Riyadh, Beijing Launch Digital Silk Road Initiative

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT)

 

Riyadh, Beijing Launch Digital Silk Road Initiative

Tuesday, 12 December, 2017 – 12:15
Riyadh – Asharq Al-Awsat

Undersecretary of the Ministry of Communications and Information Technology for Saudi Planning and Development Dr. Mohammed al-Mishaigeh revealed that his country has embarked on transformation programs and developing young talents and establishing innovation labs during his participation in the World Internet Conference, which concluded Monday in Wuzhen City, east China.

Mishaigeh said that the Kingdom and China have also launched Digital Silk Road initiative, and he called on the Chinese to boost partnerships and benefit from Saudi investment and geographical capabilities to transfer knowledge and achieve progress in the field of technology, which the Kingdom is betting on as a knowledge and economic resource.

He pointed out that the city of NEOM will be the focus of artificial intelligence, automation, manufacturing and renewable energy in the world.

Speaking at the conference, Mishaigeh said that his country has started implementing the desired social and economic transformation led by Vision 2030, which aims to bring about profound changes that will extend to many aspects of life reaching the lead in all aspects.

Notably, the Saudi participating delegation has visited the Huawei Research Center in Shanghai to learn about the latest technologies in infrastructure, smart cities and the Chinese experience in enabling the digital economy in the indoor environment.

On the sidelines of the conference, the delegation held a meeting with the National Development and Reform Commission, during which a mechanism was discussed to activate the terms of the memorandum of understanding signed between the two parties in January 2016 on promoting the development of the Digital Silk Road as well as a review of the Chinese experience in building smart cities.

The Kingdom of Saudi Arabia, represented by the Ministry of Communications and Information Technology, has participated in the World Internet Conference, which was organized by Chinese Electronic Space Administration and Zhejiang Province’s Government with participation of leading figures from governments, international organizations, companies, competent technical sector departments as well as non-government relevant agencies.

Over 1000-year-old sunken Chinese treasure returns home

(THIS ARTICLE IS COURTESY OF THE HINDUSTAN TIMES OF INDIA)

 

Over 1000-year-old sunken Chinese treasure returns home

The 162 pieces of treasure were part of a huge cargo of ninth-century porcelain traded from China during the Tang Dynasty.

WORLD Updated: Dec 11, 2017 18:26 IST

Press Trust of India, Beijing
A Ru Guanyao brush washer bowl from China's Song Dynasty is displayed during a press conference after its record breaking sale for $ 37.7 million at the Sotheby's Chinese Works of Art Autumn Sales in Hong Kong on October 3.
A Ru Guanyao brush washer bowl from China’s Song Dynasty is displayed during a press conference after its record breaking sale for $ 37.7 million at the Sotheby’s Chinese Works of Art Autumn Sales in Hong Kong on October 3.(AFP File Photo/Representative image)

A stash of 1,200-year-old Chinese treasure found under the sea has been returned to China’s central Hunan province.

Experts believe they will provide evidence of China’s overseas porcelain trade during the Tang Dynasty (618-907).

The 162 pieces of treasure were part of a huge cargo of ninth-century porcelain traded from China during the Tang Dynasty via an Arab dhow, which wrecked in Indonesia’s Java sea.

In 1998, a German salvage company discovered the shipwreck and named it ‘Batu Hitam’.

More than 67,000 pieces of treasure were found in the ship, 85 per cent of which came from a kiln in Changsha, now Hunan’s capital city.

Most of the porcelain is now owned by Tilman Walterfang, head of the salvage company.

In September, the administration office of the kiln in Changsha signed an agreement with Walterfang to return a collection of 162 pieces to China, state-run Xinhua news agency reported today.

The treasure sent home includes fine ceramics from several kilns in the provinces of Hunan, Zhejiang, Hebei, Henan and Guangdong.

The treasure is expected to be accessible to the public at a museum in Changsha by early 2018.

Partial pullout of forces as Putin claims victory in Syria

(THIS ARTICLE IS COURTESY OF THE SHANGHAI NEWSPAPER ‘SHINE’)

 

Partial pullout of forces as Putin claims victory in Syria

AP

Declaring a victory in Syria, Russian President Vladimir Putin yesterday visited a Russian military air base in the Mideast nation and announced a partial pullout of Russian forces from the country.

Putin’s surprise visit marked his first trip to Syria, drawing a symbolic line under the campaign that has shored up President Bashar Assad’s government. It was also the first visit by a foreign head of state to war-ravaged Syria since its bloodletting started nearly seven years ago.

Putin’s brief stop at the Hemeimeem air base in Syria’s coastal province of Latakia en route to Egypt came days after the Russian president declared his bid to run for re-election in the March 18 vote, helping encourage the feelings of pride about Russia’s revived global clout and prestige.

It also followed the Russian announcement last week that the Syrian army, with the help of Russian airstrikes, routed the Islamic State group in eastern Syria and restored control over the country’s border with Iraq.

In a televised speech to the Russian troops at the base, the Russian leader hailed their “excellent” performance in Syria.

“You have shown the best qualities of a Russian soldier — courage, valor, team spirit, decisiveness and excellent skills,” he said. “The Motherland is proud of you.”

Russia launched its air campaign in Syria at the end of September 2015. Russian officials say troops in Syria were there mainly to fight militants of the Islamic State and al-Qaida affiliates.

Russian television stations showed Putin walking off the plane at the air base, embracing and shaking hands with Assad. The two then visited a military operations room at the base.

The Hemeimeem base, located in a region that is the heartland of Assad’s Alawite minority, has served as the main foothold for the Russian military campaign in Syria.

“Here in Syria, far away from our borders, you helped the Syrian people to preserve their state and fend off attacks by terrorists,” Putin said, facing the troops lined up on the tarmac. “You have dealt a devastating blow to those who blatantly threatened our country. We will never forget about the victims who fell in the fight against terror both here and in Russia.”

Putin also said he had ordered the military to withdraw a “significant part” of the Russian contingent in Syria.

“Friends, the Motherland is waiting for you,” Putin said. “You are coming back home with victory!”

He added: “If the terrorists again raise their heads, we will deal such blows to them they have never seen.”

Putin, however, said the Russian military will maintain its presence at Hemeimeem and the naval facility in Tartus.

General Sergei Surovikin, the Russian military commander in Syria, reported to Putin that the military will pull out 23 warplanes, two helicopter gunships, special forces units, military police and field engineers.

Surovikin said the remaining forces will be sufficient to “successfully fulfill the tasks” to stabilize the situation in Syria. He wouldn’t say how many troops and weapons would stay behind.

Syria has allowed Russia to use Hemeimeem air base indefinitely without cost. Moscow also has signed a deal with Syria to use the Tartus base for 49 years, which could be extended if both parties agree.

The Russian military plans to modernize the air base and expand its runways to allow it to host more warplanes. It also intends to expand the Tartus facility significantly to make it a full-scale naval base capable of hosting warships, including cruiser-sized vessels.

After seeing troops march to the tunes of military marches, Putin drove up to the Russian warplanes parked on the runway and talked to the pilots, who said they will flew back home later in the day.

Assad thanked Putin for his troops’ “effective contribution” to the fight against terrorism in Syria, which he said the Syrian people “will never forget.”

Putin said: “Syria has been saved as a sovereign, independent state, refugees are coming home and conditions have been created for a political settlement under the United Nations’ auspices.”

 

 

China stresses Washington’s obligations

(THIS ARTICLE IS COURTESY OF THE SHANGHAI

China stresses Washington’s obligations

CHINA will pay close attention to the trade policies implemented by US President-elect Donald Trump, and will defend its rights in the World Trade Organization, according to a senior Chinese official.

In a campaign punctuated by incendiary accusations, Trump promised to declare China a currency manipulator on his first day in office, and threatened to slap punitive 45 percent tariffs on Chinese imports to protect jobs.

However, China’s Deputy International Trade Minister Zhang Xiangchen said in Washington that the US has obligations as a member of the WTO.

“Definitely we have paid close attention to the remarks made by Mr Trump during his presidential campaign,” Zhang told reporters.

“And we will also (be) closely observing what he will do after he takes office.”

But he seemed to cast doubt on whether Trump would follow through on his threats.

“I think after Mr Trump takes office he will be reminded that the United States should honor its obligations as a member of the World Trade Organization.”

When asked if China would retaliate, he said that “as a member of the WTO, China also has the right to ensure its rights.”

Zhang also told reporters that economists and government officials agree China is not manipulating its currency, and “significant progress has been made” toward establishing a market-based exchange-rate regime.

Chinese officials are in Washington for the Joint Commission on Commerce and Trade, a forum to promote trade and investment and resolve disputes. Zhange said that officials on both sides feel strongly that the bilateral trade relationship will continue to be important “no matter how the leadership changes.”

US Trade Representative Michael Froman told reporters following the final JCCT meeting of the Obama administration that the relationship with China is key, but acknowledged there are “headwinds around the world about the benefits of trade and skepticism on the US-China relationship in particular.”

He stressed that “the American public expects the relationship be based on a fair and level playing field, and greater reciprocity.”

Full-Page Feature on Nuclear Radiation Survival Stirs Panic in China

(THIS ARTICLE IS COURTESY OF GLOBAL VOICES)

 

A Local Newspaper’s Full-Page Feature on Nuclear Radiation Survival Stirs Panic in China

Jilin Daily’s full page feature on nuclear radiation.

On December 6, 2017, Jilin Daily published a full-page feature on nuclear weapons and how to protect oneself in case of a nuclear radiation. This led many, in particular, residents from northern China to ask if the newspaper report is an anticipation of a United States military action against North Korea’s missile test.

Jilin province is located in north China near North Korea. Jilin Daily is affiliated with the local government of the province.

On November 29, North Korea launched a test on an intercontinental ballistic missile capable of reaching all part of U.S. mainland. Earlier, U.S. President Donald Trump warned to bring a “rain” of “fire and fury” on North Korea if the country’s leader Kim Jong Un continued to threaten U.S. security. China, in particular the northern part of China, would be affected by the “rain”.

Meanwhile, another leaked document from Jilin’s China mobile company indicated that the Jilin government has established five refugee sites in Changbai province, which shares 260 kilometers of border with North Korea.

Public discussion regarding potential warfare in North Korea was deleted quickly from social media platforms. Even party-affiliated Global Times had to withdraw its editorial upon publishing online (retrieved via Voices of America):

Currently, tension is mounting in the Korean Peninsula. North Korea has launched six nuclear tests and it is believed that the country is already equipped with a nuclear bomb. Moreover, its missile launching technology has reached a breakthrough this year and has successfully launched a missile that can reach all parts of the U.S. continent. The U.S has vowed that it would destroy North Korea economy and exercise military pressure. The risk of military conflict between the U.S and North Korea has escalated. Jilin shares border with North Korea, the whole page feature on nuclear radiation precaution is believed to be a reaction to the risk of warfare in the Korean peninsula.

Despite censorship, anxious posts about military conflicts keep popping up on popular Chinese social media platform Weibo. One Weibo user believes that the news feature published by Jilin Daily was approved by the central government:

This is not a joke. You all know that news censorship in China is very strict. Such kind of content has to be approved by senior officials before circulation. The leaders want to tell you something but can’t say that explicitly. Fellows in Dongbei (northern China), please observe the U.S consulate in Shenyang, if they retreat, run away.

Even though state-affiliated news outlets had tried to downplay the possibility of a war, many are still worried about radiation if military action was taken by the U.S. against North Korea’s nuclear facilities:

Even if the nuclear missile exploded in the sky, Dongbei area will still be endangered, right?

More critical comments blamed the government for the nuclear crisis:

To prevent a North Korea nuclear missile attack, South Korea and Japan are equipped with Terminal High Altitude Area Defense (THAAD), MIM-104 Patriot and Aircraft Carriers; Taiwan has Phased Array Warning System, Russia has Voronezh-M radar system as precaution. China is the only country which cannot clearly detect and counter North Korea missiles. Now with the threat of H-bomb, people in Jilin can only rely on newspapers which educate people with radiation common sense. Where have all the patriotic youths who protested against the THAAD by crushing Korean vehicles gone? Shouldn’t you be standing in the front line?

Since government with Chinese character [China government] has been supporting North Korea in secret, the country eventually got its nuclear weapon. Now it is threatening the security of all people in the world. Hence, the government with Chinese character should be responsible for all adverse effects of the North Korea nuclear crisis.

China must accelerate implementation of big data strategy: Xi

(THIS ARTICLE IS COURTESY OF THE SHANGHAI CHINA ‘SHINE’ NEWSPAPER)

 

China must accelerate implementation of big data strategy: Xi

Xinhua

Chinese President Xi Jinping has urged the country to accelerate implementation of big data strategy to better serve social and economic development and improve people’s lives.

Efforts should be made to advance national big data strategy, improve digital infrastructure, promote integration and sharing of digital resources, and safeguard data security, Xi said during a collective study session of the Communist Party of China (CPC) Central Committee’s Political Bureau on Friday.

“We should target cutting-edge technology and mobilize prime resources to make breakthroughs in developing core big data technology, and accelerate building an independent and controllable industrial chain, value chain and eco-system of big data,” said Xi, who is also general secretary of the CPC Central Committee.

He called for building high-speed, mobile, ubiquitous and safe information infrastructure, integrating government and social data resources, and improving the collection of fundamental information and important information resources in key areas.

The market should play a key role in the mission, and data must work as a bridge to integrate production, study and research. A group of pioneering companies and a varied and diverse talent workforce should be established, he said.

Xi underscored the importance of building a digital economy with data as a key factor, highlighting the fact that research on and use of big data is indispensable in building a modern economy.

The Internet, big data and Artificial Intelligence (AI), and the real economy should be interconnected. Industrialization and the use of information should be integrated deeper, according to Xi.

Xi also emphasized the necessity of using big data to improve governance. A nationwide information-sharing platform should be set up with the use of e-government and smart city systems.

He also ordered efforts to improve Internet governance and clean up cyberspace.

Xi urged better use of big data in improving people’s wellbeing, calling for the advancement of “Internet plus education,” “Internet plus medical treatment” and “Internet plus culture” to further ensure citizens’ equitable access to public services.

He stressed solving problems, especially prominent problems concerning people’s wellbeing, urging the widespread use of big data in areas such as education, employment, social security, medicine and the healthcare system, housing and transportation.

Big data should also be used extensively in implementing targeted poverty reduction and environmental protection, he added.

Efforts should be made to safeguard the nation’s data security, Xi said, urging strengthened ability to protect the nation’s crucial data resources, speed up relevant legislation, and improve protection of data property rights.

Protection of technical patents, digital copyrights and individual privacy should be enhanced to safeguard people’s interests, social stability and national security, said Xi.

He stressed increasing research on international data governance rules.

He urged leading officials at all levels to intensively study big data and improve their ability to use big data in their work.

China warns its nationals of imminent attacks by ‘terrorists’ in Pakistan

(THIS ARTICLE IS COURTESY OF THE HINDUSTAN TIMES OF INDIA)

 

China warns its nationals of imminent attacks by ‘terrorists’ in Pakistan

The alert comes as thousands of Chinese are in Pakistan working on projects in President Xi Jinping’s signature Belt and Road development plan, which aims to link China with the Middle East and Europe.

WORLD Updated: Dec 08, 2017 16:11 IST

Reuters, Beijing
File photo of Pakistan police officers in Islamabad. The Chinese embassy has warned all “Chinese-invested organisations and Chinese citizens to increase security awareness”.
File photo of Pakistan police officers in Islamabad. The Chinese embassy has warned all “Chinese-invested organisations and Chinese citizens to increase security awareness”.(AP)

China on Friday warned its nationals in Pakistan of plans for a series of imminent “terrorist attacks” on Chinese targets there, an unusual alert as it pours funds into infrastructure projects into a country plagued by militancy.

Thousands of Chinese workers have gone to Pakistan following Beijing’s pledge to spend $57 billion there on projects in President Xi Jinping’s signature “Belt and Road” development plan, which aims to link China with the Middle East and Europe.

Protecting employees of Chinese companies, as well as individual entrepreneurs who have followed the investment wave along what is known as the China-Pakistan Economic Corridor, has been a concern for Chinese officials.

“It is understood that terrorists plan in the near term to launch a series of attacks against Chinese organisations and personnel in Pakistan,” the Chinese embassy in Pakistan said in a statement on its website.

The embassy warned all “Chinese-invested organisations and Chinese citizens to increase security awareness, strengthen internal precautions, reduce trips outside as much as possible, and avoid crowded public spaces”.

It also asked Chinese nationals to cooperate with Pakistan’s police and the military, and to alert the embassy in the event of an emergency.

It did not give any further details.

Pakistan’s foreign ministry could not be reached immediately for comment.

China has long worried about disaffected members of its Uighur Muslim minority in its far western region of Xinjiang linking up with militants in Pakistan and Afghanistan.

At the same time, violence in Pakistan’s southwestern Baluchistan province has fuelled concern about security for planned transport and energy links from western China to Pakistan’s deepwater port of Gwadar.

The Taliban, sectarian groups linked to al Qaeda and the Islamic State all operate in Baluchistan, which borders Iran and Afghanistan and is at the centre of the “Belt and Road” initiative.

In addition, separatists there have long battled the government for a greater share of gas and mineral resources, and have a long record of attacking energy and other infrastructure projects.

Islamic State claimed responsibility for killing two kidnapped Chinese teachers in Baluchistan in June, prompting the government in Islamabad to pledge to beef up security for Chinese nationals.

It had already promised a 15,000-strong army division to safeguard projects along the economic corridor.

China’s security concerns abroad have grown along with its global commercial footprint.

In 2016, a suspected suicide car bomber rammed the gates of the Chinese embassy in the Kyrgyz capital Bishkek, killing the attacker and wounding at least three people.

China’s President Xi says ‘reflect will of the people’ on rights

(THIS ARTICLE IS COURTESY OF THE SHANGHAI CHINA ‘SHINE’ NEWSPAPER)

 

Xi says ‘reflect will of the people’ on rights

Shine

Chinese President Xi Jinping has called on the international community to respect and reflect the will of the people in developing countries in human rights development.

Xi made the remarks in a congratulatory message to the South-South Human Rights Forum, which opened in Beijing yesterday.

“It is important for the international community to respect and reflect the will of the people in developing countries in the spirit of justice, fairness, openness and inclusiveness,” Xi said. “It is the lofty ideal of mankind that everyone enjoys human rights to the full.”

Since modern times, people in the developing world have fought long and hard for national liberation and independence, for freedom and equality, for dignity and happiness, and for peace and development, Xi said in the message. “By doing so, they have also contributed significantly to the progress of human rights.”

Xi said that following a people-centered development philosophy, the Communist Party of China and the Chinese government have all along placed people’s interests above all else, and worked hard to meet people’s desire for a better life and improve respect for and protection of the fundamental rights of the Chinese people.

The development blueprint outlined at the 19th CPC National Congress held in October will give a strong boost to human rights development in China and make new and even greater contribution to the progress of mankind, he said.

Noting the development of human rights worldwide cannot be achieved without the joint efforts of developing countries, which account for more than 80 percent of the world’s population, he said human rights must and can only be promoted in light of specific national conditions and people’s needs.

Xi urged developing countries to uphold both the universality and particularity of human rights and steadily raise the level of human rights protection.

“The Chinese people would like to work in concert with people in other developing countries and beyond to advance development through cooperation, promote human rights through development, and build a community with a shared future for human beings,” he said.

Some 300 participants from over 50 mostly developing countries attended the forum.

Addressing the forum’s opening session, Chinese Foreign Minister Wang Yi said the Party congress had “identified the goal of forging a new field in international relations and building a community of shared future for mankind.”

“This is China’s answer to the question of where human society is heading, and it has also presented opportunities for the development of the human rights cause,” Wang said.

He highlighted China’s achievements in poverty reduction as an example of its efforts to improve rights. China has reduced its poverty rate to 4 percent and seeks to eradicate poverty by 2020.

Tom Zwart of Amsterdam’s Vrije Universiteit told participants that China has “entered a new era of human rights.”

The country, he said, has started to play a bigger role in building “a just and harmonious international order that also includes the international human rights system.”

Some Of China’s Neighbors Are Saying No Thanks To China’s Money

(THIS ARTICLE IS COURTESY OF ‘QUARTZ’ AND THE WEBSITE OF ANDY TAI)

((oped) TO SAY YES TO CHINA’S MONEY IS TO GIVE AWAY YOUR COUNTRY’S SOVEREIGNTY AND THE FREEDOM OF ALL OF YOUR PEOPLE!)(trs)

DAMMED IF YOU DO

More neighbors are saying “no thanks” to Chinese money—for now

December 04, 2017

There’s a learning curve to becoming a superpower, as China, having recently suffered setbacks with two of its neighbors, is learning.

Pakistan and Nepal, each involved in China’s Belt and Road initiative, a massive infrastructure push, announced last month they would no longer seek Chinese funding for two large-scale developments. In mid-November, Pakistan said that China’s conditions for financing the long-delayed $14 billion Diamer-Basha dam on the Indus River—part of the roughly $60 billion China-Pakistan Economic Corridor—”were not doable and against our interest,” including as it did China taking ownership of the entire project. Pakistan decided to go ahead with the dam, but to build it by itself.

Around the same time, Nepal decided to stop the $2.5 billion Budhi Gandaki hydropower plant from going forward in the hands of China Gezhouba Group, citing irregularities and the lack of a competitive bidding process. Last week, Nepal said that it would go ahead and build the dam itself, handing the 1,200-megawatt project over to the state-owned Nepal Electricity Authority.

“Very early on the countries along the Belt and Road initiative were at first very excited and happy about Chinese investment,” said Christopher Balding, professor of economics at Peking University HSBC Business School. “But there have been significant changes: Countries now look at how China has behaved with Sri Lanka or with Mexico.”

China, with about 60 other nations, pursue ambitious plans to connect three continents with infrastructure investments.
An ambitious Belt and Road initiative. (Source: The Economist)

In Sri Lanka, the Hambantota port is now on a 99-year lease to China Merchants Port Holdings, which has a 70% stake in the venture. In 2015, Sri Lanka sought a review of how construction of the port had been awarded and halted its development. But in the face of economic and financing difficulties, it backtracked. With some $8 billion owed to China, thanks to loans taken to rebuild after its civil war, Colombo agreed to convert some of this debt into equity in projects.

Further afield, China has asked Mexico for a $600 million refund (link in Spanish) for the scrapping of a railway project.

While most countries along the Belt and Road initiative welcome foreign investment and assistance in building modern infrastructure, the pressure being exercised by Beijing doesn’t always go down well. Countries on the receiving end of Chinese cash are starting to realize that when all is done and dusted, the infrastructure that is built is likely to end up controlled by China.

A common pattern has been for China to sign controversial projects when a pro-China government is in place—as was the case with Sri Lanka’s former president Mahinda Rajapaksa and the Hambantota port deal—only to see them revisited once less receptive administrations are in power. In Nepal, outgoing prime minister Pushpa Kamal Dahal, chairman of the Communist Party of Nepal (Maoist Centre), signed a preliminary agreement for the dam in June, just days before he relinquished his post to the rival Nepali Congress as part of a pre-existing power-sharing agreement. Current deputy prime minister Kamal Thapa criticized and scrapped the project for not having gone through open bidding as required by law.

That said, China’s rise in Asia and the world is beyond dispute—and its might is likely to grow as it proceeds firmly with its Belt and Road initiative. And in several countries in Asia and elsewhere, particularly those facing global criticism on human rights or other issues, China’s infrastructure spending plans and hands-off stance on such touchy topics are likely to overcome any reservations toward the country.

Take the example of nearby Myanmar, which in 2011 saw the cancellation (paywall) of a major Chinese hydroelectric project in the face of environmental concerns. In the years since then, Myanmar has been on the receiving end of increasing international criticism due to its purges of the Muslim Rohingya minority. Criticism deepened this year after a particularly harsh pogrom in August saw more than half a million flee to neighboring Bangladesh.

In the same month that the nonprofit Fortify Rights and the US Holocaust Memorial Museum released a major report documenting killings and rape of Rohingya, and the US made the determination that the Myanmar military is carrying out “ethnic cleansing,” China proposed a Pakistan-like economic corridor crossing the country. China is already helping to build a $7 billion port in Rakhine, the western Myanmar state that has seen the worst of the violence. Last week, as Myanmar continued to face criticism over what many see as a flawed agreement with Bangladesh to accept the return of the Rohingya—one that China may have played a role in brokering—Aung San Suu Kyi was in Beijing for a conference of international political parties, and for more discussion on investment.

China can also take heart that the vagaries of electoral fortune in democracies can sometimes revive projects China wants to back. The fate of the Nepali dam, for example, could change yet again as the country holds parliamentary polls for the first time since the end of its civil war just over a decade ago. The final stage of voting will take place Dec. 7. The two main blocks contesting the elections represent a conflicting set of alliances, with one of them saying that it will, should it win, hand the project back to China.

China Busts a $3 Billion Underground Bank

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT)

 

China Busts a $3 Billion Underground Bank as it Tightens its Grip on Money

Sunday, 3 December, 2017 – 11:00
More than 10,000 people have used an underground bank to effectively funnel billions of dollars out of China. (AFP)
Beijing – Sui-Lee Wee

The money came from all over China — its wealthy southern and eastern coasts as well as the arid northwest — as thousands of people scrambled to circumvent the country’s strict controls on wealth.

In the end, more than 10,000 people had used an underground bank to effectively funnel $3 billion out of the country before the authorities put a stop to it, Xinhua, China’s state-run news agency in November.

The discovery of the underground bank in Shaoguan, in the southern province of Guangdong, demonstrates the furtive lengths that Chinese citizens go to in order to skirt government limits and get more of their money out of the country.

The sums involved are enormous, large enough to not only affect China’s economy but resonate around the world. Two years ago, a loss of confidence in China’s outlook led many of its people to send their money abroad — a flow that helped drive a $1 trillion drop in China’s stash of surplus foreign money. The exodus was enough to darken the country’s long-held image as a major global economic growth engine.

China appears to have since stemmed the surge of money abroad, thanks to an improved economic outlook and tough new efforts to keep the money at home. But the underground bank bust announced Thursday showed the lengths that the authorities will pursue to enforce limits on money leaving the country.

The Chinese police have detained seven people believed to be involved in the bank, according to the Thursday reports. The authorities discovered 148 “illegal and fraudulent accounts” from the bank, involving more than 10,000 people, the Xinhua report said.

Underground banks are illegal but common in China. According to China’s Ministry of Public Security, underground banks handled more than $137 billion in transactions last year. There are also lawful ways of moving princely sums out of China without surpassing government limits: directing money to casinos in Macau — the only Chinese territory where casino gambling is legal — as well as using credit cards to buy luxury goods abroad and purchasing insurance policies that can be cashed out overseas.

China imposes strict limits on how much money can leave the country. Those limits help the government keep a firm hand on the value of its currency, and the Chinese authorities credit the limits with helping keep its financial system steady during emergencies like the 1997 Asian financial crisis and the global crisis that began in 2008.

The government sets a $50,000 limit on the money Chinese citizens can move out of the country in a year, though businesses and those making strategic investments can send out much more.

But growing numbers of people began dodging the limits two years ago, when a stock market crash, a surprise government-led currency devaluation and prospects of slowing economic growth led many to seek safer havens for their money.

President Xi Jinping has made it a top priority to keep more money in China. His government has shut down platforms that trade crypto-currencies; announced controls on outbound investment in property, entertainment and soccer; and imposed curbs on payments overseas.

Much of China’s underground banking activity is centered in cities that border Hong Kong and Macau, special administrative regions of China that are governed by their own laws.

In Shaoguan, the police were alerted to a suspicious bank account that was opened in 2011 in the city by a Mr. Zhong, a resident from the southern city of Zhuhai that borders Macau, according to Guangzhou Daily, an official newspaper. It did not further identify Zhong. After almost no activity for years, there were 121 transactions involving $15 million in 2016, prompting the authorities to look more closely at who was involved.

Ultimately, the Xinhua report said, the authorities discovered that the people running the underground bank had illegally bought and stole the identity documents of more than 200 people to open the fake accounts that underpinned the enterprise. News reports did not disclose detailed information about how the underground bank worked.

The Shaoguan government and the police did not respond to requests for comment.

The trail appeared to lead to Macau, according to the news reports. The suspicious bank account that prompted the investigation was opened specifically for a gambler in Macau called Peng to transfer money, Xinhua said. “Several members of the criminal gang” then converted the renminbi into Hong Kong dollars for Peng, according to the report. Hong Kong has its own currency, which tracks the value of the United States dollar.

The Xinhua report did not offer details about Peng.

Macau is under pressure to keep a tight rein on capital outflows. Most recently, it installed automated teller machines with facial recognition software to monitor transactions for people using Chinese bank cards, according to Macau Daily Times.

The Xinhua report acknowledged that underground banks are “seductive,” especially for people who struggle to get financing, but warned that “the people will suffer tremendous loss” if the banks abscond or cheat their clients.

The New York Times