Posts Tagged ‘Chinese government’

U.S., China meet on North Korea after Trump points to failed Chinese effort

June 21, 2017

Reuters

By David Brunnstrom | WASHINGTON

Top diplomats and defense chiefs from the United States and China began a day of talks in Washington on Wednesday looking for ways to press North Korea to give up its nuclear and missile programs.

The talks come a day after U.S. President Donald Trump said Chinese efforts to persuade North Korea to rein in its weapons programs had failed, ratcheting up the rhetoric after the death of an American student who had been detained by Pyongyang.

Trump’s statement is likely to increase pressure on Beijing at the Diplomatic and Security Dialogue, which pairs U.S. Secretary of State Rex Tillerson and Defense Secretary Jim Mattis with China’s top diplomat, State Councilor Yang Jiechi, and General Fang Fenghui, chief of joint staff of the People’s Liberation Army.

The State Department says Wednesday’s talks would focus on ways to increase pressure on North Korea, but also cover such areas as counter-terrorism and territorial rivalries in the South China Sea.

The U.S. side is expected to press China to cooperate on a further toughening of international sanctions on North Korea. The United States and its allies would like to see an oil embargo and bans on the North Korean airline and guest workers among other moves, steps diplomats say have been resisted by China and Russia.

Trump has had high hopes for greater cooperation from China to exert influence over North Korea, leaning heavily on Chinese President Xi Jinping for his assistance. The two leaders had a high-profile summit in Florida in April and Trump has frequently praised Xi while resisting criticizing Chinese trade practices.

U.S. Secretary of State Rex Tillerson and Defense Secretary James Mattis meet with Chinese State Councilor Yang Jiechi and General Fang Fenghui, chief of the People’s Liberation Army’s Joint Staff Department prior to the U.S.-China Diplomatic and Security Dialogue at the State Department in Washington, U.S., June 21, 2017. REUTERS/Aaron P. Bernstein

“While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!” Trump wrote on Twitter.

It was unclear whether his remark represented a significant shift in his thinking in the U.S. effort to stop North Korea’s nuclear program and its test-launching of missiles or a hardening in U.S. policy toward China.

China’s Foreign Ministry said on Wednesday that Beijing had made “unremitting efforts” to resolve tensions on the Korean peninsula, not as a result of external pressure but because China was a responsible member of the international community and resolving nuclear issue was in its own interests.

On Tuesday, a U.S. official said U.S. spy satellites had detected movements recently at North Korea’s nuclear test site near a tunnel entrance, but it was unclear if Pyongyang was preparing for a new nuclear test, perhaps to coincide with Wednesday’s high-level talks.

A South Korean Defense Ministry official said North Korea remained prepared to conduct a sixth nuclear test at any time but there were “no new unusual indications that can be shared.”

North Korea last tested a nuclear bomb in September, but it has conducted repeated missile tests since and vowed to develop a nuclear-tipped missile capable of hitting the U.S. mainland, putting it at the forefront of Trump’s security worries.

Trump has hardened his rhetoric against North Korea following the death of Otto Warmbier, a University of Virginia student who died on Monday. He had returned to the United States in a coma after being held captive in North Korea.

On Tuesday the president called what happened to Warmbier “a disgrace.”

China’s state-run Global Times newspaper said Chinese officials must be wary that Warmbier’s death might push Washington to put greater pressure on Beijing, but China would not act as a “U.S. ally” on the issue.

If Washington imposed sanctions on Chinese enterprises dealing with North Korea, it would lead to “grave friction” between the two countries, wrote the paper, which does not represent Chinese government policy.

Trump’s tweet about China took some advisers by surprise. A senior administration official, speaking on condition of anonymity, said the United States had limited options to rein in North Korea without Chinese assistance.

(Additional reporting by Steve Holland in Washington and Michael Martina in Beijing; Editing by Jeffrey Benkoe)

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Trump says China tried but failed to help on North Korea

June 21, 2017
Reuters

U.S. President Donald Trump (L) and China’s President Xi Jinping walk along the front patio of the Mar-a-Lago estate after a bilateral meeting in Palm Beach, Florida, U.S., April 7, 2017. REUTERS/Carlos Barria
By Steve Holland and David Brunnstrom | WASHINGTON
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President Donald Trump said on Tuesday that Chinese efforts to persuade North Korea to rein in its nuclear program have failed, ratcheting up the rhetoric over the death of an American student who had been detained by Pyongyang.

Trump has held high hopes for greater cooperation from China to exert influence over North Korea, leaning heavily on Chinese President Xi Jinping for his assistance. The two leaders had a high-profile summit in Florida in April and Trump has frequently praised Xi while resisting criticizing Chinese trade practices.

“While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!” Trump wrote on Twitter.

It was unclear whether his remark represented a significant shift in his thinking in the U.S. struggle to stop North Korea’s nuclear program and its test launching of missiles or a change in U.S. policy toward China.

“I think the president is signaling some frustration,” Christopher Hill, a former U.S. ambassador to South Korea, told MSNBC. “He’s signaling to others that he understands this isn’t working, and he’s trying to defend himself, or justify himself, by saying that at least they tried as opposed to others who didn’t even try.”

North Korean leader Kim Jong Un inspects the defence detachment on Jangjae Islet and the Hero Defence Detachment on Mu Islet located in the southernmost part of the waters off the southwest front, in this undated photo released by North Korea’s Korean Central News Agency (KCNA) on May 5, 2017. KCNA/ via REUTERS
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On Tuesday, a U.S. official, who did not want to be identified, said U.S. spy satellites had detected movements recently at North Korea’s nuclear test site near a tunnel entrance, but it was unclear if these were preparations for a new nuclear test – perhaps to coincide with high-level talks between the United States and China in Washington on Wednesday.

“North Korea remains prepared to conduct a sixth nuclear test at any time when there is an order from leadership but there are no new unusual indications that can be shared,” a South Korean Defense Ministry official said, speaking on the condition of anonymity.

Seoul was in close consultation with Washington over the matter, the official added.

North Korea last tested a nuclear bomb in September, but it has conducted repeated missile test since and vowed to develop a nuclear-tipped missile capable of hitting the U.S. mainland, putting it at the forefront of Trump’s security worries.

U.S.-CHINA DIALOGUE

The Trump statement about China was likely to increase pressure on Beijing ahead of Wednesday’s Diplomatic and Security Dialogue, which will pair U.S. Secretary of State Rex Tillerson and Defense Secretary James Mattis with China’s top diplomat, State Councilor Yang Jiechi, and General Fang Fenghui, chief of joint staff of the People’s Liberation Army.

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Secretary of State Rex Tillerson listens as President Donald Trump speaks during a Cabinet meeting, Monday, June 12, 2017, in the Cabinet Room of the White House in Washington. (Andrew Harnik – Associated Press)

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The State Department says the dialogue will focus on ways to increase pressure on North Korea to give up its nuclear and missile programs, but also cover such areas as counter-terrorism and territorial rivalries in the strategic South China Sea.

The U.S. side is expected to press China to cooperate on a further toughening of international sanctions on North Korea. The United States and its allies would like to see an oil embargo and bans on the North Korean airline and guest workers among other moves, steps diplomats say have been resisted by China and Russia.

In a sign that U.S.-Chinese relations remain stable, a White House aide said Trump’s daughter Ivanka Trump and her husband, White House senior adviser Jared Kushner, were invited by the Chinese government to visit the country later this year.

Trump has hardened his rhetoric against North Korea following the death of Otto Warmbier, a University of Virginia student who died on Monday in the United States after returning from captivity in North Korea in a coma.

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Otto Warmbier

“A DISGRACE”

In a White House meeting with visiting Ukraine President Petro Poroshenko, Trump criticized the way Warmbier’s case was handled in the year since his arrest, appearing to assail both North Korea and his predecessor, President Barack Obama.

“What happened to Otto is a disgrace. And I spoke with his family. His family is incredible … but he should have been brought home a long time ago,” Trump said.

State Department spokeswoman Heather Nauert said the United States holds North Korea accountable for Warmbier’s “unjust imprisonment” and urged Pyongyang to release three other Americans who are detained.

Chinese state-run newspaper the Global Times, published by the official People’s Daily, said Chinese officials must be wary that Warmbier’s death might push Washington to put greater pressure on Beijing.

“China has made the utmost efforts to help break the stalemate in the North Korean nuclear issue. But by no means will China, nor will Chinese society permit it to, act as a ‘U.S. ally’ in pressuring North Korea,” the Global Times said in an editorial.

If Washington imposes sanctions on Chinese enterprises, it would lead to “grave friction” between the two countries, said the paper, which does not represent Chinese government policy.

Trump’s tweet about China took some advisers by surprise. A senior administration official, speaking on condition of anonymity, said the United States had limited options to rein in North Korea without Chinese assistance.

White House spokesman Sean Spicer said a meeting between Trump and North Korean leader Kim Jong Un is less likely following Warmbier’s death.

Spicer said Trump would be willing to meet Kim under the right conditions, but “clearly we’re moving further away, not closer to those conditions.”

For graphic on Americans detained by North Korea, click: tmsnrt.rs/2r5xYpB

(Additional reporting by David Brunnstrom, David Alexander and John Walcott in Washington, Jack Kim in Seoul and Michael Martina in Beijing; Editing by Howard Goller, Leslie Adler and Lincoln Feast)

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Chinese Companies Move Deeper Into Shadow Banking — Beijing wary it is moving too fast

June 4, 2017

Beijing’s game of Whac-A-Mole against financial risks is sending some borrowers into even darker corners

June 4, 2017 7:00 a.m. ET

BEIJING—China’s crackdown on debt is driving some companies to a murkier form of financing as it gets harder to secure bank loans or tap the bond market.

New loans from so-called trusts, firms that raise money from individuals and corporations to plow into riskier areas of the economy, reached 882.3 billion yuan ($128.6 billion) in the first four months of this year, according to data from the People’s Bank of China, nearly five times as much as the same period in 2016.

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Trust firms, which often charge borrowers higher rates than banks, occupy a middle ground between banking and asset management. They are licensed and loosely regulated by China’s banking watchdog, but they lack some of banks’ protections, such as government deposit insurance, and they have more flexibility to invest in risky areas than banks do.

For companies, trusts represent the next best thing as bank loans or bond financing dry up or become more expensive.

Government-owned Qingzhou City Construction and Investment Co., in the eastern city of Qingzhou, received permission to issue bonds last year. But with rising yields on corporate debt, it has turned to a trust firm instead, according to people familiar with the matter.

Daye Trust Co. is helping Qingzhou City Construction raise 200 million yuan through a two-year product that offers investors returns of 6.5% a year. The firm would pay Daye a rate of about 8%, which is still less than it was expecting to pay for bonds, these people say. Qingzhou City Construction intends to use the proceeds to finance a water-treatment project.

One area of concern for authorities as they tackle soaring Chinese debt — a factor in Moody’s Investors Service’s downgrade of China’s sovereign debt last week — is loans that banks disguise as investments. A shift to trust lending would make it even harder to gauge the true extent of credit in the system.

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“Regulation of the trust sector has been much more ad hoc” compared with that of the formal banking sector, says George Xu, a Moody’s credit analyst. As a result, “trust firms can hide where they’re investing.”

China’s banking regulator declined to comment on the rise in trust loans.

Actions by China’s central bank and banking regulator to raise short-term funding costs and rein in banks’ hidden loans have made banks increasingly reluctant to lend.

China Zheshang Bank Co., a midsize lender that had grown with the help of off-book loans and aggressive lending tactics, said that it would step up scrutiny of borrowers, turning down property developers in cities with unsold housing and businesses in “outdated industries.”

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The regulatory storm has roiled Chinese markets, sending bond yields to the highest levels in two years, as banks sell down their bondholdings to boost liquidity. Higher yields are a burden for companies, many of which have canceled bond-issuance plans.

The market stress has made Beijing wary it is moving too fast. According to people familiar with the matter, the central bank and the banking, securities and insurance watchdogs have held meetings in recent days to discuss how to tackle the debt problem at a more measured pace.

Authorities continue to give trusts more leeway than banks to invest in risky projects, including property, steel and other sectors, where authorities have tried to dial back borrowing.

Shanxi Trust Co. in northern China said it issued the sixth iteration of a trust product for a local construction company in April, with the aim of raising 50 million yuan. The borrower had been working with the trust firm for the past few years, according to Liang Lu, a project manager at Shanxi Trust, who said its customers don’t typically include companies that can get bank loans.

Trusts loans have surged at times in the past, amid regulator tolerance and high demand for credit from companies when the economy was booming. A record surge in the first four months of 2013 led regulators to crack down on the sector. Two years later, trusts helped investors leverage bets to buy stocks, which contributed to a flood of borrowing that culminated in a market crash that summer.

At the end of 2016, trust loans made up 10% of China’s total so-called shadow-banking system, or lending outside regular bank loans and bond markets, according to Moody’s. Trust loans accounted for 15% of total shadow banking as of the end of 2013. Moody’s says the decline in share was mainly because high-yielding investment products from banks, another kind of shadow lending, grew faster.

Even companies with access to formal banking channels and the capital markets are turning to shadow banks.

“It takes time to issue bonds,” said Eva Lau, investor-relations manager at Shimao Property Holdings Ltd., one of China’s largest property developers. The Hong Kong-listed firm got central bank approval to issue notes in the interbank market, but in anticipation of a lengthy process, it turned to Xiamen Trust Co., which is helping Shimao Property raise 1 billion yuan.

Image result for Shimao Property Holdings, photos

The company still plans to issue bonds and expects to pay yields of up to 4.5% on the later bond sale, said Ms. Lau. By comparison, borrowing from nonbank financial institutions, including trusts, came at 5.7% interest rates in 2016, compared with 5.3% from banks issuing yuan loans, according to Shimao’s latest 2016 financial report.

Ms. Lau said Shimao turned to Xiamen to diversify funding channels and said that the recent regulatory tightening wasn’t a factor. The company doesn’t detail its funding sources; Ms. Lau said trust financing is a tiny portion of the firm’s total financing.

Back in Qingzhou, one person familiar with Qingzhou City Construction and Investment said the company’s strong government backing means it doesn’t have to pay as much as a private company for trust financing.

The firm has yet to tap the bond market.

Write to Chao Deng at Chao.Deng@wsj.com and Lingling Wei at lingling.wei@wsj.com

https://www.wsj.com/articles/chinese-companies-move-deeper-into-shadow-banking-1496574002

Philippine Authorities Seize 605 Kilos of Meth From China — China Sends the Drugs, Duterte Government Kills the Addicted, China Gets The South China Sea

May 29, 2017

MANILA, Philippines — Philippine authorities say they’ve seized 605 kilograms (1,334 pounds) of methamphetamine shipped from China following a tip from the Chinese government.

National Bureau of Investigation officials said Monday that the drugs, with a street value of 6.05 billion pesos ($121.4 billion), were seized over the weekend from a brokerage warehouse in metropolitan Manila, while a portion was intercepted from a shipment consignee.

The operation was jointly conducted with the Philippine Drug Enforcement Agency, police and the Bureau of Customs, which alerted the NBI on information from China’s Office of National Narcotics Control Commission about a large shipment of illegal drugs.

Since taking office last year, President Rodrigo Duterte has launched a war on illegal drugs that has last left thousands of suspected drug dealers and addicts dead.

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Philippines President Rodrigo Duterte (L) and Chinese President Xi Jinping shake hands after a signing ceremony held in Beijing, China October 20, 2016. Ng Han Guan, Reuters (FILE)

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President Rodrigo Duterte and Russian President Vladimir Putin meet for the first time during a bilateral meeting on the sidelines of the Asia-Pacific Economic Cooperation (Apec) Leaders’ Meeting in Lima, Peru, on November 19. ROBINSON NIÑAL JR./ Presidential Photo

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China Vows Maximum Effort to Recover Kidnapped Citizens in Pakistan — “Human Rights Cuts Both Ways”

May 25, 2017

BEIJING — China said on Thursday it will do all it can to ensure the safe return of two citizens kidnapped in Pakistan and it promised new measures to protect Chinese people and companies working in the country, an important link on its Silk Road infrastructure plan.

Gunmen pretending to be policemen kidnapped two Chinese language teachers in the Pakistani city of Quetta, in the violence-plagued province of Baluchistan, on Wednesday.

“China will continue to make maximal efforts alongside Pakistan to strive for the safe return of the kidnapped individuals as soon as possible,” foreign ministry spokesman Lu Kang told a regular briefing in Beijing.

“We will also take further actions to ensure the safety of Chinese individuals and organizations in Pakistan,” he added.

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“To build the Belt and Road, we cannot have kidnapping.”

China has pledged to invest $57 billion in new rail, road and power infrastructure across Pakistan as a flagship project within its sweeping Belt and Road initiative to tie Asia to Europe and Africa by reviving ancient Silk Road trade routes.

Chinese officials have repeatedly urged Pakistan to strengthen security for its companies and individuals, especially in resource-rich Baluchistan, where China is building a port and funding roads to link its western regions with the Arabian Sea.

No group has claimed responsibility for the kidnapping.

In the past, Islamist militant groups have kidnapped foreigners in Pakistan for ransom or to drum up publicity for their cause.

Separatist rebels also operate in Baluchistan as do criminal gangs.

The China National Radio state broadcaster reported that three Chinese citizens, two women and a man, were eating in a restaurant in Quetta when gunmen men came in and dragged them toward a car without license plates.

A crowd formed around the kidnappers who then fired warning shots into the air. One of the Chinese woman then escaped, the broadcaster said, citing a witness.

Police in Quetta told Reuters the teachers did not work on Beijing-funded China-Pakistan Economic Corridor projects as they did not have guards.

Pakistan provides security for all Chinese workers on CPEC projects in Baluchistan.

(Reporting by Christian Shepherd; Editing by Robert Birsel)

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China may have to learn to treat others like equal human beings….

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China condemns couple’s kidnapping in Pakistan — “China condemn all forms of kidnapping” (but not torture?)

May 25, 2017

AFP

© AFP | Pakistani soldiers stand guard at the site where a Chinese couple was kidnapped in Balochistan province, which is at the heart of a $50-billion project by Beijing but is racked by separatist and Islamist insurgencies

BEIJING (AFP) – 

China condemned on Thursday the armed kidnapping of a Chinese couple in Pakistan, after the abduction raised safety concerns for Beijing’s multi-billion dollar investments in the country.

“The Chinese government attaches high importance to the safety of Chinese citizens overseas,” foreign ministry spokesman Lu Kang said during a regular press briefing.

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China foreign ministry spokesman Lu Kang — File photo from AFP

“We condemn all forms of kidnapping activities,” Lu said, adding that the government was working closely with Pakistani authorities to ensure their release.

The abduction happened Wednesday afternoon in Quetta, the capital of the southwestern province of Balochistan, which is at the heart of the $50-billion China Pakistan Economic Corridor (CPEC) project but is racked by separatist and Islamist insurgencies.

“They were dragged into a vehicle without number plates by three unknown men,” senior local police official Aitzaz Goraya told AFP.

One Chinese woman managed to escape as the men began firing in the air to scare off onlookers.

A passer-by, Muhammad Zahir, was shot as he tried to prevent the abduction.

He told AFP he saw three men forcing a Chinese woman into a white car but she was resisting and crying.

“I stopped to observe the situation but they had forced the woman in the car by then and were pushing the man.

“So I rushed to them and asked what they were doing. One of them said, ‘We are from the crime branch of the police and we are taking them for investigation’ and I told them that they should not misbehave with people. Then the driver came out and shot me in my leg,” the 35-year-old said.

China’s deputy chief of mission in Islamabad, Zhao Lijian, said the kidnapped pair had been studying Urdu at a language centre. Local police had earlier said they were teaching Chinese.

China is ramping up investment in Pakistan as part of a plan unveiled in 2015 that will link its far-western Xinjiang region to Gwadar port in Balochistan with a series of infrastructure, power and transport upgrades.

Mineral-rich Balochistan has been plagued by Islamist and separatist insurgencies since 2004, with hundreds of soldiers and militants killed in the fighting.

A greater push towards peace and development by Pakistani authorities, including with CPEC, has reduced the violence considerably in recent years.

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End to 1MDB saga still elusive after Bandar Malaysia setback

May 9, 2017

The chief of state fund 1Malaysia Development Berhad (1MDB), Mr Arul Kanda, was last Tuesday personally overseeing the dry run for Prime Minister Najib Razak’s site visit the next day to the Bandar Malaysia development.

Over a year ago, Mr Arul brokered the deal to sell 60 per cent of the upcoming township by 1MDB for RM7.4 billion (S$2.4 billion), one of the main planks of the plan to retire the state firm’s whopping US$11 billion (S$15.5 billion) debt.

But the lavish party to be attended by Datuk Seri Najib and the top brass of the Malaysia-China consortium that bought the stake didn’t happen, as the deal was aborted last Wednesday.

More worryingly for the Malaysian government, another key plank to bury 1MDB’s controversial dealings – a settlement with an Abu Dhabi sovereign fund over a US$6.5 billion claim – still needs a great deal of work.

The past fortnight was supposed to help draw a line under 1MDB’s controversial dealings. It turned out to be two weeks of unfulfilled hopes.

1MDB chief Arul Kanda personally oversaw the dry run for Prime Minister Najib Razak's visit to the Bandar Malaysia development last Tuesday, but the lavish party was scrapped after the deal was aborted last Wednesday.

1MDB chief Arul Kanda personally oversaw the dry run for Prime Minister Najib Razak’s visit to the Bandar Malaysia development last Tuesday, but the lavish party was scrapped after the deal was aborted last Wednesday. ST FILE PHOTO

Today, even lawmakers from Mr Najib’s ruling coalition are questioning the accord involving 1MDB and Abu Dhabi’s International Petroleum Investment Company (IPIC), with claims that taxpayers would eventually have to pay billions of dollars for any shortfall.

While most analysts feel that the protracted 1MDB saga would not be a key issue for voters during the polls – expected to be called this year – it may yet undermine Mr Najib’s leadership even if Umno returns to power.

“After the polls, when (Umno is) firmly back in office, 1MDB may become a major factor influencing whether party warlords will move against Najib or not,” ISEAS – Yusof Ishak Institute’s visiting senior fellow Wan Saiful Wan Jan told The Straits Times.

This is because, until the 1MDB debts are fully dealt with, the scandal is an albatross around Mr Najib’s neck. There is also the matter of continuing investigations and court action in the United States, Switzerland and Singapore, which have hurt Malaysia’s reputation.

On its part, the Malaysian government is trying to paint the setback caused by the cancellation of the Bandar Malaysia deal as a minor bump on the road. Putrajaya is also saying that the 1MDB-IPIC deal is a success as the parties are making progress.

Immediately after 1MDB and IPIC confirmed The Straits Times’ report of their interim settlement on April 24 of a US$1.2 billion loan, the government began talking up the apparent success in erasing some of the liabilities.

“These significant events represent the continued positive progress made by 1MDB, which is nearing the completion of its rationalisation programme,” said Mr Najib’s press secretary Tengku Sariffuddin Tengku Ahmad in a statement last week.

But opposition MP Tony Pua – one of the sharpest critics of 1MDB – noted that IPIC’s disclosure revealed “that they got exactly what they wanted, the return of US$1.205 billion worth of cash advances to 1MDB… and to discharge itself entirely as guarantor for 1MDB’s US$3.5 billion worth of bonds”.

The dispute stems from a 2015 debt-asset swop which involved 1MDB handing over responsibility for the bonds along with US$3.51 billion it had transferred to Aabar BVI, a British Virgin Islands firm that IPIC denies is its subsidiary.

The Malaysian Parliament’s bipartisan Public Accounts Committee (PAC) reported that the transfers could not be verified.

“Are 1MDB and Arul Kanda telling us that despite having paid US$3.51 billion to IPIC, we still owe the US$3.5 billion we borrowed?” asked Mr Pua. “The only explanation for the incredible situation is that the US$3.51 billion was never paid to IPIC as claimed.”

Malaysia’s Finance Ministry responded by insisting a letter from the BVI authorities confirms that Aabar BVI belonged to IPIC.

But soon, government lawmakers on the PAC began asking questions too. Barisan Nasional MP Marcus Mojigoh from Sabah demanded that the letter be made public. Kedah Umno MP Aziz Sheikh Fadzir called on the Finance Ministry to explain where the payments that 1MDB made to Aabar had gone towards.

Then came news of the Bandar Malaysia deal being cancelled.

Even though there are more than enough suitors to step in, questions remain as to whether taxpayers will again be asked to pick up the tab for 1MDB. The government took back Bandar Malaysia, encumbered by an RM2.4 billion bond and RM2 billion owed for relocation services last year, having sold it to 1MDB in 2011 for just RM1.6 billion.

A version of this article appeared in the print edition of The Straits Times on May 08, 2017, with the headline ‘End to 1MDB saga still elusive after Bandar Malaysia setback’.
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Chinese Firms Unable To Shed Doubts About Malaysia Port Project — Uncertainty among potential Chinese partners as PM Najib’s involvement in 1MDB looms large

May 8, 2017

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China’s Ambassador to Malaysia Huang Huikang (second from left) checking out a model of the Melaka Gateway project with KAJ Developments CEO Michelle Ong (left) in March. Industry players and government officials are now doubtful about the project taking off, due to the uncertainty among its Chinese partners.PHOTO: FOTOBERNAMA

Cash-strapped Malaysian players are instead driving plans, hoping to get leg-up in expansion efforts

In this second and final part of China’s growing involvement in the Malaysian economy, The Straits Times looks at the major port proposals that were supposed to involve companies from China, and what is happening to them. The first part published yesterday discussed the incoming China projects and their effect on Malaysian players.

Beijing’s apparent support for new Malaysian ports has sparked Kuala Lumpur’s optimism that it can supplant Singapore as South-east Asia’s shipping hub of choice. But the main proponents of these ports are not the huge Chinese companies being talked about.

Instead, they are actually cash- strapped Malaysian players hoping to secure a leg-up in efforts to expand quickly. And while Beijing is supportive of Malaysia’s plan, The Straits Times understands that China’s state-linked firms earmarked as partners have doubts about the viability of pouring billions into an already over-supplied sector.

“Port Klang is already expanding despite not running at full capacity. It makes no sense to pursue both the Melaka Gateway and Carey Island Port so close to each other in the Malacca Strait,” said former Port Klang Authority (PKA) chief Lee Hwa Beng.

At least three new port projects, said to involve China and worth some RM155 billion (S$50 billion), were in the offing as of early this year.

But the massive Carey Island project beside the main Port Klang in Selangor, valued at RM100 billion and which was supposed to bring in a Chinese partner, instead acquired an Indian partner during Prime Minister Najib Razak’s visit to India last month.

Industry and financial sources with knowledge of the plan told The Straits Times that MMC Corp, the Malaysian conglomerate proposing the deal ahead of plans for a public listing of its ports business, found China Merchants Group’s (CMG) terms too demanding.

“MMC can’t afford to finance the project on its own. But CMG doesn’t just want to be a bankroller,” a source said of the port on an island next to the established Port Klang.

Industry players and government officials are also doubtful that the RM43 billion Melaka Gateway, spearheaded by the little-known KAJ Developments, will take off, due to uncertainty among its Chinese partners, chief of which is PowerChina International.

The Chinese firms are still evaluating the potential returns from having to build the harbour on one natural island and three reclaimed ones. “In three years, they’ve invited ministers including the premier to several launches and signings, but are still short of a legally binding agreement,” a government source told The Straits Times.

It is only on Malaysia’s east coast town of Kuantan in Pahang that there is a Malaysian port project which has long started work with the help of a Chinese company. The Kuantan port is being expanded at a cost of RM4 billion with the involvement of China’s Beibu Gulf Port Group.

For China, not only does most of its trade pass through the Malacca Strait, but also up to 80 per cent of its imports of oil and gas needed to power up its economy. This prompted then Chinese President Hu Jintao to make the “Malacca Dilemma” a key strategic issue as far back as 2003.

But Malaysia is not China’s only solution to securing a trade route from Europe and the Indian Ocean. Beijing has also embarked on port-and- rail, and oil-and-gas pipe links in Myanmar, Nepal, Bangladesh and Eastern Europe. Last November, Chinese cargo was successfully carried overland to Pakistan’s Gwadar Port to be shipped out.

“Yes, China is friendly to Malaysia now and wants stronger allies in Asean. But it also has other strategic interests, and we cannot assume Malaysian ports are its top priority,” said former PKA boss Datuk Lee.

Analysts also believe Beijing could be cooling its long-standing policy of funding mega projects abroad.

“The Chinese government itself may now be concerned about its global image and, most importantly, about capital flight,” said Dr Johan Saravanamuttu of the S. Rajaratnam School of International Studies.

A version of this article appeared in the print edition of The Straits Times on May 08, 2017, with the headline ‘Chinese firms harbour doubts over Malaysian port projects’.
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China to launch own encyclopaedia to rival Wikipedia — “Cultural Great Wall”

May 3, 2017

AFP

© AFP/File | China plans to launch its own online encyclopaedia next year, hoping to build a “cultural Great Wall” that can rival Wikipedia as a go-to information source for Chinese Internet users who Beijing fears are being corrupted by foreign influences

SHANGHAI (AFP) – 

China plans to launch its own online encyclopaedia next year, hoping to build a “cultural Great Wall” that can rival Wikipedia as a go-to information source for Chinese Internet users who Beijing fears are being corrupted by foreign influences.

China is under pressure to write its own encyclopaedia so it can guide public thought, according to a statement by the project’s executive editor Yang Muzhi published last month on the website of the Chinese Academy of Sciences.

He once listed Wikipedia, which is available in China, and Britain’s Encyclopaedia Britannica as potential rivals and said the project aims to exceed them, according to an article he wrote late last year.

The project, which will be under the guidance of the state-owned China Publishing Group, “must have Chinese characteristics,” he wrote, adding it would be a “symbol of the country’s cultural and technological development” and increase its softpower and international influence.

Unlike Wikipedia — and its Chinese version Baidu Baike — which are written by volunteers and are in a constant state of revision, the new project, which was approved in 2011, will be entirely written by professionals.

So far over 20,000 scholars and academics have been enlisted to compile the project, which aims to have more than 300,000 entries by its 2018 launch.

The new encyclopaedia will be based on a previous printed version, published in book form in 1993. A second edition, which can be accessed through a special terminal, was released in 2009.

The newest version will be released online before being published in a bound edition.

China has over 700 million internet users but a 2015 report by US think tank Freedom House found that the country had the most restrictive online use policies of 65 nations it studied, ranking below Iran and Syria.

It has maintained that its various forms of web censorship — collectively known as “The Great Firewall” — are necessary for protecting its national security.

Sites blocked due to their content or sensitivity, among them Facebook and Twitter, cannot be accessed in China without special software that allows users to bypass the strict controls.

Beijing issued a new restriction for online freedoms, requiring Chinese Internet users to provide their real names when accessing online news sources.

The new restriction will come into effect on June 1.

Related:

China taking on Wikipedia with its own online encyclopaedia — “Old political framework” has to be abandoned

April 30, 2017

More than 20,000 scholars involved in country’s biggest publication project

By Stephen Chen
South China Morning Post

Sunday, April 30, 2017, 7:16pm