dismantling of a major nuclear test site. In early October, the United States and North Korea held a working-level meeting in the Swedish capital Stockholm, but it ended without progress. Pyongyang has said the talks broke down as Washington came to the table "empty-handed". The United States and North Korea remain technically in a state of war as the 1950-1953 Korean war – in which US-led multinational forces fought alongside the South against the North, backed by China and the Soviet Union – ended in a ceasefire. ^ top ^

China says lifting some sanctions on North Korea is best way to ease tensions (SCMP)
2019-12-19
China has touted its proposal offering sanctions relief to North Korea as the best option to defuse tensions, calling on Thursday for a compromise in the stand-off between Washington and Pyongyang over the latter's nuclear and missiles programmes. The proposal, made jointly with Russia on Monday, calls on the UN Security Council to lift some sanctions on exports and foreign workers to "break the deadlock" in the stalled talks between Pyongyang and Washington. "This is the best plan in the current situation to resolve the stalemate in the denuclearisation of North Korea and for its peace and stability," Foreign Vice-Minister Luo Zhaohui told reporters, adding that a political solution was still achievable despite a recent rise in tensions. The comments come with the US special envoy for North Korea Stephen Biegun set to arrive in the Chinese capital on Thursday for talks. The US holds veto power in the 15-member council and remains opposed to any sanctions relief, however, making the China-Russia resolution unlikely to go through. Biegun's public call to Pyongyang for renewed dialogue during a visit to South Korea earlier this week went unanswered, underscoring the reclusive state's discontent at a lack of concessions for its previous decision to halt nuclear tests and long-range missile launches. Pyongyang has conducted a series of weapons tests and waged a war of words with US President Donald Trump in recent weeks, stoking fears the two countries could return to a collision course. North Korean leader Kim Jong-un and Trump met for the first time in Singapore in June 2018 and have met twice more since, but scant progress toward denuclearisation has been made and Kim has given Trump until the end of this year to show flexibility. North Korea's UN envoy declared this month that denuclearisation was off the table, and some analysts say Pyongyang could soon conduct a test for a major strategic weapon such as an intercontinental ballistic missile. "We hope that the concerned parties will practise restraint and meet each other halfway, and work through dialogue to realise positive interactions and quickly find a meeting point to find a resolution," Luo said. ^ top ^

Prime Minister receives heads of Mongolian diplomatic missions (Montsame)
2019-12-19
Prime Minister U.Khurelsukh received heads of Mongolian diplomatic missions abroad on December 18. At the meeting, the Prime Minister briefed about the present socio-economic situation of the country. Noting 7.3 percent economic growth thanks to efforts to stop downfall and grow economy, the PM said that the debts worth MNT7.5 trillion have been repaid, foreign currency reserve has reached approximately USD4 billion, salary, retirement pension and benefits have been raised in line with the inflation rate, as well as major construction works such as construction of railway, auto roads, refinery, and wastewater treatment plants are going on. The PM also said that there are government policies and programs on providing the domestic needs of energy, oil products and healthy foods completely and developing the sectors of export, infrastructure, foreign relations, and information technology. Moreover, it endeavors to develop agriculture, farming and tourism sectors besides mining with a purpose to diversify economy, added the PM, emphasizing the importance of participation and effort of the heads of diplomatic missions. The ambassadors were requested to make an effort to attract investment to the country and introduce Mongolian products to the markets of the countries of their mission. Some of the ambassadors reported that talks were held with relevant officials and organizations in the directions of improving management of state-owned industry that operates with loss, distributing mineral resources products, implementing a joint energy project, raising a funding and reducing air pollution. ^ top ^

Innovative product materials and ingredients to be exempted from customs duties and VAT (Montsame)
2019-12-19
At its regular meeting on December 18, the Cabinet approved a list of raw and other materials and reagents which are not locally produced, but necessary for producing new products within innovative projects, to exempt customs duties and value added tax. MNT 3 billion and 633 million worth of 188 types of raw and other materials and reagents necessary for producing 68 innovative products to be produced by 12 innovative project implementers in 7 industries such as productions of cosmetics, laboratory diagnostic devices, biotechnological and microbiological products, natural mineral compounds, pharmaceuticals, and veterinary medicines and nutrients are listed to be exempted from the taxes. The decision enables the innovators to make state of the art innovative export oriented or import substitute products that would contribute to the country's economic growth. ^ top ^

Parliament of Mongolia and European Parliament hold 13th regular meeting (Montsame)
2019-12-18
The 13th regular meeting between the Parliament of Mongolia and European Parliament was held in Brussels, Belgium on December 12. Mongolian parliamentary delegation led by N.Oyundari, head of the Mongolia-European Parliament group in Mongolian parliament, attended the meeting and discussed about bilateral political and economic relations and changes arisen since the 12th inter-parliamentary meeting and further cooperation issues. The parties also exchanged views on climate change, security and regional matters. The European Parliament noted its support for Mongolia's third neighbor policy and expressed commitment to continue its projects and programs towards diversification of Mongolian economy and trade promotion. It also emphasized an importance of Mongolia's foreign investment environment and stability of applicable legislation. ^ top ^

Jennia Jin
Embassy of Switzerland