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CNS: Tillerson Mentions US-China Mutual Respect in Beijing

China News Service, China’s second earliest established state-level news agency, reported on March 19 that U.S. Secretary of State Rex Tillerson visited Beijing in preparation for the meeting between China’s top leader Xi Jinping and U.S. President Donald Trump and to discuss a reduction in the tension on the Korean peninsula.

According to the article, during Tillerson’s two-day visit in Beijing, he characterized the U.S. views on bilateral relations as “non-conflict, non-confrontational, mutual respect, and win-win cooperation.” Wang Fan, vice president of the Beijing-based China Foreign Affairs University, told CNS that this is exactly the core concept of the new model of major country relations between China and the U.S. that Beijing proposed. Wang interpreted Tillerson’s position as a positive, friendly signal that the U.S. voluntarily sent out, which amounts to a de facto recognition of China’s new model of major country relations.

A commentary at china.com.cn, which is directly affiliated with the State Council Information Office, noted that this is the first time a high-level U.S. official used the term “mutual respect” publicly. The commentary added that, when dealing with officials in the Obama administration, U.S. officials had open exchanges in closed door meetings, but they were reluctant to use the term publicly. The concern was that it would lead its allies to believe that China was an equal partner with the U.S., which would weaken U.S. authority in carrying out its Asia-Pacific strategies.

The New York Times, in a Chinese and English bilingual analysis, cited an unnamed diplomat in Beijing as saying that Mr. Tillerson was almost certainly sterner in private. The diplomat said, “I believe Tillerson repeated in the meetings what he said publicly in South Korea and Japan, and backed up what Trump said in his tweet.” In his Twitter post on Mar 17, Trump said China had “done little to help” in solving the issue of North Korea.

Sources: China News Agency, March 19, 2017
http://www.chinanews.com/gn/2017/03-19/8177856.shtml
china.com.cn, March 19, 2017
http://news.china.com.cn/world/2017-03/19/content_40473567.htm
New York Times, March 20, 2017
http://cn.nytimes.com/asia-pacific/20170320/rex-tillerson-xi-jinping-north-korea/dual/

Global Times: U.S. Tells South Korea to Stop Using Chinese Company’s 5G Mobile Products

On March 13, Global Times, a subsidiary of the Chinese Communist Party’s official newspaper People’s Daily, reported in its Technology Section that the U.S. has told South Korea to stop using 5G mobile products from China’s No. 1 telecom equipment manufacturer, Huawei. The report’s title reads, “The U.S. Comes Up with Another Provocation, Urging South Korea to Stop Using Huawei’s 5G Products.”

It cited overseas reports, without listing any of their sources, that the Pentagon received a letter last December from three members of Congress to investigate the role Huawei plays in South Korea’s 5G networks and to assess the security risks that Huawei poses to American facilities and military forces because of its close relationship with the Chinese government.

Global Times pointed out that this letter indicated the Pentagon intended to stop Huawei from helping South Korea build a new wireless network, while South Korean wireless vendors apparently are unwilling to have any confrontation with Huawei as they speed up building the 5G network.

According to the report, Huawei has signed contracts with organizers of the 2018 Winter Olympics to be held in Pyeongchang, South Korea. In addition, Huawei and LG U+ have worked closely together to use Huawei’s NB-IoT equipment on 4G networks. There have been no reports about Huawei products deployed by LG U+ having any security loopholes.

Global Times cited market watchers that Huawei’s products are reliable in quality and priced competitively, which raised U.S. concerns about its competitive advantage.

Shortly after the publication of this report, Global Times took it offline, but it can still be accessed at other online portals which carried the original report, including at China Finance Online, a financial services site based in the South-East Chinese city of Fuzhou.

Sources:
Global Times, March 13, 2017
http://tech.huanqiu.com/comm/2017-03/10301456.html
China Finance Online, March 13, 2017
http://news.cnfol.com/it/20170313/24423177.shtml

Global Times: Trump Adviser Hints at Reduced Criticism of China on Its Currency

Global Times, a subsidiary of People’s Daily, the Chinese Communist Party’s official newspaper, published a report on March 13 saying that the Trump administration may reduce its criticism of China for manipulating its currency.

Global Times quoted Steve Schwarzman, chairman of Trump’s strategic and policy forum as saying in an interview on CNN, “I don’t think that there’s going to be issues regarding China as a currency manipulator and some of the other things.”

Global Times also cited Bloomberg and Singapore’s leading Chinese newspaper Zaobo, “While Trump said on the campaign trail that he would label the U.S.’s biggest trading partner a currency cheater and seek to fix large trade imbalances, some administration officials and advisers are softening their rhetoric.”  Treasury Secretary Steven Mnuchin said last month that he wants to undertake a regular review of foreign-exchange markets to determine if China is cheating, adding that no announcement on currency manipulation would come before the Treasury’s April report.

The Global Times quoted Schwarzman, who is also chief executive officer of the alternative-investment management firm, The Blackstone Group LP, and who has close ties to China, “They have a certain equanimity that these are early days and there’s a learning curve for Trump.”

What Global Times did not mention was an anecdote in the Bloomberg report about China’s President Xi Jiinping, who apparently told Schwarzman that, “After three years of doing my job I know much, much more than I did my first day.” Schwarzman added that Xi said, “That’s the nature of being president of any country.”

Sources:
Global Times, March 13, 2017
http://world.huanqiu.com/exclusive/2017-03/10299710.html
Zaobo, March 13, 2017
http://www.zaobao.com.sg/realtime/china/story20170313-735445

VOA: U.S. Fines China’s ZTE $1.19 Billion for Breaching Sanctions

On March 8, Voice of America (VOA) reported that ZTE Corporation, China’s No. 2 telecom equipment company with extensive overseas operations, agreed to plead guilty and pay a fine of $892 million, as part of the settlement for breaking sanctions and selling electronics to Iran and North Korea. {Editor’s note: In addition to the $892 million ZTE agreed to a penalty of $300 million that will be suspended provided it complies with the agreement.}

VOA cited U.S. Attorney General Jeff Sessions in a Justice Department news release, “This plea agreement holds them accountable, and makes clear that our government will use every tool we have to punish companies that violate our laws, obstruct justice, and jeopardize our national security.”

On March 7, VOA quoted Zhao Xianming, chairman and chief executive of ZTE, as saying, “ZTE acknowledges the mistakes it made, takes responsibility for them and remains committed to positive change in the company.”

China’s Securities Times reported on its website that, at a press conference on March 9, Sun Jiwen, a spokesperson from China’s Ministry of Commerce, urged the U.S. to act properly for the healthy development of bilateral trade relations.

In response to ZTE’s having reached a settlement with U.S. authorities over U.S. export controls and sanctions charges, Sun remarked, “China has always resolutely opposed U.S. sanctions on Chinese companies using its domestic laws, and, in overseas markets,  has required Chinese companies to operate in compliance with local laws and regulations.”

Xinhua News Agency mentioned in a dispatch that the U.S. Commerce Department added ZTE on the Entity List under the Export Administration Regulations of March 2016. This has made it difficult for ZTE to acquire U.S. products such as chips and software.

VOA noted that when it was denied US chips and software, ZTE could have faced bankruptcy.

Sources:
Voice of America, March 8, 2017
http://www.voachinese.com/a/chinese-company-20170307/3754038.html
Xinhua News Agency, March 8, 2017
http://news.xinhuanet.com/world/2017-03/08/c_129503736.htm
Securities Times website, March 9, 2017
http://kuaixun.stcn.com/2017/0309/13100764.shtml

Taiwan’s Defense Minister Rejects the Idea of Installing THAAD

The Taiwan-based news portal China Times reported on March 5, 2017, that Defense Minister Feng Shih-kuan reiterated Taiwan’s position of being against the installation of the Terminal High Altitude Area Defense (THAAD).

During a session at the Legislative Yuan’s Foreign Affairs and National Defense committee last Thursday, legislators asked Feng whether Taiwan would host the U.S. anti-ballistic missile system THAAD. Feng replied that Taiwan “should not be involved in other nations’ wars or make pointless sacrifices in conflicts between two global powers.”

The China Times‘ report noted that some people among the Pan-Green Groups recently expressed their hope that Taiwan would take part in THAAD. However, a retired People’s Liberation Army (PLA) general on Mainland China said that the day Taiwan deploys THAAD will be the day to unify Taiwan by force. The Pan-Green Group got its name from the colors of the now ruling Democratic Progressive Party.

China Times quoted Feng as explaining the position of Taiwan’s military regarding weapons purchases. “In the past we directly bought fish, and now we hope to learn fishing — producing military airplanes and warships by ourselves.”

When questioned about his opinion on the South Korea’s decision to install THAAD, China Times reported that Feng said that the U.S., Japan, and South Korea formed the plan in order to force China to cooperate. Feng considered this an idea that “global powers” thought up and which, he believed, Taiwan should take no part.

Source: China Times, March 5, 2017
http://www.chinatimes.com/realtimenews/20170305002229-260417

China’s 2017 Economic Theme: Seeking Progress while Maintaining Stability

President Xi Jinping said on February 28 that this year, in order to achieve healthy development, China will stick to the basic economic theme of “seeking progress while maintaining stability.”

Xinhua News Agency reported Xi’s outline for this year’s economic work: to improve the quality and efficiency of the economy, to deepen supply-side structural reform, and to make major headway in economic restructuring. Xi gave this speech at the 15th meeting of the Central Leading Group on Finance and Economic Affairs, which he heads.

Three other politburo standing committee members, Li Keqiang, Liu Yunshan, and Zhang Gaoli also attended the meeting.

Xi urged that more effort be put into reducing excessive production capacity and that government departments firmly solve the problem of zombie enterprises, as they are unprofitable, debt-laden, and tie up public resources. As for people affected by the reduction in excessive capacity, Xi said that they should receive training for new job skills as well as social aid.

Xi reiterated the necessity of establishing long-term methods to promote the stable and healthy development of the real estate market. He again affirmed that “houses are built to be inhabited, not for speculation.”

Xi also said that the decisions made at all meetings of the Central Leading Group on Finance and Economic Affairs must be implemented.

Source: Xinhua News Agency, February 28, 2017
http://news.xinhuanet.com/politics/2017-02/28/c_1120545454.htm

Global Times: Posting Marine Guards at New AIT Compound in Taipei Reveals U.S. Hegemonic Nature

Global Times, a subsidiary of the Chinese Communist Party official newspaper People’s Daily, reported that a spokesperson from the Taiwan Affairs Office of the State Council referred, on February 22, to the China foreign ministry spokesperson’s position regarding U.S. marines to be posted at the American Institute in Taiwan (AIT) in Taipei. The AIT is the U.S. de facto diplomatic mission on the island in the absence of official ties. Foreign Ministry spokesperson Geng Shuang, when answering a question on the AIT on February 17, stated, “China has always objected to U.S.-Taiwan connections through official and military channels.”

In an earlier commentary on February 17, Global Times reported that Stephen Young, a former director of the AIT, said Washington would send marines soon to guard the new compound.

Wang Jianmin, a research fellow with the Institute of Taiwan Studies at the Chinese Academy of Social Sciences, said this move from Washington is a critical part of enhancing U.S.-Taiwan relations, but it would cause significant harm to Sino-U.S. relations. It would also negatively impact the already impaired relations across the Taiwan Strait.

On February 16, Wang told Global Times that the current Taiwan administration has been pushing pro-Japan and pro-U.S. policies. The U.S. takes this opportunity to enhance its military exchanges with Taiwan, so as to solidify its political commitment to Taipei. However, such a political commitment is itself a mistake. Offering special protection from one sovereign country on land within another sovereign country highlights U.S. hegemony.

Sources: Global Times, February 23, 2017
http://taiwan.huanqiu.com/article/2017-02/10183997.html
Global Times, February 17, 2017
http://taiwan.huanqiu.com/article/2017-02/10144486.html