China steps up customs checks, but North Korea trade robust


A Chinese paramilitary policeman stands guard as a truck with a North Korea license plate drives on the Friendship Bridge over the Yalu River which connects North Korea's Sinuiju to China's Dandong, Liaoning province, April 12, 2013.  Credit: Reuters/Jacky Chen

A Chinese paramilitary policeman stands guard as a truck with a North Korea license plate drives on the Friendship Bridge over the Yalu River which connects North Korea’s Sinuiju to China’s Dandong, Liaoning province, April 12, 2013.
Credit: Reuters/Jacky Chen

Trucks drive on the Friendship Bridge over the Yalu River which connects North Korea's Sinuiju to China's Dandong, April 11, 2013.  Credit: REUTERS/Jacky Chen

Trucks drive on the Friendship Bridge over the Yalu River which connects North Korea’s Sinuiju to China’s Dandong, April 11, 2013.
Credit: REUTERS/Jacky Chen

China has stepped up checks on shipments to and from North Korea almost two months after agreeing to new U.N. sanctions that demand greater scrutiny of trade, but the flow of goods in and out of the reclusive state appears largely unaffected.

The sanctions were imposed after North Korea’s third nuclear test on February 12. China has said it wants the measures enforced, but few analysts believe Beijing will take steps that hurt North Korea as it is committed to a policy of engagement.

The sanctions, on top of those agreed after previous nuclear tests, target the North’s attempts to ship and receive cargo related to its banned nuclear and missile programs, aim to stop the flow of luxury goods to North Korea’s elite and tighten financial curbs, including the illicit transfer of bulk cash.

Reuters spoke to more than a dozen Chinese trading firms that do business with North Korea, mostly based in China’s border city of Dandong through which as much as 80 percent of the bilateral trade is conducted, and also in the port city of Dalian. The companies are involved in goods ranging from non-ferrous metals and car parts to clothing and food.

About half said they had noticed customs authorities taking a closer look at shipments since the sanctions were put in place, though others said trade with North Korea was generally always more tightly monitored than with other countries.

“Look at all the trucks out there and you tell me if trade has slowed,” said trader Liu Mingjin, pointing to a long line of Chinese and North Korean trucks queuing at Dandong’s run-down border post. “Customs may be taking a closer interest, but there’s no impact on trade whatsoever,” added Liu, who imports ginseng and exports pretty much anything North Korea wants, including building materials.

That suggests that while China is expressing its growing frustration with Pyongyang and its recent threats to wage war on Seoul and Washington, it still believes in its right to conduct normal trade with North Korea.

LEGITIMATE TRADE

John Park, a North Korea expert at the Massachusetts Institute of Technology and the Harvard Kennedy School, said China was exploiting a loophole in sanctions that allow legitimate trade and aid. Under the measures, U.N. member states are not barred from economic development or humanitarian activities with North Korea.

“Forget the debate about China implementing sanctions. In many cases Chinese authorities, (and) private Chinese firms classify what they are doing as economic development,” he said.

That’s certainly the message from Dandong officials.

“Border trade (policy) is exactly the same as before – there’s no difference,” said Yin Tong, head of the municipal foreign trade and economic cooperation office. A second Dandong official, who spoke on condition of anonymity, agreed: “Trade between China and North Korea is coordinated at the state level: we don’t get to decide. And the situation hasn’t changed.”

China’s customs department referred questions about the sanctions to the Foreign Ministry, which has repeatedly said Beijing was committed to them. The ministry has refused to give details on what China is doing to enforce sanctions, but says China had the right to do legitimate trade with North Korea.

However, in a statement dated April 17, China’s Transport Ministry said it expected all government departments to fully follow the sanctions and ensure no transport of banned goods, including luxury cars, jewellery and anything related to nuclear weapons or guided missiles.

U.N. diplomats in New York said that up to now there was nothing to suggest China had taken steps to implement the sanctions aggressively. To be sure, they said all countries needed time and that it would take months to gauge U.N. member states’ commitment to the resolution.

One businessman who said Chinese inspections of goods shipped to North Korea had tightened also said the recent tensions were partly to blame. “The situation is tense, and we’re doing less trade. Cargo inspections seem to have tightened, too,” said the businessman, who asked to be identified by his family name Wang.

Another Dandong trader, Zeng Hongqun, said vehicle parts appeared to be being targeted for Chinese customs checks, though he was still able to export trucks in to the country. “Despite customs taking a closer look, we remain busy. North Korea is an old friend of China’s and we rely on them up here just as much as they rely on us,” he said, waiting at the customs post to send a new truck into North Korea.

DIPLOMATIC FRIEND

Some traders in Dalian said customs officials were paying more attention, though this preceded the latest sanctions.

“Customs inspection on cargoes to North Korea has always been quite strict,” said Zhou Jin, manager of Dalian Hengan International Logistics Company, whose shipments can include valves, pumps, sewage treatment equipment and ball bearings. “But since the second half of last year, the customs started inspecting every single one of our containers to North Korea, and we’ve never seen this before.”

Still, the border around Dandong is relatively porous, which smugglers exploit, though mostly they say for non-sensitive goods such as rice and cigarettes. “I can go back and forward with no problems,” said one border resident, who asked not to be identified. “As long as you pay off the right officials in China and North Korea, they turn a blind eye.”

The success of the new sanctions depends to a large extent on China, U.N. diplomats have said. Beijing is the closest North Korea has to a diplomatic friend, and accounts for at least three-quarters of North Korea’s imports.

Bilateral trade dropped more than 7 percent to $1.3 billion in January-March, with China’s imports from North Korea rising 2.5 percent to $590 million but exports down 13.8 percent to $720 million – excluding fuel, food or other Chinese aid. Annual trade is worth some $6 billion, a fraction of China’s trade with South Korea which last year topped $230 billion.

China is the main way luxury goods get to North Korea. The March 7 resolution gave examples of some items North Korea could not import, from yachts and racing cars to luxury automobiles and several types of gems and jewellery.

KEEPING THE POWER ON

China also supplies virtually all of North Korea’s external energy needs – crude oil, diesel and jet fuel – much of it in the form of off-the-books aid.

While Chinese data showed no exports of crude oil to North Korea in February, deliveries resumed in March, with customs figures showing 106,000 metric tons of supply. China officially supplied 523,041 metric tons of crude oil last year.

The Ministry of Commerce appears to be delaying or possibly cancelling an internal tender to supply North Korea with diesel fuel, two oil trading sources said, while a person close to state-owned Sinochem Group said jet fuel flows were normal. China supplied North Korea with 42,251 metric tons of jet fuel last year, according to customs data, and 31,050 metric tons of diesel.

Another trading source said coal imports from North Korea – typically entering China through Dandong’s Donggang Port after coming down the Yalu River or up the coast – were not affected.

Many Chinese companies are also involved in mining in North Korea. A source at Wanxiang Resources, which has a copper mine in Hyesan in North Korea’s Ryanggang province, said there had been no orders from China to withdraw their workers, although North Korean staff had been asked to attend more political activities, which was hurting production.

“If the political situation worsens, the Chinese workers can return very quickly since the mine is located 2-3 kms from the border,” the source said.

Choi Hyun-ju, a Dandong-based North Korean official whose job is to encourage investment in the North, said China had not had a change of heart about its companies investing in his country. “China’s government hasn’t been putting pressure on us,” he said. “The situation is tense at the moment, but it won’t always be this way. And the situation in North Korea is not as scary as has been reported.”

The most opaque area of China’s enforcement of sanctions will probably be related to illicit financial flows.

Chinese financial regulators had no comment in response to a report on South Korea’s Yonhap news agency last month saying Beijing had warned North Korean banks to stay within the remit of their permitted operations in China or risk penalties.

The bank most under the microscope is the Foreign Trade Bank, the North’s main foreign exchange bank. Washington announced sanctions on the bank last month, saying it helped fund Pyongyang’s nuclear program. It has urged other countries to do the same.

NO ISOLATION

To be sure, there have been calls in China to punish North Korea by limiting or even removing trade and aid, led by influential tabloid the Global Times, published by the Communist Party’s official newspaper the People’s Daily.

Chinese have also taken to Sina Weibo, the country’s answer to Twitter, to denounce North Korea’s young leader Kim Jong-un for his warmongering, lampooning him as “Fatty Kim”.

But China will not cut North Korea off completely.

The country is a useful buffer from U.S. troops stationed in South Korea, and Japan. And if China turned the screws too much then North Korea could collapse – Beijing’s ultimate nightmare scenario. Not only would that release a flood of refugees into northeastern China, it would also raise the question of what would happen to North Korea’s nuclear material.

China has also been pushing ahead with three special economic zones with North Korea, hoping to tap low labor costs across the border and encourage Pyongyang to see the benefits of economic reform.

One of those is at Rason, 50 km (30 miles) across the North Korean border, opposite China’s Jilin province. A Jilin government official with knowledge of the zone’s development said the recent tensions had shaken the confidence of some Chinese companies which had wanted to invest there. However, local authorities were still pushing ahead, the official said by telephone from Changchun, capital of Jilin.

“Indeed some companies are starting to lose confidence, but from the government and the (Rason) management committee’s point of view, there is no change in policy,” he said.

“Senior leaders of the Jilin government have been trying to soothe the concerns of some of those enterprises.”

Source: Reuters “China steps up customs checks, but North Korea trade robust”


China-India border standoff makes little sense amid improving trade ties


A Chinese soldier with an Indian soldier at a border crossing on the ancient Silk Road. The two sides clashed in a border war in 1962 and have since observed an undemarcated Line of Actual Control. Photo: AFP

A Chinese soldier with an Indian soldier at a border crossing on the ancient Silk Road. The two sides clashed in a border war in 1962 and have since observed an undemarcated Line of Actual Control. Photo: AFP

Border map

Border map

A deadlock in icy desert wastelands appears to make little sense as two Asian giants increasingly work together to boost trade and bilateral ties

It’s more than 5,000 metres above sea level, cold, inhospitable, uninhabited, with hardly any vegetation or wildlife in sight. Welcome to the icy desert wastelands of Daulat Beg Oldi, a forgotten pit stop on the Silk Road catapulted to overnight geopolitical fame as two nuclear neighbours vie for its possession in a dangerous game of tactical brinkmanship.

For two weeks now, Chinese and Indian soldiers have been standing eyeball to eyeball, barely 100 metres apart, at this easternmost point of the Karakoram Range on the western sector of the China-India border.

Both sides claim the land as their own in an unusually public show of mutual defiance that threatens to unhinge some of their newfound comity in an otherwise fraught relationship, and cast a shadow on Premier Li Keqiang’s visit to India next month.

The trouble began when Indian media started reporting a “deep incursion” on April 15 in which a platoon of about 30 Chinese soldiers entered the Daulat Beg Oldi area in the Depsang Valley of eastern Ladakh in Indian-administered Kashmir.

Shrill media reports of Chinese incursions are not uncommon in India, where Sinophobia has been wired deep into the national psyche since a drubbing by China in a border war in 1962. Every time such reports appear, New Delhi’s stock response is that it’s a misunderstanding caused by “perceptual differences”. This time is no different.

India and China do not have a real border marked out on the ground as they never got around to negotiating one. What they follow is an undemarcated Line of Actual Control (LAC), but each side has its own perception of where that line actually lies. As a result, it is not uncommon for patrols to stray into each other’s territory. Years of painstaking talks have gone into creating an elaborate mechanism to prevent such transgressions from snowballing, keeping the peace for 25 years.

What is different this time is that none of the standard operating procedures that comprise this peace mechanism seem to be working. These procedures include waving banners to alert the other patrol if it is on the wrong side of the LAC, and meetings between local commanders. This time, two flag meetings have been held but the stalemate continues. New Delhi insists Chinese troops have entered 18 kilometres into Indian territory and must leave. Beijing maintains its soldiers are on the Chinese side of the LAC and won’t budge. And, in an alarming show of strength, both sides have dug in, pitching tents to strengthen their claims.

The confrontation has sent diplomats into overdrive to calm tempers before Li’s India visit as both sides have set much store by the trip. Bilateral trade, barely about US$3 billion in 2000 following decades of shutting each other out after the war, has now reached nearly US$80 billion, making China India’s largest trading partner. The aim is to reach US$100 billion by 2015, with both sides looking for greater access to each other’s markets. They are also increasingly working together in other areas, ranging from environment to energy security.

“Sino-Indian relations are developing very quickly. Li’s visit will be his first foreign trip after taking office, and is in a complete break with protocol, showing the importance China attaches to relations with India,” says Ma Jiali, an India expert at the China Institutes of Contemporary International Relations in Beijing.

Li’s choice of India as his first port of call had created a burst of goodwill in India for its symbolism. Going by protocol, it was Indian Prime Minister Dr Manmohan Singh’s turn to visit Beijing this year to reciprocate for former premier Wen Jiabao’s tour in 2011.

Lei Guang, director of the 21st Century China Programme at the University of California, San Diego, also points to the upswing in ties, citing President’s Xi Jinping’s description of relations with India as “one of the most important for China” – an unusual focus for a new Chinese leader.

“China at this moment does not have anything to gain from asserting itself against India. If anything, as former Indian foreign minister Jaswant Singh puts it, China seems to pivot to Russia and India, even while it seems to adopt a more assertive attitude towards Japan and Southeast Asia,” Lei says.

That makes this stand-off, and its timing, even more baffling. Coming as it does on the heels of the disputes in the East and South China seas, it only feeds the notion of an assertive China. That’s at least how Dr Li Mingjiang , an assistant professor at S Rajaratnam School of International Studies in Singapore’s Nanyang Technological University, reads it.

According to Li, Chinese and Indian armies have regular run-ins but the PLA is clearly showing more aggression this time.

“It might have been caused by the new leadership’s assertive stance on issues of national interest. President Xi has publicly urged the army to spare no efforts to defend China’s territorial integrity and core interests,” he says. “Such high-profile political signals would only encourage the army, especially frontier forces, to toughen their own stance in local disputes.”

Ashley Tellis, senior associate at the Carnegie Endowment for International Peace, also believes the PLA has upped the stakes. “This one dramatically changes the status quo as the Chinese appear to have physically occupied new territory under Indian control,” he says, pointing out the Chinese picked an area where India has been attempting to ramp up defences.

India has recently reversed an ultra-defensive policy of not building infrastructure along the border lest it provides easy access to enemy forces. It is briskly laying roads and setting up airbases to catch up with dazzling Chinese facilities across the border that give China a far greater advantage in troop mobilisation should a conflict break out.

This buzz of activity close to the LAC hasn’t gone down well with local Chinese troops, who often disrupt these construction works, in turn feeding the Indian media with more incursion stories. In Daulat Beg Oldi itself, India has reactivated an old landing strip, one of the world’s highest, after nearly 50 years.

“Indians are building more outposts, which the Chinese of course do not appreciate. It’s quite likely the Indian side is eager to show its resolve to the new Chinese leadership,” says Professor Jonathan Holslag, head of research at the Brussels Institute of Contemporary China Studies.

Srinath Raghavan, the author of War and Peace in Modern India, shares the view that Chinese unease with India’s border bustle is the big driver in this round of hostilities. But the senior fellow at the Centre for Policy Research in New Delhi refuses to divine a hardening of Beijing’s overall stance towards India.

“I think it fits with past patterns of incursions in the area,” says Raghavan. “The Chinese are operating within their notion of the LAC. There is evidently an increase in tit-for-tat moves but China is not the only active party here. We too make our moves in areas that fall under China’s perceived LAC. So long as there is no agreed boundary, these things are bound to happen.”

Dr Dibyesh Anand, associate professor at the University of Westminster, London, sees in the Indian response a familiar pattern of selective leaks from the security establishment and jingoistic media outrage. “I don’t see a major policy change by Beijing. It’s an initiative of local commanders, accentuated by familiar Indian brouhaha as if Indians don’t make similar incursions.”

“Local” is a word that New Delhi has also been using a lot to describe the incident. In the understated language of diplomats, a local military move is shorthand for one driven at field level for local tactical gains – as opposed to a top-down act of aggression, the way the media and the opposition parties are portraying it in India.

Stressing the “local” aspect of the crisis also reflects efforts to not let the border face-off “spill over into the larger spectrum” of bilateral relations, as Indian Foreign Minister Salman Khurshid puts it. The opposition is already urging Khurshid to cancel his trip to China next week.

“I would be surprised if this were a co-ordinated Chinese plan to establish a new presence,” says Tellis. “I think the PLA, concerned by recent Indian efforts to upgrade its frontier defences, decided to establish a physical presence in the area. Any other explanation makes no sense because the new Chinese leadership is making a serious effort to keep Sino-Indian relations on an even keel, even if only to wean India away from the United States. The PLA does often pull in different directions from the civilian administration.”

For Tellis, a co-ordinated military-civilian manoeuvre by China is not likely as India figures too low in Beijing’s strategic priorities to merit such a venture.

According to Raghavan, there may even be a disconnect between the local Chinese military units and those at the top, not just between the PLA and the foreign office. “You will find such a disconnect surprising only if you believe that China always moves strategically, that it does not experience the usual problems of subordinate bureaucracies doing their own thing, and that the Chinese system doesn’t have its fair share of muddle. No great power has ever functioned that way.”

Smart money is on an eventual resolution, even if it takes a while. Driving India into America’s arms makes very little sense for China and ratcheting up tensions with the next superpower makes even less sense for India.

China and India have realised they are strategic partners as they need each other on the international stage, says Dr Sun Shihai , a researcher at Chinese Academy of Social Sciences, Beijing. “Compared with their goal to be independent great powers, the border row is a small issue. Neither side will let it escalate.”

Professor Simon Shen, director of the global studies programme at Chinese University of Hong Kong, agrees: “This incident won’t jeopardise Sino-Indian commercial relations and their collaboration in the BRICS framework [the economic bloc made up of Brazil, Russia, India, China and South Africa].”

But if history is anything to go by, common sense doesn’t always dictate Sino-Indian relations. Daulat Beg Oldi could be a pit stop before the two Asian giants resume their journey on a modern-day Silk Road, or before they return to their old inimical ways. A pit stop before China and India go back to making history, or repeating it.

Source: SCMP “Amid improving Sino-Indian ties, border stand-off baffles the experts”


Chinese military cracks down on license plates and corruption


Officers of China's navy pose for photographs with the new (L) and old military car licence plates, in Qinhuangdao, Hebei province April 28, 2013. China's new leadership is seeking to dismantle a system of privilege which has allowed the drivers of military vehicles to do as they please on the roads. On Sunday the Chinese military began replacing licence plates on its cars and trucks to crack down on legions of vehicles, many of them plush luxury brands, which routinely break traffic laws and fill up with free gas. REUTERS/Stringer

Officers of China’s navy pose for photographs with the new (L) and old military car licence plates, in Qinhuangdao, Hebei province April 28, 2013. China’s new leadership is seeking to dismantle a system of privilege which has allowed the drivers of military vehicles to do as they please on the roads. On Sunday the Chinese military began replacing licence plates on its cars and trucks to crack down on legions of vehicles, mny of them plush luxury brands, which routinely break traffic laws and fill up with free gas. REUTERS/Stringer

China’s new leadership is seeking to dismantle a system of privilege which has allowed the drivers of military vehicles to do as they please on the roads.

On Sunday the Chinese military began replacing license plates on its cars and trucks to crack down on legions of vehicles, many of them plush luxury brands, which routinely break traffic laws and fill up with free gas.

The People’s Liberation Army General Logistics Department began supervising the removal of current military license plates that will expire on Tuesday, the PLA Daily newspaper reported.

Luxury sedans and sport utility vehicles with PLA and People’s Armed Police license plates gliding through red lights or flashing lights and sirens to push aside cars in front of them are a common sight in China.

Newly named President Xi Jinping, who is also chairman of the Central Military Commission and thus the top military official, has tried to make fighting corruption a cornerstone of his administration, saying he will go after corrupt officials high and low.

Luxury German, American and Japanese cars and SUVs with military plates — often given to friends and family members as favors — are one of many manifestations of corruption in China that regularly irk ordinary citizens.

Family members of retired military officers and who have military plates have even claimed free gasoline.

FIGHTING CORRUPTION

“Xi Jinping has a very strong sense of crisis,” said Hu Xingdou, a professor of economics at Beijing Institute of Technology and an anti-corruption researcher.

“He has the lofty intention to use the iron fist of the state to fight corruption,” Hu said in a telephone interview.

“Of course the fight against corruption is like a violent storm, and the more you persist in going after something by putting your career on the line, the more you encounter resistance,” Hu said. “As for results, we will wait and see.”

A number of high-end auto brands will be banned from receiving the new military license plates, including sedans from Mercedes-Benz, BMW, Jaguar, Porsche, Ford’s Lincoln, General Motors’ Cadillac, Volkswagen-owned Bentley and the Volkswagen Phaeton, Xinhua said.

Absent from Xinhua’s published list were Audi sedans, the clear preference among Chinese officials with access to government cars.

Audi A7 SUVs however were listed as off-limits, along with Porsche Cayennes and other unspecified SUVs. Range Rover and Lexus SUVs with such plates are also common in Beijing.

Private and local government vehicles will also be ineligible for the plates, as well as any car costing more than 450,000 yuan (about $73,000), Xinhua said.

The policy will further decrease sales of foreign brands into Chinese government fleets. Beijing has moved to bar certain government agencies from buying foreign cars at all, potentially excluding global auto brands from a market of between 70 billion and 80 billion yuan ($11.1 billion to $12.7 billion).

The new licensing system is also meant to weed out fake military plates by using embedded electronic technology, the state-run news agency Xinhua said.

“The move is meant to crack down on the creation, sale and use of counterfeit military vehicle plates and root out loopholes in military vehicle management, so as to maintain social harmony, stability and the reputation of the military,” Xinhua quoted the PLA General Logistics Department as saying in a statement.

Source: Reuters “Chinese military cracks down on license plates and corruption”


Gamblers not so anonymous: Beijing keeps closer eye on Macau


Li Gang (C), Deputy Director of China's Liaison Office in Hong Kong, holds a news conference in Hong Kong, in May 24, 2010  Credit: REUTERS/Bobby Yip/Files

Li Gang (C), Deputy Director of China’s Liaison Office in Hong Kong, holds a news conference in Hong Kong, in May 24, 2010
Credit: REUTERS/Bobby Yip/Files

With little fanfare, China is sending an official with a ‘tough cop’ reputation to be its top man in Macau, the world’s biggest gambling hub, as Beijing puts tackling corruption center stage.

Li Gang, a veteran of handling contentious issues in Hong Kong, is slated to this year take control of China’s liaison office in the former Portuguese colony – which like Hong Kong is a special administrative region under China’s ‘one country, two systems’ principle.

The office, China’s representative in Macau, has deepened its ties with casino and junket operators, who helped bring in over two-thirds of Macau’s $38 billion in revenues last year.

The low-key but significant moves signal a deliberate attempt by China to be more directly involved in the oversight of Macau, which has drawn unwanted attention with reports of mainland officials laundering state funds and betting millions in the casinos’ high-roller VIP rooms.

Rather than signaling a crackdown on Macau’s lucrative gambling industry, casino executives say the target is those Chinese officials using public money or pledging state assets to gamble – money that could otherwise be invested in businesses.

For example, Yang Kun, a vice president at Agricultural Bank of China, owed Macau casinos 3 billion yuan ($490 million) in gambling debts, while local media have reported former high-flying politician Bo Xilai laundered money through Macau. There has been no official ruling on either case.

“They are taking a much more proactive role. The Chinese government is more concerned about assets being wasted,” said a senior executive at a Macau casino, who didn’t want to be named due to the sensitivity of the situation. “For them, it’s not about the funds being gambled, but about businesses or factories being squandered.”

CLOSER SCRUTINY

China has revamped its anti-money laundering rules, Reuters reported this month, and Macau is overhauling its laws to set more explicit requirements to detect suspicious transactions. Francis Tam, Secretary for Economy and Finance, has said there will be stricter oversight of the gaming industry, with the government paying closer attention to abnormal capital flows.

Suspicious transaction reports in Macau rose by almost a fifth last year to 1,840, and more than 70 percent of those were related to the gaming industry, according to Macau’s Financial Intelligence Office.

Li, who sits on the Chinese Communist Party’s Central Commission for Discipline Inspection, was appointed deputy director of the Macau liaison office in December, and political analysts expect him to be China’s main representative later this year when the current chief is due to retire.

Having won plaudits for his firm handling of elections and electoral reform in Hong Kong as deputy director, Li has been quoted by local media as saying anti-corruption efforts are in line with a broader effort – and one of new Chinese President Xi Jinping’s priorities – to tackle graft and the illicit outflow of funds, rather than a crackdown on Macau’s gaming industry.

MORE INVOLVED

Located on the tip of China’s southern coast, Macau is the only place in China where casinos are legal, and more than two-thirds of its visitors come from the mainland. Each month, gaming rakes in more than half of Las Vegas’ annual revenue of $6.2 billion.

“China’s government is always focusing and concentrating on Macau’s development,” said a representative of the liaison office – which works from a recently renovated building that towers above the gaudy casinos and ubiquitous pawn shops – in response to a question on whether the government was increasing its attention on Macau.

After the release of notorious mobster Wan “Broken Tooth” Kuok-koi in December, representatives from the liaison office informed casino operators that if they faced any trouble they should go directly to them. Under Portuguese control, VIP junket operators like Wan tended to take matters into their own hands, resulting in frequent and bloody violence in the 1990s.

Macau junkets are companies or individuals authorized to issue credit to gamblers and settle any subsequent debts. The biggest junket firms run multi-billion dollar operations. Alvin Chau, founder of one of the leading operators Suncity Group, was this year selected as a member of China’s CPPCC Guangdong provincial committee, elevating his political credentials.

Macau’s first Junket Association was created on the eve of Broken Tooth’s release, with operators, liaison office representatives and local regulators attending a lavish dinner at Las Vegas Sands Corp’s new resort. Photos and videos of the dinner posted online show junket operators taking oaths, raising their right hand and reading from a small piece of white paper in the other.

“The association will strive to work together to keep society stable and the economy flourishing and transform Macau into an international city,” the Apple Daily quoted the association’s president Guo Zhizhong as saying.

Deborah Ng, director of Macau’s Financial Intelligence Office, has said that casino operators have adequate controls in place to detect if government officials or high-ranking politicians are gambling.

“I think there’s improvement. I can’t say what we have done now will totally prevent the risk, but actually we can see that things are improving,” Ng said.

Source: Reuters “Gamblers not so anonymous: Beijing keeps closer eye on Macau”


China: Military license plates no longer allowed on luxury cars, more strictly controlled


A PLA officer is replacing old military license plate with a new one.

A PLA officer is replacing old military license plate with a new one.

China’s PLA (People’s Liberation Army) Daily reports on April 28 that the Chinese Defense Ministry has published a statement that new military license plates have been issued to replace old ones to enhance overall control of military license plates. In an interview, the person in chare of military transport tells the reporter that it aims to prevent:

1. Fake of such plates;
2. Unauthorized issue of such plates. Military license plates are disallowed on eleven luxury brands and models, including Mercedes-Benz, BMW, Lincoln, Cadillac, Volkswagen Phaeton, Bentley, Jaguar, Porsche, etc. as well as those that cost more than 450,000 yuan ($72,400) or have engines larger than 3.0 liters;
3. Unauthorized use;
4. Being stolen; and
5. Loss.

All registered military vehicles shall use the new license plates by May 1. By that time, use of old ones will not be allowed.

SCMP says that the Defense Ministry’s statement “said that the military had been urged by President Xi Jinping to be more disciplined and to improve its public image, and that the issuing of military plates needed to be reformed.

“Also next month, the vehicle management department of the People’s Liberation Army will launch a campaign targeting counterfeit military plates and people who abuse authentic plates. Fake plates will be identified by video at highway toll stations and plate inspectors will also randomly visit areas, such as around nightclubs, to check for military vehicles.”

SCMP says, “Professor Chen Jierong, who teaches law at Sichuan University in Chengdu, said the new regulations would probably reduce the number of luxury cars with military plates on mainland streets, but only for a while. ‘I am sure many expensive cars with military plates will re-emerge soon,’ he said. ‘They have been banned five times over the last few decades, but more emerged after each ban. This time will be the same.’

“Chen noted that military plate inspectors were powerless to stop the leasing out of military-owned vehicles, with official plates, to civilians for non-military use.

“‘It is a common practice in Beijing for an Audi A8, with a real [military] plate, real paperwork and a real driver in a military uniform, to be leased out by a senior military officer to a businessman,’ he said. ‘The businessman pays 800,000 yuan a year but gets many benefits in return, such as giving others the impression that he has strong ties to the military. It happens not only in Beijing, but in every city.’

“He said military inspectors could do little when a case involves a higher-ranking officer. Even if a vehicle is seized, Chen said, a phone call by a general could foil any action.

“Chen said people were furious about privileges associated with military vehicles, especially as the number of mainland drivers continues to grow rapidly.

“Vehicles with military plates are allowed to run red lights, drive in emergency lanes and avoid road tolls, among some other privileges.”

Whether the new restrictions work will be the acid tests of Xi Jinping’s ability to bring about real changes.

Sources: mil.huanqiu.com “General Logistics Department on military license plates: strict control, no use allowed on luxury cars”; SCMP “Ban on use of military licence plates on luxury cars in mainland China”


China Q1 factory profits up 12.1 pct


China’s industrial profits grew 12.1 percent in the first quarter this year from a year ago, official data showed on Saturday.

Chinese industrial firms made total profits of 1.17 trillion yuan ($189.78 billion) in the first three months, the National Bureau of Statistics (NBS) said in a statement on its website (www.stats.gov.cn).

In March, profits were 464.9 billion yuan, up 5.3 percent from the same month last year, it said.

Profit growth began showing signs of resurgence in December, gaining 17.3 percent year-on-year. That followed several tepid months that restrained overall profit growth to a modest 5.3 percent year-on-year in 2012 to a total of 5.6 trillion yuan.

Among 41 sectors surveyed by the NBS, 29 reported rising profits in the first three months, while nine reported shrinking profits. Two sectors reported turnarounds in profitability and one reported a shrinking loss.

The ferrous metal smelting and rolling industry reported a 3.3-fold increase in profits during the period, while profits in the electricity and heat production and supply industry leapt 90.5 percent, the statistics bureau said in a report.

Profits for manufacturers of computers, telecoms gear and electronics were up 36.8 percent from the same period last year, while those in auto manufacturing rose 10.6 percent, agriculture and food production were up 9.9 percent, general equipment up 8.5 percent and the chemical sector increased 7.2 percent.

On the downside, profits in coal mining dropped 40.3 percent while those in ferrous metal mining were down 5.2 percent and oil and gas exploration were off 4.5 percent during the same period, the report said.

China’s economy has snapped out of a seven-quarter long slowdown and started to pick up from the last quarter of 2012 as it regains internal strength on the back of Beijing’s pro-growth policies. Annual economic growth slowed to 7.8 percent last year, the weakest showing since 1999.

A Reuters poll of economists showed expectations that factory activity in April probably expanded at its fasted pace in 12 months, shoring up expectations that China’s economic recovery is stabilising.

($1 = 6.1650 yuan)

Source: Reuters “China Q1 factory profits up 12.1 pct”


Chinese tour ship sets sail to disputed Paracel islands


The first Chinese tour ship to visit disputed South China Sea islands set sail on Sunday, state media reported, a move likely to stoke a long-running territorial row between Beijing and its neighbours.

Plans to allow tourists to visit the Paracel Islands is the latest stage in China’s development of the territory, which has previously angered Vietnam and caused concern in Washington.

Vietnam and China have a longstanding territorial row over the Paracel Islands. Hanoi last month accused a Chinese vessel of firing on one of its fishing boats which had sailed in disputed waters in the area.

Up to 100 passengers paid a ticket price between 7,000 yuan (HK$8,800) and 9,000 yuan for the four-day voyage, which is set to become a monthly or twice monthly trip if the maiden trip proves successful, the Global Times said.

Only passengers in “good health, which includes having a normal weight” are permitted on the trip, the newspaper added, in a report which cites the Shanghai Morning Post.

The plan to allow cruise tours follows rapid development of infrastructure in a new city — Sansha — along with the establishment of an army garrison in the Paracels last year.

A named commentary in the Global Times defended the decision to allow tourists to visit the islands, which are known as Xisha in China.

“China’s Xisha tourism has nothing to do with its neighbouring countries,” said Ju Hailong, a research fellow at the Institute of Southeast Asian Studies at Jinan University, in the southern city of Guangzhou.

“Those who want to manipulate China’s moves to make trouble are not admirers of international law and regional security.”

Officials earlier this month confirmed they would open up the Islands to tourism.

China has occupied the Paracels since a brief war with South Vietnam in 1974. It is a cluster of about 40 islets, sandbanks and reefs.

Taiwan, the Philippines, Brunei and Malaysia all have rival claims to parts of the South China Sea, while the United States is also watching Beijing’s increased assertiveness.

In his address opening China’s parliament last month, former Premier Wen Jiabao said Beijing should “develop the marine economy… and safeguard China’s maritime rights and interests”.

Source: SCMP “Chinese tour ship sets sail to disputed Paracel islands” originated from Agence France Presse

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