Keywords: Guo Wengui, Xiang Junbo, North Korea, The South China Sea, National Park in Tibet, Internet control, High-school education, The Greater Bay Area.

CHINA – POLITICS

 1. The wanted Chinese billionaire Guo Wengui in the US revealing corrupt officials in China

On 19 April, The Beijing Government confirmed that the Interpol has issued the “Red Notice” to arrest Guo Wengui. The Chinese government made attempts to prevent Guo’s interview with Voice of America from taking place. The interview was disrupted after one-hour live broadcasting, and the VOA cited technicality as the reason. With regards to who is involved in the stories of corruption at the highest level of CCP, Guo Wengui alleged that the current vice-minister of state security, Fu Zhenghua (傅政华), had been ordered by Xi Jinping to investigate Wang Qishan for the latter’s family finances. Also, he accused a former member of the Politburo Standing Committee He Guoqiang (贺国强) and his family of having a business dispute with him in relation to the Founder Securities (方正证券股份有限公司).

• //The comments from foreign ministry spokesman Lu Kang confirmed reports by the South China Morning Post that the notice was issued at Beijing’s request. Lu did not give details of Guo’s alleged crimes. […] An Interpol red notice is a request to locate and provisionally arrest an individual pending extradition, according to the Interpol website. It is not an international arrest warrant. […] Deputy public security minister Meng Hongwei became president of Interpol in November, the first Chinese national to hold the position and which came as Beijing was trying to bolster efforts to return suspects from overseas. […] Although the acts of bribery and taking bribes carry the same penalties under Chinese law, the authorities have so far been focused more on punishing those who accept bribes. Among the 100 fugitives subject to red notices from Interpol’s National Central Bureau for China in 2015, only one was wanted on suspicion of paying bribes. All the others are suspected of embezzlement, fraud or receiving bribes. China’s move to seek a red notice was more of a warning to him than an indication an extradition was likely, Beijing-based political commentator Zhang Lifan said. “It’s a way for Beijing to exert pressure on him,” Zhang said.// Source: SCMP, 20 April 2017.

• //Guo Wengui, hours before he appeared on television to deliver what he said would be a “nuclear bomb” of corruption allegations against the families of top Communist Party officials. […] China asked Interpol to issue a so-called red notice to its member countries for Mr. Guo’s arrest, Lu Kang, a Foreign Ministry spokesman, told reporters on Wednesday in Beijing. […] In the interview, Mr. Guo called the report that he bribed Mr. Ma “false,” and he said he was not a Chinese citizen. He said he held passports from 11 other countries. […] He said he was in regular contact with F.B.I. agents and was not worried that he would be arrested. Mr. Guo said the issuance of the red notice was an attempt to prevent the Voice of America interview. […] In the interview, Mr. Guo made new allegations about business empires secretly controlled by Chinese leaders, in this instance the nephew of a current member of the Communist Party’s ruling Politburo Standing Committee. Those claims could not be immediately substantiated.// Source: New York Times, 19 April 2017.

• //China’s government pressed Voice of America to cancel the interview, an official with the broadcaster said. The Foreign Ministry summoned its Beijing-based correspondent, Bill Ide, on Monday, where he was told that the interview would be viewed by China as interference in its internal affairs and told that it might affect the renewal of journalists’ visas, according to two people at Voice of America with knowledge of the meeting. Officials from the Chinese Embassy in Washington also called Voice of America in an effort to stop the interview from taking place, one person with direct knowledge of the conversations said.// Source: New York Times, 19 April 2017.

• //It all started in an interview aired on U.S. government-funded TV station, “Voice of America,” on April 19. Guo said then Xi ordered Fu Zhenghua, the vice-minister of state security, to investigate the family finances of Wang Qishan, Xi’s close political ally and head of the party’s anti-corruption watchdog, the Central Commission for Discipline Inspection. Guo claimed that he was in turn instructed by Fu to dig into the matter. The live broadcast, however, was abruptly cut off, fueling speculation of Chinese pressure. VOA Senior Editor Dong Fang said without clarifying that it was stopped for “various reasons.” […] Xi and Wang have known each other since their youth, and worked closely together in the anti-corruption campaign. But Guo’s revelation, which some play down as being aimed at avoiding his extradition, has given rise to speculation that a rivalry may be emerging between the two.// Source: Nikkei Asian Review, 25 April 2017.

• //That changed this year. In two rambling interviews with a New York-based media company lasting more than four hours, Guo Wengui, a real estate magnate, described what he said was a ferocious struggle that culminated two years ago in the collapse of a business deal pitting him against relatives of a retired top Communist Party official, He Guoqiang. […] Guo explained in a March 8 videotaped interview with Mirror Media Group, a Chinese-language news company based on Long Island, how Mr. He’s son He Jintao was the “boss” of the second-largest shareholder in Founder Securities, a company in which Mr. Guo was seeking to acquire a large stake. He Jintao concealed his role through a proxy, according to Mr. Guo. That deal soured when Mr. Guo tried, without success, to name directors to Founder Securities’ board and became locked in a dispute with his former business partner, Li You, who was the chief executive of the brokerage’s state-owned parent, according to a report by Caixin, a Chinese news company. […] In 2015, New York Times reporters working in Beijing, Hong Kong and the southwestern Chinese city of Chengdu mapped out the financial network of He Guoqiang’s family, examining shareholding records and verifying relationships by interviewing a member of the family. Those documents and interviews show that the family did appear to control, indirectly through a series of shell companies, a stake in Founder Securities, which has a joint venture in China with Credit Suisse, the Swiss bank. Founder Securities is one of China’s biggest brokerages, with a market capitalization of more than $10 billion.// Source: New York Times, 15 April 2017.

Meanwhile, a number of news articles appeared on the Chinese tabloids such as Caixin, the Beijing News (see below), etc. which detailed Guo Wengui’s misdeeds and his relationship with many fallen officials, including Ma Jian (马建), the former deputy head of the Ministry of State Security, Zhang Yue (张越), the former head of the Hebei Provincial Political and Legal Affairs Commission, and Xiang Junbo (项俊波), the former Chairman of the China Insurance Regulatory Commission (CIRC). Ma was arrested in 2015. Zhang was arrested in April 2015 and was publicly tried on 20 April. He was implicated with the case of Zhou Yongkang. Also, Xiang was arrested in April 2016 and was the first official of ministry level after the Two Sessions in March. The authorities have a recent campaign to catch all corrupt persons within the establishment and outside in the financial service and banking sectors. Ma Jian appeared on a leaked video as a person in custody, confirming that he has accepted bribes of 60 million RMB from Guo Wengui from 2008 to 2014 and also allegedly accused Guo of many cases of illegal conduct when the latter had asked Ma to help him obtain certain benefits.

• //In the latest video featuring China’s former deputy head of the Ministry of State Security Ma Jian, who was deposed in 2015 and is currently under investigation for graft, Ma revealed details of several cases of illegal conduct by Guo, a real estate mogul who maintained close relations with a number of high-ranking officials, some of whom have since been investigated or jailed for corruption. Guo fled China to the US in 2015, but his legend dates back to a 2006 graft case where, in order to secure a key land development project in Beijing, Guo toppled the former vice mayor of Beijing, Liu Zhihua, by sending the authorities a sex tape of Liu and his mistress. Guo’s manipulation of senior officials, either through money, sex or blackmail, was revealed by Caixin magazine in a series of reports in 2015, in which they dubbed Guo “the hunter of power.” Though Guo has since blasted the reports, some details of the reports were recently confirmed by a videotaped confession, seemingly given by Ma, former deputy minister of State security.// Source: Global Times, 24 April 2017.

• //馬建稱2006年因工作關係與郭文貴相識，2008年至2014年，多次以17局的名義，包括發函及監聽等，為郭文貴擺平各種麻煩。當年郭文貴的商業地產金泉廣場違法增加建築面積面臨拆除，馬建找到時任北京市副市長陳剛，最後罰款了事，郭挽回數億元損失。2008年，郭文貴圖收購首都機場持有的民族證券股份受阻，馬建又找時任民航總局局長李家祥商談，又以17局名義發函證監會，並親自找時任銀監會副主席蔡鍔生商談，助郭文貴順利收購民族證券。而每次為郭文貴說項時，馬建總是強調郭為維護國家安全作出過突出貢獻。// Source: Ming Pao Daily, 21 April 2017.

• //官方證實已免去張越一切領導職務，成為2012年以來第4個受查河北省委常委，有別於前3個落馬省領導，他原來與前中央政法委書記周永康有一段淵源，其仕途生涯更體現內地官場的權錢交易運作。// Source: Hong Kong 01, 20 April 2017.

According to the Beijing News, Guo Wengui fabricated documents to obtain loans from the government-owned banks and was implicated in embezzlement. Also, he took advantage of the guanxi with government officials to target opponents in the business sector and to obtain monetary benefits from business deals. Many interviewees appeared to denounce Guo’s personalities.

• //他所牵头的“盘古会”一度聚拢了多名高官巨贾，包括原国家安全部副部长马建、原河北省委常委政法委书记张越等，交织了一副令人难以想象的利益之网。在北京商界，郭文贵拥有“战神”、“加勒比海盗”的称号。在2014年郭文贵身价达到顶峰，打造了貌似强大的盘古帝国，在胡润百富榜上，郭文贵家族排74位，财富总值为155亿元。权力的庇护如同驱逐舰为郭文贵在商海里保驾护航，让其成为那个游荡在灰暗地带无所不能的“战神”。 他从一个农民，成为福布斯胡润百富榜上有名的资本大鳄，在关于他的传闻里，却包涵了资本市场里未尝败绩的郭氏并购和资本转移案例，动辄数以亿元计的造富能力，从结盟到反目的高官围猎能手，利用色诱、偷拍获取寻租权力的香艳故事。// Source: The Beijing News, 19 April 2017.

• //据媒体报道，郭文贵与张越在2006年左右认识，郭文贵因公司员工酒驾肇事找张越帮过忙，郭文贵出手阔绰，张越对他颇有好感，此后，两人经常往来。一段时间，传闻张越被查，郭文贵知悉后称自己可以帮忙找关系解决问题，张越此后对郭文贵言听计从。马建和郭文贵也是在2006年左右相识，从2008年到2014年，马多次为郭文贵给与帮助，郭给马行贿总价值大概6000万左右人民币。　马建称，2008年左右，郭文贵的公司因建筑违规受到处罚，面临几个亿的损失。马建派人以国安部的名义，给相关发函，最后只对郭进行了罚款处罚，为郭文贵挽回了数亿元的损失。 此外，马建还动用国安关系为郭文贵大量删除网络负面报道，威胁报道记者，调查对立公司的账目情况。和郭文贵扯上关系而落马的，还有正部级的项俊波。据媒体报道，2010年下半年，在时任农行董事长项俊波的支持下，资金极度困难的郭文贵，获得了北京农行亚运村支行32亿元的开发性贷款。 2017年4月9日，中纪委通报，中国保险监督委员会党委书记、主席项俊波涉嫌严重违纪，目前正在接受组织审查。// Source: Sina Finance, 19 April 2017.

 2. The first incumbent official of financial supervision bodies Xiang Junbo fallen

In a parallel development to the case of Guo Wengui, the sudden fall of Xiang Junbo as the former head of China Insurance Regulatory Commission (CIRC) stirred up some discussions. The significance of his fall lies in the fact that he is the first incumbent head of the CIRC as well as the first head of government supervisory agencies in the financial field to be investigated. Analysts pointed out that the speech in March by Premier Li Keqiang is indicative of the new around of crackdown on financial corruption and Xiang’s fall could be just a start. Also, some observers argued that some insurance companies that had emerged over the past years became the instrument for money laundering by senior party cadres and Xiang did not take any actions to stop them if not also collaborating with them. There are 11 fallen officials in the financial sector since 2013 and Xiang was the first in insurance supervision. In a recent meeting of the Politburo, Xi Jinping urged to secure financial security and regarded it as part of national security. He also urged to direct financial support to real economy.

• //Xiang Junbo, chairman of China Insurance Regulatory Commission (CIRC), was being investigated for suspected serious violation of the Party’s code of conduct, according to the Central Commission for Discipline Inspection of the Communist Party of China (CPC). […] The investigation of Xiang came shortly after Chinese Premier Li Keqiang’s March 21 speech at a State Council meeting on clean governance, in which he vowed to harshly crack down on financial corruption, as the world’s second largest economy is deepening reforms in pursuit of steady economic growth. Violations and corruption in the financial sector are not uncommon as the sector is vulnerable to risks, including bad assets, bond defaults, shadow banking and illegal Internet financing.// Source: Xinhua, 10 April 2017.

• //連日來，從原保監會主席項俊波落馬，成為首位在任上被審查的“一行三會”一把手；到國務院總理李克強點名批評“個別監管人員監守自盜、與金融大鱷內外勾結，必須嚴厲懲處、以儆效尤”，再到銀監會啟動全行業整治金融亂象、加碼防控十大風險，這場始於去年底喊打金融大鱷的資本市場整治已升級為全國性金融整頓，也預示新監管時代即將到來。[…] 監管部門官員向本報表示，今年金融監管勢必加碼並保持高於以往的政治姿態。銀行、保險、證券市場都將開展全行業自查和整頓，以實現防範金融風險和脫虛入實兩大目標。金融整治的中心眼將從資本市場轉移到銀行業，糾正過度自由化的金融政策，更多強硬政策陸續有來，以行政化的高壓監管撲滅風險。// Source: CRNTT, 18 April 2017.

• //項俊波是近五年內第28位被調查的十八屆中央委員會成員，是首位在任上被審查的一行三會一把手，更是保監會成立19年以來首位被調查的主席。項俊波因‘嚴重違紀’被審查，但具體案由目前尚無準確消息。他是否與一些被調查的金融大鱷之間存在違規違法的利益輸送，或是案情的關鍵。”“在保險業的項俊波時代落幕之際，市場對於項俊波的評價可謂毀譽參半。[…] 中國國際經濟交流中心信息部部長王軍接受本報訪問時指出，”“這可能意味，中央對金融腐敗動真格了，金融反腐的大幕拉開了一角，金融大鱷們該顫抖了。” […] 除了貪腐，項俊波的另一個大問題是瀆職。過去幾年中國保險業突飛猛進，一大批資產上萬億元的保險公司突然出現在世人面前。這些崛起的龐然大物，不少是一些大貪官用來洗錢的工具，這些保險公司將貪官們原本處於灰色地帶的黑錢洗到陽光之下，然後在股市上興風作浪，或者在美歐大量購買房產。作為保險業的主管，項俊波對此視若無睹，甚至故意配合。”“內地近年金融改革的先行先試措施，不少淪為特權家庭腐敗的特區，他們的財富通過金融槓桿被放大至上千億元，真正達到富可敵國的地步。”“總理李克強曾直斥有人為製造的資金外流漏洞、大洞、深洞，‘有扮兩面人，也有有恃無恐的，有的內鬼就在會議室內’。項俊波今次被查，看來只是前奏而已，重頭戲恐怕還在後頭。”// Source: Reuters France International’s (Chinese Edition), 13 April 2017.

• //值得注意的是,2013年和2015年,项俊波掌管农行期间的两位班子成员杨琨和张云先后被中央纪委通报。《法制日报》记者逐条梳理发现,项俊波治下的保险行业,自党的十八大以来,已经有4人被中央纪委监察部官网纪律审查栏目通报。早在2013年12月1日,纪律审查栏目就通报称,中国出口信用保险公司原副总经理戴春宁涉嫌严重违纪违法,接受组织调查。更为重磅的消息出现在2017年2月23日,中央纪委监察部官网纪律审查栏目通报称,中国人民保险集团公司原党委副书记、副董事长、总裁王银成涉嫌严重违纪。一个多月后,也就是4月9日,项俊波被查。这不但打破了十八大以来保险监管部门没有官员被纪律审查通报的纪录,也打破了十八大以来“一行三会”官员被纪律审查通报的级别上限,也将该栏目通报的金融监管系统官员数量刷新为11人。 // Source: Xinhua, 26 April 2017.

• //Xi, also general secretary of the Communist Party of China (CPC) Central Committee, made the remarks Tuesday afternoon at a group study attended by members of the Political Bureau of the CPC Central Committee. Financial security is an important part of national security and a key foundation for the stable and healthy development of the economy, according to Xi. […] “Finance is the core of a modern economy,” said Xi. “We must do a good job in the financial sector in order to ensure stable and healthy economic development.” […] Xi further listed six tasks to maintain financial security, including deepening financial reform and improving the financial system by promoting accountability and compliance among financial institutions; strengthening supervision over systemically important financial institutions, financial holding companies and financial infrastructure to prevent any supervision loopholes; fighting violations of laws and rules, with a focus on comprehensive investigation of financial markets and internet finance. Xi encouraged intensifying financial support to the real economy by developing a multi-level capital market, expanding the scope of direct financing, and providing more financial support to bolster key areas such as advanced manufacturing.// Source: Xinhua, 26 April 2017.

CHINA – DIPLOMACY

 1. Tensions over North Korea’s nuclear program

The Columnist from the Financial Times (Chinese Edition) Wei Cheng observed that China-North Korea frictions are increasingly noticeable on the editorials of the state-owned newspapers in both North Korea and China. For example, on 21 April, Korean Central News Agency criticized China without naming it for following the US instruction to sanction North Korea. On 28 April, Global Times published an article arguing that China should not pay for the radical policy of North Korea’s leaders and China’s interests should be protected in its relations with North Korea. The People’s Daily on 30 April also published an article urging North Korea to comply with the UN sanctions. The columnist also suggested that the recent missile testing by North Korea on 29 April could indicate that North Korea may no longer see China as its ally and China should be prepared.

• //[中]国官方媒体《环球时报》却认为，朝鲜选择在4月29日发射导弹，主要是为了“气”美国——因为这一天是特朗普就任美国总统百日纪念日 […] 随后，特朗普4月30日在接受美国哥伦比亚广播公司新闻台（CBS News）采访时，再一次谈到中国对朝鲜不断发射导弹不会感到高兴，他强调说，他认为，中国不想看到一个不稳定的朝鲜，中国肯定不想看到朝鲜拥有核武器，而中国不喜欢朝鲜拥核已经很长时间了。[…]虽然朝鲜目前尚未公开宣布中国是其众多敌国之一，但其心底深处却早已不再把中国视为友好国家了。 […] 而后来中朝之间就朝鲜核试验问题引发的争执，更使两国关系陷入寒冬期。如今，朝鲜已经不惜公开撕破脸皮，高调批评中国。例如，朝鲜中央通讯社今年4月21日发表题为《还好意思随波逐流？》的评论，不点名地批评中国：“如果他们估错朝鲜的意志，对人家随波逐流，执着于对朝鲜经济制裁，或许会得到朝鲜的敌人的欣赏，但也要对同朝鲜关系的灾难性后果做好思想准备。”再如，韩国《朝鲜日报》引述消息称，面对中美逐步向朝鲜施压，朝鲜政府近日透过人民班演讲以及保卫部的讲座，大肆批评中国，公开斥责中国是“妨碍统一的无耻国家”，报道指出，朝鲜一般只会以类似的用语谴责美国，今次用来批评中国，情况实属罕见。[…]中共机关报《人民日报》4月30日发表署名“钟声”（意为“中国之声”）的国际评论《朝鲜半岛需要负责任行动》，仍然认为：“中国不是朝鲜半岛问题的直接矛盾方，解决半岛核问题的钥匙也不在中国手里。”[…] 其实，中国已经有人主张中国应该打出更多对朝影响力之牌了。例如，《环球时报》总编辑胡锡进就主张，必要之时，中国应该对朝“断油”。朝鲜4月29日发射不成功的导弹之后该报立即发表的那篇社评，也再次提及“断油” […] 《人民日报》4月30日发表的那篇评论严厉警告平壤当局：“朝鲜必须尊重和遵守联合国安理会决议，不可在射导、核试、被制裁，再射导、再核试、再被进一步制裁的错误道路上越走越远。” 再如，《环球时报》4月28日发表的另一篇社评明确表示，中朝关系的“前提必须是不违背中国的国家利益，不让北京为平壤的极端政策埋单”，这篇社评还在文末强硬地表态：“北京希望帮着寻找各方利益和主张的最大公约数，如果失败，半岛局势最终走向摊牌，中国既不怕朝鲜，也不怕美韩，我们有足够力量对肆意踩踏中国利益红线的任何一方予以回击。” 当然，未来中国的对朝政策，不能仅仅限于“不怕”，还需要对金正恩一旦行动上视中国为敌的那一天做好政治、经济、军事上的准备，包括反导准备，此外，中国还要认真考虑如何提前终止《中朝友好合作互助条约》。// Source: Financial Times, 02 May 2017.

Shen Zhihua, a professor from East China Normal University, proposed that China should abandon its close relationship with North Korea and cultivate new one with South Korea. Similar suggestions in the past will be muted or the speaker will be punished, but not this time. An English excerpt of Shen’s suggestion can be found here prepared by New York Times. Some American analysts argued that the alliance between China and North Korea started with their common struggle against the West during the Cold War. Some believe the Chinese government could force North Korea into action by stricter economic sanctions but China is very unlikely to do so. Another analysis by Steve Mollman on Quartz evaluated the strength and weakness of China in pressuring North Korea through economic means:

• //沈志华上个月在中国东北港口城市大连的一所大学进行的讲座中表示，中国应该抛弃变味的兄弟情谊神话，放弃支持朝鲜，转向韩国。“从目前的情况来判断，朝鲜是中国潜在的敌人，而韩国可能是中国的朋友。”根据沈志华在网上发表的一份讲稿，他这么说道。“我们要看清楚，中国与朝鲜已经不是战友了，在短期内，中朝关系不可能改善。”[…] 沈志华的观点引发了中国超国家主义者的愤怒，他们指责他对平壤的态度是出卖中国的盟友。中国国家新闻媒体没有报道他的看法和相关的辩论。[…] 在过去，中国批评朝鲜的文章会迅速遭到审查。2004年，一家很有影响力的中国政策杂志发表了一篇批评朝鲜的文章，然后就被关停。2013年，一份共产党党刊在北京的某编辑因为他公开建议中国不再支持朝鲜而被解职。沈志华说，到目前为止，他的观点都受到了容忍，表明政府可能愿意容忍对朝鲜的更大批评，以及对中朝关系的争论。// Source: New York Times (Chinese Edition), 19 April 2017.

• //Such US brinkmanship is aimed at coercing Pyongyang to drop its nuclear weapons programme. But it throws China into a highly conflicted position; Beijing’s alliance with North Korea derives from a founding narrative that asserts that China has struggled against the west to make its way in the world. This creates common cause with the hermit kingdom. Even though a nuclear-armed North Korea led by the mercurial, 33-year-old Kim Jong Un is deeply unpalatable to Beijing, it has been seen as preferable to a regime collapse and the entire Korean peninsula falling under a US security umbrella. “North Korea is a public-relations nightmare for China every time it does something bad,” says Victor Cha of the Center for Strategic and International Studies in Washington. “But Beijing is wedded to the strategic stability that a junior communist client state on its border provides in a region filled with US military allies.” He argues that Mr Trump is trying to force a change: “It takes a crisis to pry this loose.” But when Lt Gen McMaster insisted this week that Washington was “going to have to rely on Chinese leadership” to apply economic pressure on Pyongyang, he asked for something that Beijing has obdurately refused to furnish in any real sense. There is no doubt that China has the ability to bring North Korea’s economy to its knees. It can cut trade links and oil supplies, shut down the internet, banking services and tourism. “These things would devastate the North Korean economy,” says Minxin Pei of Claremont McKenna College. “But the reality is that Beijing is far from this point.” The uncomfortable truth for the US is that Beijing remains inclined to tolerate its exasperating client state for as long as Washington looms as China’s chief strategic competitor. // Source: Financial Times, 19 April 2017.

• //The Global Times, a state-backed Chinese tabloid, recently suggested a sixth nuclear test by the North would merit China cutting oil shipments. Doing so would be devastating to North Korea’s economy. China could also apply major pressure by curtailing access to its financial system. Kelly points to 2005 US sanctions against (paywall) Banco Delta Asia, a bank in Macau holding North Korean funds, as an example: “The North Koreans got really hyper-sensitive about that, and there was a lot of regime activity about that the intelligence community picked up.” But, he adds, some of the Chinese elite might also be nervous about actions taken against Chinese banks. […] These days, much of the North Korean economy is fueled by the black market. Though Chinese players are heavily involved, it isn’t necessarily under Beijing’s control. […] North Korea has economic relationships outside of China, of course. For instance the regime essentially rents out slave labor to other repressive governments. It’s also a weapons supplier, and it profits handsomely from the civil war in Syria, helping the military of president Bashar al-Assad with parts, artillery, and technical assistance. It’s a partner with Iran on various fronts, including, possibly, nuclear weapons development. It also dabbles in cyber-theft and has its own illicit drugs industry.// Source: Quartz, 03 May 2017.

2. Development in the South China Sea and ASEAN

The joint statement issued at the end of the ASEAN summit in early May this year did not ask for the stoppage of militarization in the South China Sea, which was regarded as China’s diplomatic success. Huong Le Thu, a visiting fellow at the Strategic and Defence Studies Centre, argued on the SCMP that the removal of the South China Sea issue from the ASEAN agenda was a success for China’s strategy and undermines the ASEAN as a regional actor. An analysis on Nikkei Asian Review argued that the Asian countries from ASEAN are less likely to pressure China on the South China Sea ahead of the One-Belt-One-Road Forum in May in hopes of favors from China’s economic initiatives. Another analysis by Mathew Davies on CNN contended that the ambiguous stance of the Trump Administration compared to the Obama Administration did not give ASEAN members full back-up if they confront China on this issue. Recently the Trump Administration did not allow the US warship to patrol in the South China Sea, suggesting Trump’s softer attitude toward China on the condition of the latter’s help for the North Korea issue.

• //At the conclusion of the Association of Southeast Asian Nations (ASEAN) Summit last Saturday, it issued the following Chairman’s Statement on the South China Sea: “We recognized the long-term benefits that would be gained from having the South China Sea as a sea of peace, stability, and sustainable development. “We took note of the concerns expressed by some leaders over the recent developments in the area. We reaffirmed the importance of the need to enhance mutual trust and confidence, exercising self-restraint in the conduct of activities and avoiding actions that may further complicate the situation and pursuing the peaceful resolution of disputes without resorting to the threat or use of force.” The final statement removed a reference in an earlier draft calling for a stop to “land reclamation and militarization” of the sea. That would have been a direct jab at China.// Source: Manila Bulletin, 03 May 2017.

• //China on Tuesday welcomed a softer stand taken by Southeast Asian countries on the disputed South China Sea at a weekend summit, saying it showed efforts to ease tension were working. The Association of South East Asian Nations (ASEAN) dropped references to “land reclamation and militarization” from its chairman’s statement this year at the end of its summit in the Philippine capital, Manila. The reference had been included last year and was even in an earlier, unpublished version of the statement, seen by Reuters on Saturday. Two ASEAN diplomats said that this year, China had pressed ASEAN chair the Philippines to keep China’s contentious activities in the strategic waterway off ASEAN’s official agenda.// Source: Reuters, 02 May 2017.

• //The outcome of the 30th Asean Summit last week in Manila suggests that the Southeast Asian leaders reached their signature “consensus” on South China Sea issues. That is, they will not be addressed through the Asean mechanisms. […] Despite the tension around the disputes in the South China Sea and their challenge to regional stability, Asean has resisted the pressure to speak or act together. This has undermined its relevance as a regional actor. The most embarrassing display of internal disunity came in 2012 when Cambodia, as acting chair, failed to issue a joint statement concluding the summit. […] The 30th summit reaffirmed that Beijing’s strategy works. Its statement merely underlined the concerns of some members and, in reaffirming long-term peace and stability, Asean leaders “forgot” the ongoing militarisation of the Chinese islands.// Source: SCMP, 03 May 2017.

• //As leaders of Southeast Asian nations prepare to meet for an annual summit starting Wednesday, their collective stance against China’s territorial ambitions appears to have grown markedly softer, reflecting delicate balancing acts by countries vying for economic assistance from Beijing. […] ASEAN foreign ministers will meet with U.S. Secretary of State Rex Tillerson next Thursday. Although they will discuss the South China Sea, the participants are likely to avoid antagonizing China. Both Duterte and Myanmar’s State Counselor Aung San Suu Kyi, the de facto national leader, will attend China’s “One Belt, One Road” summit in Beijing in mid-May, hoping to gain from the cross-border infrastructure initiative.// Source: Nikkei Asian Review, 25 April 2017.

• //[t]he US position has changed. The Obama administration has rejected China’s approach to the South China Sea as incompatible with international law and had offered clear and vocal support for ASEAN members who shared that position. Now, under a President Trump, the US has been muted in its defense of international law in the South China Sea. With the backstop that the US represents now removed, ASEAN members face a different calculus when making decisions about how far to push China. Criticizing Beijing, or insisting that ASEAN use more forceful language, is now more exposed than ever.// Source: CNN, 02 May 2017.

• //Six weeks ago, the United States Pacific Command requested permission from senior American officials for a United States warship to sail within 12 nautical miles of Scarborough Shoal, a disputed reef in the South China Sea that is claimed by the Philippines and China. […] The simmering crisis in North Korea seems to have changed the Trump administration’s earlier assumptions on how to handle China. Trump campaigned on being tough on Beijing, promising that he would label China a currency manipulator and would go after Beijing on trade. But with North Korea escalating its provocative behavior the past three months, attempting nine missile launches on six occasions since Mr. Trump came to power, his administration has adopted a more conciliatory air with Beijing as the president seeks help to rein in Pyongyang.// Source: New York Times, 02 May 2017.

 CHINA – ENVIRONMENT

China’s plan to establish the world’s largest national park in Tibet

According to SCMP, China will establish the world’s largest national park in Tibet in collaboration with neighboring countries such as Pakistan and Nepal. The official reason for the conservation park is to protect the Tibetan plateau for environment and ecology of the area. Scholars who are involved in the project, dubbed Third Pole Environment programme, pointed out that the project could also help protect the water source that benefits the neighboring countries as well as keeping the large oil and natural gas over there as national strategic reserve.

• //Dubbed the Third Pole National Park because the plateau and mountains, including the Himalayas, have a natural environment that in many ways resembles polar regions, it would be the world’s biggest national park. The plateau covers an area of more than 2.5 million sq km, mainly in Tibet and Qinghai, dwarfing the biggest national park at present, Greenland’s 972,000 sq km Northeast Greenland National Park. This summer, the Chinese government will launch the biggest scientific survey of the Tibetan plateau, with a large number of scientists from China taking part, accompanied for the first time by others from neighbouring countries such as Nepal and Pakistan. […] [t]he government is serious, according to some researchers, with the impetus for the Third Pole National Park coming from the very top. At a meeting with leading scientists studying Tibet in Beijing late last month, CAS (Chinese Academy of Sciences) vice-president Liu Weiping passed on an instruction which he said came directly from President Xi Jinping, saying they must contribute to the “guarding and keeping of the last piece of pure land”. Liu said the ruling Communist Party, led by Xi, had an “urge” to protect the Tibetan plateau and regarded it as an environmental and ecological imperative. […] Dr Wang Weicai, a researcher involved with the Third Pole Environment programme, a multinational effort spanning 5 million sq km initiated by China to address regional concerns, said turning the Tibetan plateau into a national park would help ease the water supply concerns of neighbouring countries that had been prompted by economic development in Tibet. “It will also help the implementation of ‘One Belt, One Road’,” a Chinese initiative to strengthen economic cooperation across Eurasia, he sai […] Professor Wang Shiping, a researcher with the Institute of Tibetan Plateau Research and a member of China’s natural reserve review committee, said the national park would not only save plants, animals and people currently living on the roof of the world, but also benefit future generations. […] “The government has decided to keep the natural resources in Tibet as a strategic reserve,” Wang said. “We will not tap this last resort as long as we can buy oil and ores cheaply from overseas. “The Tibetan plateau is huge but few people live there. Even if its economy is growing at double-digit rates, it will not contribute much to China’s gross domestic product.”// Source: SCMP, 22 April 2017.

Some scientists cast doubt over the feasibility of the national park due to its vast size and the needed re-location and cessation of economic activities within the area:

• //Professor Liu Jingshi, researcher with the Chinese Academy of Sciences’ (CAS) Institute of Tibetan Plateau Research, said the Third Pole National Park, if established as proposed, would be difficult to manage due to its unprecedented size. […]“It is too big for a park,” Liu said. And unlike the unpopulated park in Greenland, the Tibetan plateau is home to cities, towns and nomadic tribes, with native Tibetan population estimated at 7.8 million. The main purpose of a national park is conservation, which would limit a wide range of economic activities and might necessitate the relocation of some residents. “Some people will lose their jobs. The lives of many may be affected,” said Professor Yi Chaolu, another researcher with the Institute of Tibetan Plateau Research. “To establish the park or not may go beyond science. It is also a political issue.”// Source: SCMP, 22 April 2017.

CHINA – SOCIETY

1. Social media filled with sensationalized reports in China

Fang Kecheng, a Ph.D. student in the Annenberg School for Communication at the University of Pennsylvania and a former journalist at the Southern Weekly newspaper, observed that there is a widespread circulation of highly sensationalized and conspiracy-linked reports on Chinese social media, and he argued that the information is circulated on the Chinese microblogging site Weibo and social messaging app WeChat by the “marketing accounts” (yingxiao hao) which aims to increase traffic on the Internet for profits.

• //While internet users in the Western world now stand a reduced chance of encountering the Daily Mail’s content, Chinese social media outlets — including microblogging site Weibo and social messaging app WeChat — are frequently abuzz with the tabloid’s stories. In fact, the social media feeds of millions of Chinese netizens are filled not only with translations of the Daily Mail’s stories, but also with a torrent of misinformation from the West’s now-ubiquitous fake news and conspiracy theory websites. […] To be sure, the Daily Mail and American right-wing conspiracy websites are not operating Chinese-language outlets in China, though the Daily Mail does have an established partnership with Communist Party mouthpiece People’s Daily. The real force behind the massive importing from the Daily Mail and other such outlets stories is an influential — some might say notorious — group of social media accounts known as yingxiao hao, or “marketing accounts.” […] Successful marketing accounts accumulate multitudes of followers from the content they share. As they do so, they start to advertise. Some of them even succeed in securing venture capital. “College Daily,” the account that published the aforementioned fake news articles about the 2016 American presidential election secured early-stage financing of 10 million yuan ($1.45 million) in February 2016. The business model of these accounts is thus straightforward: Lure in readers via clickbait and fake news, then sell users’ attention to advertisers. For marketing accounts, traffic is everything, and quality and truth are nothing. That’s why they overwhelmingly choose to import sensational, controversial, or conspiratorial content from the likes of the Daily Mail and Political Insider, rather than from more serious and reputable sources. Even when they do import stories from, say, The New York Times or The Washington Post, they put a tabloid-esque spin on them, distorting their information. […] The commercial success of marketing accounts is facilitated by myriad factors, including other social media platforms also eager to increase traffic. The language barrier and the difficulty in accessing foreign news websites also help marketing accounts, whose readers are less likely to verify the information they read. Although some people in China are introducing fact-checking labels to fight the plague of fake news, their accounts carry much less influence than marketing accounts. Ironically, although the Chinese government has issued a law saying that publishing false rumors that are then reposted at least 500 times can result in three years’ imprisonment, these fake news articles and conspiracy theories are mostly uncensored, the perpetrators who run them safe and rich.// Source: Sixth Tone, 17 April 2017.

2. Live video streaming on the Chinese Internet under greater scrutiny

In the latest article by David Bandurski from the China Media Project of the University of Hong Kong, he observed that the Chinese authorities have taken new steps to rectify the situation of live video streaming on the Internet. He posed a question about whether such move is motivated by moral regulation or political control:

• //Following a damning report over the weekend by China’s state-run broadcaster, China Central Television, alleging the proliferation of vulgar content through popular live streaming apps, authorities in Beijing met yesterday with the operators of three popular apps, ordering them to fully submit to “rectification,” or zhenggai  –  a term that refers in Chinese to an overhaul of operations, possibly involving the removal or reshuffling of management staff. The three app operators were reportedly “invited to discussions” with the Beijing municipal office of the Cyberspace Administration of China and ordered to immediately desist from unspecified violations of Chinese regulations. They include Toutiao (今日头条), an app that offers automated selection of news stories, and “Volcano Live” (火山直播) and “Pepper Live” (花椒直播), both social platforms for live video streaming. […] Live streaming apps emerged in China during the second half of 2015, developing rapidly. By the end of 2015, the country had close to 200 live streaming platforms in operation. The emerging industry experienced tremendous growth in China in 2016, reaching an estimated 344 million users by year’s end. But live streaming apps have also come under intense scrutiny. Earlier this month, the Cyberspace Administration of China (CAC), the internet control body created by President Xi Jinping in 2014, announced that it had shut down 18 live streaming apps operating illegally, saying “anchors,” or individual program hosts, had “spread illegal content, dressed in military or police uniforms or were scantily dressed and acted flirtatiously.” […] Back in January, an article in the People’s Tribune, published by the official People’s Daily, noted that streaming platforms made it difficult to control “guidance of speech” (言论导向), a reference to the overarching goal of social and political control through the media. The article also said some content on live streaming platforms disadvantaged the “correct channelling of public opinion,” a term denoting the Party’s control and manipulation of information. “Owing to the fact that online anchors do not require examination of credentials to start working,” it said, “some anchors lack political literacy and media integrity. They take a shallow view of problems and wantonly criticise political events, inciting the sentiments of the people and demonising public figures.” […] Soon after news of the “discussion” with the three apps went public yesterday, one of the companies concerned, Pepper Live, posted a notice online in which it thanked CCTV for its “attention to and monitoring of the live streaming industry,” and pledged to improve its oversight, helping to “clean up the live streaming environment.”// Source: Hong Kong Free Press, 01 May 2017.

Meanwhile, the Cyberspace Administration of China (CAC) announced a new regulation on the publication, sharing, and editing of political news by private individuals or commercial enterprises on the Internet. It also changed the supervisory body from the State Council’s Information Office to the CAC. An analysis by Kerry Allen from the BBC argued that it could make it more difficult for business media to stay competitive. An article on Free Radio Asia suggested that now all online media outlet are succumbed to the same vetting process when dealing with political news. David Bandurski from the China Media Project of the University of Hong Kong argued that the change of supervisory body indicates the growing power of the CAC and this move together with other regulations on the Internet suggests Xi Jinping is building a cyber regime.

• //The regulation, issued by the Cyberspace Administration of China (CAC), requires the online news service providers to abide by the law, promote healthy Internet culture and safeguard national and public interest. The CAC will become the new regulator of online news service, replacing the State Council Information Office. The service providers should put in place a set of information security protocols and measures, such as reviews, checks and emergency responses regarding online news, the CAC said. There should be an editor-in-chief for all online news service providers and their staff should be qualified, according to the regulation.// Source: Xinhua, 03 May 2017.

• //In a statement published online, the Cyberspace Administration of China (CAC) said the new rules would “strengthen management of information” and “promote the healthy and orderly development of internet news, in accordance to law”. […] Organisations that do not have a licence will not be allowed to post news or commentary about the government, economy, military, foreign affairs, or “other areas of public interest”. […] This most recent regulation from the Chinese state will make it more difficult for business media in the mainland to stay competitive. […] It has already been problematic for staff from such organisations to obtain press cards to events – but financial websites such as Caijing and Caixin Online have traditionally been able to secure strong followings online because of their credible investigative journalism, and their articles are often shared through popular news portals. But in recent months, the Cyberspace Administration of China (CAC) has made increased efforts to tighten online media regulation – particularly as live streaming and video blogging becomes a popular means of telling news.// Source: The BBC, 03 May 2017.

• //According to the regulations: “Non-publicly owned capital may not enter into Internet news information gathering activities.” Beijing lawyer Li Jinglin said the regulation is “illegal,” although the regulations claimed to supersede any earlier laws. “This is illegal, because it violates China’s constitution,” Li said. “But who is going to enforce that?” […] “There is no independent judiciary in China, so there is no agency that could rule the Cyberspace Administration’s rules unconstitutional,” he said. According to the rules, online news organizations must also show that they have “qualified” personnel, suggesting that journalists and editors will be subject to the same political screening process as their counterparts in more traditional media. They will also be required to limit themselves to reprinting news information on the ruling Chinese Communist Party’s news whitelist, clearly indicating the story source, and keeping the original headline and byline.// Source: Free Radio Asia, 03 May 2017.

• //One hint as to the institutional significance of the regulations comes today in a report by Xinhua News Agency, which notes: “The CAC will become the new regulator of online news service, replacing the State Council Information Office.” This is not exactly the nail in the coffin — not yet. But we can expect both the Information Office and the Central Propaganda Department to be increasingly sidelined as the CAC comes to dominate, with a flotilla of laws and regulations behind it. […] Xi Jinping’s cyber regime is still in formation. But we can be sure that as the news in China increasingly goes digital, and as television goes mobile, the CAC’s power will grow. Its web of controls, almost assured to be one of Xi Jinping’s most enduring legacies, will overlay China’s 21st century web of communications.// Source: China Medium Project, 02 May 2017.

CHINA – EDUCATION

State Council to publish plan for improving high-school education across China

In early April the State Council has published a plan for the promotion of high-school education (2017-2020) (高中阶段教育普及攻坚计划 (2017-2020年)). The rationale behind the Plan is to popularize high-school education across the country, to relieve poverty in some impoverished areas in the middle and western parts of China, to push for China’s industrial upgrade, and to modernize education in China by 2020. Through protecting the basics and facilitating fairness, it is hoped to achieve the moderately prosperous society. Specifically, it aims to help some targeted areas with better education resources, to provide subsidies to students whose family has financial difficulties for education, to allow migrant workers’ kids to participate in exams in their residencies. Also, it will tackle three specific problems: 1) oversized classes at high-school level, 2) the imbalance of recruitment in normal and vocational schools, and 3) financial difficulties in school operation.

• //普及高中阶段教育需要在全面建成小康社会、打赢扶贫攻坚战、推动经济产业转型升级、推进教育现代化的大背景下统筹谋划。[…] 补齐短板就是针对制约普及高中阶段教育的突出问题和薄弱环节，综合施策、精准发力，保基本、促公平。普职并重就是统筹发展普通高中教育和中等职业教育，将职业教育摆在突出位置，优化高中阶段教育结构，促进普职协调发展，满足学生多样化选择需求。关注内涵就是坚持普及与提高并重，在扩大规模、提高普及程度的同时，全面落实立德树人根本任务，增强高中阶段教育的适宜性和吸引力 […] 一个总目标是：到2020年，全国普及高中阶段教育，适应初中毕业生接受良好高中阶段教育的需求。五个具体目标包括：一是全国、各省（区、市）毛入学率均达到90%以上，中西部贫困地区毛入学率显著提升；二是普通高中与中等职业教育结构更加合理，招生规模大体相当；三是学校办学条件明显改善，满足教育教学基本需要；四是经费投入机制更加健全，生均拨款制度全面建立；五是教育质量明显提升，办学特色更加鲜明，吸引力进一步增强。[…] 攻坚的关键是保基本、补短板、促公平，重点是4类地区、3类人群和3个突出问题。四类地区指的是中西部贫困地区、民族地区、边远地区和革命老区，这些地区受经济社会发展水平制约，教育资源不足，普及程度较低，是高中阶段教育的底部。《攻坚计划》明确提出，国家和地方通过实施一批重大工程项目支持这些地区扩大教育资源，改善办学条件，把这个底部托起来。三类特殊群体指的是家庭经济困难学生、残疾学生和进城务工人员随迁子女，保障这些群体的受教育权利是促进教育公平的重要体现。《攻坚计划》对此提出了相应的政策措施，一是完善扶困助学政策，不让一个学生因家庭贫困而失学；二是加强高中阶段特殊教育学校建设，积极推进家庭经济困难的残疾学生免费教育，保障好残疾人接受高中阶段教育的权利；三是在扩大教育资源的基础上，进一步落实和完善进城务工人员随迁子女在当地参加高中阶段学校考试招生的政策措施，提供更多接受高中阶段教育的机会。三个突出问题是指普通高中大班额比例高、职业教育招生比例持续下降、学校运转困难，这些问题严重影响高中阶段教育的普及水平和健康可持续发展。对此，《攻坚计划》提出通过优化学校布局结构、扩大教育资源、严格招生管理等措施逐步消除普通高中大班额现象；通过扩大中等职业教育资源、实施职业教育产教融合工程、办好特色优势专业、建立统一招生平台等措施提升中等职业教育招生比例；通过科学核定学校办学成本、建立合理的成本分担机制，建立完善中等职业学校和普通高中生均拨款制度等措施保障学校正常运转。// Source: The State Council of PRC, 06 April 2017.

The increase in vocational school education is one of the main foci of the plan. A reporter from the People’s Daily pointed out that many parents in China do not want their kids to go to vocational schools but normal high school for better career prospects. Yet, in some fast-growing industries such as railway, e-commerce, and logistics, over 70% of workers are from vocational schools and the lack of recruitment for vocational schools may lead to shortage of quality workers for these industries in the long run. Also, the reporter noted that the homogenous mode of school operation does not satisfy the need for student’s development of individuality. Dr. Ling Minhua in 2015 published an article on the value of vocational schools for migrant workers’ children on The China Journal.

• //“千方百计要上高中，宁死不屈不上中职”，抱着这种心态的家长和学生，在当前社会中并不少见。一些人对中职不屑一顾、一些中职学校吸引力差、一些地区中职教育发展滞后，这是高中阶段教育的现状，也是急需突破的难点。对此，《计划》提出：统筹普通高中教育和中等职业教育协调发展，优化高中阶段教育结构，提高中等职业教育招生比例，使普职招生规模大体相当。统计显示，目前全国共有中等职业学校（包括普通中专、成人中专、职业高中和技工学校）09万所，在校生1597.32万人，仅占高中阶段教育在校生的40.25%。而在加工制造、高速铁路、电子商务、物流运输等快速发展的行业中，新增从业人员有70%来自职业学校。可以说，职校学生在现代产业发展面前供不应求。“发展中职教育，首先要解决认识问题，牢固确立职业教育在国家人才培养体系中的重要位置。”教育部职业技术教育中心研究所所长杨进说：“发展中等职业教育不仅是对接产业升级、人才需求结构变革、缓解‘就业难’和‘技工荒’的必然要求，在广大农村和贫困地区，中职还具有精准扶贫、精准脱贫的作用。”[…] 事实上，千校一面、缺乏内涵、办学模式单一、无法满足学生个性发展，正是我国高中阶段教育的一大弊病。针对这些问题，《计划》将提高质量作为攻坚的发力点之一，提出深化课程改革，加强选修课程建设，增强课程的选择性和适宜性；建立学生发展指导制度，加强对学生课程选择、升学就业的指导；推进学校教育质量综合评价改革，改变单纯以升学率评价教育质量的倾向，发挥评价正确的育人导向作用等具体措施。 // Source: The People’s Daily, 20 April 2017.

Experts argued that the development of vocational schools could also reduce poverty in China:

• //“There is currently still a gap between the cities and the poor mountain areas in terms of education,” says Huang Yan, chairman of the Shanghai Smiles Foundation. Even with the government’s substantial poverty alleviation efforts, Huang believes it will take decades to close this gap. According to a report by Beijing Normal University, only 50 percent of students in poorer areas enroll in academic high schools, compared to more than 97 percent in China’s affluent eastern provinces. Vocational schools are touted as a means of addressing countryside poverty. “Developing vocational education does not only meet the goal of developing industries and talents, but also benefits poverty alleviation in rural China,” Yang Jin, head of the vocational and technical education center at China’s Ministry of Education, told the People’s Daily. […] Complex educational regulations combined with the shortage of experienced teaching staff and the lack of opportunities for corporate partnerships in the countryside make it easier to bring students to the city than take opportunities to rural areas. And even so, China’s strict hukou — or household registration — system can serve as an additional barrier for rural students seeking better-quality education in the city.// Source: The Sixth Tone, 24 April 2017.

A recent report (《农村绿皮书：中国农村经济形势分析与预测（2016~2017）》) shows that the income gap between different groups of rural residents has been expanding despite the state effort in poverty alleviation:

• //An annual report by the Chinese Academy of Social Sciences (CASS) found that although the wealth gap between different regions is narrowing, inequality between different income groups is expanding. The annual disposable income for rural residents averaged 12,363 yuan (US$1,797) last year, a 6.2 per cent increase over the previous year, but not every group of rural residents fared equally well. The annual disposable income for high-income groups increased by 9.8 per cent last year, and by 8.4 per cent for the middle-low group. However, the amount decreased by 2.6 per cent for low-income groups, the report said. […] “This might pose an issue, when the incomes of all the other income groups are growing but the low-income group, especially when the central Communist Party leadership takes poverty ­alleviation as one of the top priorities,” CASS researcher Du Xiaoshan warned. […] Du said the report clearly showed the wealth gap among rural residents was expanding, which cast doubt on whether the wealth gap between urban and rural residents was narrowing.// Source: SCMP, 22 April 2017.

HONG KONG – POLITICS

Activists related to the pro-independence lawmaker controversy in last October face arrests

In late April, the two former pro-independence lawmakers and a number of activists in support of them were arrested for unlawful assemblies among other charges. Director of Amnesty International, Mabel Au, urged the government not to orchestrate prosecution of dissidents and those who advocate democracy in Hong Kong. In relation to the pro-independence movement, Wang Zhenmin, the legal chief of the China’s Liaison Office in Hong Kong and the former dean of Tsinghua University’s Law School, warned recently at a forum that the One-Country-Two-Systems arrangement could be scrapped if it threatened to damage Mainland China.

• //Ousted lawmakers Yau Wai-ching and Baggio Leung Chung-hang have been arrested for allegedly participating in an unlawful assembly. […] Yau’s former legislative aide Terry Yeung was also taken to the Central Police Station, according to their office. It said Wednesday’s arrest was related to a chaotic episode at the legislature last November where Yau and Leung attempted to barge into a meeting after they were barred from entering to re-take their oaths as lawmakers. The pro-Beijing camp called police for assistance at the time, while three security guards were injured and taken away in ambulances.// Source: HKFP, 26 April 2017.

• //Nine pro-democracy activists, including senior members of two political parties, were rounded up by police on Thursday over a protest against Beijing’s interpretation of Hong Kong’s mini-constitution last November. […] The alleged offences were committed between the evening of November 6 and early on November 7 near Beijing’s liaison office in Western during a protest against the interpretation of the Basic Law that resulted in two pro-independence lawmakers – Yau Wai-ching and Sixtus Baggio Leung Chung-hang – being ousted from the Legislative Council.// Source: SCMP, 02 May 2017.

• //Demosisto and the League of Social Democrats said they expected they would be charged with unlawful assembly and public disorder, among other possible charges. On November 6 last year, Demosisto, the League of Social Democrats, the Labour Party and Student Fight for Democracy organised a protest outside the China Liaison Office after a march opposing the impending Basic Law interpretation by Beijing.// Source: HKFP, 27 April 2017.

• //Human rights watchdog Amnesty International has urged the Hong Kong government to stop its “orchestrated” campaign to prosecute dissidents, following Thursday’s surprise arrests of nine activists over their participation in a protest last November. “The repeated use of vague charges against prominent figures in Hong Kong’s pro-democracy movement reeks of an orchestrated and retaliatory campaign by the authorities to punish those that advocate for democracy in Hong Kong,” said Mabel Au, director of Amnesty International Hong Kong. She said the government attempted to discourage participation in peaceful protests through the prosecution of activists. “The Hong Kong government should be protecting freedom of expression and peaceful assembly,” she added, “but instead it appears intent on intimidating people who are challenging the authorities.”// Source: HKFP, 27 April 2017.

• //[C]hina’s Hong Kong Liaison Office legal chief, Wang Zhenmin, said the “one country, two systems” policy could easily be scrapped if Beijing sees the policy, and the Basic Law which enshrines it, being used as a tool to undermine the sovereignty of China. Wang was speaking at an event commemorating the 27th anniversary of the Basic Law, along with CY Leung, the incumbent chief executive of Hong Kong. In his speech, Wang attacked the city’s fledgling independence movement and emphasized that it was “one country” before “two systems.” “If ‘two systems’ severely distorts or even becomes a tool to confront and damage ‘one country’, then the reasons and conditions for the ‘two systems’ would no longer exist,” said the former Tsinghua University law dean. […] Wang said that the “one country, two systems” policy cannot afford to fail, but if it did, then Hong Kong would suffer much more than mainland China. “Should the system fail, the country will only lose face, but Hong Kong will lose everything,” Wang said.// Source: The Diplomat, 02 May 2017.

Regarding political reform in Hong Kong, in the latest European Union’s report on Hong Kong, it called for greater democratization and noted the functioning of “One Country Two Systems” last year despite a number of political incidents.

• //“Universal suffrage would give the government greater public support and legitimacy in pursuing Hong Kong’s economic objectives and tackling social challenges such as the socio-economic and generational divides in Hong Kong society,” read the 19th annual report to the European Parliament on Hong Kong. […] The European Commission and the European External Action Service said 2016 was a “politically challenging” year, as society became more polarised and increasingly anxious about its uncertain future after 2047 – the expiry of the guarantee that Hong Kong can maintain its capitalist system and way of life. They noted political events such as the disappearance of several booksellers, the Mong Kok unrest, the emergence of groups advocating self-determination or independence, the disqualification of two localist lawmakers, and the Basic Law interpretation by Beijing. “Record turnouts in the Legislative Council and Election Committee elections show that people are eager to play an active role in political life and in deciding the future of the SAR,” the report said. […] But it said that generally, the “One Country, Two Systems” principle continued to work well last year. It said the judiciary continued to demonstrate its independence and adherence to due process, despite being confronted with several politically-sensitive judicial reviews and the Basic Law interpretation. Freedom of speech and freedom of information were also generally upheld, the report said.// Source: HKFP, 27 April 2017.

 HONG KONG – ECONOMY

 The development of the “Greater Bay Area”

The “Greater Bay Area” was first proposed in 2009 and officially announced in the Work Report of the State Council this year. The development plan intends to be an economic hub of innovation and technology including cities in the Pearl River Delta, on par with other regional economic zones in Tokyo or New York. Recently many Hong Kong government officials joined in praising the greater cooperation with Mainland China through the “Greater Bay Area” development for its economic and social benefits. Some commentators offered their views about the economic and social benefits of the plan for Hong Kong, while some raised concerns about the potential loss of Hong Kong’s uniqueness under the One Country Two Systems Model. Wang Zhenmin, the legal chief of the China’s Liaison Office in Hong Kong, has re-affirmed the values of the OCTS Model for China’s economic reforms and anti-corruption, suggesting no Beijing’s intention to “mainlandize” Hong Kong.

• //He (CY Leung, Chief Executive of Hong Kong SAR) said Hong Kong should join nine cities with high economic growth in the bay area in drawing up a joint development plan. There is also a “natural trend” of Hongkongers increasingly moving to the mainland for retirement, work or study, Leung said. “The government is not pushing for the upward trend, let alone forcing people to move there,” he said. “It happens because there is such a demand.” […] The finance chief added that transportation between Hong Kong and China will become more convenient in the future, as the Chinese government included the bay area in its 13th Five-Year Plan for National Economic and Social Development. […] Meanwhile, Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung suggested facilitating financial services and capital flow between Hong Kong and China. He said Hong Kong possesses all the qualities needed to become the financial hub for the emerging economy in the bay area, partly because of its close proximity to cities such as Shenzhen. […] Beijing’s National Reform and Development Commission plans to complete a development plan for the bay area in October. Leung Chun-ying said earlier that the Hong Kong government needs to submit its opinion by June.// Source: Hong Kong Free Press, 25 April 2017.

Paul Yeung, a research officer of the One Country Two Systems Research Institute, argued for the benefits of the development plan to solve domestic social problems and promote economic development:

• //Firstly, the Greater Bay Area will provide more space for Hong Kong to solve its internal problems. As we all know Hong Kong is facing some increasingly serious development issues, such as a housing shortage, an aging population and declining industries. Solutions for these problems require land resources. […] Given that it is much harder to develop new land resources now than ever, the development of the Greater Bay Area may help relieve the land shortage problem to a certain extent by diverting some demand to the neighbouring region. Secondly, the plan can help enhance Hong Kong’s competitiveness. Hong Kong is inevitably facing ever stronger competition from both overseas cities such as Singapore and mainland cities such as Shenzhen. The plan can provide a smart way to turn their relationships from competitors to partners by facilitating closer cooperation between Hong Kong and other cities in the region and achieving greater synergy. Moreover, a Greater Bay Area with Hong Kong can be more competitive vis-a-vis other city clusters. According to statistics, the total GDP of all Greater Bay Area members in 2015 was US$1.4 trillion (S$2 trillion), double of that of the San Francisco Bay Area. […] The Greater Bay Area is a golden opportunity for Hong Kong as its strategic goal is to facilitate the Belt and Road Initiative. By joining the Greater Bay Area the unique advantages, which are also part of the core values of Hong Kong, in the areas of legal system and professional services can be further sharpened.// Source: The Straits Times, 18 April 2017.

Columnist King-cheung Chan argued that the development plan, which focuses on innovation and technology, will benefit Hong Kong economically by creating a big market including Guangzhou, Shenzhen, Zhuhai, Macau, etc. over 60 million population, and by cooperation on financial business.

• //至於粵港澳大灣區的構想，早在2009年就開始有人提出，廣東、深圳在制訂「十三五規劃」時，即明確表示要「攜手推進粵港澳大灣區建設」。但有關說法都只屬設想，今年政府工作報告正式提出，意味着中央政府已拍板落實，相關的規劃工作應會陸續展開。經總理的政府工作報告「提點」，下屆特區政府的施政大綱已有基本眉目，對內必須全力遏制港獨，「消滅其於萌芽狀態」，教育政策、青年工作等都要全面配合；至於經濟發展，就要「抓穩粵港澳大灣區機遇」，乘搭中國經濟發展這列快車，正如張德江委員長說，這列快車已經「為香港預留了座位」。[…] 粵港澳大灣區會否為香港帶來另一次繁榮期？按中央構想，粵港澳大灣區主要發展創新科技和創業，概念應來自美國矽谷灣區，當地駐紮了多家世界級科網和科技企業。香港受惠於大灣區應該有兩方面。一是市場——大灣區包括粵省的廣州、深圳、珠海、佛山、中山、東莞、惠州、江門、肇慶，再加香港、澳門，有兩個經濟特區、兩個特別行政區，加起來人口逾6000萬，GDP（本地生產總值）超過8萬億人民幣（2015年），是一個龐大市場，可以為香港創業者提供很多機會。二是金融，粵港澳銀行業總資產合共7萬億元，超過江浙滬「長三角」一成// Source: MingPao Daily, 15 March 2017.

SC Yeung, a commentator from the Hong Kong Economic Journal, proposed an argument that the development plan could diminish the uniqueness of Hong Kong by further introducing the system of Mainland China into Hong Kong, instead of the other way around.

• //It seems Cheng [Executive councilor Cheng Yiu-tong, former chairman of the pro-Beijing Federation of Trade Unions] would like to introduce Hong Kong’s system to China but is it Beijing’s policy to turn the Greater Bay Area into a Hong Kong-like regional economic hub? Or is Beijing’s ultimate plan to eliminate the special administrative regions of Hong Kong and Macau once the “one country, two systems” arrangements expire? Of course, Beijing’s top leaders won’t tell you the answer. It’s possible that Beijing is using the Bay Area project to erode the uniqueness of Hong Kong and turn it into just another city in the Greater Bay Area. […] The Greater Bay Area development is a central government policy to push the Pearl Delta Region economy, but the mandatory integration of Hong Kong into the mainland economy could just make things worse, forcing Hong Kong people to work, live and retire in the area. […] There is no reason for Beijing to limit Hong Kong’s contribution to Guangdong. However, Leung Chun-ying and other senior officials have been telling Hong Kong people to migrate to Guangdong. The theory is that as more Hongkongers migrate to Guangdong, there will be more room to accommodate mainlanders in Hong Kong, enabling them to experience the Hong Kong way of life. Some opposition politicians have pointed out the strange phenomenon of government officials promoting the Greater Bay Area to Hong Kong people. It’s not simply promoting the economic benefits but also aiming to brainwash Hong Kong people that their city is no longer a good place to live and that the Greater Bay Area is the answer.// Source: Economic Journal Insight, 27 April 2017.
• //Former Tsinghua University law dean Wang [Zhenmin] adopted a softer tone than the day before, dismissing concerns about the loss of Hong Kong’s unique identity. “Our nation has never wanted to ‘mainlandise’ Hong Kong because the city will lose its value if it becomes the same as the mainland,” he said. Many academics and tourists come to Hong Kong to see a city that is different from the mainland. What am I to see here if we make it the same?” Wang said Beijing had learned a lot from Hong Kong in the last three decades as the country opened up, carried out economic reforms and fought corruption.// Source: SCMP, 30 April 2017.