Chinese developer ‘rescues’ London docks with a 1.5 billion USD deal.

China News

421879923London Mayor Boris Johnson sealed a 1.5 billion USD deal with a Chinese property developer to turn a historic London dock into a 21st-century “Asian business port”: the Royal Albert Dock is set to become London’s third business district.

The deal is believed to be worth $9bn to the UK economy, generating $35 million in business rates annually and acting as a catalyst for further development in the area, strengthening trade between east and west, providing new local jobs and delivering benefits for the wider London and UK economy.

The scheme, which will see Advanced Business Park (APB) create a 3.5m sq ft office complex at the Royal Albert Dock, is the London mayor’s biggest commercial property deal and one of China’s largest investments in the UK.

Mr Johnson said the 35-acre east London project would create a third financial district in London after the City and Canary…

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PLA review warns ‘strategic uncertainties’ loom large for China

Chinese surveillance ships sail through disputed waters in the East China Sea. Photo: AP

Chinese surveillance ships sail through disputed waters in the East China Sea. Photo: AP

Rising competition among major powers in the Asia-Pacific region poses biggest challenge since collapse of communist bloc in 1990s, report says

A PLA think tank yesterday issued a report warning that the nation faces increasing “strategic pressure” for the first time since the 1990s collapse of the communist bloc, with the Asia-Pacific region now a “new global centre” for “geopolitical, economic and military competition”.

Released by the Centre for National Defence Policy (CNDP), a part of the PLA’s Academy of Military Sciences, The Strategic Review 2012 says that “big powers have intensified their gaming for regional dominance”.

According to Xinhua, the review states: “Amid strategic competition among the big powers, the fierce oceanic competition and frequent regional conflicts, the complexity, sensitivity and uncertainty of China’s security environment loom large.”

The review also notes that, as the US has accelerated the eastward shift of its strategic focus, competition for maritime rights among the region’s members will become fiercer.

Territorial disputes between China and its neighbours have escalated in recent years, with relations between Beijing and Tokyo damaged by their claims to the Diaoyus, the East China Sea archipelago known to Japan as the Senkakus. Disputes between China and several Southeast Asian countries in the South China Sea have also soared.

Commenting on the review, Yue Gang, a retired PLA colonel, said China faced major “strategic pressure” as it had become the largest communist state since the end of the cold war.

“But that was a confrontation over ideology, this time it is about territorial dispute,” said Yue. “Any compromise in these disputes will trigger a wave of nationalist movements in the relevant countries.”

The review says the stand-off between Beijing and Tokyo over the Diaoyus will last for a long time and feature repeated cycles of retaliatory actions between the two sides.

China News Service quotes the review as warning that Japanese fighter jets’ close approach to Chinese civilian patrol flights will extend the stand-off from the sea to air space – and that the risk of armed clashes will rise.

In the South China Sea, the review says, the nature of the disputes among regional players has evolved from asserting competing maritime rights to developing maritime strategies. It acknowledges that some countries are becoming anxious and that the disputes need to be managed to avoid escalating into crises.

However, Ni Lexiong, director of the Sea Power and Defence Policy Research Institute at Shanghai University of Political Science and Law, said any severe military confrontation between China and Japan was unlikely.

In the South China Sea, Ni said, the issue was more sensitive, as China’s expansion in this region amid the country’s economic and military advances had irked the United States.

“The United States has resorted to containing China by forging ties with China’s neighbours, making the dispute more complicated,” Ni said

Source: SCMP “PLA review warns ‘strategic uncertainties’ loom large for China”

Related posts:
China’s Strategy on Recovery of Islands Occupied by the Philippines dated May 28, 2013
China: Premier Li Keqiang, in Potsdam, warns Japan on postwar vows dated May 27, 2013
Ask Abe: Do You Honor Japan’s Surrender? Why Not Withdraw from Ryukyus? Dated May 21, 2013
China: PLA Navy amphibious task force reaches Malaysia ‘to defend South China sea’ dated March 27, 2013
Philippines warns of ‘very threatening’ actions by Beijing in South China Sea dated January 10, 2013
Xinhua plays down US support to Manila in South China Sea disputes dated June 9, 2012

Premier Li says China, Germany could be economic ‘dream team’

Former German Chancellor Helmut Schmidt gestures while he and Chinese Premier Li Keqiang (R) chat during a meeting in Berlin May 27, 2013.  Credit: Reuters/Michael Sohn/Pool

Former German Chancellor Helmut Schmidt gestures while he and Chinese Premier Li Keqiang (R) chat during a meeting in Berlin May 27, 2013.
Credit: Reuters/Michael Sohn/Pool

China is ready to open up new sectors of its economy to German investors, Chinese Premier Li Keqiang said on Monday, in comments that highlight Beijing’s drive for a special bilateral partnership with Berlin bypassing the EU.

“If we both come together in an ideal and optimal way, a dream team will emerge,” Li told representatives of German business during a visit to Berlin, his first to a European Union capital since becoming premier in March.

Li urged closer cooperation in manufacturing – an area where German firms increasingly see China as a competitor as it moves up the value chain – and he singled out logistics, education and healthcare as sectors for German investment.

“China is willing to open up this space preferentially to Germany,” said Li, an economist, without elaborating.

The European Commission in Brussels oversees EU trade ties with third countries and it was unclear how far Beijing could offer Berlin special access to markets denied to other member states, but Li’s comments underscored the importance of China and Germany, the world’s top two exporters, to each other.

Bilateral trade totaled nearly 150 billion euros in 2011 and Germany accounts for about a third of China’s total trade with the 27-nation EU.

Germany produces the high-quality machinery and equipment that Chinese companies need to manufacture their goods, many of which end up back in Germany. China is a giant market for German luxury cars and state-of-the-art machinery, while Chinese exports to Germany include textiles, electrical goods and toys.

Underlining the importance of this economic relationship, Germany along with a number of other EU governments came out on Monday against the European Commission’s plan to impose hefty duties on solar panel imports from China.

Brussels accuses Chinese firms of selling solar panels at below cost in Europe and plans to impose duties, making it far harder for China to gain market share.

German Economy Minister Philipp Roesler said after talks with Li there was “no need for more sanctions measures”, echoing Chancellor Angela Merkel who had stressed Berlin’s commitment to free trade during her own meeting with the premier on Sunday.

Merkel, who faces an election in September, is keen to avoid trade tensions with China, the world’s second biggest economy. China has proven a valuable alternative market for German companies during the euro zone debt crisis, which has badly dented demand in their more traditional markets nearer to home.

Li also told Roesler China was determined to tackle intellectual property theft, a longstanding concern among Western investors, adding: “This also harms the innovation and motivation of Chinese firms.”

The chief executive of industrial giant Siemens, Peter Loescher, said direct Chinese investment into Germany was still far too low at 1.2 billion euros against some 35 billion euros worth of German direct investment in China.

Source: Reuters “Premier Li says China, Germany could be economic ‘dream team’”

South China Sea tension mounts near Filipino shipwreck

A wrecked navy transport ship perched on a remote coral reef could be the next flashpoint in the South China Sea, where China and five other claimants bitterly dispute territory.

The Philippine government is accusing China of encroachment after three Chinese ships, including a naval frigate, converged just 5 nautical miles from an old transport ship that the Philippines deliberately ran aground on a reef in 1999 to mark its territory.

Philippine officials say they fear the Chinese ships will block supplies to about a dozen Filipino marines stationed in abject conditions on the rusting ship, raising tensions over one of Asia’s biggest security issues.

The area, known as Second Thomas Shoal (and as Renai Shoal in China), is a strategic gateway to Reed Bank, believed to be rich in oil and natural gas. In 2010, Manila awarded an Anglo-Filipino consortium a license to explore for gas on Reed Bank but drilling stalled last year due to the presence of Chinese ships.

Manila says Reed Bank, about 80 nautical miles west of Palawan island at the southwestern end of the Philippine archipelago, is within the country’s 200-nautical mile exclusive economic zone.

Beijing says it is part of the Spratlys, a group of 250 uninhabitable islets spread over 165,000 square miles, claimed entirely by China, Taiwan and Vietnam and in part by Malaysia, Brunei and the Philippines.

“China should pull out of the area because under international law, they do not have the right to be there,” said Raul Hernandez, a spokesman for the Philippine Department of Foreign Affairs, noting the area’s proximity to Palawan, the country’s largest province.

He said the Chinese ships were a “provocation and illegal presence”.

Chinese Foreign Ministry spokesman Hong Lei said on Tuesday the Second Thomas Shoal was part of the Spratly Islands, over which China had “indisputable sovereignty”.

“It is beyond reproach for Chinese boats to carry out patrols in these waters,” Hong said, adding China called on all parties to “refrain from taking actions that complicate the situation”.

The tension illustrates how a decades-old territorial squabble over the South China Sea is entering a more contentious chapter as claimant nations spread deeper into disputed waters in search of energy supplies, while building up navies and alliances with other nations.

Second Thomas Shoal is one of several possible flashpoints in the South China Sea that could force the United States to intervene in defense of its Southeast Asian allies.

The tension comes just before U.S. Defense Secretary Chuck Hagel meets his Asia-Pacific counterparts at the so-called Shangri-La Dialogue in Singapore at the weekend. The South China Sea is on the agenda of the regional security forum.


Philippine authorities say the three Chinese ships arrived in Second Thomas Shoal on or around May 8, escorting a fleet of 30 fishing boats. Two days later, the Philippines formally lodged a protest with China over the vessels.

As of Tuesday, two Chinese marine surveillance ships remained in the area, Philippine navy spokesman Colonel Edgardo Arevalo said. The fishing boats and the frigate had left, he said.

“The presence of those ships is a clear and present danger,” said another senior Philippine navy officer, who declined to be identified as he is not authorized to speak to the media. He said the Philippines believed China was trying to pressure it to leave the shoal.

“We don’t want to wake up one day with fresh structures sitting near our navy ship there. We have to bite the bullet and strengthen our position there or risk losing the territory.”

The wrecked U.S.-built ship, the BRP Sierra Madre, is among Asia’s loneliest military outposts. The ship was launched in World War Two, saw action in Okinawa and was used again in the Vietnam War. It was transferred to the Philippine government in 1976 under a military assistance program.

Soldiers are equipped with a small generator for cooking. Radios are battery-powered and supplies are delivered by boat.

“They want us out of the area,” another Philippine navy officer said of China.

The Association of South East Asian Nations (ASEAN), a 10-nation grouping that includes the Philippines, has been talking to China about a binding code of conduct to ease tension. But China says it will negotiate “when the time is ripe”.

ASEAN foreign ministers are due to meet in Thailand in August to forge a position on the code of conduct before meeting Chinese officials in late August or early September in Beijing.

The easternmost territory held by China is Mischief Reef, about 65 km (40 miles) northwest of Second Thomas Shoal. China occupied it in 1995. The Philippines occupied Second Thomas Reef with the BRP Sierra Madre in 1999, preventing China moving further east.

In March, Malaysia protested against the incursion of four Chinese ships in James Shoal, about 80 km (50 miles) off Sarawak on Borneo island. Chinese sailors fired guns in the air during the visit to the shoal. Last month, a Chinese maritime surveillance ship returned to James Shoal to leave behind steel markers to assert its claim.


Zha Daojiong, an international relations professor at Beijing’s Peking University, said China was serious about asserting its claims in the South China Sea and it was important the region did not misunderstand this.

“There is now a quiet agreement among different Chinese voices that sometimes you have to act as well as issuing statements,” he said. China would, however, never completely close the door on possible co-operation.

Ian Storey, a scholar at Singapore’s Institute of South East Asian Studies, said tension at Second Thomas Shoal could prove more dangerous than last year’s stand-off at unoccupied Scarborough Shoal, given the presence of Filipino troops.

“It is hard to imagine China using force to gain full control over Second Thomas, but some kind of blockade to drive out the Philippines’ troops would have to be a possibility,” Storey said. “There is a real chance of escalation or miscalculation.”

Source: Reuters “South China Sea tension mounts near Filipino shipwreck”

Related posts:
China’s Strategy on Recovery of Islands Occupied by the Philippines dated May 28, 2013
China: PLA Navy amphibious task force reaches Malaysia ‘to defend South China sea’ dated March 27, 2013
Philippines warns of ‘very threatening’ actions by Beijing in South China Sea dated January 10, 2013
Xinhua plays down US support to Manila in South China Sea disputes dated June 9, 2012

China’s Strategy on Recovery of Islands Occupied by the Philippines

Major General Zhang Zhaozhong

Major General Zhang Zhaozhong

Recently, well-known military expert Major General Zhang Zhaozhong talked in a TV interview in Beijing about the current situation of dispute between China and the Philippines at the South China Sea and analyzed China’s strategy in the South China Sea Region. The following is what has been said in the interview:

TV host: Well, we have watched the footage and now let’s look at the big screen that shows the Chinese islands and reefs illegally occupied by the Philippines. All of us shall remember that counting from the north, there are the Beizi Island, Feixin Island, Zhongye Island, Xiyue Island, Shuanghuangzhou Shoal, Mahuan Island, Nanyue Island and Siling Reef. What one has stolen has to be returned. No matter how long the Philippines have illegally occupied those Chinese islands and reefs, I believe that it cannot change the fact that those islands and reefs are inherent Chinese territories. However, what shall we do to counter those rude and barbarian acts of the Philippines?

Zhang Zhaozhong: What shall we do about those islands and reefs? I think that in the main we have done some things relatively successfully in dealing with the Philippines. Since the 1990s, the Philippines has done quite a few illegal and irrational things in its attempt to turn the Huangyan Island into its territory by means of presidential order, domestic legislation, etc. Each time our Ministry of Foreign Affairs Protested, but it refused to listen. In the meantime, it was busy doing this and that such as sunk a boat there and conducting lots of patrols there. By April, 2012, an incident finally took place that it took initiative to detain Chinese fishermen by force, i.e. it sent troops to detain at gun point the Chinese fishermen who entered the lagoon to carry out normal fishing.

Since then, we have begun to take measures to seal and control the areas around the Huangyan Island, seal and control continuously up till now. In the over one year period since then, there have been fishermen in the inside. Our fishermen are often there because there is lot of fish there. Fishermen go there in large ships and then sail small boats in the lagoon to fish. They can have shelter in the lagoon when there is a typhoon. The fishermen conduct normal production there. In the area around the island fishing administration ships and marine surveillance ships are conducting normal patrols while in the outer ring there are navy warships. The island is thus wrapped layer by layer like a cabbage. As a result, a cabbage strategy has taken shape. If the Philippines wants to go in, in the outermost area, it has first to ask whether our navy will allow it. Then it has to ask whether our fishery administration ships and marine surveillance ships will allow it. Therefore, our fishermen can carry out their production safely while our country’s marine rights and interests as well as sovereignty are safeguarded. Is that not satisfactory?

We can adopt this method elsewhere. We have not resorted to war and we have not force the others to do anything, haven’t we? You have invaded and then left. You have violated Chinese law and China’s sovereignty and territorial integrity, haven’t you? Why did you point your guns at our fishermen? As you have first violated the law and pointed your guns at our fishermen, you would never be allowed to enter the area. We should do more such things in the future. For those small islands, only a few troopers are able to station on each of them, but there is no food or even drinking water there. If we carry out the “cabbage” strategy, you will not be able to send food and drinking water onto the islands. Without the supply for one or two weeks, the troopers stationed there will leave the islands on their own. Once they have left, they will never be able to come back. For many things, we have to grab the right timing to do them. Over the past few years, we have made a series of achievements at the Nansha Islands (the Spratly Islands), the greatest of which I think have been on the Huangyan Island, Meiji Reef (Mischief Reef) and Ren’ai Shoal (Second Thomas Shoal).

We have gained quite satisfactory experience about the ways to recover the islands and reefs and defend them. For the Nansha and Xisha (Paracel) Islands, we have established Sansha City to administrate them. That was a good step we have taken. The next step shall be the strengthening of power and authority in implementing our law in conduct our administration. The further next step shall be the vigorous development there, including the development of economy, tourism, marine fishery and marine protection. We have to do much more work there and coordinate various efforts. We shall not rely only on military effort. In the military perspective, fighting is the last resort while before it there must be production on a large scale and with high enthusiasm and large-scale production on the sea. That is why I say that we have to create such an environment and atmosphere.

Source: “Zhang Zhaozhong: To recover the islands occupied by the Philippines, the ‘cabbage’ strategy is enough” (translated from Chinese by Chan Kai Yee)

While Belarus borrows, China makes money

China News

Belarus_ChinaChina is building an entire city in the forests near the Belorussian capital Minsk to create a manufacturing springboard between the European Union and Russia.

Belarusian President Aleksandr Lukashenko allotted an area 40 percent larger than Manhattan around Minsk’s international airport for the $5 billion development, which will include enough housing to accommodate 155,000 people, according to Chinese and Belarusian officials.

Lukashenko, who’s led his former Soviet state of 9.5 million for two decades, is turning to China to help revive a $60 billion economy that’s needed $6.5 billion of bailouts from the International Monetary Fund and Russia since 2009. The hub will put Chinese exporters within 170 miles of EU members Poland and Lithuania and give them tax-free entry into Russia and Kazakhstan, which share a customs union. It will also let them draw from a workforce that’s 99.6 percent literate and makes $560 a month on average…

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China profit growth quickens, no harbinger of recovery

A worker assembles components at a workshop of Bernard Controls in Beijing April 25, 2013.  Credit: Reuters/Ed Jones/Pool

A worker assembles components at a workshop of Bernard Controls in Beijing April 25, 2013.
Credit: Reuters/Ed Jones/Pool

China’s industrial profits growth quickened in April from the previous month, though the government noted that the pickup was due mainly to a low comparative base, indicating that the world’s second largest economy still faces slack domestic and external demand.

Chinese firms made profits of 436.7 billion yuan ($71.22 billion) in April, up 9.3 percent from the same month last year, quickening from a year-on-year growth of 5.3 percent in March, the National Bureau of Statistics said on Monday.

The improved gains in April were caused by the low comparison base in the same month a year earlier, Yu Jianxun, an official from the bureau’s industrial department, said in a statement accompanying the data.

Profits had fallen 2.2 percent in April last year from 2011, compared with gains of 4.5 percent year-on-year growth in March 2012, said Yu.

In the first four months on 2013, Chinese firms made total profits of 1.61 trillion yuan, up 11.4 percent from the same period a year ago, the NBS said (

Among the 41 industries tracked, 30 posted profit growth and eight reported a profit drop in the first four months compared with the year earlier period. Three sectors reported turnarounds in profitability.

Profits for manufacturers of computers, telecommuications equipment and electronics were up 44.8 percent from the same period last year, while those in the electricity and heat production and supply industry leapt 92.6 percent.

The ferrous metal smelting and rolling industry reported a 38.6 percent year-on-year increase in profits during the period, while profits in auto manufacturing rose 12.9 percent.

Petroleum refining, coking and nuclear fuel processing sectors swung into profit from losses in the first four months, while profits in oil and gas exploration dropped 7.9 percent.

The figures come after the HSBC/Markit flash purchasing managers index, the earliest indicator of China’s industrial activity, showed a contraction for the first time in seven months in May as new orders fell.

The PMI added to concerns that China’s economic recovery has stalled and that a sharper cooldown may be imminent.

($1 = 6.1316 Chinese yuan)

Source: Reuters “China profit growth quickens, no harbinger of recovery”