Posts Tagged ‘China’

Southeast Asian nations tell China to stop land reclamation in South China Sea — Nations want China to abide by “Three Halts”

August 4, 2015


“The Philippines fully supports and will pro-actively promote the call for the ‘3 halts': halt in reclamation, halt in construction, and halt in aggressive actions.”



Southeast Asian countries on Tuesday backed a U.S. call to halt land reclamation in the South China Sea, underlining unease in the region over Beijing’s continued expansion on disputed islands.

China has said it does not want the issue raised at this week’s meeting of foreign ministers from the Association of Southeast Asian Nations (ASEAN) in Kuala Lumpur.

But Malaysia Foreign Minister Anifah Aman said member nations agreed that “exercising self-restraint in the conduct of activities that would complicate or escalate tension must be enhanced” in the South China Sea.

Albert del Rosario, Secretary for Foreign Affairs, the Philippines, November 8, 2014. File photo

Philippines Foreign Minister Albert Del Rosario accused China of carrying out “massive reclamation activities” in the disputed waters.

“We see no let up on the unilateral and aggressive activities of our northern neighbor in the South China Sea,” he said at a meeting in the Malaysian capital.

“The massive reclamation activities … have undermined peace, security and stability in the South China Sea,” he said, urging Southeast Asian countries to address the issue with China.

Chinese Foreign Minister Wang Yi is surrounded by journalists at the Association of Southeast Asian Nations (ASEAN) Foreign Ministers Meeting in Kuala Lumpur on Tuesday, August 4, 2015. Photo: AP

In an earlier statement, Del Rosario said the Philippines was ready to help de-escalate tensions if China and other claimant states agreed to be bound by the same conditions.

Neither China nor the United States are members of ASEAN, but both will be represented during several days of talks. U.S. Secretary of State John Kerry is in Kuala Lumpur on Wednesday and Thursday.

“The Philippines fully supports and will pro-actively promote the call of the United States on the ‘3 halts': halt in reclamation, halt in construction, and halt in aggressive actions that could further heighten tensions,” Del Rosario said in a statement.

“We will agree to be bound only if China and other claimant states agree to the same.”


Singapore’s Foreign Minister K. Shanmugam told reporters in Kuala Lumpur that the South China Sea could not be ignored, adding that Singapore was not happy with an informal code of conduct signed by ASEAN and China in 2002.

“South China Sea is an issue. We cannot pretend that it’s not an issue,” he said.

“We have got to move beyond philosophical discussions to actually say what is in the substance of the agreement.”

In a speech at a Singapore university on Tuesday, Kerry addressed tensions in Asia and said that the United States wanted a region where “countries cooperate to prevent small disputes from growing into large ones.”

Malaysia, the current chair of ASEAN, has said the topic was not off-limits and would be raised. In opening remarks on Tuesday, Aman said ASEAN should play a major role in reaching an “amicable” solution to the territorial dispute.

China claims most of the South China Sea, through which $5 trillion in ship-borne trade passes every year. The Philippines, Vietnam, Malaysia, Taiwan and Brunei have overlapping claims.

China has shown no sign of halting its construction of artificial islands in disputed areas.

It has also accused the United States of militarizing the South China Sea by staging patrols and joint military drills, while the United States has called for a halt in China’s artificial island building in the area.

Chinese Foreign Minister Wang Yi, in comments likely to provoke regional neighbors and Washington, said the United States and the Philippines should “count how many runways there are in the South China Sea and who built them first.”

In a front page commentary on the overseas edition of the Communist Party’s official People’s Daily, a senior academic said that the U.S. was teaming up with Japan to “disrupt” the South China Sea.

“Japan has been cooperating with the United States to hype up the ‘China threat’, making noise for their alliance to interfere in the South China Sea,” Su Xiaohui, a senior researcher at the Foreign Ministry-backed China Institute of International Studies, wrote.

“This is not beneficial to regional peace and stability.”

(Additional reporting by Ben Blanchard in BEIJING, Manual Mogato in MANILA, David Brunnstrom in SINGAPORE and Angie Teo in KUALA LUMPUR; Editing by Mike Collett-White)


Australia to Accelerate Naval Buildup

August 4, 2015


Australia says work on nine advanced frigates will start within five years, three years earlier than expected

The HMAS Hobart at its launch in Adelaide in May; Australia plans a major naval buildup.
The HMAS Hobart at its launch in Adelaide in May; Australia plans a major naval buildup. PHOTO: AWD ALLIANCE/EUROPEAN PRESSPHOTO AGENCY
By Rob Taylor
The Wall Street Journal

CANBERRA, Australia—Australia will accelerate construction of a fleet of warships as part of an ambitious buildup meant to more closely integrate its military with the U.S. and respond to instability in Asia.

Prime Minister Tony Abbott on Tuesday said his conservative government would start work on a 20 billion Australia dollar (US$14.6 billion) fleet of nine advanced frigates within five years—three years earlier than expected—while also beginning construction of 20 large offshore combat vessels.

“This is about ensuring that we have a strong surface fleet to deal with whatever naval contingencies we face indefinitely, forever in fact,” Mr. Abbott told reporters. “This is a message of hope and confidence to the people of our country.”

A strategic blueprint to be released as soon as next month lays out a modernized fleet of 40 surface warships and submarines that will allow Canberra to take a larger security role—as called for by the U.S.—in the face of unease over China’s rise and island-building in the South China Sea.

Allies like Britain, Canada and the U.S., as well as European counterparts like Germany and the Netherlands, have been restraining defense budgets in response to sluggish economic conditions. But Mr. Abbott, buoyed by a decadelong resource boom that helped contain debt, has pledged to boost military spending to 2% of GDP from the current 1.8%, adding A$3.5 billion a year to the current A$32 billion military budget.

Australia is building air warfare destroyers worth A$8.5 billion and introducing two 29,000-metric-ton transports each able to carry up to 1,000 amphibious troops, as well as helicopters, tanks and vehicles. It is also spending A$20 billion-plus on eight submarinesand A$10 billion on thousands of new armored ground vehicles.

The country will eventually have Asia’s biggest fleet of Lockheed Martin F-35 stealth fighter aircraft, as well as long-range maritime drones and submarine-hunting Boeing P-8A Poseidon aircraft. It has just accepted the first of 12 Growler electronic-warfare and jamming aircraft, the first outside the U.S.

“The U.S., all of Europe, the United Kingdom, everyone, is reversing military spending in an attempt to retire debt and redirect money to more urgent programs,” says defense-budget expert Mark Thomson of the Australian Strategic Policy Institute. “Australia is behaving very differently.”

Australia’s defense planners see a strategic-risk environment unlike any since the end of the Vietnam War, driven by China’s rise and military buildups by Indonesia, Vietnam, Thailand and Singapore—all looking to hedge against strategic uncertainty related to China.

“For us, this is wake-up time in strategic terms, and I think that weighs heavily on the government’s mind,” says Mr. Thomson.

Australian Defense Minister Kevin Andrews in March told a naval conference that with 70% of Australia’s exports moving by sea in trade worth A$220 billion a year, a beefed-up navy is central to a defense planning white paper. The paper, which had been expected this month, has been delayed as the government looks to prioritize naval shipbuilding, in part to protect jobs as next year’s election looms.

For more than a year U.S. Navy commanders have urged Australia to look at larger and more capable frigates able to undertake policing patrols and anti-submarine operations in a region that will be home to more than 300 submarines inside a decade. Washington also wants the ships to operate seamlessly with U.S. Navy counterparts, and has been strengthening its alliance with Australia more broadly, sending 1,150 Marines to Darwin this year for training and seeking more naval port visits.

“We think it would be good for Australia to have bigger ships that are able to do more and be as multi-role as possible, to work with allies like ourselves and Japan,” said a senior U.S. Navy official who asked not to be named as he isn’t authorized to speak to media.

Mr. Thomson said the U.S. wants Australia to help plug strategic gaps as the U.S. rebalances forces to Asia, including with anti-submarine frigates and submarines able to help protect American aircraft carriers.

Australia will likely choose its frigate fleet from designs including Britain’s new Type 26 frigate, built by BAE Systems, competing with the European-designed Fremm multipurpose frigate built for France and Italy. Germany’s 7,200-metric-ton F-125 frigate and Meko 600 escort frigate will also compete.

Write to Rob Taylor at

China’s First Heavy Industries Chairman Kills Himself Instead of Facing Corruption Charges

August 4, 2015

Wu Fusheng, 51, was found hanged in his office in Heilongjiang at about midnight on Sunday


The chairman of China First Heavy Industries committed suicide while the heavy machine maker was under investigation by the country’s anti-graft watchdog, the official Xinhua news agency said on Tuesday.

Wu Fusheng, 51, was found hanging in his office in Qiqihar city in the northeastern province of Heilongjiang at about midnight on Sunday, the news agency said, quoting police sources.

First Heavy announced Wu’s “sudden death” in a brief statement to the Shanghai Stock Exchange on Monday, without providing details.

The Communist Party’s graft watchdog, the Central Commission for Discipline Inspection, sent inspectors to First Heavy’s parent company on July 6, a First Heavy executive told Reuters, speaking on condition of anonymity as she was not authorised to speak to foreign reporters.

The inspection, which is part of the anti-graft agency’s investigation of central government-controlled state-owned enterprises, is expected to finish on September 5, the executive added, without elaborating.

President Xi Jinping has mounted a sweeping campaign against deep-seated corruption since assuming power three years ago, saying that it threatened the party’s very survival.

Scores of senior officials in the party, the government, the military and state-owned enterprises have been brought down by the campaign, including the former security tsar, Zhou Yongkang, and PetroChina’s vice chairman Liao Yongyuan.

China’s anti-corruption watchdog has targeted a roving campaign of inspections at government agencies and state-owned enterprise conglomerates this year, focusing on strategic industries.

“We need to sharpen the ‘Sword of Damocles’ hanging above those in power and use inspections to keep them in awe,” watchdog head Wang Qishan was quoted as saying in February.

First Heavy makes heavy equipment for nuclear power and petrochemical plants, among others.

Wu, also a deputy party boss at First Heavy’s unlisted parent, had been the chairman of the listed company since 2008, according to the executive.


China island-building tops Asean meet agenda

August 4, 2015

AFP and The Philippine Inquirer

KUALA LUMPUR–Beijing faces pressure over its island-building in the South China Sea during high-level Asian security meetings this week that will include the top US and Chinese diplomats.

China is expanding tiny reefs into islands and topping some with military posts to reinforce its disputed claims over the strategic sea, fanning fears of a regional arms race and possible conflict.

Southeast Asia’s human-trafficking problem and concerns over North Korean missile launches are also expected to be among the issues discussed at the talks in Kuala Lumpur.

But a senior US State Department official said the sea row will be at the “center” of the three days of foreign minister meetings starting Tuesday, an annual security dialogue hosted by the 10-member Association of Southeast Asian Nations (Asean).

“The Asean [countries], like us, are concerned about the scale, the scope, the pace, and the implications of China’s reclamation work,” the US official said.

Secretary of State John Kerry and his Chinese counterpart Wang Yi will attend the Asean Regional Forum (ARF), along with foreign ministers from Southeast Asia, Japan, the Koreas and other nations.

Asean members Vietnam, the Philippines, Malaysia and Brunei all have various claims to the South China Sea, as does Taiwan.

Chinese Foreign Minister Wang Yi is surrounded by journalists at the Association of Southeast Asian Nations (ASEAN) Foreign Ministers Meeting in Kuala Lumpur on Tuesday. Photo: AP

Provocative actions

But Beijing claims nearly all of it, and its neighbors complain the land reclamation violates a regional pledge to avoid provocative actions.

The dialogue is an opportunity for Asean and others “to express directly to the Chinese” their concerns, the US official said.

The Asean has grown increasingly impatient, but Beijing adamantly rejects criticism, claiming “indisputable” sovereignty over nearly all of the waterway, believed to hold important oil and gas reserves.

Washington has warned the tensions could impede freedom of navigation in what is a major route for international trade.

Malaysian Foreign Minister Anifah Aman told reporters on Friday there had recently been “important progress” in talks between Asean and China toward a “Code of Conduct” (COC) at sea, a set of rules meant to avoid conflict.

However, Aman’s statement seemingly contradicts recent comments made by the Philippines secretary of foreign affairs, Albert del Rosario, who told a United Nations arbitral court in The Hague last month that Beijing had spent years preventing a potential COC deal from being ironed out.

“China’s intransigence in the 13 years of subsequent multilateral negotiations has made that goal nearly unattainable,” Del Rosario told the Permanent Court of Arbitration.

Analysts concur, saying Beijing has long worked to frustrate progress while building up its presence.

“China’s leaders will not sign, or if they sign they will not abide by, an enforceable COC whose implementation would seriously constrain their freedom to do as they please,” Donald Emmerson, a Southeast Asia expert at Stanford University, wrote recently.

The “time has come to abandon Asean’s entrenched mirage” of a meaningful COC, he said.

Kerry is expected to push host Malaysia to step up efforts to fight human trafficking after Washington last week controversially lifted the country out of the lowest tier in its annual report card on the scourge.

Refugee crisis

Southeast Asia was seized earlier this year by a refugee crisis after a Thai crackdown on people-smuggling left thousands of migrants from Bangladesh and Myanmar stranded at sea.

Along with Thailand, Malaysia was found to have brutal trafficking camps on its soil.

Southeast Asian countries blamed Myanmar over the persecution of its Rohingya minority, which drives many into trafficking rings.

It was not clear whether Asean member Myanmar would face significant pressure over the issue in Kuala Lumpur.

Kerry also is due to meet with his Turkish counterpart as both sides grapple with the threat posed by the Islamic State.

There is also the possibility the top North and South Korean diplomats could hold a brief and rare meeting.

Perennial tensions between the Koreas remain high, with nuclear-capable Pyongyang believed to be preparing for a long-range rocket test. —M Jegathesan

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Can China Continue to Dictate the News Agenda Online? Propaganda, Censorship, Credibility and Influence

August 4, 2015


For Chatham House, Vincent Ni looks at how the Xi Jinping administration is managing to control the media message even as the media industry shifts from traditional outlets to the Internet:

Since Xi came to power, Chinese journalism has been affected by a wave of digitization. Even the state-owned news agency Xinhua maintains a big presence on Chinese social media, using modern techniques to attract younger readers. When referring to Xi Jinping, who is both president and party leader, Xinhua’s Weibo microblogging account will use the sobriquet ‘Xi Dada’, which means ‘Uncle Xi’. This contrasts with the sterner sounding, ‘General-Secretary Comrade Xi’ that is often used by newspapers and traditional media.

These changes partly reflect a shift in global media trends, but also stem from a push initiated by Xi himself. In August 2014, Xi brought up the issue of the media for the first time in a meeting of the Central Leading Group on Comprehensively Deepening Reforms, a body set up to push his plans through all levels of China’s vast administration.

Xi stressed that ‘[we must] forge a batch of new mainstream enterprises that are diverse in form, with advanced methods, which are competitive, and build a number of new media groups that have strong force, propaganda strength, credibility and influence, and shape a three-dimensional, diverse and modern communication system with converged development.’

Investors know this kind of party language well. The next day, media stock prices soared and rumours circulated suggesting that the government would increase funding to state-owned news groups. In the weeks that followed Xi’s speech, media organizations such as China Central Television redesigned their new media strategies and extended their operations. [Source]

See also a previous discussion on how the Party utilizes the Internet to harness public opinion, via CDT.

August 2, 2015 8:03 PM
Posted By:

 (China has a pattern of silencing or censoring critics)

“Shut up, Close Your Eyes!” by Mehman Huseynov

Australia ready to weigh in on South China Sea at ASEAN talks

August 4, 2015


Chinese Foreign Minister Wang Yi is surrounded by journalists at the Association of Southeast Asian Nations (ASEAN) Foreign Ministers Meeting in Kuala Lumpur on Tuesday. Photo: AP


Kuala Lumpur:  Foreign minister Julie Bishop says she will raise concerns about rising tensions in the flashpoint waters of the South China Sea at annual diplomatic talks in Malaysia, despite objections from China.

“I will focus on urgent political and national security challenges facing our region, including countering violent extremism and addressing maritime issues,” Ms Bishop said ahead of meetings of the 10-member Association of South-East Asian Nations (ASEAN) and their key trading partners, adding she will “register” Australia’s concern over the South China Sea.

Malaysian Prime Minister Najib Razak delivers his opening speech at the 48th ASEAN Foreign Ministers meeting in Kuala Lumpur on Tuesday.Malaysian Prime Minister Najib Razak delivers his opening speech at the 48th ASEAN Foreign Ministers meeting in Kuala Lumpur on Tuesday. Photo: AP

Earlier China’s foreign minister Wang Yi insisted that China’s controversial building of what US military chiefs say are military posts on tiny reefs in disputed waters of the South China Sea should not be raised at the talks.

Mr Wang warned that bringing up the issue was “counter-productive” and would “heighten confrontation”.

However the US and the Philippines have said they also intend to defy China’s objections and call for an end to island-building, military deployments and other aggressive actions in the South China Sea.

Australian Foreign Minister Julie Bishop, pictured last month, says she will raise concerns about rising tensions in the South China Sea.Australian Foreign Minister Julie Bishop, pictured last month, says she will raise concerns about rising tensions in the South China Sea. Photo: AP

Australia has maintained it does not take sides in the conflict that flared last year when China began expanding artificial islands in disputed waters. But the conflict is a security priority for Australia which sends almost 60 per cent of its trade through the region.

As the meetings began in Kuala Lumpur, Mr Wang bluntly reiterated China’s stand that disputes must be handled on a bilateral basis with rival claimants the Philippines, Vietnam, Malaysia, Taiwan and Brunei. “China has never believed that multinational fora are the appropriate place for discussing specific bilateral disputes,” he said.

Carlyle Thayer, an expert on the South China Sea from the University of New South Wales at the Australian Defence Force Academy, said concern in ASEAN about China’s construction of the islands has become more palpable and some nations are increasingly frustrated by the slow progress towards agreement on a set of rules to help ease tensions.

Chinese Foreign Minister Wang Yi, centre, speaks to Malaysian Defence Minister Hishammuddin Hussein in Kuala Lumpur on Tuesday.Chinese Foreign Minister Wang Yi, centre, speaks to Malaysian Defence Minister Hishammuddin Hussein in Kuala Lumpur on Tuesday. Photo: AP

Ms Bishop is scheduled to meet Mr Wang in Kuala Lumpur where she said she also intends to push for ways to prosecute those responsible for bringing down Malaysia Airlines flight MH17.

She is also scheduled to meet her Indonesian counterpart Retno Marsudi for the first time since Australia withdrew its ambassador in Jakarta in protest at the death by firing squad of rehabilitated drug smugglers Andrew Chan and Myuran Sukumaran in April.

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Protests in Taiwan over textbook revisions shows growing hate for “One China” — Students resist China’s “brainwashing”

August 4, 2015


Taiwanese student leader Wang Pin-chen (centre) speaks to reporters before their meeting with Taiwan’s Education Minister Wu Se-hwa (not pictured), demanding him to scrap ‘China-centric’ school curriculum’s guidelines and his resignations, in Taipei, Taiwan, on Aug 3, 2015. PHOTO: EPA

By Michael Gold

TAIPEI (Reuters) – Protests in Taiwan over textbook revisions which students say aim to brainwash them into accepting a “one China” view of history underscore the island’s growing sense of independence from its vast neighbor and geopolitical foe.

Hundreds of youths stormed the ministry of education compound on Friday and dozens were still camped out in the courtyard as students met the education minister on Monday in a bid to repeal changes to history books likely to hit school shelves this week.

The protesters said they could accept delaying the new curriculum, but the ministry did not back down, prompting some students to break down in tears and storm out of the meeting in anger.

“We’ve sacrificed so much and fought so hard and got nothing,” sobbed 17-year-old student leader Chen Chien-Hsun before falling on his knees in front of television cameras.

The drama followed months of smaller protests in which students have thrown paint balloons, shouted slogans and staged sit-ins in front of the ministry. Last month, dozens were arrested for scaling ladders and breaking into the building. One later committed suicide, though the motivation was unclear.

The protests, the largest in over a year, reflect a surge of nationalism among Taiwan’s youth, who are far more likely than their elders to identify as Taiwanese rather than Chinese.

They also come ahead of January elections in which the youth movement will likely help sweep in a party which leans toward independence from China, something Communist Party rulers in Beijing will never condone, even though the island is self ruled.

“We are Taiwan. China is China,” Liu Tzuhao, 18, said in front of a makeshift memorial to the suicide victim at the protest site.

Taiwan’s ruling Nationalist Party fled to the island after losing the civil war against China’s communists in 1949. China has since viewed Taiwan, which goes under the official name of Republic of China, as a renegade province and has not ruled out the use of force to bring it under its control.

“We are Taiwanese and should study Taiwan’s history,” 17-year-old Keanu Hsu declared during a forum hosted last month by the ministry before school begins at the end of August.

When ministry officials at the forum light-heartedly asked the students what name could replace Republic of China, they shouted “Taiwan” in response.

History teacher Chang Wen Lung said the textbooks warped historical episodes such as agreements establishing Republic of China sovereignty over Taiwan after World War Two and denigrated the influence of Japan, the island’s colonial ruler for decades prior and traditional foe of Beijing.


The protests echo last year’s Sunflower Movement, in which thousands of young people occupied parliament for weeks to oppose growing economic ties with China.

They also reflect the same fears about Beijing’s “one country, two systems” formula under which Hong Kong, a former British colony, returned to Chinese rule in 1997 and which Beijing aims to impose upon Taiwan.

Months of pro-democracy protests on Hong Kong streets last year threw that formula under a harsh light and became a huge embarrassment for Beijing.

One student threw a rubber sandal at Education Minister Wu Se-Hwa on Friday when he emerged to address them. Over the weekend the ministry website was inaccessible after a suspected hacking.

“We understand there’s controversy behind the textbooks,” Wu told Reuters in a recent interview. “We hope it can contribute to positive discourse in the classroom rather than on the street.”

Wu said teachers could choose how much of the revised books should be used and said that points of controversy would not be part of national examinations.

Such concessions have yet to appease opponents, who say the revision process lacked transparency and the committee was stacked with unification advocates under China-friendly President Ma Ying-jeou, who has overseen a number of trade deals with the mainland.

“It’s ridiculous,” said protester Peng Cheng, 18. “One country cannot have two kinds of history.”

(Additional reporting by J.R. Wu; Editing by Nick Macfie)



How China Killed a Philippines’ Fishing Village

August 4, 2015

Just offshore, tied up at a cement pier no bigger than a basketball court, a 10m wooden fishing boat bobs in a gentle swell, never to put to sea again.

A geo-political storm, centring on China’s territorial claims to the South China Sea, is preventing it from sailing from this sleepy town, 250km north of Manila, to what fishermen here describe as the closest thing to an “Eden” of the sea.

The reef that rings that postcard-perfect lagoon may protect the turquoise waters from the Pacific’s many typhoons, but Scarborough Shoal is now off limits to the proud fishermen from this town with a 400-year maritime history.

The tethered boat is the last of the ocean-going vessels to be sold, and when it’s gone, Masinloc will no longer see the blue marlin, yellow fin tuna, red grouper and lobsters that lit up the sunburnt faces of the intrepid few who ventured a day’s sailing from home.

Children playing on the last fishing boat in Masinloc to have sailed to Scarborough Shoal. ST PHOTO: RAUL DANCEL

Those beaming smiles are no more; brows furrow at the mention of what once was an idyllic lifestyle.

When China seized control of Scarborough in 2012, after a stand-off with the Philippines, Masinloc had to face up to a potentially bloody reality.

The grim prospect surfaced in April three years ago after a Philippine Navy frigate seized eight Chinese fishing boats suspected of poaching coral and giant clams around Scarborough. But before it could tow the boats to port, two Chinese maritime surveillance ships arrived.For two months, the Philippines and China were on the brink of war over clumps of rocks and a 150-sq-km body of water.

The US eventually mediated a deal. Both sides were told to withdraw from Scarborough. The Philippines pulled out its ships but China stayed and later roped off the mouth of the lagoon.

Scarborough used to be neutral ground despite competing claims. Boatmen from the Philippines, China, Vietnam and Taiwan would gather during the dry months from January to July to partake of the sea’s bounty. They bartered petrol, food, water and cigarettes and shared laughs over stories only men of the sea would enjoy.

“We didn’t have to speak Chinese to know what they wanted or to tell them what we needed,” said Mr Jeffrey Elad, 40, a village elder who until April this year had led fishing expeditions to Scarborough.

Named after an East India Company tea clipper that ran aground there in 1784, Scarborough lies 125 nautical miles to the east of Masinloc, most of whose 50,000 residents had ancestors who worked the sea for a living. Now, only about 2,000 head out every morning, but never beyond the safety of their own bay.

Since 2012, the Chinese have kept away fishermen from Masinloc and a few other towns in La Union and Pangasinan provinces farther north.

The boatmen have had to look inland for jobs. Many have traded their nets and paddles for motorised rickshaws, passenger jeeps, livestock and farms. A 600MW coal-fired power plant, commissioned in 1998, has supplanted fishing as Masinloc’s lifeline.

Thousands work at the plant’s 137ha compound. They, in turn, create an ecosystem of odd jobs and mom-and-pop outlets that now make up Masinloc’s modest economy. Some still keep close to the sea, running fish stalls, diving for shellfish and ornamental fish or ferrying occasional tourists around the bay.

Mr Pedro Manglicmot, 40, a fisherman who now spends most of his time serving as a councillor, said Scarborough used to promise easy money for those with the means to get there.

On a good week, two days of fishing around the shoal could yield a harvest worth up to 300,000 pesos (S$9,000) – 10 times the cost of the trip. That was why fishermen had been taking the risk to break through the Chinese blockade. But Mr Manglicmot said he has given up on Scarborough. The risk of losing his investment by betting that he can slip under China’s nose is just too high.

He bristles at reports that the Chinese have been busy harvesting giant clams and corals from Scarborough, protected by their coast guard. “Pretty soon, they are going to clear Scarborough of what rightfully belongs to us. They are stealing from us,” said Mr Manglicmot.

The Philippines, Vietnam, Malaysia and Brunei are staking ownership to parts of the South China Sea, a vital sea lane for trade worth about US$5 trillion (S$6.6 trillion) a year.

But China is claiming “indisputable sovereignty” over 80 per cent of it – waters enclosed by what it calls its “nine-dash line”, a relic of the country’s early 20th-century nationalist era. Scarborough is inside that line.

Once a regular fisherman, Mr Viany Mula, 43, now rents a motorcycle to make deliveries around Masinloc. He would gladly trade his rickshaw for a chance to set out to sea again, but most of the time his boat just sits idle, awaiting a buyer.

For Mr Elad, the village chief, his voyage to Scarborough in April was definitely his last. “It’s over,” he said.

A version of this article appeared in the print edition of The Straits Times on August 04, 2015, with the headline ‘Death of a fishing village’.


 (Contains links to several previous articles)

Chinese Fishing boats are ready to set sail from Tongling port in Dongshan County, southeast China’s Fujian Province, Aug. 1, 2015. A three-month seasonal fishing ban in the sea area south of 26.5 degrees north latitude was lifted on Saturday. [Photo: Xinhua]

Chinese Fishing boats set sail from Tongling port in Dongshan County, southeast China’s Fujian Province, Aug. 1, 2015. A three-month seasonal fishing ban in the sea area south of 26.5 degrees north latitude was lifted on Saturday. [Photo: Xinhua]



ASEAN: China on a diplomatic collision course with South China Sea neighbors

August 4, 2015


ASEAN needs to do more to resolve South China Sea issues peacefully and cooperatively, Malaysian Foreign Minister Anifah Aman said at the opening of the 48th ASEAN Foreign Ministers Meeting in Kuala Lumpur.

KUALA LUMPUR: China was on a diplomatic collision course with some of its neighbours and the United States over its controversial island-building, as regional security talks opened Tuesday (Aug 4) in Kuala Lumpur.

Beijing is expanding tiny reefs in the flashpoint South China Sea into islands and topping some with military posts to reinforce its claims over the strategic waters, fanning fears of a conflict.

Ahead of the gathering hosted by the 10-member Association of Southeast Asian Nations (ASEAN) that kicked off on Tuesday in Malaysia, Chinese Foreign Minister Wang Yi signalled no compromise.

During a stop in Singapore on Monday, Wang insisted that the issue should not be raised at the talks, and that China would press ahead with its controversial land-reclamation works.

“China has never believed that multilateral fora are the appropriate place for discussing specific bilateral disputes,” Wang told reporters before travelling to Malaysia.

Attempts to bring the issue up are “counter-productive” and “heighten confrontation”, he warned. However US and Southeast Asian officials say the hot-button issue will be raised in Malaysia this week.

In his opening remarks at the 48th ASEAN Foreign Ministers Meeting on Tuesday, Malaysian Foreign Minister Anifah Aman took a swipe at Beijing’s refusal to address the thorny issue with its neighbours at the talks.

“ASEAN can and should play a vital part in effecting an amicable settlement” on the South China Sea, he told fellow foreign ministers. “Above all we must be seen to address this issue peacefully and cooperatively. We have made a positive start but we need to do more.”

Beijing claims control over nearly all of the strategically important South China Sea, a key shipping route thought to hold rich oil and gas reserves. Vietnam, the Philippines, Malaysia and Brunei – all ASEAN members – also have various claims to the South China Sea, as does Taiwan.

Beijing has long insisted that disputes must be handled on a bilateral basis with rival claimants, rather than with a united bloc.


Adding to the tensions, a Washington-based think tank said this week Beijing could be preparing to build a second airstrip on an artificial island.

China is already building a 3,000-metre runway on Fiery Cross reef, which could ultimately be used for combat operations, according to the Center for Strategic and International Studies (CSIS).

Wang rejected calls by some rival claimants and the United States to suspend the land reclamation. “The freeze proposal may seem even-handed on the surface but it is actually unrealistic and will not work in practice,” he said.

Foreign Secretary Albert del Rosario of the Philippines, which has been one of the most vocal critics of China’s actions at sea, said on the meeting’s sidelines that Manila was checking into the reports of a new runway.

Only Southeast Asian foreign ministers met on Tuesday, but the talks will expand over the following two days into the ASEAN Regional Forum (ARF), attended by US Secretary of State John Kerry, China’s Wang, and envoys from the wider region including Japan, the Koreas, Russia and elsewhere.

Kerry is to meet Wang on Wednesday morning on the sidelines. He had been due to meet his Turkish counterpart Mevlut Cavusoglu on Tuesday evening, as both sides grapple with the threat posed by the Islamic State, but the one-on-one has since been dropped from a schedule provided to journalists.

China’s Response to Stock Rout Exposes Regulatory Disarray

August 4, 2015


Poor coordination in responding to market plunge prompted Premier Li Keqiang to chastise officials at July 4 meeting

Chinese Premier Li Keqiang during a visit to France on July 1. He demanded more-coordinated action from regulators to shore up faith in China’s stock markets.
Chinese Premier Li Keqiang during a visit to France on July 1. He demanded more-coordinated action from regulators to shore up faith in China’s stock markets. PHOTO: ZUMA PRESS
By Lingling Wei
The Wall Street Journal
BEIJING—As China’s summer stock slide deepened, threatening a key plank of Beijing’s plan to overhaul the world’s No. 2 economy, the country’s premier pounded the table and demanded that regulators get their act together.Meeting with senior financial and economic officials in Beijing on July 4,LiKeqiang criticized them for failing to anticipate the severe market plunge, officials with knowledge of the gathering said. Then he urged them to act in a coordinated way to stanch the bleeding, these officials said.“I want strong measures to rescue the market,” ordered the usually mild-mannered premier, according to the officials. At the meeting were those in charge of China’s central bank, the country’s securities and banking regulatory agencies and the Finance Ministry.The regulators, who had previously acted in isolation and sometimes at cross-purposes, responded. China’s central bank unleashed a flood of money aimed at a state agency tasked with propping up share prices and investors who borrow to buy shares, while the securities regulator halted new listings and state-owned companies and brokerages pledged to buy up shares. The moves helped stem drops that had erased most of the gains China’s stock market posted during this turbulent year.

Beijing’s newfound unity now faces a test. China’s stocks have resumed their downward march, falling 4% since July 6 and 12% since July 23, bringing the total loss since the slump began in mid-June to $3.3 trillion, driven by weakening investor confidence amid a slowing economy.

Longer term, the uncoordinated response from regulators in the months leading up to the July 4 meeting raises questions about whether Chinese authorities will be up to the challenge of implementing market changes and introducing greater risks into the country’s financial system.

“The recent sharp rises and falls in the stock market offered a stress test on the stability of China’s financial system as well as the ability of regulatory agencies to respond to emergency,” said Zhang Ming, a senior economist at the Chinese Academy of Social Sciences, a government think tank. The “lack of regulatory coordination” exposed by the market turmoil, Mr. Zhang added, should make the government “all the more cautious” about carrying out its pledge to allow freer flows of capital across China’s borders.


Interviews with more than a dozen Chinese officials and advisers to the government show conflicting moves and a lack of coordination hampered Beijing’s initial response to the market rout. At one point, the securities regulator made a move that put downward pressure on the market in the same week that the central bank moved to push it up. Until July, a major source of market funding went largely untouched by regulators. The securities regulator more than once moved to trim lending to investors to buy shares, only to reverse course.

“There was an obvious lack of communication between the central bank and the securities regulatory commission on what needed to be done to prevent a market meltdown,” a Chinese official close to both institutions said. “It can be argued that the market-rescue effort could have been less costly had there been better regulatory cooperation.”

Even at the July 4 meeting, officials weren’t initially on the same page, said the officials familiar with the discussion. Zhou Xiaochuan, governor of China’s central bank, and Lou Jiwei, China’s finance minister, both objected to using too-aggressive intervention because they felt it would harm China’s effort to bring more market forces into its economy, said the officials. They eventually went along with Mr. Li’s plan, which, according to the officials, was then signed off on by President Xi Jinping before he left for Russia on July 8. Mr. Xi’s endorsement underscores the leadership’s desire to restore the public’s confidence in its ability to manage the economy as well as to prevent the stock malaise from spreading to other parts of the economy.

A press official at the State Council, the Chinese government’s top decision-making body, referred questions to “relevant regulatory agencies.” Press officials at China’s main financial regulatory agencies including the central bank, securities commission, banking regulator and Finance Ministry didn’t respond to requests for comment.

‘There was an obvious lack of communication between the central bank and the securities regulatory commission’
—A Chinese official close to both institutions.
Chinese officials have sought to allay concerns over their commitment to financial reforms. Last month, in the midst of the market rout, the central bank scrapped quotas that limited investments from foreign central banks, sovereign-wealth funds and other big financial institutions in the country’s $6.1 trillion bond market, signaling Beijing’s intention to move forward with change.

One of the first signs of regulatory confusion emerged in late June, when Chinese stocks started to sell off. The People’s Bank of China—dubbed yang ma in China, or Big Mama—on June 27 unveiled a quarter-point interest-rate cut and loosened some banks’ reserve requirements, a rare two-step not seen since the height of the 2008 global financial crisis.

But in the following days, the China Securities Regulatory Commission approved plans by many companies to sell new shares—moves that could sap market liquidity at a time of cooling investor demand. The securities watchdog didn’t halt new share offerings until more than a week later, after Mr. Li’s July meeting. Analysts attributed the drop in shares in late June in part to the commission’s move. The CSRC’s action surprised and frustrated PBOC officials, say some at the central bank.

The disarray highlights the competing interests of different regulators. The central bank looks at the country’s overall financial stability, while the securities regulator oversees the capital markets. Under Xiao Gang, former head of one of China’s biggest state-owned banks, the securities agency wants to make China’s stock markets—long seen as immature and driven by flighty retail investors—into a valid funding source for companies shunned by risk-averse banks. But it also wants to give indebted state-owned companies— a major impediment to making China’s economy more market-driven—a place to sell shares to pay off their debts, giving the agency an incentive to keep IPOs flowing.
Regulatory disorganization was also apparent in how China dealt with the rapid buildup of debt used by investors to finance their share purchases. Neither the country’s central bank nor securities and banking regulators has clearly defined authority over what is known as margin financing, a major driver of China’s share run-up since last year.

Official data show margin borrowing from brokerages surged nearly fivefold over the past year to about 2 trillion yuan ($322 billion) in early June before the boom turned to bust. Official margin financing stood at 1.34 trillion yuan on July 31, according to data provider Wind Information Co., as many investors rushed to unwind their leveraged bets amid falling stock prices.

But those figures didn’t include money borrowed by investors from unofficial channels such as banks and Internet finance firms—an amount that brokerage Everbright Securities Co. estimates totaled an additional 2 trillion yuan as of last month. As the selloff worsened in early July, triggered by heavily indebted investors rushing for the exit, the central bank had to step in to make cash available to brokers to expand margin lending to investors.

The securities regulator has also changed course on its own margin-financing policy. In mid-April, it sought to cut back on margin financing provided by brokerages. But the agency backed off from that effort when stocks fell in May due to a potential liquidity squeeze.

In early July, the agency started allowing investors to borrow against their homes to buy equities. The measure came just weeks after the regulator warned investors of the risks associated with such borrowing and promised to tighten supervision over margin financing.

China’s leadership has been trying to make its financial regulators work better together by forming an interagency group called the Financial Stability Coordinating Committee. However, the group, set up in 2013 and headed by Mr. Zhou, the central-bank governor, has largely been inactive, according to Chinese officials.

Chinese stocks took another severe beating on July 27, when the benchmark Shanghai index fell 8.5%—the most in more than eight years—partly due to speculation that the government could soon end its rescue mission.

“There is a learning curve” for the government on how to deal with financial markets, said Zhu Haibin, China economist at J.P. Morgan Chase & Co., at a media round table in late July.

Write to Lingling Wei at



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