Posts Tagged ‘Chinese’

China’s balancing act on debt is becoming trickier

November 18, 2017

The government must hold its nerve, even as economic growth slows

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China’s president, Xi Jinping, delivers a speech in Beijing: non-financial sector debt in the country has gone from $6tn in 2007 to nearly $29tn today © EPA

NOVEMBER 16, 2017 

Why continue working when you are guaranteed a monthly income?” So asks Xu Yongan, a 55-year-old former steelworker from Anhui province and the recipient of an employee buyout. It may seem a bit puzzling that in China, the factory to the world, factory workers are paid to stay home. The solution to the puzzle — as to most puzzles about the Chinese economy — comes down to debt.

The government worries that years of investment-led growth have left the country with a heavy debt burden and lots of excess industrial capacity. It was a government-led effort to shut inefficient factories that led to Mr Xu’s early retirement.

That Chinese debt has grown to dangerous levels is beyond dispute. Non-financial sector debt has gone from $6tn in 2007 to nearly $29tn today, according to data from the Bank of International Settlements. The debt, equivalent to 260 per cent of gross domestic product, has brought with it dramatic declines in credit efficiency. The International Monetary Fund points out that in 2016 it took four units of credit to raise GDP by one unit. A decade ago the ratio was 1.3 to one.

China’s debt-to-GDP ratio is not far from that of the US, for example. But, as Zhou Xiaochuan, the central bank governor, emphasised last month, China’s companies bear an extraordinary high portion of the burden. Corporate debt levels at 160 per cent of GDP make it the most leveraged corporate sector in the world.

A year ago the situation looked even less tenable than it does today. Since then, the efforts to rein in excess capacity seem to have had some effect. Commodity prices have firmed, helping the big state-supported industrial companies. Private company growth (particularly in technology, as exemplified by groups such as Alibaba and Tencent) have helped reduce overall leverage levels. If China is to grow its way out of its debt problems, these trends must continue. Another potentially helpful factor is rural growth: over the past decade, China has promoted the transfer of agricultural land usage rights among farmers, resulting in bigger farms, increased investment and higher returns. Data on the scale of such transfers is scarce but an online broker,, has transferred a cumulative 6.8m hectares since it started up in 2009.

It reassures many China bulls that, due to its current account surplus and accompanying high savings rate, China has lent effectively all of the money to itself. But all the same, if the debtors cannot service their debts, a painful restructuring will be necessary. To avoid a crisis the government will have to tread carefully. The tentative withdrawal of credit from the economy is making the bond market jumpy. The central bank yesterday added more reserves into the financial system than it has in almost a year, to stem weakness in government bond prices. But liquidity injections are not a long-term solution to a debt problem. Neither is moving debt around by, for example, issuing asset-backed securities, which are increasingly popular in China.

So the government must continue to move deliberately and hope the centre holds. It will need to stay disciplined about keeping a lid on loan growth, industrial capacity and — most importantly — the shadow banking system of dodgy fund companies, trusts, and wealth management products. Slow and steady progress these front, even if the economy does not grow as quickly as previously, will send a reassuring message to global investors, and minimise the chances that China’s debt addiction will require a more radical form of treatment.


Even With Beijing Pushing Hard, Electric Cars Prove Hard to Start

November 17, 2017

Electric vehicles aren’t yet living up to the hype, auto makers in China are finding, as they churn out more EVs than they can sell—even with generous government subsidies—to satisfy Beijing’s directives.


By Trefor Moss
The Wall Street Journal
Nov. 17, 2017 6:14 a.m. ET


GUANGZHOU—Electric vehicles aren’t yet living up to the hype, auto makers in China are finding, as they churn out more EVs than they can sell to satisfy government directives.

At the Guangzhou Auto Show, companies are reckoning with the challenge of attracting buyers—and generating profits—while meeting Beijing’s requirement that electric vehicles account for roughly 3% to 4% of their total output in 2019.

Volkswagen AG aims to build 400,000 EVs by 2020 to meet the green-car targets, but it is unrealistic to expect consumers alone to buy that many, said Jochem Heizmann, the company’s chief executive in China. The company, he said, is studying options like car-sharing services to soak up the excess.

EV supply already exceeds demand: Auto makers made 424,000 in the first nine months of the year, but sold only 398,000, according to the China Association of Automobile Manufacturers. And analysts think individual consumers account for as little as a quarter of the total, the rest bought by state-run taxi companies or other public-service fleets.

“Customers are hesitant to pay a lot more money for an electric vehicle,” said Hubertus Troska, China head for Daimler AG, parent of Mercedes-Benz. And that cost gap is with generous EV subsidies in place. The government is set to end them in 2020.

Still car makers pile on. Last week, Ford Motor Co. became the latest foreign maker to commit to make EVs in China, announcing plans for a new $756 million plant. Tesla Inc. aims to build an EV factory in Shanghai.

Government policy does assure a certain level of demand: In congested cities like Guangzhou new license plates for gasoline cars are severely restricted, making EVs more appealing. And for now there are the generous subsidies. Consumers pay only $5,400 for the Baojun E100 electric car, for example, but its maker—a joint venture between General Motors Co. and SAIC Motor Co.—gets an extra $8,760 from the government.

Even given falling costs for batteries and other EV technologies, the end of subsidies will make it impossible for many makers to profit on EVs, said Jing Yang, an associate director at Fitch Ratings. They will “have to sacrifice short-term profitability for market share,” or simply quit the EV business, Ms. Yang said.

Auto makers could face similar problems in the U.S. GM, for example, which currently sell one fully electric vehicle there—the Chevrolet Bolt—plans two more by early 2019. But demand is uncertain outside states that offer heavy incentives, such as New York, California and Colorado. The company, which aims to be profitable on battery-powered cars by 2021, has said ride-sharing fleets, such as Lyft Inc. drivers, will play an important role in keeping EV sales viable.

This has been a strong year for some Chinese auto makers—but not electric pioneers like BYD Co. and BAIC Motor Co., whose overall car sales in the first nine months of 2017 were down 19% and 26%, respectively. They have overcommitted to EVs, some analysts think, accounting for nearly half the Chinese market between them.

The Lite, launched at the Guangzhou Auto Show on Friday, sells for around $13,100—for now. Photo: Trefor Moss/The Wall Street Journal

EV launches at the auto show Friday included the BAIC Lite, a two-seater with a 200-kilometer (124-mile) range that seeks to stand out with flashing exterior LED panels that Deputy General Manager Lu Hao said will entice young buyers. With subsidies the Lite costs around $13,100. Pushing up the price when subsidies end would kill sales, Mr. Lu admitted, so to make the cars viable BAIC would need to develop service revenues.

BYD is sticking to its 2018 EV sales target of 200,000, a company spokeswoman said, up from its goal of 170,000 this year. Through October, it had sold 88,000 EVs.

Even as China’s EV leaders struggle and despite concerns about the strength of demand, the big foreign players are readying their assault on the market. Volkswagen will invest nearly $12 billion in EV development and launch five EVs a year in China through 2025, Mr. Heizmann said. Daimler is investing around $750 million in a local battery plant to power electric Mercedes-Benz cars.

“We’re going all in,” Mr. Troska said.

Their determination challenges Chinese hopes of dominating the future EV market. When it comes to EVs, “profitability will be achieved with volume sales,” and ultimately only the big foreign manufacturers have the scale, said Janet Lewis, Macquarie Capital Research’s managing director of equity research.

—John Stoll in Detroit contributed to this article.

Write to Trefor Moss at


China Enlists Western Media to Spread Its Message

November 11, 2017

Tie-ups linked to propaganda arm aid mission to ‘tell Chinese stories well’

Women walk past a roadside poster of Chinese President Xi Jinping in October after the Communist Party granted him a new term and greater authority.Photo: GREG BAKER/Agence France-Presse/Getty Images

BEIJING—Xi Jinping wants the media to tell China’s stories better. These days, he is increasingly finding willing partners abroad.

The Chinese leader has exhorted state media to do more to “enable the world to see a multidimensional and colorful China” and present his nation as a builder of global peace and help strengthen China’s influence abroad.

China has for years placed paid English-language state-media supplements in Western newspapers, including The Wall Street Journal and the New York Times, and has placed similar advertorials with Australian, Indian and British media.

Under Mr. Xi, Beijing, which often calls Western depictions of its society unfair, has stepped up support for co-productions with foreign partners, including documentary tie-ups spotlighting the country’s culture, technological advancements and infrastructure projects.

One such feature is “China: Time of Xi,” a three-part documentary produced by Discovery channel’s Asia arm that was first broadcast in China in late October, shortly after China’s Communist Party gave the leader a level of authority not seen here since Chairman Mao.

A Discovery Channel’s documentary, shown in this YouTube video, portrays the Chinese Communist Party’s approach to development as a model for the world.

Interspersed in the production are admiring words for Mr. Xi and his policies from people such as Robert Lawrence Kuhn, a host for China’s state broadcaster, and former Australian Prime Minister Kevin Rudd, who says “Xi Jinping is a leader who dreams very big dreams.”

In one episode, economist Dambisa Moyo praises Mr. Xi’s signature Belt and Road initiative as “one of these incredibly transformative ideas.”

The documentary mentions some of China’s challenges, such as pollution. But there is no mention of more controversial aspects of Mr. Xi’s tenure, such as his crackdowns on speech and dissidents or his moves toward one-man rule.

“It’s not our place to sort of comment on or provide the good and the bad. We don’t look at it that way,” said Discovery representative Karun Arya. “We’re in the business of infotainment.”

Many of these projects receive support from state arms linked to government propaganda departments, including state broadcaster China Central Television. Such partnerships give China more say in how its story is told—with the imprimatur of a respected media outlet or producer.

For foreign media companies, the co-productions offer access to a large potential audience in a country that censors the media and routinely impedes camera crews. The tie-ups also bring new funding opportunities for makers of documentaries, which can be expensive and require funding from multiple partners.

Some producers involved in Chinese joint ventures said that with China’s resources and appetite for enhancing its profile abroad, its deepened interest in documentary work is a welcome development.

Discovery said the “Time of Xi” project was conceived by its team and received help with research and access from China Intercontinental Communication Center, a company belonging to the Communist Party Propaganda Department. CICC, which bought the distribution rights for China and other Asia-Pacific regions outside Discovery’s footprint, didn’t respond to a request for comment on its foreign production partnerships.

People’s Daily, the party mouthpiece, celebrated the documentary as an “in-depth interpretation on China’s development path, ideas and inspirations for the world.”

Vikram Channa, Discovery Networks Asia-Pacific’s vice president for production and commercial partnerships, describes Discovery’s approach as part Hollywood, part journalism. “We are visual, emotive storytellers,” he said. “It’s not CCTV but neither is it BBC or CNN. It’s bang in the middle.”

A poster with a portrait of Chinese President Xi Jinping overlooks a street at sunset in Shanghai in September.Photo: aly song/Reuters

Discovery has been making documentaries in China since 1997, with offerings that include a weekly one-hour special called “Hour China” on topics such as China’s wildlife, technological and engineering accomplishments and culture.

“There are too many stories of conflict, of us versus them,” said Kenny Png, a Singapore-based producer who has worked in China and was involved with postproduction work for “Time of Xi.” As China’s global profile expands, he said, people who work on Chinese co-productions “can help soften the dialogue.”

Production companies working with Chinese partners pick their content carefully, preferring topics such as culture, travel or history. Examples include wildlife and travelogue films such as Disney ’s panda-focused “Born in China” and National Geographic’s “China From Above,” on culture and infrastructure.

“Time of Xi” is rare in its focus on China’s leadership. “We just tend to not do anything about post-1949 history because you’re just asking for trouble,” said a producer, citing the year the Communists came to power.

Even seemingly innocuous topics can prove challenging. In the nature documentary “Big Pacific,” a co-production funded by parties including America’s PBS and CCTV’s documentary channel that premiered this year, an issue arose over images of sealife, according to one of the American producers, John Cullum.

After the Chinese side objected to what it saw as excessive footage from rival Japan, producers addressed such concerns by not stating the location for a segment on orange clownfish filmed in Japanese waters, he said. “That helped,” said Mr. Cullum.

CCTV didn’t respond to a request for comment.

China’s effort to get foreigners to “tell China stories well,” as Mr. Xi puts it, has been particularly on display with its massive “Belt and Road” plan to revive ancient trade routes. To promote the effort, Beijing has held forums for international journalists to guide them on how to create a “splendid chapter of media cooperation” based on Mr. Xi’s foreign-policy vision.

In Jiangsu province, employees of the state-owned broadcaster, Jiangsu Broadcasting Corp., explained in a recent article that foreign hosts are better at telling Chinese stories because they are believable and persuasive.

The company provided the majority of the funding for a series that aired this year on BBC, “Tales From Modern China.” The production, jointly financed by the BBC, highlighted topics such as China’s supercomputers.

When the company works with foreigners, a Jiangsu Broadcasting official said, the company strives to “show a Chinese image full of positive energy.”

— Xiao Xiao contributed to this article.

Write to Te-Ping Chen at

China Gave Trump a Win on Trade and He Didn’t Even Know It

November 10, 2017


By Jennifer Jacobs, Peter Martin and Craig Gordon

  • Chinese make move to allow more foreign investment in banks
  • Move is like what Trump was seeking but China didn’t tell him
U.S. President Donald Trump, right, speaks with Xi Jinping, China’s president, during a welcome ceremony outside the Great Hall of the People in Beijing, on Nov. 9, 2017.Photographer: Qilai Shen/Bloomberg

American and other securities firms scored what looks like a big win Friday when China announced new rules allowing them to own 51 percent stakes in joint ventures. It’s just the sort of market-opening move President Donald Trump was seeking on his first trip as president to Beijing.

Except Trump didn’t know it was coming.

He didn’t even ask for it in specific terms on the trip, say people familiar with the situation — even though it’s been at the top of the wish list for U.S. financial firms for years. The State Department didn’t know either.

It is the single most-important thing that happened while Trump was in China, business experts agree, and he would have been well within his rights to trumpet it on Twitter. China has resisted letting overseas firms have controlling stakes inside the country, but experts say it’s a critical step to allowing investment to flourish inside that nation’s tightly controlled economy.

And yet it didn’t even merit a mention in the 1,392-word statement the White House released about what happened while Trump was in China.

Read more: China moves to open market for financial firms

U.S. officials sought to downplay the significance of the development, saying it’s just one small step when China needs to fundamentally remake its approach to letting foreign investment onto its shores.

Trade Deficit

Some financial experts disagree, saying that it’s an important development for individual banks seeking to strengthen their foothold in the world’s second-largest economy — something that also would help Trump with his goal of reducing the U.S. trade deficit with China.

In one way, the lack of notice to Trump reflects a very Chinese approach to such matters, to do things that benefit China, and only in the manner and in the timing that suits China’s needs.

“China has planned for this for a very long time, and now is the right time to announce it because Trump is visiting,” said Iris Pang, a China economist at ING Groep NV in Hong Kong.

In another way, it puts the relationship between Trump and Chinese President Xi Jinping in a clearer light. During the trip, Trump boasted of the closeness and warmth between the two men, and White House aides stressed repeatedly that the trip was about cementing that relationship, not individual wins.

Xi’s Timing

But Xi easily could have bestowed this gift upon Trump during his visit by telling him about the pending move — ahead of one of their joint appearances, for instance — something to blunt the theme in the coverage that Trump has very little to show despite already spending almost a week in the Asian region, either on trade or North Korea.

The fact is that Xi didn’t let show just how hard it will be to make the achievements concrete in the future.

The exact timing of the openings are not yet known and few details were offered in today’s announcement. There are also many ways that Chinese policy makers could slow-walk market opening, Tom Orlik, the Chief Asia Economist at Bloomberg Economics in Beijing wrote in a note.

In addition, U.S. banks may approach investments in Chinese banks with some caution, considering ongoing concerns over leverage in the Chinese economy and shadow-banking exposures. What’s more, banks including Bank of America Corp. and Goldman Sachs Group Inc. have in recent years exited their stakes in Chinese lenders, seeking to avoid punitive capital imposts on minority shareholdings, a legacy of regulations introduced after the financial crisis.

HSBC’s Stake

After sales by Citigroup Inc. and others, HSBC Holdings Plc has been left as the only one with a major holding, in the form of its 19 percent stake in Bank of Communications Co.

Andrew Polk, co-founder of research firm Trivium China in Beijing, said he doesn’t know why this announcement wasn’t folded in with Trump’s trip. He believes past work between U.S. and Chinese trade negotiators had brought this item to the point of being announced — and suggested that if Trump had just asked directly, the Chinese might have given it to him or told him ahead of time.

But the real motivation for China isn’t offering the U.S. a concession — it’s about the Chinese government wanting to boost foreign direct investment, or FDI.

China is “panicked about the extremely low levels of FDI inflows they have and now realize that to get higher FDI inflows they’ll have to do some more opening. This is part of that,” Polk said.

China’s growing debt pile is a major economic risk. Total debt will reach 292 percent of output in 2019 and 328 percent in 2022, up from 162 percent in 2008, according to projections by researchers at Bloomberg Economics.

No Way to Compete

Polk said the Chinese are making changes in sectors, like banking, where their built-in advantage is so huge, a little more outside money won’t really challenge them. “They’d never have done this 10 years ago,” he said. Now, “just with the size of these things, there’s no way a foreign firm can compete.”

Polk believes this is a big deal for individual firms, less so in the overall picture of China’s economy, because the amounts are still relatively small. “It’s not a big deal in the relationship between China and outside entities. If you’re HSBC or Standard Chartered then it could be a big deal for your business,” he said.

— With assistance by Jeff Kearns


Chinese dissident writer dies on medical parole

November 8, 2017


© AFP/File | The death of writer Yang Tongyan comes just months after Chinese Nobel laureate Liu Xiaobo, who died in July, weeks after he was transferred from prison to a heavily-guarded hospital to be treated for late-stage liver cancer

BEIJING (AFP) – A veteran Chinese dissident who had nearly completed a 12-year prison sentence for “subversion” has died on , rights groups said Wednesday.

Writer Yang Tongyan died on Tuesday, nearly three months after an August 23 surgery to remove a brain tumour, Amnesty International said in a statement, citing information from close friends.

Rights groups say a pattern has emerged in recent years where China releases activists from prison in poor health, or only weeks before they pass away, with late Nobel Peace Prize laureate Liu Xiaobo being a notable example this summer.

News of the death emerge as US President Donald Trump, whose government had urged China to release Liu before he died, arrived in Beijing for meetings with Chinese leader Xi Jinping.

“The death of yet another long-term Chinese detainee on medical parole is alarming,” said Nicholas Bequelin, East Asia Director at Amnesty International.

“There seems to be no accountability for the pattern of deaths on medical parole of people labelled by the authorities as ‘enemies of the state’,” Bequelin added.

Yang was convicted in 2006 for posting anti-government articles online, after having already spent a decade in prison for “counter-revolutionary” crimes.

The 56-year-old had been released from Nanjing Prison on medical parole in August following his diagnosis with an “aggressive form of brain cancer”, PEN America said in a statement.

Yang was a 2008 recipient of PEN’s Freedom to Write Award and a member of the Independent Chinese PEN Centre.

His death, less than four months after that of Liu Xiaobo, “is another black mark on the Chinese authorities’ human rights record,” said Karin Karlekar, PEN America’s Director of Free Expression at Risk Programs.

Liu was detained in 2008 after co-writing Charter 08, a petition calling for democratic reforms.

The veteran of the 1989 Tiananmen Square pro-democracy protests died in July, more than a month after he was transferred from prison to a heavily-guarded hospital to be treated for late-stage liver cancer.

Dissident writers and activists have long received lengthy prison sentences in China after speaking out about issues the authorities deem politically sensitive.

In another case, Chinese authorities detained activist Cao Shunli in 2013 as she attempted to travel to Geneva ahead of a UN review of China’s rights record.

She died in custody after she was denied medical treatment, her family and lawyers said.

AFP tried to phone Yang’s older sister, but an automated message said the number was not receiving incoming calls.

When asked whether Yang had requested overseas treatment prior to his death, foreign ministry spokeswoman Hua Chunying told AFP she did not have any information.

The Huashan hospital in Shanghai, where Yang was treated according to AFP sources, said their press department was not available to answer questions.

An officer at Nanjing Prison refused to answer any questions.

China Reforming The World Order — Some friction to be expected in China’s rise as global leader

November 2, 2017

By Goh Sui Noi
China Bureau Chieg
The Straits Times

BEIJING • China’s ambition under President Xi Jinping is clear – to be a global leader by the middle of this century.

In his report last week to the Chinese Communist Party (CCP), Mr Xi said China aspires to be a “global leader in terms of composite national strength and international influence”.

This is part of the Chinese dream of the “great rejuvenation of the Chinese nation” after its century of decline and humiliation from the Opium War of 1840.

The country, Mr Xi said at the 19th five-yearly national congress of the party, is now at a “new historic juncture” in its development. And the new era will be one that “sees China moving closer to centre stage and making greater contributions to mankind”.

These contributions include, among other things, offering its development model as a “new option” for other countries wanting to speed up their development and taking an “active part” in reforming the international order.

While observers say China’s aspirations are understandable, there are those – both in Asia and the West – who worry about what these mean for the rest of the world.

Western observers are of the view that China intends to replace the US as the dominant power in Asia and reshape the international order to be more in line with its interests.

China’s ambition to serve as a development model and increase its international influence, together with its endeavour to turn its People’s Liberation Army into a first-class military force – as mapped out in Mr Xi’s report – reinforces “the widely held assessment that China harbours a deep-seated desire to displace the United States as the dominant power in Asia”, wrote two analysts with the American think-tank Centre for Strategic and International Studies.

Photo: A military band practising before the opening session of the Chinese Communist Party’s 19th National Congress at the Great Hall of the People in Beijing. While observers say China’s aspirations are understandable, there are those who worry about what these mean for the rest of the world. PHOTO: AGENCE FRANCE-PRESSE


In addition, wrote Ms Bonnie Glaser and Mr Matthew Funaiole, Mr Xi’s highlighting of the building of islands and reefs in the South China Sea as a major achievement of his first term showed China would “prioritise strengthening its control over the contested waterway at the cost of rising friction with its neighbours and the United States”.

Furthermore, during his first term, Mr Xi has sent mixed signals over whether China supported a rules-based international order, taking part in United Nations peacekeeping missions but also rejecting international tribunal findings against its claims to the South China Sea. Mr Xi’s vision for the future, they suggested, may signal an intention to double down on challenging elements of the prevailing world order that Beijing sees as contrary to Chinese interests.

During his first term, Mr Xi has sent mixed signals over whether China supported a rules-based international order, taking part in United Nations peacekeeping missions but also rejecting international tribunal findings against its claims to the South China Sea.

The “overarching vision (Mr Xi) laid out should raise alarm bells in Asian and Western capitals”, they said.

While not disagreeing totally on the issue of the international order, Professor Jia Qingguo, dean of Peking University’s School of International Studies, said China’s promotion of reform of the international order is not about China’s interests alone, but also about making the system more equitable and fair.

He added that China is a beneficiary of the international order and that stability of the system is important to it.

He pointed out that Mr Xi, in his report to the party congress, also stressed that China would safeguard the stability of the order.

He added that the US was the most powerful nation in the world and that it was important for China to handle its relations with the US well. “This is important bilaterally for China, and also for safeguarding the international order.”

As for China’s growing military might, he contended that a strong Chinese military is not a bad thing. “If it is in China’s interest to safeguard this order, then a strong China is a good thing for the international order,” he said.

Prof Jia also pointed out that while China needs to be heard on the world stage because of its growing interests all over the world, the international community is also demanding that it plays a bigger role given its growing influence as a result of its economic might.

“In the past, China could sometimes dodge or keep quiet,” he said. “But now as its status and influence grow, people expect it to say or do something.”

On issues like the North Korean nuclear crisis, “people expect China not just to speak up but also play an important role”, he noted.

The US has been pressing Beijing to do more to rein in North Korea’s nuclear and missile programmes and the subject is expected to come up when US President Donald Trump visits China next week.

Still, there is also disquiet in the Asian region over China’s intentions as it grows stronger.

Over in India, former Indian ambassador to China Ashok Kanthi wrote that the manner in which the Chinese pursued their dream “has generated widespread anxieties, including in India”. This included “China’s readiness to deploy its economic, military, political and diplomatic clout to advance its interests, defined in increasingly expansive and unilateral terms”.

In Indonesia, an article in The Jakarta Post pointed to Mr Xi’s envisioning of a more modern and powerful military for the new era, saying the Indonesian military needed to continue to reform and modernise too, to respond to the changing strategic environment. It talked about the possibility of confrontation with “a more affluent and powerful China” over “the unresolved territorial dispute over parts of the South China Sea near the Natuna Islands”.

No automatic alt text available.

China H-6 bomber near Scarborough Shoal, the Philippines

It also raised concern over China’s Belt and Road Initiative to help build infrastructure in developing countries, saying that while Indonesia should make the most of the financing and development opportunities presented by the initiative, it also needed to ensure that the law of the land prevailed.

While there are actions by the Chinese that cause concern, particularly in their neighbourhood, Professor Yang Dali of Chicago University warned against getting into a situation where whatever the Chinese do “is necessarily bad”.

He pointed out that Mr Xi was right in saying that some Chinese practices and experiences may be of value to other developing countries which can learn from them, such as China’s development of infrastructure and investment in education.

He noted, too, that in the area of climate change, China has chosen to play a pivotal and global role that has been welcome.

China, he said, has been willing to learn, adapt and react to external criticism, including in the way the Chinese-led Asian Infrastructure Investment Bank is run. In doing so, China will not only be a global citizen “but also play a leadership role that is valuable for the global community”, he added.

In the East Asian region, China’s problem is possibly that it has risen so fast that it is not ready for the leadership role that it is playing.

It needs to go through a learning period, Prof Jia noted, including accumulating knowledge of international organisations and understanding of the conditions of the region and its history and culture.

Both sides, China and its neighbours, have to adjust to each other, he said.

China was an ordinary power before now, but is becoming less so.

“China needs to adjust its view of things and the way it does things accordingly,” said Prof Jia.

At the same time, countries in the region also need to adjust to China’s rise. While in the past they may be used to a certain way of dealing with their relationship with China, they now have to use other methods.

“During this period of adjustment, there may be contradictions and conflict,” he said.

At the end of the day, he said, China’s desire is to have good relations with its neighbours because this means China will be more secure and have more opportunities for growth.

The same could be said for countries in the region. The question is what kind of relationship is acceptable to both sides – and that needs to be negotiated.

A version of this article appeared in the print edition of The Straits Times on November 02, 2017, with the headline ‘Friction to be expected in China’s rise as global leader’. Print Edition | Subscribe

India’s New Afghan Trade Route Via Iran, Bypasses Pakistan

November 2, 2017

By Anjana Pasricha

FILE - A speed boat passes by oil docks at the port of Kalantari in the city of Chabahar, 300km (186 miles) east of the Strait of Hormuz, Jan. 17, 2012.

FILE – A speed boat passes by oil docks at the port of Kalantari in the city of Chabahar, 300km (186 miles) east of the Strait of Hormuz, Jan. 17, 2012.

Opening a new trade route to Afghanistan that bypasses Pakistan, India has dispatched its first consignment of wheat to the war torn country via the Iranian port of Chabahar.

The strategic sea route is a significant step in bolstering trade with Kabul that has been hampered because rival Pakistan does not allow India to transport goods to Afghanistan through its territory.

After the shipment was seen off by Indian Foreign Minister Sushma Swaraj and her Afghan counterpart Salahuddin Rabbani via a joint video conference Sunday, the Indian government called it a “landmark moment.”

In the coming months, six more consignments of wheat totaling 1.1. million tons will be sent from India’s western port of Kandla to Chabahar. From the Iranian port it will be taken by road to Kabul.

The shipment comes days after U.S. Secretary of State Rex Tillerson, on a visit to New Delhi, allayed concerns that the Trump administration’s tough stand on Iran could pose a fresh stumbling block to India’s plans to develop the strategic Iranian port as a regional transit hub.

Indian Foreign Minister Sushma Swaraj, right, shakes hand with U.S. Secretary of State Rex Tillerson in New Delhi, India, Oct. 25, 2017.

Indian Foreign Minister Sushma Swaraj, right, shakes hand with U.S. Secretary of State Rex Tillerson in New Delhi, India, Oct. 25, 2017.

Easier connectivity to Afghanistan is key for India to step up its economic engagement with Kabul, which Washington has called for as part of its new policy to stabilize the war torn country.

And Chabahar port, in which India is investing $500 million to build new terminals, cargo berths and connecting road and rail lines, is the centerpiece of the strategy to improve linkages not just with Afghanistan, but also to resource-rich Central Asian republics.

“This is the first time that we are getting into Afghanistan through a route different than what traditional routes have been,” said South Asia expert Sukh Deo Muni at New Delhi’s Institute of Defense Studies and Analyses.

Indian leaders expressed optimism about the project, which is still a work in progress. Minister Swaraj called it the starting point of a journey that would spur the unhindered flow of commerce and trade throughout the region. Prime Minister Narendra Modi tweeted the launch of the trade route, “marks a new chapter in regional cooperation & connectivity.”

I congratulate Afghanistan & Iran on Indian wheat shipment being flagged off from Kandla to Afghanistan through Chabahar.

This development marks a new chapter in regional cooperation & connectivity.

The sea route via the Iranian port is the second step taken by India to increase connectivity with Kabul. In June it opened an air freight corridor to provide greater access for Afghan goods to the Indian market.

The Chabahar port is seen as India’s answer to the Gwadar port in Pakistan being developed by China.

FILE - A Pakistan soldier stands guard while a loaded Chinese ship prepares to depart Gwadar port, about 700 kilometers (435 miles) west of Karachi. Pakistan, Nov. 13, 2016.

FILE – A Pakistan soldier stands guard while a loaded Chinese ship prepares to depart Gwadar port, about 700 kilometers (435 miles) west of Karachi. Pakistan, Nov. 13, 2016.

The project was conceived almost 15 years ago, but the plans were stalled for years due to U.S. led international sanctions on Iran. Their easing prompted India to sign a trilateral pact with Iran and Afghanistan last year to develop the port.

U.S. Secretary of State Tillerson indicated in New Delhi last week that fresh sanctions on Iran by the Trump administration would not pose a stumbling block to those plans.

“It is not our objective to harm the Iranian people, nor is it our objective to interfere with legitimate business activities that are going on with other businesses, whether they be from Europe, India or agreements that are in place that promote economic development and activity to the benefit of our friends and allies as well. We think there is no contradiction within that policy,” he told reporters in India.

Those words have been welcomed in New Delhi said analyst Muni. “I think there is a far more reassuring feeling in India vis-a-vis the Trump administration than what the initial thought was,” he said.

The shortest and most cost effective land routes between India and Afghanistan lie through Pakistan. However, due to longstanding rivalries between the two countries, India is not allowed to send any exports through Pakistani territory and Afghanistan is only allowed to send a limited amount of perishable goods through Pakistani territory to India.

Philippines drug rehab facility a ‘mistake,’ ‘impractical’ — Donated by the Chinese real estate mogul Huang Rulun (Neither China nor the Philippines known for expertise in drug treatment and addiction recovery)

November 1, 2017
The money spent to construct the mega drug rehabilitation facility in Nueva Ecija could have been used to fund smaller, community-based anti-drug programs, DDB Chairman Dionisio Santiago said. File photo

MANILA, Philippines — The construction of a massive drug-rehabilitation facility in Nueva Ecija is a “mistake” and “impractical,” according to the chairman of the Dangerous Drugs Board.

Instead, the money spent to construct the Mega Drug Abuse Treatment and Rehabilitation Center in Fort Magsaysay in Palayan City could have been used to fund smaller community-based anti-narcotics programs which are proven to be more effective, according to Dionisio Santiago, the chairman of the DDB.

“Impractical. That was a mistake. Ang problema naging excited si president pero yung ginasta dun pwedeng ginamit sa mga community-based rehab yan na maliliit which can accommodate only between 150 to 200 (The president might have been excited, but the money could have spent to finance community-based rehabilitation programs that can accommodate only between 150 to 200 people),” Santiago said in an interview with ANC.

“Masyadong malaki yung 5,000. Saan ka kukuha niyan? (Five thousand people are too big. Where will those individuals come?)” he added.

READ: Send drug addicts to N. Ecija center

Santiago said that family support was important in the process of drug rehabilitation, and the distance and the location could prevent the kin of patients from visiting them in the facility located in Nueva Ecija.

“Saan mo pangagalingin yun? Yung iba taga-Batangas. Sa rehab kailangan mo family support. Paano ka pupunta kung pamasahe lang papunta sa loved ones mo wala ka (Where will they come? Some are from Batangas. In rehabilitation, family support is important. How can you go there if you don’t have money for your fare?)” the DDB chief said.

The drug facility can serve up to 10,000 patients and was donated by the Chinese real estate mogul Huang Rulun.

It occupies a land area of 11 hectares and has a total construction area of 60,000 square meters with 172 building units.

Huang donated P1.4 billion to build two rehabilitation facilities in the country and said that his money was his contribution to the fight against illegal drugs in the Philippines.

READ: Gov’t drug rehab centers get P2-B cut — Recto

Santiago also bared that they had already submitted a proposal to Malacañang two to three months ago that would provide a “balanced approach” to tackling the drug menace.

The DDB chief said that this thrust, stipulated in the Philippine Anti-Illegal Drugs Strategy from 2016 to 2022, will be more aligned with the social reform and national security agenda of President Rodrigo Duterte.

“We want to show the people na hindi puro law enforcement itong anti-drug campaign (We want to show the people that the anti-drug campaign is not just about law enforcement.). We want to show that it has been a balanced approach,” he said.

“It is now more aligned with the social reform agenda of the president, with national security strategy agenda. Dahil dito, we want to show na yung social reform, kasama ang anti-poverty (In this program, we want to emphasize social reform including anti-poverty program),” he added.

The DDB chairman admitted that the president may have been unaware of the PADS when he launched his brutal crackdown on illegal drugs more than a year ago.

“I don’t think so,” Santiago answered when asked if Duterte was aware of this policy paper.

“I don’t think he will disapprove this” as this will show that he has a heart, Santiago added.

He also believed that the president was convinced that the problem of illegal drugs in the country was a public health issue.

Santigao lamented that in the past months the law enforcement aspect of the government’s anti-drug campaign was highlighted while the other thrusts such as health care alternatives, education and justice were “suppressed.”

He said that since the president transferred the lead authority in the anti-drug campaign to the Philippine Drug Enforcement Agency the situation in the country had “calmed down.”

The DDB was also taken out of the picture in the previous months which led to emphasis on the law enforcement aspect of the program, Santiago added.

He said that the board was already coordinating with groups to target the most vulnerable sectors of the society to drug abuse.

“We are making some adjustments,” he said.

Duterte is accused of enabling thousands of drug-related killings in his campaign to eliminate illegal drugs, a charge that he has denied.

According to human rights groups, at least 12,000 people have already died in the campaign, but government agencies deny this and claim that many of these deaths are still under investigation.

RELATED: The war on drugs

China considers three-year jail terms for disrespecting national anthem, flag

October 31, 2017

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BEIJING (Reuters) – China’s largely rubber-stamp parliament is considering tougher penalties for people who disrespect the national anthem or flag in public, including up to three years in jail, state news agency Xinhua said on Tuesday.

Xi Jinping has ushered in new legislation aimed at securing China from threats both within and outside its borders since taking over as president in 2013, as well as presiding over a sweeping crackdown on dissent and free speech.

China passed a new law in September mandating up to 15 days in police detention for those who mock the “March of the Volunteers” national anthem, a law that also covers the Chinese territories of Hong Kong and Macau.

Parliament is now looking at whether to amend China’s Criminal Law to include criminal penalties for disrespect of the national anthem, including intentionally distorting the lyrics or tune, Xinhua said.

The tougher penalties also apply to desecration of the national flag, or emblem, including burning, defacing or trampling on it in public, the report said. That, too, had previously been punishable by up to 15 days’ detention.

A draft amendment has been submitted for deliberation at a bi-monthly session of parliament’s standing committee, which started on Monday.

“Violators in this regard may face punishments of up to three years of imprisonment, according to the draft,” it said.

It was not clear when the amendment might be passed but it could be at the end of the week, when parliament’s standing committee closes its current session.

The earlier national anthem law has fueled concern in Hong Kong, whose residents have grown nervous over China’s perceived encroachment of the city’s autonomy following such events as the disappearance of booksellers who later emerged in mainland Chinese custody.

In 2015, Hong Kong football fans booed the Chinese anthem during a World Cup qualifier, prompting a fine for the territory’s football association from world body FIFA.

In August, Shanghai police detained three men for having “hurt patriotic feelings” by dressing up as Japanese soldiers and posing for photographs outside a memorial to China’s war with Japan, state media said.

Reporting by Ben Blanchard; Editing by Michael Perry and Paul Tait

Chinese universities start ‘Xi Thought’ institutes — “Xi Philosophy will be implanted into students’ hearts and minds”

October 30, 2017


© AFP/File | A slogan in a Beijing street reads “Promote Xi’s thought of socialism with Chinese characteristics in the new era, making it a lively practice in Beijing”

BEIJING (AFP) – Xi Jinping Thought will now be taught, researched and promoted in universities across China, ensuring that the leader’s eponymous philosophy is implanted into students’ hearts and minds.

At least twenty universities have established research institutes for Xi’s ideology, which was enshrined in the Communist Party’s constitution during its 19th national congress this month.

The distinction places Xi on a par with Mao Zedong and Deng Xiaoping. It means that his dogma — “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” — will become a mantra for a new generation.

According to media reports Sunday, the research institutes will not “hide in the ivory tower” but advocate the incorporation of Xi thought in all aspects of daily life.

“We will gather many experts and professors to disseminate and preach Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era in businesses, neighbourhoods and villages,” Jiang Hongxin, head of Hunan Normal University’s newly-founded Xi Thought research centre, told the People’s Daily, the party mouthpiece.

Jiang’s attitude mirrors that of many institute directors, who in interviews with Chinese media over the weekend espoused a deep devotion to spreading Xi-isms.

“The (research) centre has a unique duty, which is to push forward Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era in curriculums, in classrooms and in minds,” Chen Xianda, a professor at Renmin University of China, told the Beijing-based Guangming Daily.

One institute director said the centre was the school’s way of “answering Xi’s call” to educate young people, while another said the Xi Thought organisation would “guide the entire school, from top to bottom, in implementing the spirit of the 19th congress”.

“We must always keep in mind the generosity of General Secretary Xi Jinping,” Zhou Qihong, a party secretary at Wuhan Donghu University, told the People’s Daily.

The lessons must “enter brains and hearts”, he said.

The education ministry also released guidelines Monday for mandatory elementary and high school extracurricular programmes that include activities to “foster emotional attachment to the Chinese Communist Party“.