cefc PM Press Meeting July 4, 2013 Politics and IR Edward Snowden

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1 cefc PM Press Meeting July 4, 2013 Politics and IR Edward Snowden 1. Latest: Snowden applied for political asylum in at least 19 countries including China. 2. Earlier in last week of June: A surge in criticism of the US by the mainland press followed after Snowden s departure from Hong Kong, provoking parallel response from the US press. National defense minister Colonel Yang Yujun spoke at a news conference: 1 a. NYT retorts: Latest official remarks appear aimed at persuading Chinese citizens that their government holds the moral high ground in Internet issues. China heavily censors and monitors the Internet. 2 White House: serious setback in relations b. Kerry s latest softening on China rhetoric 3 3. The Snowden case on HK- mainland relations: Beijing most concerned with stability of relations with US, hence relieved to see Snowden gone although domestic public opinion widely regards Snowden as a hero and wants to keep him The Atlantic: Beijing is no doubt pleased with how everything has turned out. But in the long term, Hong Kong's growing sense of political identity is an issue that will keep China's Communist leaders awake at night. Today's defiance of the United States is tomorrow's with a nearer, more closely connected, neighbor. 5 Reaction from the Chinese press 1. Global Times: China has to catch up with the US on network security technology to completely reverse the current international climate of opinion in this regard and restore China's image, as it is one of the main victims of US cyber attacks. China should form its own network security forces in a just and forceful manner, and fully enhance its capability in safeguarding network security Caixin, adopting more reformist rhetoric: Hopefully, the Prism program and Edward Snowden's revelations will awake the sleeping netizens of the world and make them understand that in the virtual environment, they are at an absolute disadvantage with those in power. We urgently need to set up limits, to balance and to hold accountable our rulers. New rectification campaign? 1. June 18: a. Full text of Xi Jinping s speech 7 1 Ministry of National Defense, 2 NYT, defense- ministry- accuses- us- of- hypocrisy- on- spying.html?ref=asia&_r=0 3 NYT, kerry- china- relations.html?pagewanted=2&ref=asia 4 NYT, said- to- have- made- call- to- let- leaker- depart.html?adxnnl=1&ref=asia&adxnnlx= NJEQXujmoI/HfjHbll5EyQ 5 The Atlantic, hong- kongs- remarkable- statement- on- edward- snowden- says- about- the- territory/277138/ 6 Global Times, 7 Xinhua,

2 b. c. 2. Cheng Ming July feature: a. Referencing four previous campaigns (Yan an, 1957, 1959, 1989): 3. Zhu Jianguo on the campaign s implication: pronouncement of death sentence on civil society 8 a. b. c. 4. To look out for: South Review s July 3 issue: Politics update 1. Lei Zhengfu, former official who was embroiled in sex tape scandal, is jailed for 13 years for accepting bribes: 30 9 Economy and society Financial reform 1. The PBOC engineered a massive credit squeeze to assert its determination to crack down on the shadow banking sector, which comprised of problematic wealth management products used by banks to refinance dodgy borrowers (municipal governments and real estate developers). As a result short- term borrowing costs soar to extraordinary levels and raised fear of a lasting credit crunch. 2. Caixin: A number of banks also temporarily halted lending to businesses and individuals due to mounting pressure from liquidity shortage. 10 Earlier in March regulator has also put quantitative restrictions on banks wealth management business to limit risk Cheng Ming, 9 Xinhua, 10 Caixin, 26/ html 11 Caixin, 28/ html

3 3. The credit squeeze made for a bracing week of financial drama - - and it signaled that China's leaders are not averse to causing a bit of drama to underscore their desire for reform in the financial industry Global Times: The central bank's words and actions convinced a growing number of analysts that while the worst- case scenario of a credit freeze and banking crisis seemed very distant, the era of rapid growth fueled by cheap credit was also over. 5. Newly released figures by the National Audit Office on local government debt: 13 a. Focused on 15 provincial governments and their capital cities: by the end of last year, the direct liabilities, guaranteed debt and indirect liabilities of all the 36 local governments exceeded 3.8 trillion yuan, up nearly 13 percent from two years ago. b. Auditors listed a number of major concerns: i. Rapid growth of debt ii. Linkage to infrastructure: overdue debt related to highways and secondary roads exceeded 1.7 billion and 3.1 billion yuan last year iii. Heavy reliance on land sales revenue iv. Fundraising fronts: Some local governments were found circumventing restrictions and borrowing through channels e.g. trust loans, WMPs, illegal fundraising etc. v. Ability to pay back: Some financing platforms were unable to pay back debt on their own vi. Ad- hoc process: Many local governments have yet to establish a standardized budgeting and risk monitoring system for their debt. Ethnic tensions 1. Latest riots in Xinjiang: a. Turpan riots with death toll rising to 35: Rioters killed 24 people (of which 16 were from the Uyghur ethnic group), while police killed 11 of the attackers and captured 4, according to state media. b. Days before fourth anniversary of violent riots in Urumqi another riot broke out in Hotan Prefecture 14 c. Global Times claims that Uyghur terrorists are finding training in Syria: An anti- terrorism official told the Global Times in an exclusive interview that about 100 people like Memeti Aili had travelled to Syria to join the fighting alongside Syrian rebels since last year Their purpose is to overcome their fears, improve their fighting skills and gain experience in carrying out terror attacks New Human Rights Watch report on mass rehousing and relocation of Tibetans by the Chinese government into socialist villages in the last seven years. 16 a. Origin of policies: i. Great Development of the West (2000): including two environmental migration schemes, reverting farmland to forest ( ) and reverting pasture to grassland ( ) ii. New Socialist Countryside and Comfortable Housing Campaign ( )(2005- present): NSC: renovation and remodelling of villages and settlements to achieve. CHC: to ensure 80% of farmers and herders would live in safe and suitable housing within five years. iii. Leapfrog Development Strategy (2010): greater investment and broader plans to spur economic growth and further reorganize the Tibetan countryside. Stated objective is to raise per capita net income of farmers 12 The Atlantic, has- engineered- a- financial- crisis- and- it- might- work/277099/ 13 Caixin, 18/ html 14 CDT, erupts- anew- in- xinjiang/ 15 Global Times, see also NYT, increases- security- in- restive- region.html?ref=asia&_r=0 16 Full report available at HRW:

4 and herders to close to national level by Expansion of area to cover Tibetans outside of the TAR. b. Problems: i. Coercion on relocation and rehousing programs, despite state claims that they are voluntary ii. Inadequate consultation and lack of remedies iii. Inadequate compensation and subsidies iv. Problems in housing quality and suitability v. Increased financial burdens: house construction and renovation costs borne by individual households vi. Other cultural and economic impacts: Loss of farmland crops and livestock; increased living costs; limited employment opportunities; difficulties in integration c. Achieving surveillance through dividing each neighborhood along a grid system, destroying traditional spatial patterns of livelihood Research paper in latest issue of JOCC: Nuisance value: Uyghur activism in Germany and Beijing- Berlin relations a. Uyghur communities began settling in Germany in 1950s and 1960s; and by 1990s Munich has become their centre of national and political activism in Europe. b. Beijing has brought pressure on Berlin to monitor them and even intimidate them, but Munich also reacted by deciding to take in Uyghurs released from Guantanamo. Nonetheless, it has not taken concrete action to do so. Six of the detainees were eventually flown to Palau in Children s welfare and protection 1. Recent spate of negative news concerning children and students 2. Negligence of two children in Nanjing: Nandu editorial: Gaping holes in legislation and implementation: a. b. c. 4. Government reaction: Introduction of pilot program at four locations in Jiangsu, Zhejiang, Henan and Shenzhen. 20 a. Children will be categorized into four groups:. Under each group there are further subdivisions. 21 Welfare coverage will be provided according to different subdivision and different location. 5. New Weekly June 15 issue: a. 17 See Google map photo at BBC, asia- china NYT, 19 Nandu, 20 Nandu,

5 New law on elderly care 1. Law for the Protection of the Rights and Interests of the Elderly requiring children to provide financial support, mental support and life care to elderly parents once they reach age of 60. Employers are to provide 20 days of paid home leave to employees whose parents live far away. 2. Critics: An unenforceable law seems like mixing law and ethics 22 a. Ambiguous definition: E.g. what constitutes regular visits? b. Universal application unviable: E.g. unrealistic to demand migrant workers who may not afford to travel home often c. No specified punishment for those who break it, though law states that those who neglect the elderly could face court action 3. First ruling based on new law: A case in Wuxi, Jiangsu: a. : Society updates 2. Further measure against violent land expropriation:. More than 20 officials received punishment for breaking the law in land expropriation cases Latest figures on graduate unemployment: Economic Observer article a b c Most recent case of labor activism: Executive of US based medical supplies firm held captive by employees, following the January case of Chinese and Japanese managers being held hostage at another company. Cause of conflict: firm s plan to move production to India WSJ, new- filial- piety- law- draws- first- blood/ 23 Xinhua, 24 Xinhua, /c_ htm 25 Economic Observer, 26 WSJ, release- u- s- factory- executive- from- captivity/

6 a. : Launching of online petitioning system by State Bureau for Letters and Calls. The system runs only on Internet Explorer and requires verified information registration: need to submit national identification number. 28 Critics: a. Identification may make petitioners vulnerable to retribution b. Give excuse to local officials to keep petitioners from going to Beijing: People s Daily: 29 Publication highlights 1. South Reviews (Nanfeng Chuang) on the younger generation: 2. New Weekly on the rise of entertainment in an increasingly anxious society: a. On the entertainmenization ( ) of anti- corruption efforts, serious literature, religion, traditional art, politics, government s weibo, news, scholarship, etc. b. c. 3. Journal of Current Chinese Affairs features collection of articles on stability preservation, among these: a. Susan Trevaskes on rationalizing stability preservation through Mao s not so invisible hand : examines how authorities rationalize the policing of crime and protest and articulate current situation in terms of handling social contradictions and struggles, framing social conditions according to Maoist dialectics of suppression and leniency b. Xie Yue presents systematic data on how grass- root governments have found it increasingly hard to finance security operations. c. David Kelly on how the rise to dominance of stability preservation in the political order coincided with highly charged debate over universal values, as well as the related discussion of China model TAIWAN Controversial pact on cross-strait investments 1. Pact backed by the KMT sparked off intense clash at the legislature s meeting: Cross- strait service trade agreement that aims to liberalize cross- strait investments in a range of service 27 DW, E5%A1%94%E6%81%A9%E6%96%AF%E8%A2%AB%E6%89%A3%E4%BA%8B%E4%BB%B6/a WSJ, online- petition- website- crashes- on- first- day/ 29 People s Daily,

7 sectors that includes real- estate, banking, e- commerce, beauty parlors, transportation, tourism, cleaning services and telecommunications Critics: Influx of mainlanders a security threat: a. : 31 b. c. Ministry of Economic Affairs: Chinese companies must invest $200,000 before they can dispatch up to two Chinese managers to Taiwan : cheap Chinese labor will not be flooding the job market 3. DPP: 32 a. Lack of consultation: b. Fear that intensified competition will squeeze out local capital and local workers: 4. Case of beauty salons and hairdressers 33 a. 5. Case of publishing companies 34 a. b. 6. Government response: setting aside of NT$95.2 billion to counter damage the pact may cause to local firms. Society: Almost 50% believes that Taiwan will not benefit from the agreement. 35 Related: China Brief article on Taiwan Work Leading Small Group under Xi Jinping 36 HONG KONG July 1 demonstration 30 WSJ, pact- at- the- heart- of- taiwans- latest- violent- legislative- brawl/ 31 Liberty Times, t1.htm 32 DPP, 33 Apple Daily, %A3%E5%90%88%E8%B3%87%E4%B8%AD%E5%9C%8B%E7%8D%A8%E8%B3%87%E7%BE%8E% E5%AE%B9%E6%A5%AD%E4%B8%8D%E5%B0%8D%E7%AD%89 34 Blog of Rex How, 35 Apple Daily, %94%E6%88%90%E6%B0%91%E7%9C%BE%E5%8F%8D%E5%B0%8D%E7%B0%BD%E5%85%A9% E5%B2%B8%E6%9C%8D%E5%8B%99%E8%B2%BF%E6%98%93%E5%8D%94%E8%AD%B0 36 China Brief, =25&cHash=32538eed9e60ea5382e6290bb4660df0#.Uc07setUGUc

8 1. Record number of marchers according to more than one measurements 2. Occupy Central received boost: a. Forum held by Civil Human Rights Front; b. Donations; c. Survey indicating increased popularity of movement 3. Earlier: Creative protest at APA graduation ceremony attended by CY Leung Sing Tao, 4%BA%E5%A8%81- %E5%93%80%E6%82%BC%E6%94%BF%E6%AC%8A%E5%B7%B2%E6%AD%BB- %E6%BC%94%E8%97%9D%E7%94%9F%E4%B8%89%E9%9E%A0%E8%BA%AC- %E6%A2%81%E9%9C%B2%E5%BE%AE%E7%AC% html?.b=index&.cf3=Jumbotron&.cf4=1&.cf5=%E6%98%9F%E5%B3%B6%E6%97%A5%E5% A0%B1&.cf6=%2F ; House News interview, %E6%A2%81%E6%8C%AF%E8%8B%B1%E4%B8%89%E9%9E%A0%E8%BA%AC/