Unacceptable US spying

With the NSA eavesdropping scandal continuing to unfold and revealing an increasing number of the United States friends have been victimized, the exposure of alleged Special Collection Service units of the US spy network on Chinese soil came as no surprise.

To many Americans, we are at the very best a potential rival, if not an enemy, despite all the official rhetoric about partnership.

According to the German weekly Der Spiegel, SCS cells operate in five Chinese cities -Beijing, Chengdu, Hong Kong, Shanghai and Taipei.

The White House has some explaining to do because such establishments and activities are illegal in nature and not covered by diplomatic immunity. Nor are there any known bilateral agreements allowing their existence.

Decision-maker ignorance, as was the case in US President Barack Obama’s reply to reports on the NSA’s alleged snooping on German Chancellor Angela Merkel’s cellphone, will not be an acceptable excuse.

It is doubtful that, as the final user of the intelligence collected by the omnipresent US spy apparatus, the US president doesn’t, even occasionally, verify the source of the information.

And never tell us they are here to fight terrorism. While this country has been contributing in all earnest to the global war on terror, its own vulnerability to terrorism has hardly been a concern to the US. Washington has consistently blinded itself to the existence of terrorist threats in and to the country’s Xinjiang Uygur autonomous region. Attacks from such terrorists, which have claimed hundreds of lives in recent years, have, more often than not, been beautified as a rebellion against the “repression of religious freedom” or “discriminative policies”.

Nor is the SCS necessary in China to address US safety concerns. American people, with spies as one of the rare exceptions, are safe and welcome in those cities and the country in general. So if national security is the “one purpose” of US national security operations, as Obama told his home audience the other day, he can rest assured and save money by recalling the SCS staff from China.

While the American intelligence system is given overwhelming authority to carry out surveillance operations at home under the US Patriot Act, this land is China.

Given the lasting worries about terrorist threats on the other side of the Pacific, the SCS people will find themselves more useful and welcome at home.

China Daily via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/Rqjk1KzwC8E/

Resist extremism in Xinjiang

In recent years, the infiltration of Islamic fundamentalism and extremism into the Xinjiang Uygur autonomous region is threatening the region’s social stability and healthy economic and social development. We should resolutely resist the penetration of extremist religious ideas, says Xinjiang Daily. Excerpts:

As we all know, the rise of Islam has more than 1,400 years of history and it has developed into a world religion for multiple nationalities. After spreading across the world and going through different stages of development, Islam shows two essential features: unity and diversity.

Muslims around the world have different ethnic cultures, which is reflected in their respective customs, literature and art, values, thoughts and feelings. These are part of a nation’s cultural traditions and characteristics.

Yet although Muslims in different parts of the world may have different rituals, customs, clothing and many other aspects of life, they share their belief in Islam. As long as Muslims around the world do not violate the basic tenets of Islam, their colorful traditional culture will be recognized by most of the world’s Muslim communities. It is the existence of these differences that has created the colorful and diverse Islamic culture and civilization.

In recent years, the infiltration of Islamic fundamentalism and extremism into the Xinjiang Uygur autonomous region is threatening the region’s social stability and healthy economic and social development.

Religious extremism is promoting the Islamization of society and the negative impact it is having is increasingly prominent. More and more Uygur women no longer wear colorful Uygur costumes. In some areas of southern Xinjiang, music, traditional dances, painting, sculpture and some other social and cultural activities are banned and even some Uygur wedding and funeral customs are blamed because they are said to violate Islam. Islamic fundamentalist extremists deliberately strengthen the public’s consciousness of religious identity through various means, and deliberately bloat the atmosphere of religious extremism with the purpose of gradually eroding and even extinguishing the traditional Uygur culture.

In essence, Islamic fundamentalism is the product of religious politicization in the Islamic revival movement. The salient feature of Islamic fundamentalism is to transform Islam into an exclusive political ideology and use it as a tool to exclude, oppose and replace all non-Islamic ideologies, political systems and lifestyles.

Islamic fundamentalists use a thinking pattern of binary opposition to view and understand the world, which has strong exclusivity. It not only rejects the existence of all different cultures and all pagan beliefs, it also rejects the homogenous culture and beliefs because there are certain disparities and differences between these cultures, beliefs and their extremist religious ideas. The radical views and fanatical behavioral pattern of the fundamentalists completely violate the spirit of tolerance, moderation, mutual respect and harmony of Islam.

Islamic fundamentalists have an extremely narrow interpretation of the Quran, and, in the name of religion, they are inciting the masses to achieve their ulterior political motives. Their fundamentalism and extremist ideas ignore the history and reality of the diversity of Islamic culture and they want to “purify” the religion and beliefs and exclude dissidents with extreme measures.

In the name of religion, they insult and belittle ethnic traditions, trying to penetrate some countries and regions with their extremist ideas. Gradually they erode and eliminate traditional ethnic religions and cultures, and reshape the political and social ideologies in these countries and regions.

These practices go against the wishes of the majority of people and deviate from the mainstream ideology, culture and belief of society. It can be predicted that if the Islamic fundamentalists are allowed to run amuck in society, it will inevitably cause more social conflict and frictions. Islamic fundamentalism and extremist ideology is unsuitable for Xinjiang’s social situation and is against popular sentiment, it will cause irreparable damage to traditional Uygur culture and enormous damage to the diversity of Islamic civilization.

China Daily via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/wfDsumnkQHw/

Firms heading home as benefits wane in China

More companies from Europe and the United States that outsourced production to China are returning home as price gaps narrow, reports Matt Hodges

For Dutch engineering and electronics conglomerate Philips NV, improved automation and smarter robots meant it made more sense financially to build a new factory in Drachten last year than extend its operations in China.

Philips found the robots to be more productive than workers in Guangdong in southern China, where it, like many other foreign multinationals, faces rising labor and raw material costs and occasional staff shortages.

General Electric Co took arguably a bigger gamble by opting to reshore some production from China to its Appliance Park in Louisville, Kentucky, also in 2012.

There, GE was able to redesign one of its water heaters and slash the time it takes to get it to warehouses. Efficiency rose and material costs fell by more than 20 percent, enabling it to lower the US retail price of its GeoSpring heater from $1,599 to $1,299. GE also returned production of some washing machines and refrigerators.

Such cases have become more common over the past five years as more European and US companies find it attractive to return jobs and production home, a strategy known as reshoring.

These moves mostly involve companies that sell mainly to their domestic markets. And they indicate that China’s competitiveness as a global low-cost production base is waning.

“Current research shows many (US) companies can reshore about 25 percent of what they have offshored and improve their profitability,”said Harry C. Moser, founder and president of the Reshoring Initiative, in an e-mail to China Daily.

Figures from the nonprofit organization show that from 2000 to 2008, the number of manufacturing jobs offshored from the US grew by 100,000 to 150,000 each year, while the number reshored was about 2,000 per year.

Moser wrote that the numbers now stand at “maybe 30,000 to 50,000 jobs/year offshoring, while reshoring is growing at about 30,000 jobs/year”.

“New offshoring is down 70 percent to 80 percent, and new reshoring is up about 1,500 percent.”

According to a report by the RI in July, most US companies returned production home because of higher wages in China and unfavorable currency value. Other reasons cited were quality problems, freight costs and other problems related to delivery, such as deadlines not being met.

Chinese factory workers’ expectations are changing. According to the National Bureau of Statistics, the average annual urban income jumped to 41,799 yuan ($6,850) in 2011, from 24,721 yuan in 2007.

Rising costs and other issues have persuaded some companies to abandon their China manufacturing dreams. Sleek Audio LLC returned production to Florida after losing hundreds of thousands of dollars in scrap and more in lost sales due to poor quality control in China.

Scovill Fasteners Inc cited rising salaries and the experience of seeing one-quarter of its staff never return from their annual holidays in explaining its decision to go back to Georgia.

Other factors cited for reshoring include high oil prices that make international shipping more costly, friendlier investment climates in the US and parts of Europe and soaring wages in China. Labor costs have shot up by as much as 500 percent in China since the turn of the century, and they’re still rising.

However, “salaries for technicians and designers in China are still much lower than in the US and Europe,”said Zhang Jun, director of the China Center for Economic Studies at Shanghai’s Fudan University.

Though high-profile companies such as Caterpillar Inc, Google Inc and Ford Motor Co have followed the reshoring trend, finance professors and business consultancies in Shanghai warn against overplaying the situation.

“This reshoring trend is quite prominent, and it’s going to continue in the near future. But its fate over the longer term really depends on how well and how quickly China can transform itself from a country driven by investment and imports to one driven by domestic consumption,”said Xu Bin, a professor of economics and finance at the China Europe International Business School, which has a main campus in Shanghai.

For every big-name company that’s moved work back home, there are other producers staying put in China.

French Industry Minister Arnaud Montebourg said recently that “only a few”French companies have decided to reshore or given it serious thought. And in July, the Financial Times described the reshoring trend among United Kingdom companies as “modest”.

“Europe is behind the US, but it’s starting to push hard,”said Moser. “It is spreading in the Netherlands and France, and there is interest in the UK, Switzerland, Italy and Belgium.”

The number of reported cases is limited — perhaps 100 in the US, likely even fewer in Europe — but it hints at the changing dynamics of the global playing field. The US now has highly competitive energy prices, and its workers are among the most highly skilled and efficient in the world.

Incentives cut back

China, meanwhile, is slowly reducing incentives to attract foreign direct investment. Changes in the value of the yuan, dollar and other currencies are having an impact as well.

“In the past, the Chinese government used many favorable policies to attract FDI, but as Chinese companies close the technological gap, it is winding these down.

“This is going to continue, and foreign multinationals find it quite frustrating,”said Xu. “They’re also not receiving the kind of policy incentives that local companies are getting.”

Small companies are part of the offshoring trend, too.

In April, the president of Quality Float Works Inc, a Chicago company that makes hollow float metal balls, told ABC Radio Australia that his experiment with outsourcing to China had proven to be a mistake due to faulty materials, delivery delays and the changing economic landscape.

“It started out being a very positive experience. We were able to save a lot of money, but unfortunately it went downhill,”Jason Speer said. “It became a nightmare. It ended up costing us money overall, because all the time and money that we wasted in trying to check everything … (we) ended up just having to buy it again.”

Boston Consulting Group, which has published papers on reshoring in recent years, predicts that ongoing trends could “virtually close the price gap”for most products sold in the US by 2015.

“Within five years, the total cost of production for many products will be only about 10 to 15 percent less in Chinese coastal cities than in some parts of the US where factories are likely to be built,”BCG wrote in 2011.

“Factor in shipping, inventory costs, and other considerations, and — for many goods destined for the North American market — the cost gap between sourcing in China and manufacturing in the US will be minimal.”

The firm advised companies to “rigorously assess their global supply networks”when deciding where to base production, rather than just looking at factory prices.

It said that China remains the best choice for products that require a large workforce or that are destined for Asian markets. But it added that companies that choose to keep production in China need dramatic efficiency improvement to prosper.

One German businessman whose company makes automobile components in North China said that it’s the country’s winning supply chain that keeps his company anchored. But he expects more foreign companies will leave in the next five years as tax and land incentives weaken.

By Matt Hodges ( China Daily)

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Baidu’s e-mall shut over copyrights

Chinese search engine Baidu launched an online shopping mall Thursday, but the e-mall powered by cloud computing was shut down in less than 24 hours due to suspected copyright issues.

The e-mall provides service allowing users to trade electronic files, including videos, pictures, documents as well as music. Users can also post transaction information and comments. All the transactions are done via Baidu’s payment platform, baifubao.

Baidu said earlier it doesn’t own copyrights of all the electronic files uploaded by its users nor does it have the obligation to check the files, according to a statement detailing its cloud computing operating system. The search engine required potential users to sell copyrighted resources based on an honor system. If any copyright complaints were filed, the use of related electronic resources will be stopped, Baidu said.

The statement, however, was criticized by copyright experts. They believed Baidu’s computing-based e-mall gives users much more freedom, which is likely to result in the abuse of copyrights.

It was not the first time Baidu had to deal with copyright issues.

In 2005, music companies such as Universal Music, Warner Music and Sony BMG sued Baidu for providing copyright-infringing downloads of their music. The case was finally ruled in favor of the music companies. Baidu agreed to pay royalties to get legal access to the copyrighted songs.

In 2011, renowned Chinese writers led by Han Han accused Baidu of “stealing” their works in its Wenku literary database and allowing users to download them for free. Baidu was ordered in 2012 to pay 145,000 yuan (about $22,939) to the writers for failing to take action to prevent their works from being pirated.

China Daily via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/Enu1eC0TRXg/

‘Dangerous provocation’ condemned

The Ministry of National Defense on Thursday criticized Japan for interfering in a Chinese military drill on the open sea, calling the move “an extremely dangerous provocation”.

A Japan Maritime Self-Defense Force warship intruded into a sea area in the West Pacific where the Chinese navy was holding an exercise on Oct 25, Yang Yujun, spokesman for the ministry, said a news briefing.

China had publicized the exercise areas in advance via international maritime organizations in accordance with international practice, alerting foreign vessels and planes to take precautions.

But the Japanese warship entered the area and stayed there for three days before leaving on Oct 28, Yang said.

Japan also sent reconnaissance aircraft and ships to closely monitor the Chinese navy ships during the drill.

“The actions of the Japanese ships and planes not only interfered with our normal exercises but also endangered the safe navigation of Chinese ships and planes, and might lead to misjudgment and accidental injuries”.

The Ministry of National Defense has protested to Japan over the issue, Yang said.

He called on Japan not to disturb China’s legitimate military drills and make sure no such incidents recur.

“Otherwise, all consequences that arise will be borne by the Japanese side,” Yang said, adding that China reserves the right to take further actions.

Ding Hao, a senior researcher at the Academy of Military Sciences, said Japan’s action shows their strong objection to the PLA’s activities in the area.

“Japan also wants to take the opportunity to collect military information on China, which can be regarded as a strong provocative action because military drills are highly confidential.”

The eight-day drill, which began on Oct 24, is the first open-sea exercise in which maritime and air forces from all three of China’s fleets took part.

It is expected to improve high sea combat abilities and hone strategies for using information technologies.

Yang urged Japan to accept and get accustomed to “reasonable and legitimate military activities of other countries.”

Commenting on Japan’s 2014 defense budget report, which increasingly targeted China, Yang said Japan has kept playing up “military threats” from China to serve its own military expansion.

Ding said Japan wants to hold China responsible for disputes between the two countries, despite the fact that it is Japan that has kept creating tensions in the region, with issues from the Diaoyu Islands to the Yasukuni war shrine.

“Japan’s moves aim to support its domestic military policy, at the cost of bringing huge harm to mutual trust with China. The problem can only be intensified if Japanese leaders continue their confrontational policies,” Ding said.

Regarding Japanese Prime Minister Shinzo Abe’s recent remarks that Japan should take a stronger leading role in Asia and confront China, Yang questioned whether a country that is reluctant to make a profound reflection on its history and is seeking to challenge the post-war order can take a leading role in Asia.

In an interview with the Wall Street Journal on Oct 26, Abe said one way that Japan could “contribute” to the region would be countering China.

By Li Xiaokun and Zhang Fan ( China Daily )

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China, India may set up military hotline: spokesperson

China and India are considering establishing a hotline between the headquarters of the countries’ armed forces, according to a recently signed agreement, a Chinese Defense Ministry spokesman said on Thursday.

Spokesman Yang Yujun told a regular press conference that the two armed forces will make joint efforts to maintain peace and stability in border areas following the signing of a Border Defense Cooperation Agreement during Indian Prime Minister Manmohan Singh’s official visit to China last week.

Relevant military personnel and departments may hold regular meetings, Yang said, noting that the two sides agreed to continue to promote mutual trust in the Line of Actual Control.

The agreement summarized good practices and experiences on the management of differences in China-India border areas, Yang said, adding that the border areas have generally maintained peace and stability in recent years.

He stressed that the Chinese army is willing to work with India to constantly promote mutual trust, enhance cooperation and maintain peace and stability of the border areas so as to benefit relations between the two countries.

Xinhua News via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/rsSMKOdHZCg/

China alleges Japanese interference in naval drills, warns it may take further measures

China on Thursday accused Japan of interfering in its recent naval exercises and said it may take unspecified further action if the meddling doesn’t stop.

The tough talk comes amid a bitter dispute over competing claims to an uninhabited island group in the East China Sea.

Defense Ministry spokesman Yang Yujun told reporters that a Japanese navy ship entered the exercise zone on Oct. 25 and stayed for three days, despite a Chinese notice to ships that it’s navy would be conducting drills in the area.

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China’s Clean-Air Drive Likely to Take a Long Time

China’s pollution, while extremely severe, is not unique, and efforts by other countries, like Britain and the United States, to conquer dirty air may hold lessons for China’s future.

The Chinese government is working on the problem and recently announced new limits on pollutants along with a promise of increased monitoring. Public awareness has spiked, a necessary step toward ending the crisis. But the overriding message from other nations is a discouraging one: Serious change can take decades, especially when pollution is a byproduct of economic growth.

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Kate Galbrath, The New York Times via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/hiDLCeiYuhg/

U.S. Asks China to Team Up on Oil

Over the past five years, China has amassed hundreds of millions of barrels in strategic petroleum reserves.

Now the U.S. wants China to work with it to coordinate releases of those barrels when needed to help ensure oil market stability.

U.S. Secretary of Energy Ernest Moniz said Wednesday during a trip to Beijing that China is willing to discuss a coordination agreement on the use of strategic petroleum reserves. Mr. Moniz said he expects both countries to hold “stronger” and more “active” discussions about that coordination in the coming year.

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Wayne Ma, The Wall Street Journal via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/qe3vIiJ8jEc/

China, Southeast Asians demand answers over reports US, Australian embassies used to spy

China and Southeast Asian governments demanded an explanation from the U.S. and its allies on Thursday following media reports that American and Australian embassies in the region were being used as hubs for Washington’s secret electronic data collection program.

The reports come amid an international outcry over allegations the U.S. has spied on the telephone communications of as many as 35 foreign leaders.

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China state media calls for stern action after Tiananmen attack

Chinese state media demanded severe punishment on Thursday to put down what China has said is a holy war aimed at Beijing by Islamist militants from the restive Xinjiang region.

Security has been strengthened in both Beijing and in Xinjiang in the far west after an SUV ploughed through bystanders in the capital’s iconic Tiananmen Square on Monday and burst into flames.

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Expectations for the CPC’s New Third Plenary Session

Many foreigners that have visited China claim they were amazed by the Chinese people’s familiarity of history; it seems everybody — a senior citizen or a child they chatted with in street, or an official or businessman they met on official occasions, or even a taxi driver — could readily quote historical facts, sometimes anecdotes, in any talks related to history.

Qin Xiaoying

That’s true. China indeed is a nation with a strong sense of history. And that’s why the announcement that the Third Plenary Session of the 18^th Central Committee would be convened at the end of this year has triggered so much historical association and expectation among the public.

The memory of the 1978 Third Plenary Session of the 11^th Central Committee of the Communist Party of China is the primary driver of this conjecture. At that conference of historical significance, Deng Xiaoping and other veteran leaders of the Party categorically abandoned the Soviet-style economic development model, and launched the reform and opening-up drive to start three-decades of high-speed growth of the economy. China resolutely broke with self-seclusion to merge into the globalization process, and has since played a pivotal role in international affairs.

The fact that the “Third Plenary Session” initiated this crucial turn in China’s course of development helped the 1978 conference go down in history.

Now, China seems to have come to another crucial moment. Will the new “Third Plenary Session” prescribe another vital change for system reform? This is everybody’s expectation.

At the start of his term of office, President Xi Jinping said: “The people’s pursuit of a good life is our goal.” This statement can be interpreted from another angle. That is, the ruling party must take it as its statutory responsibility to stamp out all that has caused public resentment.

What the public resents most is the social inequity they see in the rampant corruption, widening poor-rich disparity, and growing unemployment. They are also dissatisfied with the worsening environment pollution and the chaotic social management service. It was such chaos in management that generated so many safety problems – in manufacturing, civil engineering, transportation, food and medicines. The degradation of moral standards and professional ethics, and the collapse of traditional values has also contributed to the public’s dissatisfaction.

Analysts said that, despite their multiplicity, the above-mentioned grievances of the public and their expectations for reform reflect just one thing. That is, China is experiencing a massive political and economic transformation. The transformation is needed because China has fallen into an awkward state after it has lost labor dividends. It can neither compete with lower-income countries in labor cost, nor rival developed countries in hi-tech innovation. If it cannot get out of this awkward state as soon as possible, it may become further mired in the so-called “middle-income trap”. This grim situation has forced China’s ruling party and government to wage a large-scale economical restructuring campaign, re-arrange industrial distribution and seek a system renewal.

Another development that cannot be neglected is the public’s ever-growing demand for democratic participation in state affairs. This demand has arisen as a result of the dramatic improvement of people’s material life and education, and the increase of their knowledge about the outside world, especially because of the emergence of a middle class in Chinese society. The frequent occurrence of incidents involving confrontation and their quick circulation on the internet has hastened this growing demand. Therefore, how to respond to these requests for democracy is an urgent task for China’s decision-makers.

Scholars have pointed out that after 35 years of fast growth, China inevitably has to enact a economic and social transformation. They said such a forced transformation was also what most developing-turned-industrialized nations once “encountered” after the high-speed growth of the economy. China will greatly impress the world if it can effectively reconcile the needs to strengthen social control and liberalize the economy, and succeed in meeting the challenges in this new development model.

As they speculated on what may be the core content of the Chinese Communist Party’s new Third Plenary Session, observers from Chinese and foreign media outlets seem to have ignored two pieces of the speech that Xi Jinping made recently. One is “Stoppage and retrogression will lead us nowhere. Reforming and opening-up can only be in continuous tense and never in perfect tense” The other is “China is a large country; it cannot afford to make a subversive mistake on the fundamental issue.” What was he saying? He was demonstrating his determination for reform and also showing the policy, speed and limit set for the reform.

Qin Xiaoying is a Research Scholar with the China Foundation for International and Strategic Studies.

Qin Xiaoying, Research Scholar, China Foundation For International and Strategic Studies via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/NH4ICWbESKM/

China to Step up Security After NSA Allegations

China said Wednesday that it would take steps to protect its data better in the wake of allegations that the U.S. National Security Agency collected millions of phone records of European citizens and spied on its allies.

Foreign Ministry spokeswoman Hua Chunying told a daily news briefing that China was concerned by the recently exposed surveillance activities and was closely monitoring the situation.

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China, Malaysia to Hold First-Ever Military Drills

China and Malaysia, which have competing territorial claims, have agreed to hold landmark military drills next year.

Malaysian Defense Minister Hishammuddin Hussein made the announcement Wednesday during a three-day official visit to Beijing.

Hussein said it is the first time the two countries have held joint military exercises since establishing formal defense ties in 2005.

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U.S., China to bid for overseas nuclear projects: U.S. energy secretary

The United States is committed to working with China on the development of new nuclear reactors in both countries and will also encourage joint bids for projects elsewhere, U.S. Energy Secretary Ernest Moniz said in Beijing on Wednesday.

“Nuclear collaboration played an important role in our visit and deservedly so,” said Moniz, speaking to journalists in a briefing after a series of meetings with senior Chinese energy officials.

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China’s Bank of China, Agricultural Bank report double-digit profit growth

Two of China’s major state-owned lenders, Bank of China and Agricultural Bank, reported double-digit earnings growth Wednesday as the industry prepares for reforms that are likely to squeeze profits.

Bank of China Ltd. said its profit for the three months ended Sept. 30 rose 13.8 percent to 39.5 billion yuan ($6.3 billion). Agricultural Bank of China Ltd. said earnings rose 15.3 percent to 45.6 billion yuan ($7.2 billion).

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Spy scandal ‘will weaken’ US global credibility

Incident may lead to new international rules on surveillance

Anger over Washington’s extensive eavesdropping on world leaders and ordinary citizens has shown no signs of abating, as observers say using anti-terrorism as an excuse for pervasive surveillance is “hypocritical and abused”.

Chinese experts said the disclosure shows the United States is making the most of its intelligence capabilities to secure its supremacy in the world, and the scandal will weaken its global credibility.

Observers also said the scandal may prompt new international rules to rein in transnational spying as 21 countries have reportedly asked for a UN draft resolution against the US surveillance.

The latest reports reveal the US was responsible for broad surveillance of the communications of as many as 35 world leaders and likely millions of foreign nationals.

The leaders monitored through the National Security Agency phone tapping included German Chancellor Angela Merkel, who was reported to have been spied on by the US since 2002.

The NSA was also accused of accessing tens of thousands of French phone records as well as tracking 60.5 million telephone calls in Spain in a single month.

Qu Xing, president of the China Institute of International Studies, said Washington has been highly concerned by European integration, as Europe would surpass the US to become a new power center if the EU worked as successfully as expected.

But Qu said US-EU relations will forge ahead in the long term despite the recent setback.

“The US and Europe are like a pair of business partners. Both benefit from a cooperative relationship and neither can put up with the consequences of a breakup,” Qu said.

Shi Yinhong, a senior expert on US studies at Renmin University of China, said, “Perceiving itself as a superpower, the US holds the arrogant attitude that it is not a big deal to steal other countries’ information”.

In another development, Japanese media revealed over the weekend that the NSA approached the Japanese government in 2011 to allow it to tap the international fiber-optic cables that traverse the country and carry much of the traffic across East Asia, in an attempt to gather more information on China.

Calling cybersecurity “a matter of sovereignty”, Foreign Ministry spokeswoman Hua Chunying urged the international community on Tuesday to set up a new security concept of mutual trust, benefit and equality, and to create binding regulations within the UN framework.

“China and Russia have submitted a draft plan, in an effort to help the world jointly tackle the problem,” Hua said.

Experts said Washington not only offends its allies by the extensive monitoring, but also harms mutual trust.

Dong Manyuan, deputy director of the China Institute of International Studies, said Washington can hardly find any excuse for its wiretapping.

“Originally, the US claimed that it monitored billions of calls worldwide to fight terrorism. However, the reality shows that Washington has expanded its monitoring to Merkel and other European leaders, who share the same values as (US President Barack) Obama,” Dong said.

Washington recently denied that Obama was informed of the operation against Merkel in 2010.

“Obama did not halt the operation but rather let it continue,” German newspaper Bild am Sonntag quoted a high-ranking NSA official as saying. A poll by a German magazine found that 60 percent of Germans believe the scandal has damaged ties.

The White House on Monday acknowledged that more constraints are needed regarding the NSA’s surveillance practices to ensure that privacy rights are protected.

“We need to make sure that we’re collecting intelligence in a way that advances our security needs and that we don’t just do it because we can,” White House spokesman Jay Carney said.

The spying row prompted European leaders last week to demand a new deal with Washington on intelligence gathering that would maintain an essential alliance while keeping the fight against terrorism on track.

Swiss President Ueli Maurer warned the revelations risked “undermining confidence between states”.

“We don’t know if we’re only seeing the tip of the iceberg or if other governments are acting in the same ruthless manner,” he told reporters.

Analysts said the exposure of the US surveillance and the subsequent global anger may lead to the birth of a binding international agreement on spying through telecommunications and cyberspace.

Shi said the series of eavesdropping operations may accelerate the formulation of rules in the global community, but it will be extremely difficult.

“In fact, international rules can only help in a limited way. What we can do is protect ourselves technically,” Shi said.

During the weekend, Germany and Brazil drafted a UN General Assembly resolution that condemns “indiscriminate” and “extra-territorial” surveillance, and ensures “independent oversight” of electronic monitoring.

The draft has enlisted 19 other countries including US allies Mexico and France.

Brazilian President Dilma Rousseff canceled a trip to the US last month over allegations the NSA intercepted her office’s communications.

Guo Xiangang, vice-president of the China Institute of International Studies, said Washington will restrain its “current unbridled behavior” if a UN resolution comes into force, but it will never give up surveillance of other countries, including its allies.

“Despite a rift with allies, the US will further integrate its intelligence power to continue actions that fit its national interest,” Guo said.

By Pu Zhendong ( China Daily )

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Party plenum to be held on Nov 9

Agenda for comprehensive reforms expected to be set at the meeting, say experts

Leaders of the Communist Party of China will convene a much-anticipated meeting starting on Nov 9 to set the country’s reform agenda for the next decade.

The Third Plenary Session of the 18th CPC Central Committee will be held between Nov 9 and 12 in Beijing, according to a Party statement on Tuesday.

It will be the third time that the Central Committee, with more than 200 members, has met since the new Party leadership was elected last November.

Historically, such third plenary sessions draft key reform plans, particularly on economic matters.

The announcement was made after the Political Bureau, the top decision-making body of the Party, held a meeting presided over by President Xi Jinping, also general secretary of the CPC Central Committee.

During the meeting, they listened to a report about opinions solicited within and outside the Party on a draft decision of the CPC Central Committee on major issues concerning comprehensive reforms.

The draft decision will be submitted for review at the third plenum, the statement said. No details were revealed.

The statement said the realization of the Chinese dream of national rejuvenation — a concept that has been promoted by the new Party leadership — requires deepening reforms in an all-round way.

It also stressed that the Party’s leadership must be strengthened and improved, giving full play to its core role that exercises overall leadership and coordinates all efforts to ensure success of the reforms.

Party organs at all levels are urged to exercise their duty to lead reforms, improve decision-making mechanisms and raise the capacity of officials in charge in pushing forward the reforms.

Liu Shanying, a political researcher at the Chinese Academy of Social Sciences, said Tuesday’s meeting has made clear that the latest round of reform is a collective mission of the whole Party.

“A comprehensive roadmap is expected to be rolled out at the plenum to integrate related departments to carry out the reform plan in a collaborative way,” he said, “and the central government may take charge of the issues that require nationwide coordination, such as social security”.

Tuesday’s meeting also emphasized the need for stimulating the vitality of productive forces such as labor, technology, management and capital.

The statement said the Party will speed up development of the socialist market economy, democracy, cultural development, social harmony and environmental protection.

“We should let all sources of wealth spread and let all people enjoy more fruits of development fairly,” it said.

Liu said he expects the upcoming meeting to emphasize the need for administrative deregulation, which can cut red tape, support the long-term growth of small businesses and inject vitality into the market.

The State Council lowered the administrative barriers for starting new businesses on Friday by eliminating some registered capital requirements and simplifying bureaucratic procedures for establishing new companies.

“The economic growth of the past decades was achieved at the cost of excessive energy consumption and unequal distribution of resources among business owners,” Liu said.

“The upcoming meeting may address social equity by limiting monopolist industries and allowing those with advanced technology and scientific management to benefit more from daily economic activities.”

The Party’s central leadership on Tuesday also approved a regulation to fight waste and extravagance among Party and government officials, calling for strengthened supervision and harsher punishments for violators.

“In recent years, some Party and government departments have competed for ostentation and extravagance, which lead to huge spending and waste,” said a statement released after the meeting.

At the meeting, the Political Bureau approved the Regulation on Strictly Enforcing Thrift and Fighting Waste in Party and Government Departments, which aims to strictly limit, supervise and punish various violations related to spending public money.

The regulation covers public fund management, domestic and overseas trips, business receptions, meetings and other official activities, the use of non-private vehicles and offices as well as resource savings.

Details of the regulation were not released.

The statement urged various Party and government departments to abide by the regulation.

Yang Weidong, a law professor at the Chinese Academy of Governance, said extravagance and waste have long sparked public dissatisfaction, and they reflect abuse of power by some officials.

The campaign marks a good start to “put the power in a cage”, Yang said.

The Party has to put an end to extravagance and waste by officials before it can focus on reforms, he said.

By Zhu Zhe and Zhao Yinan ( China Daily )

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Construction on China-U.S. nuclear security center begins

Construction on a nuclear security center jointly financed by China and the United States began in Beijing on Tuesday.

Construction of the Center of Excellence on Nuclear Security is scheduled to be completed by 2015, according to Wang Yiren, vice chairman of the China Atomic Energy Authority (CAEA).

Located in the Changyang science and technology park in the southwestern outskirts of Beijing, the center will be equipped with environmental labs, response force exercise facilities, test sites for physical protection, and buildings for technology display and training, experiments and scientific research.

The center is designed to become a regional center that will serve as a platform for training and technological exchanges.

The center, an idea originally put forward by former Chinese President Hu Jintao in April 2010 during the Washington Nuclear Security Summit, will bolster nuclear security capacities in China and throughout Asia, Wang said.

China and the U.S. signed a memorandum of understanding to set up the center during Hu’s state visit to Washington in January 2011.

CAEA chairman Ma Xingrui and U.S. Secretary of Energy Ernest J. Moniz were present at Tuesday’s groundbreaking ceremony.

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China Reform Planning Meeting To Be Held Next Week

China’s ruling Communist Party says its leaders will meet late next week to craft a long-range economic blueprint for the country.

The official Xinhua News Agency reported that the party’s Politburo announced after a meeting Tuesday that the 18th Party Central Committee’s Third Plenary Session will be held Nov. 9-12 in Beijing.

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China central bank seeks to reassure money markets after rate spike

China’s central bank sought to reassure money market traders that a spike in short-term interest rates does not signal a dramatic tightening of liquidity, sources said, in an apparent move to avoid a repeat of a credit panic that roiled markets in June.

The People’s Bank of China also warned against “excessive leverage”, or borrowing, that would leave banks overexposed to sudden spikes in demand for cash, said the sources, who attended a closed-door meeting between a PBOC official and traders from major financial institutions late last week.

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Foreign Hedge Funds Warm to China

More foreign hedge funds are devoting resources to China, attracted by strong returns, the potential for growth and signs that the country will continue to develop its financial markets.

China-focused hedge funds managed $12.9 billion in assets as of the end of September, exceeding levels before the global financial crisis, according to Eurekahedge, which tracks the industry. In the nine months ended Sept. 30, average returns from China-focused hedge funds eclipsed those in neighboring countries, with the exception of Japan.

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China shares down, dragged by small caps and Shanghai FTZ

China’s primary share indexes eased on Tuesday despite strong performance by mainland banks, as an ongoing exodus from overbought small-cap stocks and Shanghai free trade zone (FTZ) issues dragged.

The Hang Seng index in Hong Kong was down 0.13 percent at midday, but the mainland component of the index was up 0.58 percent, lifted primarily by Chinese banks listed in Hong Kong.

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Shanghai FTZ reform in full swing

China’s first experimental free trade zone (FTZ) in the economic hub of Shanghai has forged ahead since it opened a month ago, turning a new page for the world’s second largest economy.

Since the opening of the China (Shanghai) Pilot FTZ, its service center has been busy with people eager to register companies.

As of Oct 23, 157 firms, including 135 Chinese and 22 foreign-funded ones, have been registered in the zone. They have a combined registered capital of $829 million, according to sources with the administration of the service center.

Most of the companies are engaged in trade and service businesses, the sources said.

The service center, which opened on Sept 29 when the FTZ was launched, processes paperwork under a more streamlined and unified procedure.

Business license approvals, which used to take about one month, can now be offered within four working days, said Fang Yushu, who has registered his insurance company.

The zone has become a hit, attracting visitors both online and offline.

Since the start of registration services on Oct 8, the service center has received nearly 2,300 enquiries and registrations each day, while daily visits to the FTZ’s website averages 1.8 million.

Experts say the zone will be a testing ground for bolder market-based economic reforms in the upcoming decade so as to further boost economic vitality.

A range of sectors from financial services and medical care to shipping and education will be open for foreign investment.

On Sept 30, the FTZ’s administrative commission published a “negative list” of 190 restrictions that limit foreign investment in such sectors as banking, insurance and the hospitality industry.

Regarding the negative list, Shanghai mayor Yang Xiong said on Sunday that the current version is only applicable for this year and would be renewed and shortened each year for 2014 and 2015.

“I believe that as our work deepens, the negative list will be shortened gradually,” Yang told a press conference at the conclusion of an annual gathering of international advisors to the city government.

The FTZ will also be the outpost to test full convertibility of the Chinese currency renminbi, its use across national borders and liberalized interest rates.

The FTZ is currently in close contact with China’s central bank, as well as the country’s top banking, securities and insurance watchdogs to work out detailed plans to regulate freer financial activities within the zone.

So far four foreign banks — Citibank, Development Bank of Singapore, Bank of East Asia and HSBC — have established presence in the zone.

By loosening restrictions on foreign investment and a gradual relaxation of capital account, authorities want to see what works and what does not in an isolated area along the Yangtze delta and prepare for what can be implemented nationwide.

So the zone’s mission, suggested by officials and analysts alike, is not to create another special economic zone with loose regulations and preferential policies, but to experiment with caution a set of reform measures deemed necessary to revitalize the world’s second largest economy.

“We hope that the building of the FTZ will be an orderly reform rather than a once-and-for-all attempt that will bring chaos in supervision,” said Lewis Lu, a partner with KPMG Advisory (China).

While authorities should take bold steps in liberalizing formerly closed sectors, they should also improve oversight with detailed and implementable policies, Lu added.

China vowed to open 23 areas across six industries in the service sector in the FTZ, according to a statement released prior to its opening. So far, 12 areas are ready for opening and seven are pending policy adjustments from the State Council, or China’s Cabinet.

Another four areas involving shipping, banking and legal services still await detailed regulations from related state departments.

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Government thinktank report on reform under spotlight

The Development Research Center of the State Council (DRC), a Chinese government thinktank, has highlighted eight key reform areas in a report ahead of a key plenum of the Communist Party of China (CPC).

The goal of the country’s next round of reform is to construct a dynamic, innovation-led, inclusive, orderly socialist market economy with rule of law, according to the report published on the official website for the DRC-sponsored China Economic Times.

The new round of reform will serve to improve China’s market economy system, transform government functions and innovate the structure of enterprises, with its core being “to properly handle the relationship between the government and the market,” says the report.

The Chinese government has attached great significance to the role of reform in providing momentum for the country’s growth and development, with comprehensive reforms expected to be mapped out during the Third Plenary Session of the 18th CPC Central Committee scheduled for November.

The DRC report details eight main reform areas. The areas cover monopoly industries, land, finance, tax and fiscal systems, opening-up, government administration, state-owned assets, as well as boosting innovation and green development.

The report suggests to further widen market access and promote competition in key industries, including to diversify investment in the railway sector, ease access to exploring unconventional oil and gas and relax restrictions for importing crude, refined oil and natural gas.

It also proposes to reform the electricity industry and its pricing scheme, and to re-organize telecommunication enterprises.

The report offers advice on deepening land reform, suggesting to allow collectively-owned rural and state-owned land to enter the market of non-farmland under necessary planning and regulations.

A reform on the financial system should be promoted, with emphases on lowering the threshold for entering the financial market and further liberalizing interest and exchange rates, the report proposes.

A new round of fiscal and tax reform should be initiated to strengthen fiscal stability and sustainability in the medium- to long-term, including improvements in the social insurance system and a local tax reform featuring property tax and consumption tax.

DRC economists also propose to further open up the Chinese economy, introducing competitive investors and operators in sectors including energy, telecommunications and finance, and improving the business climate in China.

The DRC is a policy advisory organization for the Chinese central government.

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China responds on U.S. spying

China on Monday called on the international community to speed up the formulation of guidelines for cyberspace under the lead of the UN in the wake of accusations that the United States intercepted the private communications of 35 world leaders.

The eighth meeting of the UN Internet Governance Forum was held from 22 to 25 in Bali Island, Indonesia, noted Foreign Ministry spokeswoman Hua Chunying at a daily news briefing.

Delegates expressed concern and dissatisfaction over U.S. spying on the phone records of 35 world leaders, saying that it has harmed other countries’ sovereignty, invaded personal privacy and affected the public’s trust and confidence, Hua added.

According to reports by German news agency DPA, the U.S. National Security Agency has acknowledged that it intercepted the leaders’ private communications.

The development of the situation recently has proven right what China has repeatedly expressed about cyber security, that cyber security is a common focus of all countries, Hua said.

She added that the international community must accelerate the formulation of guidelines for a code of conduct in cyberspace within the UN framework in order to ensure an open, secure Internet.

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Australia upholds ban on Huawei’s bid

Australia on Tuesday maintained a ban issued by the previous labor government to bar China’s telecom company Huawei from bidding for the country’s high speed national internet program, local media reported.

According to reports, Australian Attorney-General George Brandis has issued a statement, indicating that the government would uphold the ban due to security concerns.

Local analyst told Xinhua on condition of anonymity that the current conservative government’s decision would give a big blow to its relation with its major trading partner China when the two countries are struggling to reach a free trade agreement in a year.

Huawei Australia was banned by the former Labor government earlier this year from tendering for Australia’s National Broadband Network (NBN) project over security reasons. Recently, the United States also issued a congressional report, saying Huawei and ZTE, another Chinese telecom company, pose a security threat to the United States and should be barred from U.S. contracts and acquisitions.

However, the U.S. report were dismissed by Huawei Australia Chairman John Lord as “protectionism”, not security.

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Sinopec field could reignite China shale hopes

Chinese oil giant Sinopec Corp is for the first time pumping shale gas from test wells in commercial quantities in what it hopes will be a breakthrough in the development of a badly needed new energy source.

Stymied by the cost of drilling and complexity of tapping shale gas, China has struggled in its bid to revolutionize its energy supplies and unlock what may be the world’s largest shale gas reserves by emulating the frenetic exploration and production of the U.S. shale boom.

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China to Start Monitoring Pollution Effects in Worst-Hit Cities

China will start monitoring the effects of air pollution on the health of people in 16 of the nation’s worst-hit cities and provinces including Beijing and Shanghai.

The government plans to set up a nationwide network in three years to five years to monitor the impact of pollution on health, the National Health and Family Planning Commission said in a statement on its website today. Provinces to be monitored include Hebei, Jiangsu, Sichuan and Inner Mongolia, according to the statement.

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Government Think Tank Offers Insight Into Reformist Goals

As China’s leaders prepare to gather in Beijing next month to outline their priorities for the next decade, officials are busily hashing out the agenda in closed-door negotiations.

A set of recommendations by an influential government think tank provides one side of the argument.

In a 200-page report, the Development Research Center of the State Council, China’s cabinet, advocates far-reaching reform of the financial system, an end to the state’s monopoly on land sales and tougher management of state-owned enterprises. The report, which was reviewed by The Wall Street Journal, is expected to be published this week.

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Three die after car crash at Tian’anmen

A driver and two passengers were killed after a jeep crashed into a crowd of people and caught fire in front of the Tian’anmen rostrum in downtown Beijing on Monday, police said.

Eleven tourists and police officers were also injured by the jeep, which crashed into a guardrail of Jinshui Bridge on the moat of the Forbidden City before bursting into flames at 12:05 p.m., according to municipal police and Beijing Emergency Medical Center.

Police have arrived at the scene. The fire was put out soon after.

The eleven injured have been sent to hospitals nearby.

A further investigation is underway.

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Chinese naval drill continues despite disturbance

Flotillas attached to the Beihai, Donghai and Nanhai Fleets proceeded with exercises in the west Pacific on Sunday despite foreign disturbance, according to the People’s Liberation Army.

Foreign military vessels and reconnaissance aircraft remained in the exercise area for an undue time monitoring Chinese activity in the close distance and seriously disturbing the naval drill.

On Saturday, Defense Ministry spokesman Geng Yansheng told a press briefing that Japanese authorities notified China on Oct. 23 that a Japanese fishing boat had sent a distress signal from a prohibited area at the site of the drill.

China allowed Japanese vessels to enter the area to facilitate the rescue out of humanitarian concern, Geng said.

Chinese authorities had previously publicized the exercise areas via international maritime organizations in accordance with international practice, alerting foreign vessels and planes to take precautions.

The drill is the first open-sea drill in which maritime and air forces from all three of China’s fleets have taken part.

Participating teams had been heading for destinations since Oct. 18 and started a confrontation drill in the west Pacific on Oct. 25.

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ABC apologizes for offensive words on Chinese

American Broadcasting Companies Inc. (ABC) has apologized to the Chinese community and the Asian community for permitting a show with offensive words on Chinese, an Asian American political organization told Xinhua on Sunday.

The ABC said in its letter to the organization that a call with their producer to personally apologize would have been insufficient, therefore they’re writing again to offer their sincere apology, said S.B.Woo, president of 80-20 National Asian American Political Action Committee.

“We would never purposefully broadcast anything to upset the Chinese community, Asian community, anyone of Chinese descent of any community at large,” the ABC said in the letter. “Our objective is to entertain.”

The ABC stressed that they’ve “taken swift action” and removed it from all platforms and promised to “edit it out of any future airing of the show.”

In the ABC’s show “Jimmy Kimmel Live”, aired on Oct 16, Jimmy Kimmel asked children on how the United States should deal with the government shutdown and the debt owed to China. One of the children commented that the United States should “kill everyone in China.”

Critics said that Kimmel was wrong for not stopping the comment and failing to explain to the children that it was not the right idea, and even worse the ABC failed to remove the comment from the show.

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Forum urges stable relations for China, Japan

Priorities are timely dialogue and a crisis management mechanism

A stable China-Japan relationship is in the interests of the two countries, Asia and the world, participants in the Beijing-Tokyo Forum agreed on Sunday.

The countries should be committed to peaceful means of settling disputes and problems, they said.

Officials, diplomats and scholars from the two countries put their heads together in Beijing over the weekend, trying to find solutions to the deadlock in China-Japan relations.

They agreed that shared interests should be maintained, unstable relations improved, and the deteriorating situation and confrontational feelings Chinese and Japanese harbor toward each other should be brought under control.

In the context of the territorial standoff, the top priority is to conduct timely dialogue and negotiations, achieve a settlement through peaceful means and establish a crisis management mechanism and a long-term mechanism that help avoid accidental friction and even military conflicts.

Former Japanese prime minister Yasuo Fukuda said building a strategically beneficial relationship between China and Japan is of great significance. “The two countries should find a solution to the problems in their ties.”

Japan should deal with its history appropriately when forming its diplomacy, Fukuda said. In doing so, Japan can survive in the international community. Otherwise, it will be isolated.

Zhao Qizheng, former chairman of the Foreign Affairs Committee and former minister of the State Council Information Office, took the Beijing consensus as the appeal of the majorities.

“The consensus should become a force driving in the relationship to create better conditions,” Zhao said. “I hope that it will turn into concerted action.”

Though more than 70 percent of Chinese and Japanese wished to see a better relationship, more than 90 percent have negative feelings toward each other, according to the opinion poll in August by China Daily and Japan’s non-profit organization The Genron NPO.

China Daily and The Genron NPO began the annual Beijing-Tokyo Forum in 2005, when China-Japan relations were strained by then-Japanese prime minister Junichiro Koizumi’s frequent visits to the controversial Yasukuni Shrine.

Japan’s current prime minister, Shinzo Abe, said in an interview with The Wall Street Journal that Japan was ready to be more assertive because “there are concerns that China is attempting to change the status quo by force, rather than by rule of law”.

Abe made similar remarks on Sunday when addressing the Japanese ground self-defense force. He said it is necessary to give up the idea that “a deterrence will be achieved as long as the defense force is ensured”, Japan’s Kyodo News Agency reported.

He underscored the importance of discussing the legislative basis for Japan to exercise collective self-defense, which is forbidden in Japan’s pacifist constitution.

By CAI HONG and ZHANG YUNBI ( China Daily )

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Chinese court upholds ousted politician Bo’s conviction

JINAN, China — Ousted politician Bo Xilai lost his appeal against a life sentence for corruption in his final public appearance Friday before prison — an inglorious end for the once-rising star whose vaulting ambition unnerved China’s leadership.

The former Politburo member had fallen from power in a scandal that became a volatile distraction for the Communist Party, unleashing tales of murder and betrayal in the highest ranks. On Friday, two security guards with hands on his shoulders escorted him out of the courtroom — and off the political stage — ahead of a key leadership meeting next month on economic policy.

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China and Europe make up after averting trade war

China and the European Union sought to mend ties on Thursday after narrowly avoiding a trade war this year, but the EU’s trade chief told Beijing to stop handing out state subsidies that Brussels says are illegal.

Europe is China’s most important trading partner and for the EU, China is second only to the United States, but the bilateral relationship has been bedevilled by a series of damaging trade rows ranging from steel and wine to solar panels.

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Taiwan’s president, Ma Ying-jeou, plans to expand relations with China

TAIPEI, Taiwan — Taiwan’s President Ma Ying-jeou outlined plans Thursday to further improve ties with China, already at their warmest level in decades, and rebutted criticism that he is giving up too much in exchange for better economic relations with the island’s former foe.

Ma said in an interview that he has not conceded anything of substance to China in pursuit of economic cooperation during the past five years but rather has freed his island from a “vicious cycle” of provocation.

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In rare China sale, Sinopec seeks partner for Canada shale

Sinopec Group wants to sell half of its two biggest shale gas acreages in Canada to spread costs and accelerate their development, as the Chinese energy company focuses increasingly on return of investment, an executive said.

A sale of an overseas asset would be a rare move for one of China’s state-owned energy companies, which have spent hundreds of billions of dollars investing in hydrocarbon resources from North America to Australia to secure China’s energy needs.

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Response to a City’s Smog Points to a Change in Chinese Attitude

Emergency measures came swiftly in Harbin, the northeastern city blanketed with hazardous smog this week: Schools were shut down, buses ordered off the roads, the airport closed, police roadblocks set up to check tailpipe emissions from cars. City officials even fanned out in the surrounding countryside, ordering farmers to stop burning the cornstalks left in their fields after the harvest.

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U.S. talking to Turkey about China missile deal concerns

The United States is concerned Turkey’s decision to build a missile defense system with a Chinese firm could undermine allied air defenses, its envoy said on Thursday, but dismissed talk of a broader rift with Ankara.

U.S. Ambassador to Turkey Francis Ricciardone said Washington had begun “expert” talks with Turkey to assess the impact of its plans to co-produce the long-range air and missile defense system with a Chinese firm under U.S. sanctions.

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China to send air pollution inspection teams to provinces

China’s Environment Ministry said on Thursday it will send inspection teams to provinces and cities most seriously affected by smog to ensure rules on fighting air pollution are being enforced.

China’s smog crisis was thrown back dramatically into the spotlight this week when Harbin, a frigid northeastern city of 11 million people, virtually ground to a halt when a pollution index showed airborne contaminants at around 50 times the levels recommended by the World Health Organisation.

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Russia’s Shrinking Leverage With China

This week brought an increasingly familiar sight from Beijing: high-ranking Russian officials shaking hands with their Chinese counterparts. The occasion, just as it has been in recent months, was a slew of new energy deals that will further align the two countries as trading partners and bring Russia one step closer to becoming China’s primary fossil-fuel provider.

On Tuesday, Russia’s largest oil producer, the state-owned Rosneft, announced it had agreed to supply Sinopec, China’s state-owned oil and gas company, with 100 million metric tons of crude over the next decade, a deal that Russian Prime Minister Dmitry Medvedev valued at around $85 billion. In a touch of ominous irony, several hours later, news broke that Rosneft had cut its forecasts for the amount of oil a key field in Siberia is expected to produce, raising questions about Russia’s ability to feed China’s growing demand for crude.

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Wal-Mart Plans to Open More Stores in China

Wal-Mart will open 110 new stores in China between 2014 and 2016, adding 19,000 employees to its roster, said Greg Foran, Wal-Mart’s China CEO. He said the retailer also aims to open two more Sam’s Club stores next year, on top of its current 10, and will roll out more in the next few years.

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China 2013 growth seen at 7.6 percent, topping target, slowdown likely next year: Poll

China’s economy is set to grow 7.6 percent in 2013, beating the government’s 7.5 percent target, before losing some steam next year as the government forges ahead with structural reforms, a Reuters poll showed.

Growth for 2014 may come in at 7.4 percent, according to the median forecast in a poll of economists conducted between October 18-22.

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DPRK says it will not move first on nuclear disarmament

The Democratic People’s Republic of Korea (DPRK) said Wednesday it would not unilaterally dismantle its nuclear deterrence unless outside nuclear threats were removed, the official KCNA news agency reported.

“As action for action remains a basic principle for finding a solution to the nuclear issue on the Korean peninsula, the DPRK will not unilaterally move first,” a Foreign Ministry spokesman said in a statement.

The denuclearization of the peninsula did not mean unilateral nuclear disarmament by the DPRK but a process of realizing a whole nuclear-free peninsula by removing substantial outside nuclear threats on the principle of simultaneous actions, the statement said.

U.S. Secretary of State John Kerry said early this month Washington would be open to dialogue if Pyongyang started denuclearization first.

The National Defense Commission on Oct. 12 dismissed the U.S. request as “an intolerable mockery and insult to the army and people of the DPRK.”

The statement criticized Washington for shifting responsibility to Pyongyang and urged Washington to abandon its hostile policy toward Pyongyang.

China’s Foreign Ministry spokeswoman Hua Chunying said in a press briefing Wednesday that Beijing had been “in close communication with all relevant parties of the six-party talks.”

China’s chief delegate to the six-party talks, Wu Dawei, and his Russian counterpart, Igor Morgulov, met in Beijing Monday and exchanged views on the denuclearization of the Korean Peninsula and the resumption of the six-party talks, the ministry said in a brief statement.

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China seeks end to Japan’s Diaoyu provocation

Chinese Foreign Ministry spokeswoman Hua Chunying on Wednesday urged Japan to stop all provocation detrimental to China’s sovereignty.

Hua made the remarks after a regular press conference while responding to a media report that the Japanese Foreign Ministry have released a video online claiming sovereignty over the Diaoyu Islands.

“We urge the Japanese side to correct its attitude, stop all words and acts detrimental to China’s sovereignty and make concrete efforts towards properly handling and resolving the Diaoyu Islands issue.” Hua said.

Hua stressed that the Diaoyu Island and affiliated islets are part of China’s inherent territory, a fact supported by historical and jurisprudential evidence.

“No matter what means the Japanese side uses to assert its illegal claims, it cannot change the objective fact that the Diaoyu Islands belong to China.” Hua said.

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Chinese fleet heads for open sea drill

A vessel formation with China’s Nanhai Fleet on Wednesday sailed across the Bashi Channel toward its destination in the West Pacific Ocean for a combat drill, according to sources with the People’s Liberation Army.

The team will join other formations and planes from the Beihai Fleet and Donghai Fleet in the drill, which is expected to improve the combat system, hone strategies for utilizing information technologies, coordinate ships and planes and conduct integrated defense.

The drill, which is in line with international laws and practices, marks the first open sea drill in which maritime and air forces of the three fleets will jointly participate.

“With a more complicated hydrological environment, open sea combat demands stronger intelligence warning and detecting abilities as well as higher requirements for communication and command system equipment,” said Lin Hai, head of a command group in the drill.

The Bashi Channel is an international waterway linking the South China Sea and the Pacific Ocean.

Xinhua News via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/Q3Rw2Cqa3ow/

China and India sign ‘landmark’ border pact

Cooperation agreement will help nations manage disputes

China and India made a major step forward in their ties on Wednesday with an agreement on border defense cooperation and measures to promote regional economic integrity.

After witnessing the signing of the border agreement with his Indian counterpart Manmohan Singh, Premier Li Keqiang said at a news conference that they believe “the two countries have more common interests than disagreements”.

The two countries have the ability to manage border disputes, Li said.

Singh said the agreement “will add to the existing instruments to ensure peace, stability and predictability on our borders”.

Qu Xing, president of the China Institute of International Studies, said the agreement is a “landmark” legal document to regulate the behavior of both sides and will help eliminate potential misunderstanding and misjudgment.

Beijing and New Delhi have successfully put the border situation under control and properly handled the latest ups and downs, Qu said.

China and India held the fourth round of a consultation and coordination meeting on border affairs in Beijing late last month.

Meeting Singh on Wednesday, President Xi Jinping told him that they should further manage disputes so that the China-India relationship would “correspond to the revitalization process of the two countries”.

Hu Shisheng, director of the Institute of South and Southeast Asian and Oceanian Studies at the China Institutes of Contemporary International Relations, said, “Both governments have a strong consensus in ensuring the tranquility of the border, and leaders of both sides are also clear that they want to eliminate disturbance from sensational media reports about the border issues.”

A memorandum of understanding on strengthening cooperation on cross-border rivers was also signed.

China will enhance cooperation with India on infrastructure construction, including railways, to push forward the development of the BCIM Economic Corridor, involving Bangladesh, China, India and Myanmar.

“The first meeting of the working groups from the four countries will be held in December” to study the detailed plans of constructing the economic corridor, according to a statement released after the meeting.

Beijing and New Delhi have set up working groups and the Chinese group visited India this month.

“The project will be a defining factor of the following decade,” Hu said, adding that the two countries, as the important poles of the mega-project, should take advantage of the economic corridor.

China and India also agreed to study the potential for a bilateral regional trade arrangement, and said a bilateral strategic and economic dialogue will be held in November or December.

Liu Xiaoxue, an expert on Indian economic studies at the Chinese Academy of Social Sciences, said a greater degree of openness between the two huge emerging economies will help fully tap potential.

“China and India have a population of 1.3 billion and 1.2 billion respectively, and if they fully open their markets to each other, we will both survive,” Liu said.

The leaders also discussed the construction of a Chinese industrial park in India to ease the trade imbalance.

India should accelerate infrastructure construction to “help attract investors, especially the world’s leading manufacturers”, Liu said.

This will help eliminate India’s huge trade deficit against China, Liu said.

Singh arrived in Beijing on Tuesday night for a three-day visit.

The Indian prime minister will deliver a speech at the Party School of the Central Committee of the Communist Party of China on Thursday.

By Zhang Yunbi and Li Xiaokun ( China Daily )

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No Need for China to Counterattack the US

President Obama cancelled his trip to Southeast Asia due to the federal government shutdown, and appointed Secretary of State John Kerry to attend the occasions instead. While the country was trapped by domestic political disagreement and polarization and was pressured by China and Japan to resolve its debt ceiling stand-off without delay, it still took time out to trumpet that Chinese President Xi Jinping took advantage of President Obama’s absence to push China’s offers to neighboring countries.

The Notion of the Zero-sum Game Still Works

The US has reaffirmed that it does not aim at containing China and will work with China to build a “special relationship” which means that the US is willing to accommodate China’s rise, including China’s increasing roles in the Asia-Pacific. However, it seems that it is easier said than done.

Frequent exchange visits between China and ASEAN have been taken by the US as the former making great efforts to strengthen its ties with the latter, with the intention of counterbalancing US influence.

Immediately following President Xi’s visit to Southeast Asia which included visiting Indonesia and Malaysia as well as attending the 21^st APEC Economic Leaders’ Meeting, Chinese Premier Li Keqiang attended the 16th China-ASEAN (10+1) Summit, the 16th ASEAN Plus China, Japan and the Republic of Korea (10+3) Summit and the 8th East Asia Summit (EAS). He also paid official visits to Brunei, Thailand and Vietnam. The day after Li finished his visit to Southeast Asia, ASEAN Secretary-General Le Luong Minh started his trip to China.

In contrast, the leader of the world’s largest economy failed in making full participation at the events. Some regional countries have expressed disappointment and dissatisfaction with this, because they believe that this reflected the neglect from the US side. What is more important, they are suspicious of the consistency and continuity of the US “rebalance”, from which they are expecting more investments.

When President Xi encouraged macroeconomic policy coordination, economic and financial stability and sustainable development of Asia-Pacific, John Kerry, acting as Obama’s stand-in, deliberately emphasized the “importance of intellectual property” in his speech at the APEC CEO Summit and warned the countries that “want to be innovation economies” about their “ideas at risk of being stolen”.

The US is also worried that China will seek leadership in Asia-Pacific in the context of fading US influence.

Facts speak louder than words. Since the US and China have reached agreements to work towards a new type of relationship between great countries, both sides need to avoid contradictory behaviors which will undermine the foundation of mutual trust.

China’s Success Is Not At the Cost of the US Interests

Currently, China’s foreign relations with ASEAN seem to be more skilled and confident.

First, China has kind of succeeded in making ASEAN realize that China’s development is a blessing for regional prosperity and it is willing to bring more benefits to the neighbors. China has sensed the concern of the regional countries about its development in recent years. The country has tried to show its sincerity in peaceful development. At the same time, China stressed common interests and shared goals with ASEAN, which play as the foundation for cooperation.

Second, China is increasing investments in the fields that have already boosted China-ASEAN relationship. China-ASEAN free trade area has worked effectively in promoting trade cooperation and people’s exchanges between the two sides. Chinese leaders underlined the importance of upgrading this free trade area. Interconnectivity has also been a focus in China-ASEAN relationship. Accordingly, China proposed establishing Asian infrastructure investment bank to provide further support for improving regional interconnectivity.

Third, China tailored some approaches to deal with specific challenges nowadays. In consideration of the global economic crisis which has had serious impact on regional economies, China facilitated financial cooperation to jointly deal with challenges. Maritime cooperation is another focus in the context of increasing uncertainties in South China Sea. China has also realized that people-to-people will strengthen the ties between countries. Therefore, China set up plans for encouraging cultural exchanges and travel facilitation.

Last but not least, China has made progress in addressing South China Sea disputes. Maritime cooperation is helpful for easing the tension. China and Vietnam announced to establish work group, which will be helpful to form pleasant environment for resolving territorial disputes.

China’s confidence in the relationship with ASEAN seems to be self-dependent. It is not fueled by undermining the US interests. On the contrary, China has been seeking co-existence and coordination with the US presence in Asia-Pacific. A case in point is that China cautiously avoided the impression that it was promoting Regional Comprehensive Economic Partnership (RCEP) as a competitor of Trans-Pacific Partnership (TPP) which was supported by the US.

Therefore, the US should have a practical judgment on the current situation in Asia-Pacific. China is aware that it is mission impossible to gain exclusive influence in the region.

The US no-show doesn’t necessarily lead to a clearer field for China. With closer ties with China, especially in the economic fields, Southeast Asian countries are also eager to strengthen their relationship with the US.

Su Xiaohui, Deputy Director, Department of International and Strategic Studies, China Institute of International Studies.

Su Xiaohui, Deputy Director of Inernational & Strategic Studies, CIIS via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/0ix5D2FSk5M/