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SCHWEIZER
BOTSCHAFT IN BEIJING
EMBASSY OF SWITZERLAND IN BEIJING
AMBASSADE DE SUISSE EN CHINE |
Der wöchentliche
Presserückblick der Schweizer Botschaft in der VR China
The Weekly Press Review of the Swiss Embassy in the People's Republic
of China
La revue de presse hebdomadaire de l'Ambassade de Suisse en RP
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Mongolia
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| Switzerland |
Swiss backing of US position 'laughable', says finance expert (China Daily)
2020-08-16
It is laughable that Switzerland has chosen to side with the United States [on the Hong Kong elections issue], according to Swiss financial consultant Angelo Giuliano, noting that it has also postponed elections because of the novel coronavirus pandemic. ^ top ^
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| Foreign Policy |
President no more? A US bill would ban the title for China's leader (SCMP)
2020-08-21
Lawmakers in Washington have introduced a bill to change the way the federal government refers to the leader of China, prohibiting the use of the term "president". The Name the Enemy Act would require that official US government documents instead refer to the head of state according to his or her role as head of the Chinese Communist Party (CCP). The Chinese leader, currently Xi Jinping, holds three official titles, none of which is "president": head of state (guojia zhuxi, literally "state chairman"); chairman of the central military commission; and general secretary of the CCP. Yet the English-speaking world, including US President Donald Trump, has generally opted for "president", which critics say offers unwarranted legitimacy to an unelected leader. "Addressing the head of state of the People's Republic of China as a "president" grants the incorrect assumption that the people of the state, via democratic means, have readily legitimised the leader who rules them", the legislation states. The bill singles out China, despite the fact that presidents in numerous countries are either unelected or in power resulting from elections that are not considered free and fair. Introduced by Representative Scott Perry, Republican of Pennsylvania, the House bill would prohibit the use of federal funds for the "creation or dissemination" of official documents and communications that refer to the China's leader as "president". A spokesperson for Perry, who sits on the House Foreign Affairs Committee, did not respond to a request for comment on the extent to which "communications" would include public statements and remarks by US officials. The legislation comes as many top cabinet officials, led by Secretary of State Mike Pompeo, have recently begun abandoning the term "president" in favour of "general secretary". A White House report in May outlining Washington's strategic approach to China used Xi's party title exclusively. The bill "formalises something that we've been taking note of in administration statements," said Anna Ashton, head of government affairs at the US-China Business Council. Trump has not followed suit, though he has stopped referring to Xi as a "friend" as relations between the two countries continue to sour. "I don't want to talk to China right now," he said on Tuesday. Perry's bill comes amid strategic efforts by the Republican Party to increase criticism of the Chinese government as a way to deflect scrutiny of the federal government's handling of the coronavirus pandemic, according to an internal memo sent to Republican candidates in the spring and obtained by POLITICO. "China's blatant dishonesty towards the international community cost lives, and the CCP and [World Health Organisation] must be held accountable for their failures," Perry, who faces a close race in November for his southern Pennsylvania seat, said in May. In recent months, Perry has introduced a flurry of aggressive and somewhat unlikely bills related to China, including legislation that would cut US funding to the United Nations until the body expels China and recognises Taiwan, and bills that would authorise the US president to recognise Hong Kong and Tibet as countries independent from China. Those bills have languished upon introduction, failing to gain support from any of Perry's colleagues. But this act has drawn the backing of a handful of other Republican lawmakers, including Representative Ted Yoho of Florida, a prominent congressional China hawk on Capitol Hill known for his work on Taiwan-related issues. Even with support, the bill faces an uphill battle in the few months left to this congressional session, with legislative efforts related to the coronavirus pandemic and the November elections looming large on lawmakers' agendas. "I can't imagine it will move this session," one Democratic House aide, not authorised to speak publicly, said of the Name the Enemy Act. Any bill that has not reached the president's desk by the session's close in early January is wiped off the docket, and must be reintroduced the following session. Ashton said that Perry's bill was less likely to "gain steam" than China-related bills tackling other, more weighty subjects, such as forced labour, supply chains, and regulation of Chinese companies listed on US exchanges. ^ top ^
Will India get on the SCRI bus for long? (Global Times)
2020-08-20
India, Japan and Australia have begun discussions on launching a trilateral Supply Chain Resilience Initiative (SCRI), with the aim of reducing dependency on China's manufacturing sector, The Economic Times reported on Wednesday. While it seems justified for countries to cooperate on supply chain recovery for the post-coronavirus period, it doesn't obscure the geopolitical thinking behind the plan. Generally speaking, the China-centered Asia value chain is expected to be at the heart of global economic recovery. Yet, instead of turning to China - the first major economy to show a recovery from the coronavirus pandemic - the initiative appears to make a detour by pinning its hopes on India, which is still far from bringing the pandemic under control. Given its strained relationship with China, Australia may hope India could step up under the supply chain alliance to replace China's role in its economy. Such a vision is understandable as many believe India has the same demographic dividend as China had decades ago. Yet, it is questionable whether or not India can really undertake such an important role as to counter the so-called China supply-chain dominance. While it is true that the Modi government has made various efforts and attempts to promote industrialization in the country over the years, there is also no denying its manufacturing bottlenecks are unlikely to be addressed in the short term. Moreover, with the world's third highest tally of coronavirus cases, the Indian economy is taking its worst hit for decades. The impact is so serious that it may hinder the resumption of the manufacturing industry in the country. If India's own industrial foundation doesn't meet requirements for establishing an industrial chain in the pre-pandemic days, it will certainly become harder for it to do so post-pandemic. What's more, any international supply chain cooperation calls for an open trade environment - exactly the thing India is unsuited to adapt itself to. For a long time, the Indian economy has been awkward in the globalized trade system. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, also known as TPP-11, did not invite India, and the Regional Comprehensive Economic Partnership (RCEP) is expected to be signed without India. It is not because India is not interested in participating in the global value chain through various regional trade arrangements, but because it is reluctant to open its market to the outside world. For the Indian government, supporting domestic industries has always been prioritized over luring foreign investment.As such, India is unlikely to play a big role in reviving the regional supply chain. Compared with India, the ASEAN is more flexible and open in its trade practices, and therefore may be more suitable to become the world's next manufacturing hub. There is no denying that industrial cooperation is important in the world of rising protectionism, but it is still regrettable to see a geopolitical shadow behind it. ^ top ^
With RIMPAC, Washington flexes its military muscles with allies' help (Global Times)
2020-08-19
The coronavirus has caused many multinational military exercises to be conducted virtually or even canceled. Yet the 27th Rim of the Pacific (RIMPAC) exercises kicked off on Monday as scheduled near the Hawaiian Islands. Because of the pandemic raging worldwide, the RIMPAC exercises have been scaled back to focus only on at-sea exercises and forgo in-port cultural activities. However, the risks of coronavirus infections are still high. Nine soldiers from Thailand, a RIMPAC partner, tested positive for coronavirus upon returning from a three-week joint training in Hawaii in July, prompting Thailand to suspend further joint military training. Those participating in RIMPAC in confined space of ships are at greater risk of virus infections. As such, the effectiveness of a scaled-down drill will also be impacted. However, the Trump administration was determined to carry out the RIMPAC exercises under such circumstances to send a message that it is improving US military abilities for a war. The US also intends to show its allies and partners in the Pacific region that it still has the dominance and final say in the region - that the US won't give up the region despite a ravaging pandemic. Some voices speculate that this year's exercises aim to warn Beijing that bilateral support between Washington and its regional partners such as Tokyo - which is expected to experience a spike in maritime tensions with Beijing - remains strong. The US had invited China to join RIMPAC in the past. But in 2018, the Pentagon announced that it had "disinvited" China because of the "militarization" of islands in the South China Sea. China is not part of this year's RIMPAC either. Against the backdrop of worsening China-US relations, RIMPAC is actually joint military exercises that target China as an imaginary enemy. This year, Taiwan had hoped to join RIMPAC as an observer. But it was not invited at the last minute. Actually, the US only uses the island of Taiwan as a bargaining chip. Under current circumstances, bringing Taiwan in as an observer will not change the course of RIMPAC much. It will instead only irritate China, so the US felt it was unnecessary to do so. Despite the island of Taiwan's willingness to participate, the US did not take its demands seriously. The US is still ranked No.1 in terms of military strength, especially its naval forces. The ships and aircraft of the US fleets are world-class. But recently, it must have felt that such strength is declining due to fires aboard US Navy amphibious assault ships like the USS Bonhomme Richard and the spread of coronavirus on its aircraft carriers. Although US military strength is still above those of other countries, it probably feels it is not enough to deter China alone - so it must woo its allies and fellow countries to counter the China's influence. The countries that join this year's RIMPAC have their different calculations. Countries that are able to participate in RIMPAC must have a certain degree of military strength. This includes, for instance, the standard of warships - the tonnage, the cruising radius, and the speed. So participating countries want to prove that their naval forces are competent enough to exercise together with the US forces so that they can claim regional influence. For countries like Japan and the Philippines, cooperating and retaining military ties with the US under the COVID-19 pandemic can help them curry favor from the US - and garner US support for future scenarios. Therefore, it is unclear whether the mini RIMPAC (among the so-called like-minded countries) really serves the objective of securing the Indo-Pacific region, or is merely a platform where each has its own axe to grind. ^ top ^
New Delhi hurting itself by snubbing Beijing (China Daily)
2020-08-19
In recent months, the Indian government has taken a series of actions targeting China, from suspending customs clearance of imports from China, banning the use of a series of Chinese apps, offering incentives to lure manufacturing companies to relocate from China to India, and asking Indian pharmaceutical companies to wean themselves from Chinese chemicals. These are part of the Indian government's so-called self-reliance plan to reduce Chinese imports and use the vast Indian market to attract manufacturing enterprises to invest in India. Taking advantage of the anti-China political atmosphere created by the Unites States, the Indian government plans to increase its manufacturing share from 15 percent to 25 percent. It seems that India has achieved initial success in its plan, especially in the field of electronics manufacturing. After it offered $6.65 billion (46.06 billion yuan) as incentive to encourage India-bound electronics manufacturers, about two dozen overseas companies have reportedly pledged $1.5 billion to build mobile phone factories in India. However, because of excessive protectionism and poor infrastructure, India is yet to realize its industrialization. India can learn from China's experience. China's capital and strong infrastructure construction capacity can help India improve its infrastructure and lay the foundation for its manufacturing industry. The growth of Chinese companies in India is more suited for exploring and developing the Indian market. However, India's current policy has been to not only exclude excellent Chinese companies from its infrastructure market, but also shut down a number of Chinese-funded apps. For the Chinese enterprises involved, these policies could mean their losing the Indian market; but for India, the losses could be even greater. Going by experience, few countries will actively participate in India's infrastructure development because of the high degree of uncertainty and the problem of excessive delay. In the internet sector, without the participation of Chinese investments, and Chinese technologies with its unique advantages, India's development will slow down. Most overseas electronics companies invest in India to cater to the local market; India has a long way to go before it can become a new "world workshop". Its poor infrastructure and logistics apart, India also lacks enough engineers. Under the existing system, the Indian government is also unable to work out stable policies for social and economic development, such as a policy for stable exchange rates. For manufacturing enterprises, export-oriented ones in particular, a drastically fluctuating exchange rate poses a serious challenge. India is an attractive market but uncertainties remain. Its protectionist policies and unstable business environment could pose a threat to the development of its manufacturing sector. And India's attempts to cut off the supply chain from China will not only harm its industries but also hamper its long-term sustainable development. ^ top ^
Sino-EU treaty would promote solidarity (China Daily)
2020-08-18
The eighth High-Level Trade and Economic Dialogue between the European Union and China, held in late July under the theme "Post-COVID-19 China-EU Cooperation, Promote Steady Recovery and Growth for Global Economy", has produced fruitful outcomes and consensus. Both sides appreciated the progress made in the China-EU Bilateral Investment Treaty negotiations and agreed to strengthen supervision and guidance to complete negotiations and reach agreement on a high-level investment treaty within the year. The BIT initiative was born at the 2012 China-EU Summit when the two sides reached consensus on starting BIT negotiations as soon as possible. Seven years have passed since then, and 31 rounds of negotiations have been conducted. Six rounds of negotiations were held this year, with the first five seeing positive progress over negative lists. In the 31st round of negotiations, several breakthroughs were made on fair competition rules. Talks were held around three key issues. The first was market access. The EU hopes to expand areas of mutual investment and achieve equal access to each other's market. China has already shortened the negative list on a gradual basis, but due to the gap between the development levels of their industries, there are still divergences on equal market access. At the 25th round of negotiations in December last year, China and the EU exchanged improved offers on market access lists. The second key issue was a settlement mechanism for investment disputes. The focus was on improvement, utilization and selection of investor-state dispute settlement, which is widely applied in international investment and is also an important part of the China-EU BIT negotiations. The EU put forward the proposal of investment courts while improving investor-state dispute settlement, and was more inclined to the former and its gradual application. As a result, there are some uncertainties and divergences in choosing settlement mechanisms for investment disputes. The third key issue was a level playing field for competition. This is mainly about the competitive neutrality principle for small and medium-sized enterprises. Developed economies believe that SMEs, with their preferential policies, are not on a level-playing field with private companies. The EU hopes to include competitive neutrality into the BIT.But such a practice is clearly targeted at SMEs, thus creating divergences between the two. Fortunately, substantive progress has been made on these three issues. China has signed bilateral investment agreements with 26 out of 27 EU member states, laying a solid foundation for the BIT between both sides. However, different demands and complex internal relations of the 27 states make it quite difficult to get the BIT through. When promoting the BIT negotiations, China should strive to make sure a BIT is more rational and beneficial. Since China and the EU are at different development stages, a uniform opening arrangement and negative list is not reasonable for China. Instead, China should come up with a list that is acceptable to both sides to strike a balance between opening-up and economic security. China should explore a modern bilateral investment negotiation model that covers both outbound investment and utilization of foreign capital. A dispute settlement mechanism should strike a balance between the interests of host countries and those of investors. China should consider reasonable exception clauses and keep certain policy space instead of totally accepting EU reform proposals when making arrangements for arbitration procedures and jurisdiction limits. Last but not least, when it comes to fair competition, China should continue with the reform of SMEs and urge the EU to relax controls on high-tech investment. As for the EU, the BIT negotiations will bring the negative list management model, thus enlarging market access to China, and will enhance the protection of EU investment in China and legal certainties of EU investors' status in China. For China, the negotiations will boost investment in the EU, help take opening-up to a higher level, and achieve high-quality development of trade and investment. This year marks the 45th anniversary of the establishment of China-EU diplomatic relations. Against the backdrop of China-US trade frictions, a China-EU BIT will ease the impact of China-US economic and trade competition and create more opportunities for long-term cooperation between China and the EU. When it comes to benefits for the whole world, a China-EU bilateral investment treaty will send positive signals to the world amid the COVID-19 pandemic, boost confidence in economic recovery and promote multilateral and regional solidarity and coordination. ^ top ^
China's consular staff from Houston touch down in Beijing (Xinhua)
2020-08-18
The staff from the recently closed Chinese Consulate General in Houston arrived in Beijing on Monday evening, with Chinese State Councilor and Foreign Minister Wang Yi greeting them at the airport. The staff were returning home for the first time since July 21, when the United States abruptly demanded that the Chinese Consulate General in Houston cease all operations and events within a specified time frame. In his welcome speech, Wang said that, in the face of an unexpected incident, the Chinese consular staff had remained calm and unflappable, resolutely safeguarding the core interests of the country, the dignity of the country and the people, and the legitimate rights and interests of Chinese agencies abroad in an extremely difficult and even dangerous environment. Wang said that the Consulate General in Houston showed that the anti-China forces in the United States are undermining China-U.S. relations and deliberately trying to block China's development. "But this is going against the tide of history, and it will never succeed!" he stressed. In a recent exclusive interview with Xinhua, Wang said that the Chinese Consulate General in Houston was the first consulate general opened by China in the United States after the establishment of diplomatic ties, and it had always been an important symbol of China-U.S. friendship. After the planned closure was announced in July, the Chinese Embassy in the United States said in a statement, "It is a political provocation unilaterally launched by the U.S. side, which seriously violates international law, basic norms governing international relations and the bilateral consular agreement between China and the U.S." In a countermeasure, China demanded the closure of the U.S. Consulate General in Chengdu. The move was put into effect on July 27. At the airport on Monday, Wang said that China firmly believes that China-U.S. relations will be revived after the current period of difficulty, adding that the destiny of China is in the hands of its people. Under the leadership of the Communist Party of China, no one and no force can stop the nation from moving towards rejuvenation, Wang said. ^ top ^
US bid to target Alibaba misguided, short-sighted (Global Times)
2020-08-16
US President Donald Trump is reportedly looking to restricting other Chinese technology companies in the US, such as China's e-commerce giant Alibaba Group. This comes after his recent move to block ByteDance's TikTok and Tencent's WeChat apps. Unlike TikTok, the short video sharing app developed by ByteDance, Alibaba and Tencent, which have an enormous presence in the Chinese internet world, have not expanded as quickly in overseas markets. But it is worth noting that WeChat recorded a surge in app downloads after Trump signed an executive order to ban the app, with many users in the US rushing to install it before the ban takes effect. WeChat downloads in the US spiked by 41 percent during the six-day period after the ban announcement, according to data from Sensor Tower. What has happened to WeChat begs the question as to whether there is any possibility that this kind of political suppression by Washington could also stimulate Alibaba's market expansion in overseas markets. If the Trump administration really moves to restrict Alibaba's businesses, people around the world will be interested to know how successful Alibaba is, considering that the US government is overly sensational and obsessed with national security concerns. To a certain extent, it could also be an opportunity for the Chinese tech giant to show the world how it has helped American farmers and businesses connect with Chinese consumers over the years. Some American politicians may believe it is politically profitable to assault Chinese firms in the run up to the upcoming presidential election, but in reality it could be toxic to the US economy and its interests. Over the past four decades, China and the US have developed close economic and trade ties, and any attempt to use political brute force to push for a decoupling from China would inevitably lead to lose-lose situation. Take Alibaba for an example. The impact of a potential ban on Alibaba's business in the US may largely be limited, because the whole US market contributes to less than 3 percent of Alibaba's annual revenue, according to media reports. Yet, even though the proportion of revenue is not high, there are still a large number of American small businesses and farmers relying on the Chinese-owned internet platform to sell US produce to Chinese shoppers. Unlike TikTok, which is just an entertainment app for most Americans, Alibaba's platform has close bearing to American jobs and earnings. By coercing Chinese tech companies, the Trump administration appears to be pursuing a decoupling from China starting with the technology sector, but in doing so it is increasingly isolating itself from the world. Other countries will not simply buy its cliché national security excuses and follow it mindlessly. It is unthinkable for any company that wants to do business in China to disregard useful means of commerce, be it WeChat or Alibaba's e-commerce platform. There is no denying that Chinese companies will face challenges and pushback in their efforts to explore some Western markets. Given the unprecedented political environment at present, it is possible the discrimination will get more intense in the future. ^ top ^
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China, US to hold phase one trade deal talks 'in the coming days' (SCMP)
2020-08-20
China and the United States will hold trade talks in the coming days to review the progress in meeting the terms of the phase one trade deal, China's Ministry of Commerce said. "The two sides have agreed to hold a call in the coming days," said spokesman Gao Feng on Thursday when asked when the talks would be held. The US and China were reportedly due to hold talks last Saturday to review the implementation of the deal. US President Donald Trump said on Tuesday that he postponed the talks because he is unhappy with China over the handling of the coronavirus outbreak. Vice-Premier Liu He and US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin had been expected to review the progress of the deal at the weekend, with a semi-annual review agreed when the two sides signed the deal at the White House in January. On Wednesday, White House chief of staff Mark Meadows said the review had not been rescheduled, but that Lighthizer remained in regular contact with his Chinese counterparts about fulfilling the commitments of the deal. China promised to buy more American goods as part of the phase one deal, including US$77 billion this year, with a goal of raising the value of purchases by US$200 billion compared with 2017 levels. But Beijing has fallen behind the commitment because of the coronavirus pandemic and inflamed tensions with Washington. US official data and industrial data, though, show that China has increased its purchases of agricultural and energy products in recent months. Meanwhile, the Ministry of Commerce dismissed suggestions that China has curbed overseas shipments of rare earth exports in July as a countermeasure against the US. China exported 1,620 tonnes of rare earth elements last month, a drop of 69.1 per cent from a year earlier and down 44 per cent from June, according to Chinese customs data. Rare earth exports to the US dropped 35.2 per cent from a year earlier to 5,184 tonnes in the first half of the year, according to data from the China Rare Earth Industry Association. Chen Zhanheng, a deputy general secretary at the China Rare Earth Industry Association, an industry group of domestic rare earth companies, had already dismissed rumours about whether China was weaponising rare earths trade. "Since the beginning of this year, due to the impact of the coronavirus pandemic, the production and operation activities of downstream rare earth enterprises have slowed down," Gao added. "Chinese companies carry out international trade business based on changes in international market demand and risk conditions." China's commerce ministry also hit back at the US ban on Chinese-owned mobile app TikTok, saying the move is based on groundless charges and that it seriously violates the basic principle of the market economy. "This is not good for China, not good for the US and not good for the whole world," Gao said. Trump issued an executive order on August 6, according to which "any transaction" between an American citizen and ByteDance – the Chinese owner of short video hit TikTok – will be outlawed in 45 days for national security reasons. Trump also applied the order to Tencent's WeChat. "We once again urge the US side to abandon its wrongdoings, stop unwarranted suppression of Chinese companies, and do more things that are conducive to the economic and trade cooperation and the people's welfare of the two countries," Gao added. ^ top ^
China's population: the big picture of a greying society (SCMP)
2020-08-20
China is the world's most populous country, home to more than 18 per cent of the people on the planet. But while its economy has expanded rapidly in recent decades, its population – estimated to be about 1.4 billion – has been greying. By various estimates, China's population could peak at around 2027-2029 then start to shrink, presenting serious challenges for the country's health system and pension funds. Most Chinese people live in the central, eastern and southern coastal areas, which have been among the fastest growing economies in the country. The autonomous regions of Xinjiang and Tibet in the far west and Inner Mongolia in the north are among those areas with the smallest populations. Chongqing, in China's southwest, is the country's biggest city, with more than 34 million people by the end of 2018. Nearby, Chengdu, the capital of southwest Sichuan province, is home to 14.7 million people. Other heavily populated regions are more economically advanced parts of the country. The southern province of Guangdong, China's manufacturing hub and the first region to embrace market reforms in the 1970s, is the country's most populous province. Other major population centres include Jiangsu province and neighbouring Shanghai. Researchers from the Chinese Academy of Social Sciences forecast last year that China's population would peak at 1.44 billion in the late 2020s then start shrinking from 2030. Around the same time, India is expected to surpass China as the world's most populous country. In the 1990s, China's fertility rate fell below the level that a country needs to maintain its population, which is generally about 2.1 children for every woman of reproductive age. The fertility rate was 6.1 in the 1950s and fell to 3 in the 1970s as China began to control population growth with measures such as the "one-child policy", which restricted most couples to one offspring. The fall continued as the country made the shift in the 1980s to a more urban society. As birth rates fall, Chinese society is ageing rapidly. In the early 2000s, 7 per cent of the population was at least 65, making China an ageing society, according to the World Health Organisation's definition. When more than 14 per cent of the total population is over 65, it qualifies as an aged society, a benchmark China is expected to reach by 2022, according to Chinese research firm Evergrande Research Institute. If that forecast is accurate, China will have transformed into an aged society in just 21 years. Japan took 24 years to make the same transition, while Germany took 40, Britain 46 and France 126. In an ageing society, a smaller labour force must support a bigger population of retirees, which could strain China's retirement fund and slow the country's innovation and economic growth. In a 2019 report, the United Nations said governments could mitigate these effects by promoting employment among women, gradually increasing the retirement age and supporting a work-life balance to allow people more time to build a family. For most of Chinese history, people were encouraged to get married young and have more children. It was not just a way of paying respect to elders but also provided labour for a largely agricultural society. After coming to power, the Communist Party continued to promote growth in the 1950s and 1960s, offering financial incentives for families with more children. In the 1970s, the party started looking into population control as part of the plan to better allocate scarce resources and accelerate China's economy. This evolved into the "one-child policy". There were exceptions to the rule. Rural families with a firstborn daughter were allowed to have a second child once the first child turned four. In 2015, China introduced the "two-child policy" allowing couples to have two children but this has not led to an increase in births. After the easing policy, the annual population growth rate moved up from 0.5 per cent to 0.54 per cent and 0.56 per cent for the next two years before falling to 0.36 per cent in 2019. In 2018, China's marriage rate fell to 7.2 per thousand, down from 9.9 per thousand in 2013. Chinese policymakers plan to delay retirement age and roll out incentives to promote marriage and childbearing. In May, the State Council, China's cabinet, issued a directive that asks local government to find ways to make it easier for families to take care of children. Some suggestions include annual parental leave, extending maternity leave and setting up more child care facilities in communities. ^ top ^
Xi Focus: Xi instructs army to complete follow-up flood control work (Xinhua)
2020-08-20
Chinese President Xi Jinping, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission (CMC), has instructed the armed forces to make unremitting efforts to complete the follow-up tasks of flood control and disaster relief. Xi, who was inspecting flood control and disaster relief work in east China's Anhui Province, gave the instruction on Thursday after hearing reports from the military on joining localities in battling floods across the country. On behalf of the CPC Central Committee and the CMC, Xi extended regards to servicemen of the Chinese People's Liberation Army (PLA) and the People's Armed Police Force, and members of the militia and the reserve force, who had been fighting floods and helping with disaster relief. Xi stressed the need for the military to continue emergency rescue and disaster relief efforts, assist flood-hit areas in post-disaster recovery and reconstruction, and complete the follow-up tasks of flood control and disaster relief. As of Wednesday, dispatches totaling more than 1.2 million head counts from the PLA and the People's Armed Police Force and more than 300,000 from the militia had been made in flood control missions in 17 provincial-level regions. They evacuated more than 170,000 residents, handled over 3,900 breaches and piping emergencies, and reinforced embankments of more than 900 km. Under the firm leadership of the CPC Central Committee, China has scored major achievements in the battle against floods, Xi said, highlighting the spearhead role of the armed forces in shouldering critical tasks. Xi demanded that relevant military units work with local authorities and strengthen research and analysis of the water situation to ensure the scientific and proper use of the military forces. He required the army to keep in good condition, promptly check potential risks and dangers, effectively carry out emergency rescue and disaster relief work, safeguard people's lives and property, and help them restore normal production and life. "This flood battle is a practical test of the leadership and command system of our army, and the army's combat readiness and ability to perform the tasks," Xi said. Xi underscored requirements to complete all the work of the armed forces in the second half of the year, stressing efforts to strengthen the organization and leadership, focus on priority tasks and innovate ways and methods to achieve the development targets of the national defense and the armed forces for 2020. The army must always enhance its awareness of potential threats, persist in considering the worst-case scenario, and strengthen military training and war preparedness to guarantee that, when the time comes, it will take action and win, Xi noted. Xi required solid effects in key areas of work such as the implementation of the military's 13th Five-Year Plan, the formulation of its 14th Five-Year Plan, and the reform of its policies and systems. Xi underscored the importance of reinforcing theoretical and political education and running the military strictly in accordance with the law. CMC Vice Chairman Zhang Youxia and others attended the event. ^ top ^
Despite disasters, harvest expected to be successful (China Daily)
2020-08-21
Natural disasters this year - including the severe flooding along the Yangtze River - have not dented prospects for a bumper harvest in China, and the country's overall food security is guaranteed, Yu Kangzhen, vice-minister of the Ministry of Agriculture and Rural Affairs, said on Thursday. China's early rice output reached 27.3 million metric tons this year, up 1.03 million tons from last year, according to data released by the National Bureau of Statistics on Wednesday. While the year-on-year increase is modest, Yu said the uptick represented a significant landmark as this year's early rice production had reversed a seven-year trend of decline. Meanwhile, the summer grain output this year was reported to have reached a historic high of 142.8 million tons this year, up by 1.21 million tons from last year, official data show. With all eyes now set on autumn grain production-which accounts for 70 percent of the nation's total grain production annually-Yu said monitoring data show that areas used to grow autumn crops have registered a slight increase, and the growth of crops is positive. "Local governments have taken active measures to prevent and mitigate the impact of natural disasters, and the resumption of production is timely and effective," he said. This year, China has countered massive flooding in the middle and lower reaches of the Yangtze; serious drought in its northeastern provinces; and typhoons hitting some coastal areas in the south, according to Yu. These disasters have exerted a toll on autumn grain planting in parts of Northeast China and rice production in some southern provinces, but most regions have witnessed a better growth of crops compared to last year, Yu said. "Drought and flooding did not change the stable and positive trend of this year's grain production," Yu explained."We will witness a bumper harvest if no major disasters occur for the rest of the year." He added that China's grain stocks have been maintained at a high level so far, further securing the country's food supply and contributing to stabilizing grain prices. "There are about 40 days left before we will begin harvesting autumn grains on a large scale," he said. "Our work will be rooted in combating disasters step by step and aiming for a full harvest." Yu said celebrations during the Chinese Farmers' Harvest Festival, which falls on each year's autumn equinox and will be celebrated on Sept 22 this year, will demonstrate the stable footing of the country's agricultural and rural sector and will boost confidence in socioeconomic development. The core festival event will be held in Yuncheng, Shanxi province. It will be the first time the event is held outside Beijing since the festival was created in June 2018. ^ top ^
Nation shifts to targeted monetary policy (People's Daily)
2020-08-19
China has suspended its large-scale monetary easing, as the economy is recovering, and shifted to innovative monetary measures to channel funds into weak sectors in a more targeted way, while guarding against financial risks, policy analysts said on Tuesday. The monetary authorities will prefer "structural monetary policy tools", as the central bank calls them, to address financial strains in a targeted manner. The tools are designed to support small and medium-sized businesses and their employees, by ensuring the provision of credit to specific sectors and preventing excessive money spilling across the financial system, according to analysts. That policy tone has been reiterated by top-level policymakers since July, as economic data provides more indication of recovery, although consumer consumption still lags behind. Signals could be read from the State Council's executive meeting chaired by Premier Li Keqiang on Monday, which emphasized maintaining liquidity at a reasonable and ample level, but avoiding the "flood irrigation type" of monetary easing, and guiding financing into the nonfinancial sector. The meeting called for promoting reform of the loan prime rate procedure, the representative lending rate to prime corporate borrowers, and the further reduction of real lending rates. Since the start of the COVID-19 pandemic, the People's Bank of China, the nation's central bank, has brought down the loan prime rate by 0.3 percentage points to 3.85 percent. "China's economic data for July showed that the recovery remains unbalanced and reliant on extraordinary policy support," said Shaun Roache, Asia-Pacific chief economist at S&P Global Ratings. "The central bank wishes to lower borrowing costs while guarding against financial risks, and it is trying by developing tools that increase access to credit for the real economy, especially small and medium-sized enterprises." "The PBOC noted the focus in the second half is to ensure monetary policy becomes more precise, and China may pull this off, although history suggests that monetary policy is a blunt tool rather than a scalpel," he added. On Sunday, China's top banking and insurance regulator, Guo Shuqing, who is also the PBOC's vice-governor, warned about financial risks and rising debt. He stressed control of highly risky shadow banking activities and disposal of nonperforming loans as early as possible. The central bank has included targeted cuts to the reserve requirement ratio, along with relending and rediscount facilities, in its structural monetary policy toolkit, according to its second quarter monetary policy report. It also introduced two new structural facilities in June－one is to defer the repayment of loans' principal and interest and the other is to purchase small business credit loans, to ensure market entities can receive sufficient funds. "If monetary policy only focuses on the quantitative target, more structural issues will be seen," which will reduce the efficiency of the quantitative-based monetary policy, the report said. Wang Qing, chief macroeconomy analyst at Golden Credit Rating, said that the possibility of using the traditional tools－a broad cut to interest rates or the reserve requirement ratio, will decrease from the third quarter. "Monetary policy will remain more flexible, and policy tightening is less likely," Wang said. Lu Ting, chief economist in China at Nomura Securities, said, "Beijing is likely to continue its 'wait and see' approach, by neither stepping up nor rolling back its existing policy easing measures." Meanwhile, in the face of the worsening international environment, Beijing's policy focus may turn increasingly inward, Lu added. On Monday, the PBOC injected a net amount of 300 billion yuan ($43.31 billion) in medium-lending facility loans, which suggested that the central bank has no intention of tightening its monetary policy, according to analysts. ^ top ^
Xi Focus: Xi inspects east China's Anhui Province (Xinhua)
2020-08-18
Xi Jinping, general secretary of the Communist Party of China Central Committee, on Tuesday inspected east China's Anhui Province. While visiting Funan County in the city of Fuyang, Xi went to a floodgate, a luggage and bag company and a "zhuangtai," a residential structure on raised ground with higher elevation that functions as a safe haven from river floods. Xi checked the water situation of the Huaihe River and learned about local measures for flood control, disaster relief and post-flood production recovery. He also visited and consoled those affected by floods. ^ top ^
Top Party school's retired professor Cai Xia expelled from Party for wrong political remarks, serious disciplinary violations (Global Times)
2020-08-17
The Party School of the Communist Party of China (CPC) Central Committee announced on Monday that it has rescinded the Party membership of retired professor Cai Xia for making remarks that had serious political problems and damaged the nation's reputation in serious violations of political discipline of the Party. Her relevant retirement benefits have also been removed, the Party School of the CPC Central Committee said in a statement. Cai, a retired professor from the Party School of the CPC Central Committee (Chinese Academy of Governance), made statements that had serious political problems and damaged the national reputation, leading to very serious consequences, it said. Cai's remarks have seriously violated the Party's political and organizational discipline as well as the norms of conduct for personnel in public institutions, it said. The school committee decided to expel Cai from the Party and cancel her retirement benefits in accordance with the regulations on CPC disciplinary actions following a joint investigation by the Central Commission for Discipline Inspection (CCDI) of the CPC and the Party School's discipline committee, the statement said. Cai was known for frequently making remarks that have defamed the Party and the country. In 2016, she was criticized by news site gmw.cn for losing her "Party spirit" after she expressed support for former property tycoon Ren Zhiqiang, who is known for his aggressive remarks online. In July, Ren was expelled from the Party for serious violations of discipline and law. She also defended Sina Weibo celebrity Xue Manzi, also known as Charles Xue, after Xue was detained in Beijing for soliciting prostitutes in 2013. Xue, also known for aggressive online remarks, was believed to be involved in reposting multiple rumors from Qin Huohuo, who was detained in 2013 for "provoking trouble" by creating and spreading online rumors and profiting from them. Cai also attempted to justify Qin's actions by claiming that the crackdown on online rumors abuses public power to violate citizens' rights. ^ top ^
Xi calls on youth to make new, greater contributions to undertakings of Party, country (Xinhua)
2020-08-17
President Xi Jinping on Monday stressed that the country's youth should be mobilized to make new and greater contributions to undertakings of the Party and the country. Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, made the remarks in a congratulatory letter to a session of the All-China Youth Federation and a congress of the All-China Students' Federation, which opened in Beijing on Monday morning. On behalf of the CPC Central Committee, Xi extended congratulations on the opening of the meetings, and sincere greetings to young students and young people of all ethnic groups and all walks of life in China, as well as overseas Chinese youth. Over the past five years, under the leadership of the Party and with the help and guidance of Chinese Communist Youth League organizations, youth federations and students' federations at all levels have played an important role in the Party's work related to youth. Noting that the country is about to secure a victory in completing building a moderately prosperous society in all respects, and embark on a new journey toward the second centenary goal of fully building a modern socialist country, Xi called on Chinese youth to have firm ideals and convictions, and work tirelessly with the people in the new era. Xi urged Party committees and governments at all levels to improve leadership in youth work and continue their support to youth federations and students' federations. Youth federations and students' federations were asked to deepen reform and innovation, and organize and motivate the youth and students to follow the Party and make new and greater contributions to undertakings of the Party and the country. Wang Huning, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and a member of the Secretariat of the CPC Central Committee, attended the opening meeting, together with the other about 3,000 representatives and officials. Chen Xi, a member of the Political Bureau of the CPC Central Committee and head of the CPC Central Committee's Organization Department, read Xi's letter at the meeting. Vice Premier Sun Chunlan, also a member of the Political Bureau of the CPC Central Committee, addressed the meeting on behalf of the CPC Central Committee. Sun called on the young Chinese to rally more closely around the CPC Central Committee with Comrade Xi Jinping at its core, and strive to realize the Chinese Dream of national rejuvenation. The gatherings will summarize the work of the All-China Youth Federation and All-China Students' Federation in the past five years, and analyze and decide on the work plans for the next five years. ^ top ^
Chinese President Xi Jinping says Marxist political economy is the bedrock for nation's growth (SCMP)
2020-08-16
China's Marxist political economy will continue to adapt to the ever-changing domestic and international environment, but must remain the bedrock on which the nation builds its future, Chinese President Xi Jinping said. "The foundation of China's political economy can only be a Marxist political economy, and not be based on other economic theories," he said in an article published on Saturday in the political theory periodical Qiushi. Xi, who is also general secretary of the Communist Party of China and chairman of the Central Military Commission, said the country's economic model was a pillar of a socialist system with Chinese characteristics that not only guided economic development but also consolidated the party's ruling position. After 30 years of reform and opening up, and a changing global order, steering the economy into the future would be a major test for the party, he said. Xi dismissed suggestions that China's Marxist political economy was outdated, saying it allowed markets to play a decisive role in the allocation of resources but also enhanced the role of the government. China must support and develop its publicly owned economy, while supporting other types of ownership, he said. "The dominant position of public ownership cannot be shaken, and the leading role of the state-owned economy cannot be shaken." Xi's comments came as China remains locked in a bitter struggle with the United States on a host of issues, from trade and technology to ideology, human rights and the origins of the Covid-19 pandemic. US Secretary of State Mike Pompeo last week said America viewed the threat posed by China as "much more difficult" to counter than the one presented by the Soviet Union during the Cold War. Xi said on Saturday that China should not seek to copy Western ideology or its capitalist system. Many capitalist countries had suffered economic downturns, unemployment problems, increased polarisation and deepening social conflicts, he said. One of the main areas of conflict between China and the US is the trade war that has been ongoing since July 2018. Negotiators from the two countries were expected to meet on Saturday to review the phase one trade deal agreed between Beijing and Washington in January in a bid to ease tensions, but the talks were postponed without explanation from either side. Michael Every, head of financial markets research Asia-Pacific at Rabobank, said the deal was possibly in jeopardy for political reasons, as US President Donald Trump campaigned for re-election. "Trump alluded that China is now placing record orders of US agri products [a commitment made in the January deal]," he said. "China will play along given it doesn't know who will win the US election. But we remain of the view that this deal will collapse at some point – and probably when it's most politically expedient for Trump." ^ top ^
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| Beijing |
Mask no longer mandatory for outdoor activities in Beijing (People's Daily)
2020-08-20
Beijing residents are allowed not to wear face masks outdoors, according to the latest guideline issued by Beijing Center for Disease Prevention and Control on Thursday. However, with the exception of their partners, residents still have to wear face masks while in close contact with other people, according to the guideline focusing on outside activities. When residents go to sports venues, they should follow the rules and get permission before entering. Guardians should accompany children in outdoor activities and pay attention to children's personal hygiene. They should remind children not to touch their eyes, mouths and noses with their hands while playing with shared toys and facilities. In outdoor activities, residents should not spit on the ground, and should use a tissue or their elbow to cover their mouths while sneezing and coughing. Oral and nasal secretions, as well as sputum, should be covered by paper and thrown into the dustbin. Residents should wash their hands as soon as they arrive home. ^ top ^
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| Shanghai |
New business models of Internet economy flourishing in Shanghai (People's Daily)
2020-08-19
Spreading batter, adding egg, brushing sauce, and packing, a Chinese chef surnamed Gao finished making an appetizing jianbingguozi, a popular Chinese pancake, in less than two minutes. Gao handed the jianbingguozi to his assistant, who glanced at the computer screen and then put the food into one of the containers of a thermal cabinet. After no more than one minute, the food was taken by a man surnamed Li who had just came out of the subway and scanned a QR code on the cabinet. The above happened at a store of Hexiaoma in Shanghai, a breakfast store of Alibaba's grocery chain Hema Xiansheng. The store is located at the B2 floor of a shopping mall near an exit of the World Expo Museum Station of Line 13 of the Shanghai Metro in Huangpu district. Consisting of a breakfast stall and an automatic thermal cabinet, the store sells breakfast on site and also allows consumers to place orders online. "I placed the order two stops in advance, so I got my steaming breakfast when I just arrived at the store," said Li. "It's so convenient. Now I can enjoy freshly made breakfast even if I slept a little longer in the morning," he added. In recent years, Shanghai has grasped the opportunities generated by the booming internet economy and enabled the over 20 million residents in the megacity to enjoy a wonderful and convenient life benefited by flourishing online platforms and ever-changing modern technologies. "The blue marks indicate the real-time position of the couriers, while the yellow ones are their next destinations. The red marks suggest delivery delays," Li Wei, a staff member of e-commerce grocery platform Dingdong Maicai, introduced to People's Daily, pointing to an electronic map. More than 200 marks are distributed within a 3-kilometer radius on the map. Li, who is in charge of a distribution center of the platform on Songhong Road of Shanghai's Changning district, couldn't take his eyes off the map as a rain was about to drop at 10:00 am that day and lunch orders were flocking in. At the same time, 11 sorters were busy packing while 17 deliverymen were rushing in the rain to send products to the customers. "Hello, we are sorry to tell you that your vegetables might arrive five minutes late because of the heavy rain," Wang Yaxu, a deliveryman of the distribution center explained to a client over the phone as the delivery time of the order was about to exceed the 29-minute time limit promised by the platform. "That's all right. Be careful on the road," said the customer, a woman surnamed Chen who had shift grocery shopping to the online platform after the COVID-19 outbreak. In fact, Chen had doubted whether it was a good idea to buy vegetables online at first, for she thought it would be much better to make a purchase after comparing the goods on site like she had done over the past decades. To her surprise, the online grocery shopping was quite satisfying, and she soon became a loyal customer of the platform. "I like cooking carp and bean curd soup, so I need fresh fish. The three carp I ordered were kept in a tank with oxygen pump when they were delivered to me, and they were still lively when I put them into my basin," Chen introduced. "Dingdong Maicai became a black horse in the field of grocery e-commerce since February with a revenue of more than 1.2 billion yuan (about $173 million)," Liang Changlin, founder and CEO of the platform told People's Daily. Liang, who has operated the platform for over two years in Shanghai, once planned to spend a year on market cultivation, but his target was achieved in just over a month. Shanghai's online transaction of grocery products totaled 17.48 billion yuan during the first half of this year, up 138.8 percent from a year ago. Changes not only happened in the way of grocery shopping. After attracting a great number of leading e-commerce enterprises, Shanghai rolled out a series of Internet-based shopping activities to further give play to major platforms. Empowered by the city's dynamic digital transformation, many brick-and-mortar businesses have also tapped into online platforms and launched cloud-based activities, including online shopping events, exhibitions, and shows. With enormous potential for rapid growth, consumer-oriented services are growing into an important engine for e-commerce businesses in Shanghai, said Zhou Lan, deputy head of Shanghai Municipal Commission of Commerce. The online transactions for goods totaled 311.6 billion yuan in Shanghai during the first six months this year, marking a 14.3-percent growth from the same period of the previous year, according to Zhou. ^ top ^
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| Guangdong |
Xinhua Headlines: New port opens to boost interconnectivity in Greater Bay Area (Xinhua)
2020-08-19
A new port to facilitate travel between Macao and Zhuhai, south China's Guangdong Province, was officially put into use Tuesday, a new step to boost development of the Guangdong-Hong Kong-Macao Greater Bay Area. Dubbed a "super passage," the main working area of the Hengqin port has a total floor area of 450,000 square meters, equivalent to 63 football fields. It has a designed daily capacity of 222,000 passengers, which can help ease the pressure of Gongbei Port and increase the daily capacity for passenger flow between Guangdong and Macao. Gongbei Port has long been the main passenger channel between Zhuhai and Macao. In 2019, the port saw a total of 145 million passengers, ranking first in China for eight consecutive years. However, the Gongbei Port has been running far beyond its designed capacity, thus resulting in a series of problems such as prolonged queuing time and slow customs clearance procedures. As a flagship project of the Guangdong-Hong Kong-Macao Greater Bay Area, Hengqin Port significantly simplified clearance procedures. "The opening of the new port will further enhance interconnectivity of Guangdong and Macao, provide more convenient, fast and considerate services for personnel, economic and trade exchanges, inject new impetus into the development of Hengqin New Area, and lay a solid foundation for deepening the Guangdong-Macao cooperation and advancing the building of the Guangdong-Hong Kong-Macao Greater Bay Area," said Ma Xingrui, governor of Guangdong. The port has adopted a brand-new working pattern between Guangdong and Macao, further enriching the connotation of "one country, two systems," according to Chief Executive of the Macao Special Administrative Region (SAR) Ho Iat Seng. The staff of the two sides work in the same office building and share the same equipment. The unprecedented management and construction model is new for Guangdong and Macao, he said. Chinese authorities in February 2019 unveiled the development outline for the Guangdong-Hong Kong-Macao Greater Bay Area, aiming to build the region into a role model of high-quality development. The Greater Bay Area consists of Hong Kong, Macao and nine cities of Guangdong Province. At around 3 p.m. Tuesday, a Macao resident surnamed Ieong became the first person to go through the self-checking passage at the new Hengqin port to enter Zhuhai. The process took her just 26 seconds. "It's very convenient as I only need to use my ID once when crossing the port," Ieong said, adding that she was very excited to be the first person to make the crossing. Previously, the Hengqin checkpoint in Zhuhai and the Lotus checkpoint in Macao were designed as separate customs clearance channels, which was inconvenient for travelers. The new Hengqin Port adopts a "joint inspection and one-time release" customs-clearance mode. According to official data, the number of Macao residents holding Zhuhai residence permits exceeds 50,000, and the total number of people who live in Zhuhai and work in Macao is more than 60,000. The new Hengqin Port's convenient inspection procedures are expected to increase the volume of travel. In the first seven months of this year, the number of Macao-funded enterprises registered in Hengqin was more than double that for the same period last year. Liu Guangqian, who works at the Hengqin Port, has witnessed the changing relationship between Zhuhai and Macao. "Tourists and laborers employed in Macao used to take up the bulk of crossings at this port. Now, there are more businessmen, workers and students crossing," he said. ^ top ^
Shenzhen announces citywide 5G coverage (Xinhua)
2020-08-17
Shenzhen Mayor Chen Rugui announced on Monday that the city has achieved full coverage of 5G independent networking. Chen said at a press conference that the city has realized the goal set in 2019 of 45,000 5G base stations built by the end of August 2020 to support the establishment of the citywide 5G network. Jia Xingdong, director of Shenzhen municipal bureau of industry and information technology, said the total number of 5G base stations in Shenzhen has exceeded 46,000, putting the city ahead of schedule. The tech hub in south China's Guangdong Province is home to a bevy of Chinese startups and tech heavyweights, including Huawei and Tencent. Its GDP rose about 6.7 percent year on year in 2019, reaching more than 2.69 trillion yuan (387.6 billion U.S. dollars). Jia said that, in the next step, the city will promote the development of 5G industries by making a number of breakthroughs in 5G technologies and building a comprehensive 5G application ecosystem. ^ top ^
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| Tibet |
China-India border dispute: PLA flexes military muscle with live-fire drill in Tibet (SCMP)
2020-08-18
Chinese state media has again highlighted a PLA exercise near the Indian border, as tensions continue to simmer between the neighbours. Communist Party mouthpiece People's Daily published a video of the live-fire drill conducted by the People's Liberation Army in the Himalayas, along with details of the exercise, as state media steps up a propaganda campaign to show China's military might on the Tibetan Plateau. It came days after Foreign Minister Wang Yi paid a rare visit to Tibet, including a trip to the disputed border with India. The visit was seen by observers as a symbolic gesture after months of friction between the two countries following a deadly border clash in June. The latest live-fire drill took place at an altitude of 4,600 metres (15,000 feet) in the middle of the Himalayas, which separate China and its South Asian neighbours – India, Nepal and Bhutan. The report did not give the exact location or say when the drill took place. "The exercise … tested the coordinated strike capability of multiple units and put new equipment to the test in a combat situation," it said. The report detailed how the PLA troops set out at 4am to get into position dozens of kilometres from the starting point while avoiding enemy reconnaissance. During the exercise, target drones were shot down with surface-to-air missiles. The enemy's rear command posts, missile launchers and communication hubs were knocked out with guided bombs. PLA troops also launched saturated artillery fire on the enemy's frontline positions, bunkers and camps. And a precision missile strike on remaining fortresses was carried out at the end of the drill, according to the report. The footage showed recently deployed artillery being used in the drill – a vehicle-mounted version of the HJ-10 anti-tank missile system, 155mm and 122mm calibre vehicle-mounted howitzers, and HQ-16 air defence missiles. Antony Wong Dong, a military expert based in Macau, said the new lightweight artillery was designed for rapid response situations on the Tibetan Plateau. "They're making the debut there as a demonstration of power," he said. People's Daily said the drill was "scheduled in the annual training plan" of the PLA's Tibet Military Region. However, it was just the latest in a recent series of live-fire exercises in the region, where the PLA has sent a large number of troops. The stand-off between Chinese and Indian border troops has shown little sign of abating, although the two sides have disengaged from the major hotspots along the disputed boundary. The latest tensions peaked in June when 20 Indian soldiers were killed in the worst clash between the two sides in decades, in the disputed Galwan Valley. China has not revealed the number of its casualties. ^ top ^
Wang Yi visits Tibet, says diplomatic front to work with region in safeguarding national security (Global Times)
2020-08-15
Chinese State Councilor and Foreign Minister Wang Yi said the diplomatic front will work with people in Tibet to safeguard national security and support Tibet's opening-up as he visited the region on Friday, the Tibet Daily reported on Saturday. His trip came against the backdrop of China-India border clash in the Galwan Valley in June. On Friday, Wang met with Wu Yingjie, Tibet's Party secretary, and Qizhala, chairman of Tibet regional government, and other local officials. Wang said that the security and stability of the region is important to the overall development of China. Given the new period of major changes that's rarely been seen in a century and the complicated influence brought by the global coronavirus pandemic, the diplomatic front will work with people in Tibet to ensure regional stability, China's national security and support Tibet's opening-up and cooperation with the outside world, economic and social development, according to Wang. Wang also mentioned the current international situation and China's diplomatic work saying that Tibet has made great achievements regarding economic development, stabilizing and developing border areas, joining external cooperation and participating in projects under the Belt and Road initiative. Wang also visited the border area to learn about the situation of poverty alleviation, infrastructure building and the construction of villages, the Tibet Daily reported. Wang conducts special "research trips" to several Chinese regions every year. For example, in February 2019, he visited the China-Myanmar border in Southwest China's Yunnan Province where he emphasized maintaining the stability of the border areas and promoting its development. In August 2019, Wang visited Southwest China's Chongqing Municipality to investigate the promotion of Belt and Road initiative. ^ top ^
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| Xinjiang |
Lockdown remains in Xinjiang's capital despite no confirmed COVID-19 cases for 2 days (Global Times)
2020-08-18
Thirty-three days after Urumqi, the capital city of Northwest China's Xinjiang Uygur Autonomous Region, reported its first COVID-19 patient in a fresh wave of the outbreak, the city is seeing signs of the outbreak easing, as zero confirmed infections were reported for the second consecutive day on Monday. The region registered only one new asymptomatic case in Urumqi, capital of the region, on Monday. Zhang Yuexin, a medical expert who is part of Xinjiang's anti-epidemic team, told the Global Times that two days of zero confirmed cases does not mean the battle against the novel coronavirus is over, but it's a good sign. "We will wait for another incubation period of 14 days before Urumqi should consider lifting its restrictions and community lockdown. If no new patients are found in this period, Urumqi can declare victory over this wave of the epidemic." Urumqi on Monday reported zero confirmed cases and only one silent carrier, according to local health authorities on Tuesday. After COVID-19 patients were discovered in mid-July, Urumqi entered into "wartime mode" to fight against COVID-19, sealing all local residential communities and banning all gatherings. The restrictions have yet to be lifted. Zhang attributed the two consecutive days of zero confirmed cases in Urumqi to the government's effective anti-epidemic measures, which included widespread testing and prompt community lockdowns. Urumqi spent a great deal of effort in finding COVID-19 patients in local communities by giving at least two free nucleic acid tests each to its 3.5 million people, the Global Times learnt from locals. Some residents in key neighborhoods where COVID-19 patients were previously reported were given tests every five days. According to the local health authority, Xinjiang still has 354 confirmed patients in hospitals and 124 silent carriers. Between July 15 and Monday, 472 confirmed patients were discharged from hospitals and 114 asymptomatic patients were relieved from medical observation. Currently, there are 8,538 people under medical observation in the region. ^ top ^
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| Hongkong |
Hong Kong's WTO threat against US 'Made in China' ruling puts city in uncharted waters (SCMP)
2020-08-21
On April 24, 1986, when Hong Kong became an independent member of the global trading system in its own right, Michael Cartland stood up from his erstwhile British colleagues within the European Community's delegation and walked over to take Hong Kong's seat between Haiti and Hungary. More than a third of a century later, Hong Kong is facing an existential crisis in the system in which it has thrived for decades. In response to sweeping national security legislation that has placed question marks on Hong Kong's autonomy, Washington has begun to strip away the city's special trading status. Goods made in Hong Kong for export to the United States must be labelled as "Made in China" from September 25. And the city will no longer enjoy unfettered access to sensitive technology due to US export controls on China being broadened to include Hong Kong, while many think additional tariffs on Hong Kong's exports will follow in due course. On Thursday, a Hong Kong Commerce and Economic Development Bureau spokeswoman told the South China Morning Post that it "will take action against the US under the WTO dispute-settlement mechanism to defend our separate customs territory status and protect our interests", adding that the US rules on labelling flout "Hong Kong's status as a separate WTO member". Citing articles 116 and 151 of the Basic Law, which "provide that the HKSAR is a separate customs territory", she said that it will seek bilateral consultations with the US, which will proceed to a panel dispute at the World Trade Organisation should the talks fail. This is uncharted territory for Hong Kong, one of the world's most open economies, which has only once been the sole sponsor of a WTO suit – when it requested consultation on Turkey's garment import quotas in 1996. The Hong Kong government is said to be formulating what kind of complaint it will lodge, and lawyers at the WTO have "heard no rumblings as yet", sources said. But in a city often defined by free trade, there are conflicting views as to whether taking on the world's most powerful economy is the best course of action. "I think it is a mistake," said Cartland, now retired in Hong Kong after having spent decades representing the city, first via the General Agreement on Tariffs and Trade (GATT) in the late '80s, then as a judge at the WTO. "It is a hornet's nest that we might kick; the result could be worse. My advice would be: don't stir things up, [Donald] Trump could easily just make things much worse for Hong Kong." But others say Hong Kong must stand up for its rights as a separate WTO member, as a matter of principle. "Hong Kong people need a legal compass for trading, and the Hong Kong government should take a lead on that. We can't say: 'Trump says this, there is nothing we can do about it.' So, what rules apply? Or are there no rules? We can't just act like any other mainland city because Trump has redefined us as that," said Alan Hoo, a pro-establishment politician and chairman of the city's Basic Law Institute. In interviews with more than a dozen trade scholars, politicians, diplomats and lawyers, a majority said there is a legal case for the US to answer to, with multiple articles in the GATT and WTO covering potential infringements on labelling, tariffs, export controls and autonomy, even if victory would not be guaranteed. "I see potentially multiple violations of WTO rules in the US action – a number under the GATT and the Agreement on Rules of Origin, and possibly the Agreement on Customs Valuation as well. If they really want to preserve Hong Kong's autonomy, they have a funny way of showing it – hacking away at one of the main pillars," said Stuart Harbinson, previously Hong Kong's permanent representative at the WTO, and a strong supporter of action against the US. Representatives of other trading partners in the city who have been privately critical of the national security law also acknowledged Hong Kong's WTO membership, with the implication that they would not follow America's lead. "We are rule-abiding," said one official, in an apparent dig at Washington's unilateral assault. Angered by Trump's erosion of Hong Kong's special trading status, proponents of action insist that the Hong Kong government must act quickly. "Just because it is a labelling issue right now doesn't mean it won't be a prelude to something else," said Chin Leng Lim, a law professor at the Chinese University of Hong Kong (CUHK). "If someone comes onto your land, you don't make a fuss about it. Tomorrow they pitch a tent, and you think, 'I don't go to that part of my land anyway'. Before you know it, there's a settlement, and when you say, 'Get off my land', they might say they've been here for a long time and nobody complained before. So, there is a point of principle, but there is also a practical element to this." Hoo urged the government to be more aggressive in defending the city's rights under Chapter 5 of the Basic Law, which he described as the most "capitalistic" document you will find anywhere in the world. "The Hong Kong government is going around like a half-decapitated chicken claiming it has still got its head," Hoo added, accusing the leadership of failing to pre-empt an escalating situation. "Where is the task force on this?" But there is also a group of trade watchers urging caution. They do not necessarily dispute the validity of a case, more the practicality and desirability of the process. WTO action could invite further ire from a Trump administration that wants to be seen as being tough on China ahead of November's presidential election. Hong Kong might also be inviting an international audience to sift through its relationship with Beijing, raising questions as to whether the spoils of victory would even be worthwhile. Julien Chaisse, a trade professor at City University of Hong Kong, said that this sort of "Pandora's box scenario" would emerge if the government brought a case under Article 26.5.c of the WTO's founding document, which enshrines fair treatment for any member that "possesses or acquires full autonomy in the conduct of its external commercial relations". But even if Hong Kong raised a case on other trade-specific grounds, as is more likely, the US could request broadening it to include a forensic analysis of Hong Kong's autonomy. "This would need to be sanctioned by Beijing … I don't think that they will want this to be litigated in public," said Henry Gao, a professor of trade law at Singapore Management University. "If I was a Hong Kong government official, I would not want to make such a hoo-ha." Rambod Behboodi, a former Canadian government trade official now at law firm King & Spalding in Geneva, cites the example of Canada bringing a WTO case against France over a ban on asbestos, which was a major Quebecois export. Canada ended up losing the case, but the process in itself was even more damaging for Ottawa, Behboodi said, since it highlighted the government's determination to support the sale of toxic materials. "This was a cautionary tale about airing your dirty laundry in public. A WTO case could expose more about the Hong Kong-China relationship than they want," Behboodi said. "The US will have a year and a half of solid material showing Hong Kong may not have independent policies to Beijing. Does the Hong Kong government want that evidence judged by an international tribunal?" Then there is the fact that the WTO itself is in a state of disarray. Without a functioning WTO appeal court, the US could just keep appealing if it lost. Even a victory may be a pyrrhic one, given that there are few retaliatory options. "So, if Hong Kong decides to put tariffs on the US – which would be a first – what does it target? Consumer products or food? What kind of message does that send about Hong Kong? And who would it hurt, the US or Hong Kong consumers," asked Bryan Mercurio, a trade law professor at CUHK. The Hong Kong government's statements since the US announced the end of "Made in Hong Kong" goods have been ferocious. In a statement sent to the Post, a spokeswoman said that the "US' actions have demonstrated its double standards and hypocrisy, seriously violating international law and the basic norms underpinning international relations, and are despicable". Through all the tumult of the past year, Hong Kong has tried to maintain its image as a bastion of free trade, and US efforts to wipe this out appear to have stung as much as any of the international criticism that has come the city's way since last summer. Felix Chung, the leader of the Liberal Party, among the most pro-free trade of Hong Kong's political groupings, summed up the dilemma facing the government: "In reality, this action is totally useless. Even if we win, it will come a few years later, and even then the US can ignore it – it is too big, too strong. "It is symbolic action, but the government has to do something. At least making a complaint will tell the whole world that we are protecting our reputation." ^ top ^
More Hong Kong democrats complain of being followed as another activist reportedly flees city (HKFP)
2020-08-17
More high-profile pro-democracy figures in Hong Kong have complained of being tailed by unknown men, as activist Sunny Cheung reportedly fled the city last week amid fears of the Beijing-imposed national security law. On Monday, state-owned Wen Wei Po cited sources as saying that Cheung relocated to the UK last Friday. Sources told the paper that Cheung – a former spokesman of the now-disbanded Hong Kong Higher Institutions International Affairs Delegation (IAD) – decided to flee after another activist Agnes Chow was arrested on suspicion of colluding with foreign forces last Monday. She was made to surrender her travel documents. The offence carries a maximum of life imprisonment under the sweeping legislation that also criminalises secession, subversion and terrorist acts. Cheung, who had actively engaged in international lobbying, will meet with exiled activist Nathan Law on British soil, according to Wen Wei Po's sources. He may work with Law and former British consulate staffer Simon Cheng, who now lives in the UK under political asylum, to promote global advocacy work through a "shadow parliament," the report read. But Law denied the report on Monday afternoon, saying he had not been in touch with Cheung after he also left Hong Kong last month. The former leader of the now-disbanded political group Demosisto also rejected claims that he was involved in matters like the "shadow parliament." "No matter which direction Cheung chooses to go, I believe he will continue to make contributions to the democratic movement," Law wrote on Facebook. HKFP has reached out to Cheung for comment. Wen Wei Po's report came three days after Cheung complained on social media that he was followed by at least three unknown men, whom he suspected to be national security personnel. According to Cheung's post, which was deleted shortly after, the behaviour of his alleged stalkers resembled those who showed up outside Chow's residence hours before her arrest. The activist said she spotted a group of men standing opposite the gate of her building throughout the day before police apprehended her in the evening. She said three to four men waited there and took photos with their phones, while a vehicle dropped off another batch of men after a few hours. Figo Chan, vice-convenor of the Civil Human Rights Front (CHRF), also complained on Facebook that two suspicious men were found wandering around a radio station where he and CHRF convenor Jimmy Sham were recording a programme last Friday. Chan claimed the men tried to follow the duo when they left the station on a taxi, but did not succeed. "Actually, Jimmy and I have been repeatedly followed these days. I can only say we could be facing the country's machine. Everyone needs to take care," Chan wrote. Democratic Party lawmaker Ted Hui is also among the democrats who suspect they are being tailed. Last Friday evening, the legislator was tackled by police in Kennedy Town after he confronted people inside a vehicle whom he said were following him. Hui said the men in the car did not respond to his queries and hit his thigh when they tried to drive away. "I saw a car was following me, and they've been following me for a few days," Hui told reporters at the scene. State-owned newspaper Ta Kung Pao have since confirmed the men were their reporters. They said Hui shouted profanities and tried to pull them out of the vehicle. The newspaper slammed the legislator as "trampling press freedom" and said they reserved the right to take legal action. Last month, pro-democracy activist Joshua Wong said during an interview with the BBC that they were shadowed by "Chinese agents." He said that, following the enactment of the national security law, it was difficult for him to ensure his personal safety. "I may be chased by [a] private car or unknown people day by day. It gets more ridiculous the more they talk about it, there could be a few cars following me," Wong told BBC. ^ top ^
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| Taiwan |
Mainland, not US, to decide time of national reunification (Global Times)
2020-08-16
The Chinese mainland will not let the US decide when and how to reunify the island of Taiwan, and as the People's Liberation Army (PLA) has an overwhelming advantage in the region, reunifying Taiwan by force is not urgent as long as the separatist authority on the island and Washington do not cross the red line, said mainland experts on Sunday in response to a sensational projection by a US Navy think tank that the mainland could launch an attack on Taiwan in January, 2021. In an essay published by the US Naval Institute (USNI), former Deputy Director of the Central Intelligence Agency Michael Morell and retired US Admiral James Winnefeld painted a scenario that the Chinese mainland would reunify Taiwan by force in mid-January 2021. According to the two authors' prediction, Beijing considers that the West at that time would be distracted by the post-election power transition in the US, as well as the ongoing COVID-19 pandemic, so the mainland would see the timing as a significant chance to realize reunification once and for all. Mainland analysts rejected the projection of Morell and Winnefeld, as the mainland still upholds a desire for peaceful reunification. The priority for China has been and continues to be development and economic recovery in a post-pandemic era. If there is any serious tension or even a military clash in the Taiwan Straits, it could only be triggered by the separatist authority on the island and the US. The mainland will not unilaterally create tensions over the Taiwan question, which would be a distraction from its own development. Song Zhongping, a Chinese mainland military expert, told the Global Times on Sunday that arms sales and official exchanges between the US and the separatist authority of the island are making the situation more tense, but as long as the red line set by the Anti-Secession Law is not violated, it is unnecessary for the mainland to react to the prediction made by the US, as China has its own plan and timeline. According to the Anti-Secession Law, in the event that "Taiwan independence" secessionist forces should act under any name or by any means to cause the fact of Taiwan's secession from China, or that major incidents entailing Taiwan's secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted, the state shall employ non-peaceful means and other necessary measures to protect China's sovereignty and territorial integrity. "As the law states, the bottom line is clear. If those incidents happen, the People's Liberation Army must react immediately, regardless of whether there is a power transition in the US or not. If US provocations don't touch the bottom line, China should and will retain its policy of strategic patience to avoid an escalation of the current tension, especially before January 2021," Song said. But the Trump administration could become increasingly irrational as polling so far does not favor his reelection and his campaign could adopt more reckless tactics, experts also warned. Lü Xiang, a research fellow at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Sunday that using the power transition of the US as a window to attack Taiwan is nonsense, because China's priority this year and next is not reunification, as economic recovery in the post-pandemic era is much more urgent and important. "But there is a danger of war as the Trump administration is trying very hard to provoke China. Just like the enactment of the national security law for Hong Kong this year, if China is provoked too much, it will take action to respond at an appropriate time with its own plan, and the US will surely feel the pain," he noted. The separatist authority of Taiwan has formally signed an agreement with US arms firm Lockheed Martin to buy 66 F-16V fighter jets, reports said Saturday, further raising tensions in the Taiwan Straits, and coming just two days after the PLA announced large-scale drills in response to US provocations and Taiwan secessionist activities. While the deal was approved by the Trump administration last year and a formal signing was expected to take place sooner or later, its announcement at this particular time is believed to be yet another US provocation and a step on the red line of the Taiwan question, which further risks confrontation, Chinese mainland experts said on Saturday, adding that the People's Liberation Army (PLA) is aiming not only to deter, but also to hone its combat capability of being able to launch military action when necessary. By announcing that the F-16 deal has been finalized, the US is attempting to show its tough stance, and the move could be considered as reacting to recent Chinese military drills, Ni Feng, director of the Institute of American Studies at the Chinese Academy of Social Sciences, told the Global Times. Under these circumstances, the US move is even more dangerous, as it steps on and even crosses the Chinese mainland's red line on the Taiwan question, Ni said, noting that the risk of a military confrontation continues to rise. However, it seems as if the US is trying to trigger a fight it cannot win. The essay published by the USNI came after former leader of the Taiwan region Ma Ying-jeou said in a speech on August 10 that if the Chinese mainland decides to reunify the island by force, "the first battle is the last battle," and the US military will not come to the island's rescue nor will there be time for it to come. In the essay, Winnefeld and Morell believe an operation launched by the mainland will be over in only three days. A military expert at a Beijing-based military academy who asked for anonymity told the Global Times that US strategists are very clear that they will have no time or capability to interrupt a massive military operation launched by the PLA to reunify Taiwan, so the best option is to persuade US policymakers not to provoke China too much nor play a game of brinkmanship, as the US will get nothing from such risky behavior. The PLA can launch airborne operations, landing operations, airstrikes and can bomb military targets at the same time. Cyber attacks will paralyze all communication, transportation and even energy supply systems on the island in just a few minutes, and special forces will seize and control some important facilities such as airports to allow reinforcements into major cities on the island. The separatist leaders of the island will be eliminated or captured on the first day, and there is no chance for foreign forces to intervene, he noted. "Apart from a war, the PLA is capable of deterring US provocations, as well as the separatist authority on the island, in many ways, such as live-fire missile drills in the east waters of Taiwan Island and near Guam, sending bombers and fighter jets to fly over the 'airspace' of the island," he said. ^ top ^
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| Economy |
China's wish to end US dollar dominance is unlikely to come true with no genuine challenger in the wings (SCMP)
2020-08-20
One thing that Beijing hates about the world is the dominance of the US dollar, and China has been working for over a decade to undermine its role in global trade and investment. But China's wish to dethrone the US dollar as the main anchor currency may not come true any time soon even though it has weakened recently, analysts said. China's discomfort with the US dollar has become more acute recently with Washington's moves to sanction both Chinese and Hong Kong officials while also threatening to punish financial institutions dealing with these individuals, including Hong Kong chief executive Carrie Lam Cheng Yuet-ngor. This power stems from the US dollar's dominance, leaving China few options to hit back. In an extreme scenario, the US could cut off Chinese businesses and banks from access to the US dollar payment system, seriously disrupting China's cross-border trade and investment flows. China is also unhappy with the "exorbitant privilege" enjoyed by Washington because of the US dollar's role as the main international reserve currency, particularly when the US Federal Reserve engages in monetary easing to address domestic economic woes, as it has done this year, effectively weakening the currency. Beijing views the US Federal Reserve's recent monetary moves as a way of shifting the cost of its domestic problems onto other countries, including China, by collecting seigniorage – a form of profit made by a currency issuer from the people who use it. Guo Shuqing, the chairman of the China Banking and Insurance Regulatory Commission, also warned that the unprecedented stimulus might plunge the world into another global financial crisis. "In an international monetary system dominated by the US dollar, the unprecedented, unlimited quantitative easing policy of the US actually consumes the creditworthiness of the dollar and erodes the foundation of global financial stability," Guo wrote in an article published in the Chinese official journal "Qiushi" last the weekend. Guo's concerns come after the US provided trillions of US dollars of stimulus to boost the economy in face of the coronavirus crisis, with more likely on the way. The US Federal Reserve programmes to buy securities and pump money into the financial system – so called quantitative easing – has caused its balance sheet to swell from US$4 trillion in mid-March to roughly US$7 trillion in August. The US dollar's weakness in recent months – the US dollar index has lost about 11 per cent since its peak in late March "particularly against the euro" – has further amplified concerns in Beijing that its overseas assets and its more than US$1 trillion in reserves denominated in US dollars will be devalued. The US Federal Reserve's easing, along with a deep contraction in US growth, has prompted some strategists, including from investment banking giant Goldman Sachs, to warn that US fiscal and monetary policies may be triggering fears of a "debasement" of the currency, that is, a loss in its ability to preserve the value of investments. That, in turn, could erode the US dollar's reign as the dominant force in global foreign exchange markets because the huge amounts of US dollar liquidity in the financial system could eventually lead to a rise in inflation once the pandemic is over, Goldman Sachs said. However, many other analysts said the US dollar's status is unlikely to change in the near term because of a number of advantages that other currencies cannot yet match. Warnings about the US dollar's demise are not new, with the debate over whether economic stimulus eventually leads to inflation having continued since the global financial crisis more than a decade ago. Also, even well before the coronavirus pandemic started to ravage the world, there was concern about the US dollar because of the sizeable trade and fiscal deficits being amassed by the US. And between 2003 and 2014, the US dollar index was lower than its current level, at times much lower. China started to take action to reduce its reliance on the US dollar after the global financial crisis, with Beijing promoting the use of yuan in cross-border deals, however, as the yuan is not freely convertible, it is far from an alternative to the US dollar. Former central bank governor Zhou Xiaochuan had also floated the idea of using the special drawing rights, an accounting unit at the International Monetary Fund (IMF), to replace certain functions of the US dollar, although China has made few moves to promote it and few businesses in real world use the asset. In the latest push, current People's Bank of China governor Yi Gang wrote in an opinion piece in the Financial Times last month that the IMF should allocate special drawing rights to member countries to help combat the impact of the coronavirus, although there has been little follow-up on the proposal. No matter how Beijing has tried to bypass the US dollar, its predominant global role is well entrenched for the foreseeable future due to its competitors' weaknesses. And for China, the harsh reality will continue: it still has few cards to play if the US restricts Chinese banks' access in response to the national security law that Beijing imposed on Hong Kong, analysts said. Former senior US Treasury official Mark Sobel, who is now the US chair of the Official Monetary and Financial Institutions Forum, a London-based think tank, said speculation about a collapse of the US dollar causing it to lose its reserve status is "incredibly far fetched and implausible". According to Sobel, the US still has the deepest and most liquid capital markets in the world, its financial system is resilient and there is global inertia which supports continued US dollar use. "The dollar was not ordained as the world's reserve and financial currency or declared so. It happened in response to organic factors – a large vibrant economy, deep liquid capital markets, and strong property rights. These characteristics will not be replicated elsewhere in the coming decade," Sobel added. The US dollar became the international reserve currency in 1944 after the Bretton Woods Agreement. Today, it still accounts for around 62 per cent of the world's foreign exchange reserves – although that is down from a peak of more than 85 per cent in the 1970s – followed by the euro at around 20 per cent, according to the IMF. For many international investors, and especially central banks managing foreign reserves, holding the US dollar means holding US Treasury securities. In China's case, the latest figures showed that 58 per cent of China's foreign exchange reserves as the end of 2015 were held in US dollars. Barry Eichengreen, professor of economics at the University of California, Berkeley, and a former senior policy adviser to the IMF, said the US dollar's recent slide is in fact one in a series of readily explicable fluctuations. The US dollar strengthened on the back of safe-haven flows into US Treasuries when the coronavirus spread around the world in March, and it started to depreciate after the US Federal Reserve poured buckets of liquidity into financial markets starting in May. The US dollar's subsequent depreciation reflects the changing prospects for the US and European economies, Eichengreen said. With the spread of the coronavirus, the US outlook is deteriorating, so investors expect the US Federal Reserve to keep interest rates low for longer. James McCormack, global head of sovereign and supranational ratings at Fitch Ratings, said that there is clearly a desire on the part of policymakers in several countries to curtail the dominance of the US dollar, but real change has yet to take hold. "It is conceivable that markets eventually adopt a less favourable view of US government creditworthiness, undermining [US] Treasuries' risk-free status, but even then the Treasury market infrastructure that investors value – its depth and liquidity – could be largely unchanged," said McCormack. While economists generally agree that the probability of the US dollar being displaced is negligible in the short term, whether it is likely to happen in the longer term depends in part on the emergence of a viable alternative, with no leading contender currently seen as an option. Yu Yongding, a prominent Chinese economist who was formerly an adviser to China's central bank, said whether the US dollar collapses depends on the extent to which the Trump administration further undermines the US's credibility, and whether the US Federal Reserve can scale back in a stable manner its qualitative easing. The outlook for the Chinese currency to replace the US dollar as the world's reserve currency remains out of reach. The share of yuan in the reserves of global central banks is only around 2 per cent, of which a quarter is held by Russia, as Moscow encourages Beijing to be more assertive in challenging Washington's dominant role in the global economy. China warned to prepare for being cut off from US dollar payment system as part of sanctions like Russia The euro is a more frequently used currency, and some observers explain the recent increase in demand by pointing to the European Union agreement last month on an unprecedented €750 billion (US$893 billion) stimulus package to shore up the pandemic-ravaged economy that would funded by all 27 member states borrowing jointly from capital markets for the first time. However, the new bonds that will be issued are equivalent to only 5 per cent of the stock of US Treasuries in the hands of the public. "It's a drop in the bucket, in other words. And a drop does not a liquid market in safe assets make," Eichengreen said. The European Union recovery fund does show an increase in solidarity that should make the euro a more attractive reserve asset, but Europe runs an external surplus and does not need inflows from reserve managers, said Brad Setser, a former US Treasury official and now a senior fellow at the Council on Foreign Relations. Also, with negative interest rates on its reserve assets, it is effectively taxing central banks around the world who hold their reserves in euros. German 10-year bonds, the benchmark for continental European bonds, currently have a negative yield of 0.46 per cent, meaning purchasers will not receive all their original investment back when the bond matures, let alone make a profit. "There is literally no market in Europe large enough to absorb a large outflow from [US] Treasuries. The financial turmoil in March showed that in periods of real distress you still need dollars. And Asian central banks are back in the market, buying dollars to keep their currencies from appreciating. The dollar isn't at any risk of losing its position as the world's leading reserve currency anytime soon," said Setser. China's efforts to get away from the orbit of the US dollar has achieved limited results. In Hong Kong, Beijing had hoped in 2013 that yuan deposits in Hong Kong would rapidly surpass 3 trillion yuan. However, at the end June, yuan deposits were only 639.9 billion yuan (US$92.5 billion), a 7.9 per cent drop from a year earlier, according to the Hong Kong Monetary Authority. It has also tried to build up an alliance to "de-dollarise", partly by signing bilateral currency swaps deals with central banks including the European Union, Japan, Turkey, Argentina and Belarus. China's "no-dollar" alliance with Russia received a boost after Russia was placed under sanctions by the US after its annexation of Crimea in 2014. According to the Nikkei Asia Review, the two countries have drastically cut their use of US dollars in bilateral trade in the past few years, dropping to a record low of 46 per cent in the first quarter of 2020. But the yuan's share of international payments was still less than 2 per cent in July, which was minuscule in comparison to US dollar's share of over 40 per cent, followed by the euro at around 32 per cent, according to SWIFT, the financial messaging service that is the primary network used by banks globally to make financial transactions. "Is there a real alternative for the dollar? The euro is not close, and the yuan is even further," added Chinese economist Yu. "The best result China can have is not to overthrow the dollar but to seek self-protection [from dollar hegemony]. "For instance, China can reduce its holdings of US dollar assets … so that there're fewer assets for the US to seize. It is a strategy of running away from it instead of challenging it." ^ top ^
Alibaba Quarterly Sales Soar as Concerns Linger Over U.S. Pressure (Caixin)
2020-08-21
Chinese e-commerce giant Alibaba Group Holding Ltd. reported better-than-expected quarterly results as sales rebounded to the pre-pandemic level. But rising policy uncertainties from the U.S. still cast a shadow over its outlook. Alibaba posted 34% year-on-year growth in sales for the quarter ended in June to 153.8 billion yuan ($22.2 billion), beating Wall Street estimates. Net income totaled 47.6 billion yuan, surging 124% from the same period last year. The company said its number of annual active consumers in China rose by 16 million during the June quarter to 742 million. "Our domestic core commerce business has fully recovered to pre-Covid-19 levels across the board," said Maggie Wu, chief financial officer of Alibaba. The company will continue to strengthen its core business and invest for long-term growth, she said. Alibaba captured growth from the ongoing digital transformation, which has been accelerated by the pandemic, in both consumption and enterprise operations, said Daniel Zhang, company chairman and CEO. Revenues from the core commerce business rose 34% while those from cloud computing increased 59%, according to the company. Ant Group, which is 33% owned by Alibaba, contributed 3 billion yuan of earnings to the parent company in the three months to March, Alibaba's financial report showed, offering a glimpse into the fintech giant's profitability. Based on Alibaba's equity share, that translated to about 9.2 billion yuan of profit for Ant, which is preparing for a mega dual listing in Hong Kong and Shanghai that could raise around $30 billion. Alibaba still faces uncertainties from the pandemic and increasing tensions between the U.S. and China, Zhang said on a conference call. "As the world's largest e-commerce platform, Alibaba's primary commercial focus in the U.S. is to support American brands, retailers, small businesses and farmers to sell to consumers and trade partners in China as well as other key markets around the world," Zhang said. The Trump administration earlier this month unveiled restrictive policies targeting Chinese-owned social media platform TikTok and messaging app WeChat. President Donald Trump threatened to expand the action to more Chinese companies. Meanwhile, U.S. lawmakers are pushing forward legislation that could ban Chinese stocks from trading on U.S. bourses. "We are assessing the situation and any potential impact carefully and thoroughly, and will take necessary actions to comply with any new regulations," Zhang said. ^ top ^
Semiconductor Stock Frenzy Continues as Money-Losing Firm's Shares Triple (Caixin)
2020-08-20
Beijing's drive for semiconductor self-sufficiency has propelled another money-losing company onto China's stock market, with VeriSilicon Microelectronics Shanghai Co. Ltd. trading at over triple its offering price Thursday after listing earlier this week. The Shanghai-based company's shares were down 13% at end of trading on the city's Nasdaq-like STAR Market Thursday, but the closing price of 128 yuan ($18.51) was up 232% on its offering price on continued strong investor interest. That sentiment has been a boon for the dozens of semiconductor companies that have recently listed on the STAR Market. Two of the most high profile companies to ride this wave so far are Semiconductor Manufacturing International Corp. and Cambricon Technologies, both of which made strong debuts last month. Like with VeriSilicon, Cambricon's money-losing track record didn't seem to worry investors, with its shares more than tripling in their first trading day. In 2019, Cambricon lost 1.2 billion yuan, up from 380 million yuan in 2017. Founded in 2001, VeriSilicon makes money by selling chip designs to third party manufacturers, similar to U.K.-based giant Arm Ltd. While the British company has a 40.8% global market share, VeriSilicon is the seventh largest player with a 1.8% share, behind U.S. companies Synopsys and Cadence, which have 18.2% and 5.9% shares, respectively. Over the three years to 2019, VeriSilicon reported annual revenues of over 1 billion yuan. However, amid heavy spending on research and development, the company lost money each year, though the losses did narrow as the period went on. It reported losses of 41 million yuan in 2019, down from 128 million yuan in 2017. Due to the impact of Covid-19, the company predicted its net losses after deducting non-recurring gains and losses would come to up to 103 million yuan for the first six months, according to the prospectus it filed to Shanghai Stock Exchange. Major VeriSilicon's clients include NXP Semiconductors NV, Robert Bosch AB and Facebook Inc., according to its prospectus. Currently, a firm controlled by VeriSilicon's founder Dai Weimin is the company's largest shareholder with a 16% stake. VeriSilicon's other investors include a fund affiliated to smartphone-maker Xiaomi Inc. and U.S. chipmaker Intel Inc. Investor interest in VeriSilicon, despite its poor financials and lagging technology compared to global rivals, comes as they are betting that current industry trends will favor Chinese companies. Beijing is seeking to bolster the domestic industry and create new national champions in the face of growing U.S. semiconductor export restrictions, like those that threaten to bring Huawei Technologies Co. Ltd. to its knees. ^ top ^
PBOC to promote further cross-border use of RMB (China Daily)
2020-08-17
China will further facilitate cross-border use of the renminbi by promoting pilot programs to boost trade and investment, making it possible for more foreign central banks and monetary authorities to hold the currency as a reserve asset, according to a report from the nation's central bank. After a decade of the currency's internationalization, Chinese policymakers expect that the allocation of RMB assets by foreign investors will be further facilitated, and domestic financial market transactions by foreign investors will keep growing rapidly. Cross-border use of the RMB has sustained rapid progress and maintained robust growth this year, even amid the impact of the COVID-19 pandemic, which has severely hit global trade, finance and the economy, analysts said, commenting on the report released late on Friday by the People's Bank of China. More than 70 central banks and monetary authorities worldwide have incorporated the RMB into their foreign exchange reserves so far, according to the PBOC's 2020 RMB Internationalization Report. The central bank promised to steadily push forward RMB internationalization based on market forces and the orientation of better serving the real economy. "We expect more foreign traders to join crude oil, iron ore and other commodity futures trading and use the RMB more frequently in real commodity trading. More varieties of RMB-denominated financial products will be provided," it added. Jin Zhongxia, the International Monetary Fund's executive director for China, said, "China's capital market can further open up, which requires free floating of the RMB." "It also needs to develop foreign exchange forward products, and better control the overall money supply and foreign debt," Jin said at a seminar held last week by the China Finance 40 Forum. Jin suggested issuing RMB-denominated treasuries and central bank bills in the offshore market. Meanwhile, the stock market can attract more foreign investors through establishing an international board, which allows initial public offerings for high-growth enterprises from emerging economies. Under the complex international environment at the moment, "RMB internationalization is not a subordinate target that can be sacrificed, but a major issue related to whether China's economy can effectively alleviate the impact of external shocks", Jin added. Supported by the monetary authorities' policies, analysts expect more market participants will accept the RMB as a settlement and payment currency, especially those located either in neighboring countries or areas related to the Belt and Road Initiative. Free trade zones and the Guangdong-Hong Kong-Macao Greater Bay Area will become the driving force of RMB cross-border payment. Last year, cross-border RMB settlement hit a record high of 19.67 trillion yuan ($2.83 trillion), increasing 24.1 percent year-on-year, the PBOC's report said. The yuan's share of global foreign exchange reserves hit a record high of 2.02 percent as a global currency in the first quarter, according to the IMF. This was the highest level since the fund first published details of renminbi reserve assets in 2016. The fund also said that by the end of 2019, the scale of renminbi reserves had reached $217.67 billion, accounting for 1.95 percent of the total foreign exchange reserves of designated currencies, ranking fifth and surpassing the Canadian dollar's share of 1.88 percent. Due to the impact of China-US trade frictions and other external vulnerabilities, the foreign exchange market showed increased fluctuations, and more enterprises prefer to use the RMB as a safe investment asset to mitigate risks, said Guan Tao, chief global economist at BOC International (China) Co Ltd. Another survey conducted recently by the Bank of China also showed that the international currency status of the RMB reached a new high in 2019. About 80 percent of domestic and foreign respondents to the survey believed that the RMB's role as an international currency will not be inferior to that of the Japanese yen or the British pound in the next decade. The result was 3 percentage points higher than that in 2018, and had continued to rise for the fourth consecutive year since 2016, Bank of China said. ^ top ^
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| Mongolia |
Parliament approves President's partial veto on Law on State Great Khural (Montsame)
2020-08-20
At its session held on August 20, the State Great Khural, the parliament of Mongolia, discussed and resolved to approve President of Mongolia Battulga's partial veto on the Law on State Great Khural, with 79.9 percent of the members in attendance voting in favor of the veto. On May 26, 2020, President Battulga put a partial veto on article 38.2 of the latest revised version of the Law on State Great Khural, which states "President shall draft a bill within the limits of their powers stated in article 38 of the Constitution", claiming that the article is incompatible with the concepts of recent amendments to the Constitution of Mongolia and not achievable unless principles to elect the president and regulations following it are changed. As introduced by U.Shijir, Head of the Office of President at the meeting of the Parliamentary Standing Committee on State Structure on August 19, the article restricts the president to draft bills on the most critical internal and external issues facing the country as the head of the state and National Security Council. Recent amendments to the Constitutions, which came into force on May 25, 2020, incorporate an article (26.1) that reads "The President, Members of the Parliament, and the Government shall exercise the right to draft a bill and the scope and limits of this right shall be determined by law" is one of the changes made to the Constitutions proposed by the President with a view to improve the governance system and distribution of powers as well as to avoid giving the power to President and Parliament members to draft bills on important matters, such as criminal code, or budget and tax laws, general directions for economic and social issues, that needs to be prepared by only professional organizations or relevant ministers. Today's parliamentary resolution to accept the president's partial veto is effective immediately, from August 20. ^ top ^
Female MPs form group in the Parliament (Montsame)
2020-08-20
Thirteen female MPs, regardless of their party affiliation, have joined to form a Group of Female MPs in consultation with the Speaker of Parliament, announced the Group today. The Group, headed by MP D.Sarangerel, will work on ten directions in society, including poverty, alcoholism, violence, children and women's rights, and their protection. Ms. Sarangerel stressed that at this time when the irregular parliamentary session is holding discussion of the 2020 budget amendment, the group would make efforts to allocate MNT2.5 billion in the state budget for childcare services. ^ top ^
Parties apply to run for local elections (Montsame)
2020-08-17
Political parties have submitted their official requests to compete in the elections of Citizens' Representatives Khurals of aimags, the capital, soums and districts, scheduled on October 15, 2020 under the relevant law. Specifically, D.Sumiyabazar, chair of the Capital City Committee of the Mongolian People's Party, R.Dagva, chairman of the Citizens' Representatives Khural (City Council) of the capital city, J.Batbayasgalan, acting governor of the Capital City, D.Purevdavaa, chair of the Capital City Committee of the Democratic Party, as well as M.Tulgat, head of Democratic Party group in the City Council, submitted to the Capital City Election Commission the applications to participate in the elections. According to the Law on Elections of Citizens' Representatives Khurals of aimags, the capital city, soums and districts, branches of political parties in aimags, the capital city, soums and districts shall submit their applications to the aimag, capital city, soum and district election committees at least 60 days before the polling day. ^ top ^
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Pascal Wanner
Embassy of Switzerland
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