Politics and Society
Chinese police have published a list of six terrorists and decided to freeze their funds and assets. The six were all core members of the terrorist group "East Turkistan Islamic Movement (ETIM)," according to a statement issued Thursday by the Ministry of Public Security.

The six terrorists were identified as Nurmemet Memetmin, Abdulkyum Kurban, Paruh Tursun, Tursunjan Ebibla, Nurmemet Raxit, and Mamat Imin Nurmamat. Accusing these terrorist of planning and executing terrorist acts against Chinese targets within and outside the country the Ministry stated it expects the foreign governments to assist China in their arrest.

The Ministry of Public Security also reported Chinese police have struck a heavy blow to the ETIM in recent years by cracking dozens of cases of terrorist acts and foiling terrorist attacks. However, the ETIM is still disseminating propaganda and inspiring members of the "three evil forces" of separatism, extremism and terrorism who live in China, and attempts to stage terrorist acts, said the spokesman.
Source (s):Xinhua, April 6, 2012.

Soft power spearheads diplomacy, says FM official

China plays fairly, advocates peaceful development in the international community and never seeks hegemony, which is the "best soft power" the country can have, said Qin Gang spokesman of the Foreign Ministry and head of its information department.

Qin also stated that China is committed to peaceful development and world harmony.Consequently, with a betterment of China’s economy the country will naturally take on greater international responsibilities and make bigger contributions.

With China’s overseas activities increasing he stated, the international community hopes to hear the country’s response to major events as soon as possible. This growing global influence of China is also reflected in the fact that the Ministry’s micro blog on Sina Weibo called Waijiao Xiaolingtong, which literally means foreign affairs information, already has nearly 2 million followers.
Source (s):China Daily, April 7, 2012.

China on high alert for forest fires

China faces a tough test in preventing forest fires, with key wooded areas reporting higher temperature and lower levels of rainfall this spring, a forestry official said Thursday.

The State Forestry Administration (SFA) and its forest fire prevention office have urged close monitoring and preventive measures against forest fires. Data from the SFA showed that in the first quarter, the nation reported 1,106 forest fires, down 64 percent from the same period last year. The fires killed eight people and injured six.

During the past three days, however, forest fires more than doubled compared to last year. This is due to the Tomb-sweeping Day rituals, where people burn incense and paper money in remembrance of the dead.
Source (s):Xinhua, April 5, 2012.

SCIENCE AND TECHNOLOGY
Huawei ban irks China, Australia Justifies

The Australian Prime Minister Julia Gillard justified the banning of the Chinese information technology company Huawei from bidding in broadband infrastructure development projects in Australia, by stating national security reasons. She said “We’ve taken it for the right reasons through the right process based on the right advice about a piece of critical infrastructure for our nation’s future.”

China on the other hand has expressed its discontent over the decision. A spokesperson for the Chinese Commerce Ministry, Shen Danyang stated that the move was “unjust” and the Chinese government was “deeply concerned” over the issue. He argued that Huawei was already supplying such equipment to other nations. Moreover, 90 percent of the company’s employees in Australia were Australian citizens, he added.

The Chinese Ministry of Foreign Affairs added to the that “We hope the relevant authorities of Australia will provide a market environment for Chinese companies that is fair and free from discrimination, instead of wearing colored lenses and obstructing Chinese companies’ normal operation in Australia in the name of so-called security.”

Prime Minister Gillard in her statement said that it would be a mistake by not looking at issues separately. “But it would be a great error indeed to move from a moment where we are seeing one thing differently and then extrapolate that to the full dimensions of the relationship — a very grave error indeed,” she said.

Huawei was banned from bidding for a nation-wide high-speed internet network building project worth US$ 38 billion. It was reported that Australian intelligence agencies pushed for the ban as numerous cyber attacks had been traced to China. Huawei is one of the largest manufactures of equipment used for internet networks. Some earlier reports have also alleged that Huawei maintains close relations with the Chinese People’ Liberation Army (PLA). In fact, it is said that Huawei received large amount of funding from the PLA during its inception.
Source (s):Washington Post, March 29 and China Daily, April 06, 2012.

China completes its 28th Antarctic Expedition

China’s “icebreaker” called the Xuelong (snow dragon) completed its 196-day long journey covering 28,000 nautical miles. The Xuelong delivered supplies to China’s Antarctic stations. The scientists on board the ship also conducted a number of scientific research projects including polar environment survey.

The ship left the port of Tianjin on November 03, 2011 and was equipped to cut through ice of 1.2 meters of thickness.
Source (s)China Daily, April 06, 2012.

ECONOMY
Crucial times, IMF review and prudent monetary policy

Chinese economists are predicting the following weeks to be crucial for its economy. The economy is ideally expected to bottom out in April and then remain stable for a couple of months before slowly growing faster in the second half of the year.

National Bureau of Statistics show that large Chinese industrial companies earned 606 billion Yuan in profit in the first two months of 2012, down 5.2 percent year-on-year. State-owned companies saw their 179.1-billion-yuan profit for the two months down by 19.7 per cent year-on-year. Even though some slowing down was expected, analysts suggest that the economy is losing speed faster expected, reinforced by sluggish demand from both in China and abroad. The government, especially the Ministry of Commerce, stated its intent to stoke consumption but the policies are likely to take time.

Meanwhile IMF’s first evaluation of China’s financial sector notes that China’s financial system had a robust overall, but faced a steady build-up in vulnerabilities. Noting that while significant progress had been made towards developing a more commercially-oriented financial sector, and supervision and regulation were being strengthened, risks stemmed from the growing complexity of the system and the uncertainties surrounding the global economy.

The People’s Bank of China said it would balance efforts on ensuring stable and relatively fast economic growth, maintaining the overall stability of prices and preventing financial risks. The central bank said it would gradually promote the liberalization reform of interest rates and improve the formation mechanism of the Yuan’s exchange rate to promote greater two-way flexibility and ensure its stability.
Source (s):China Daily, April 05, 2012; IMF Press Release 11/409

Trade and financing

China-South Korea FTA is likely to precede the China- South Korea-Japan FTA according to Korean government officials. The three countries signed a trilateral agreement to promote investment on March 22, after five years of negotiations. South Korean’s cumulative investment in China reached $36 billion as of 2011 (though China gives the figure as $50 billion), while China’s investments in South Korea - mainly in tourism and entertainment reached $3 billion. Even as trade figures continue to increase, investment was a matter of concern as South Korean investments in China marked a 1.2 per cent decline in 2011 as compared to a 66.8 per cent increase in 2010.

African country Ghana meanwhile is likely to avail a $3 billion loan from China Development Bank according to a statement by the Ghana Vice President John Dramani Mahama. This is the largest loan so far to a West African nation and the money is earmarked for major infrastructure development, including a new gas pipeline, fishing harbors, roads and railway lines.

It needed third-party approval from the IMF because of Ghana’s poor financial status, which means any additional lending had to be scrutinized to avoid it getting into further debt. The new loan has been criticized on the grounds that Chinese companies will be key beneficiaries from the infrastructure work. Vice President Mahama insists, however, there are provisions for Ghanaian and other companies to get 40 percent of the contracts.
Source (s):China Daily, April 06, 2012.

China-Israel R&D development

Israel’s cabinet approved a joint industrial research and development (R&D) projects between the two countries. The project is being cited as an important tool to promote trade ties with China, as well as the establishment of a special fund to support (Israeli) companies operating in China and India. The focus areas are renewable energy resources, improving water management, and increasing agricultural output utilizing cutting-edge tools and techniques.
Source (s):Xinhua, April 07, 2012

ENERGY
Hydropower cooperation with Nepal

Nepal has approved of a $1.8 billion contract on the 750 MW West Seti Hydropower to China’s Three Gorges Corporation. With no public bidding for the West Seti project, there was great debate over whether the Nepal government should have called for a competitive tender. The Export-Import Bank of China will provide loans of $1.8 billion for a period of 10 years for the project, in which Three Gorges Corp will hold 75 per cent equity, and the Nepal Electricity Authority the rest.

Some of the electricity generated by the West Seti plant could be supplied to China, as Nepal was unlikely to absorb all the power, given the small size of the country. Three Gorges Corp’s rivals, including Sinohydro Corp, are also building hydropower plants in Nepal, but private companies from Europe and India are the major investors in the sector.
Source (s):China Daily, April 04, 2012.

Shale oil exploration

China National Petroleum Corp is negotiating with Royal Dutch Shell to jointly explore shale oil in the Santanghu Basin of Xinjiang Uygur autonomous region. In March, Shell and CNPC had signed a production-sharing contract to explore and develop the 3,500-square-kilometer Fushun-Yongchuan block in the Sichuan Basin. The major aim of the cooperation is to introduce cutting-edge foreign technologies and management expertise.

The country’s oil majors CNPC and Sinopec have ambitious plans for the production of shale gas and oil as the country gears up its efforts to reduce its dependence on foreign oil. Analysts suggest that if China exploited unconventional gas, the nation’s dependence on imports of natural gas could be less than 10 per cent within 20 years, as opposed to nearly 70 per cent without it.
Source (s):China Daily, April 06, 2012.

FOREIGN AFFAIRS
Talks of cooperation among China, Japan and ROK

Foreign ministers of China, Japan and the Republic of Korea (ROK) met on April 8, for talks on trilateral cooperation in China’s east coast city of Ningbo. During the meeting, the ministers also agreed to jointly support the development of the 10-member Association of Southeast Asian Nations (ASEAN).

The three nations sealed a long-discussed trilateral investment agreement last month intended to pave the way for closer business ties between them. The investment deal will be the first legal economic agreement between China, Japan and the ROK. The three ministers agreed to launch FTA negotiations at an early date and building a China-Japan-ROK circular economy model base at a faster pace, according to the release.
Source (s):China Daily, April 08, 2012

China becomes Russia’s top trade partner

China has become Russia’s top trade partner in the first two months of 2012, according to a report released by the Russian Federal Customs Service. According to the report, in the first two months of this year, China-Russia trade turnover rose 21.1 percent year-on-year, reaching 13.3 billion U.S. dollars.

In 2011, bilateral trade reached a record high of 80 billion dollars. The two countries have set a goal of lifting bilateral trade to 100 billion dollars by 2015 and to 200 billion by 2020.
Source (s):Xinhua, April 07, 2012.

China to negotiate directly with ASEAN members

China will now negotiate directly with members of the Association of Southeast Asian Nations (ASEAN) on drafting a code of conduct concerning the South China Sea.

At the annual ASEAN summit in the Cambodian capital of Phnom Penh, Philippine President Benigno Aquino said ASEAN should forge a common position on a proposed code of conduct aimed at easing tensions in the South China Sea before talking with China. The Declaration on the Conduct of Parties in the South China Sea (DOC) signed by China and ASEAN countries in November 2002 is only intended to promote peace and stability in the South China Sea, and not used for resolving disputes on territorial sovereignty and maritime rights in the South China Sea.
Source (s):Xinhua, April 05, 2012.

Contributors:

•   Sadhavi Chauhan
•   Priyanka Mehrotra
•   Rahul Prakash
•   Akhilesh Variar