RMB Devaluation and global stock market turbulences

• Background: A sudden devaluation of RMB by the Central Bank on August 11 took the world of investors by surprise. It was followed by a wave of global stock market fluctuations as well as China’s stock markets. Investors’ confidence in China’s as well as Asian economic growth was reported largely shaken. As the continued devaluation of the yuan sparked concerns over the slowing down of China’s economy, the stock market in Shanghai, Shenzhen as well as Hong Kong plummeted as an indicator of capital outflow from China and Hong Kong, causing the dubbed ‘China’s Black Monday’ on August 24. In response to the stock market slump, The People’s Bank of China lowered its interest rate and bank lending limits (the ‘double-lowering’) on August 26. Premier Li Keqiang admitted China’s economy is facing new pressure, but assured that the Beijing government can handle it well and there is no basis for RMB to depreciate further. In an effort to stabilize the financial market, the Chinese police launched a nationwide campaign against underground bank. In assessing the reason for the devaluation, Zhou Hao of Commerzbank in Singapore regards the move as a way to get RMB into the IMF basket of Special Drawing Rights.
• //The People’s Bank of China said the centre of the yuan’s trading band was reset […] In a loosening of central controls, each day’s midpoint will now be based on the previous day’s closing price, rather than being controlled centrally. […]It has been lobbying the International Monetary Fund to include the yuan in its basket of reserve currencies known as special drawing rights (SDR), which are used by the Washington based fund to lend to sovereign borrowers. The current members of the group are the US dollar, yen, euro and British pound. The devaluation may be an attempt to make trading more open and market-based, observers said. “I don’t think this is a reaction to the weak trade data over the weekend, I think it’s because of the SDR,” said Zhou Hao of Commerzbank in Singapore. “They need to have a market-based mechanism and they need volatility.”// (Source: the Guardian, 2015-08-11)
• Professor in Economics 刘芍佳 thinks the yuan devaluation is a combined result of correcting over-appreciation of RMB in the past few years and China’s slower economic growth. // 刘芍佳对BBC中文网说，这次人民币贬值的主要原因有二，「一是经济规律影响：中国前几年的通货膨胀率过高，人民币不但没有贬值反而升值，这次是自然修复过度增值。二是中国经济形势下行压力导致，人民币贬值有助中国出口贸易等因素。」[…]目前所谓人民币升值贬值都是在政府可控的一定范围内的汇率变化。而过度的变动也不是政府希望看到的，因为那不符合中国经济发展的利益。他说，中国现在作为资本输出的国家，过度或大幅贬值并不利益中国资本走向国际，相反，因为中国进口量也很大，大幅贬值还会反过来推高中国通货膨胀率从而影响中国经济。// (Source: BBC, Chinese edition, 2015-08-19)
• According to 周景彤, a senior economist at Bank of China on the state-owned newspaper, the reasons for the ‘double lowering’ are threefold: 1) to relieve the downward pressure on economic growth by reducing financing costs; 2) to regain the investors’ confidence in China’s stock market; and 3) to induce the volatility of currency in the market and thus relieve the pressure on interest rate hike.//这次央行的‘双降’主要出于三方面原因：一是中国经济下行压力依旧没有缓解，从7月投资、消费、进出口、工业生产等主要经济指标，以及PMI、外贸先导指 数等先行指标看，经济未能延续五六月份企稳态势，因此稳增长的压力增大，为进一步降低社会融资成本，刺激企业投资和居民消费，降息降准是有必要的；二是近 期全球资本市场出现剧烈动荡，国内股市连续大跌，系统性金融风险增大，降息降准有助于提振市场信心，缓解压力；三是外汇占款减少，在近期人民币贬值和资本 外流的背景下，降准有助于增加市场流动性，减轻市场利率上升压力。”中国银行国际金融研究所高级经济师周景彤// (Source: People’s Daily (Overseas Edition), 2015-08-26)
• A senior economist at Capital Economics David Rees evaluated that the recent turbulences in stock market would not repeat the scenario of 1997 financial crisis as the combination of currency crisis, economic recession, and debt problems does not appear yet. //伦敦凯投宏观（Capital Economics）的高级经济学家 David Rees则认为，90年代亚洲金融危机导火索源于这些国家经济过热，吸引大量热钱流入，从而导致很多亚洲国家的汇率高估，而当时他们手持的外汇储备十分有限并拥有大量的外币债务。“一旦资本出现外流触发货币汇率危机，经济衰退以及债务问题爆发等连锁反应，但目前这些条件并不具备。// (Source: 21^st century Business Herald, 2015-08-26)
• Nicholas R. Lardy also assessed that the recent stock market rout in China does not constitute an economic crisis or signify China’s economic hard-landing. Instead, it is market correction long over-due in its equity market. // There is little evidence that China’s economy is slowing significantly from the 7 percent pace reported by the government for the first part of the year. Wage growth is running at about 10 percent annually; the pace of creation of nonagricultural jobs is stronger than in any recent year; both real disposable income and consumption expenditures of Chinese households are growing strongly. It is not the picture of an economy heading for a hard landing. […]Some economists watching from abroad believe that the country is in the midst of a financial crisis because of the excessive debt burden it incurred in recent years. But that view is even less well supported. After a very modest two-day depreciation earlier this month, the exchange rate of the renminbi has changed little against the dollar for eight consecutive trading days; capital outflows continue at a moderate, very sustainable pace; bank liquidity remains strong. This does not yet look remotely like a financial crisis. Rather than a financial and economic meltdown, China is experiencing an overdue correction in its equity market. […] Despite what many think, not all debt is the same, nor are all equity market slides. There have been many more corrections in both the United States and China than there have been financial crises. Allowing those corrections to take place is part of letting markets determine outcomes, which is a good thing. // (Source: New York Times, 2015-08-26)
• In order to control the panic in the financial market, police officers started a wave of prosecution and detention of individual traders who are accused of selling on a short-term and journalists who are alleged as spreading rumors to destabilize the stock market. // Anxiety in the industry surged last week after Li Yifei, the prominent China chief of the world’s largest publicly traded hedge fund, disappeared and Bloomberg News reported that she had been taken into custody to assist a police inquiry into market volatility. […] The authorities are canvassing industry players in several cities, including Beijing and Shanghai. Police officers under the Chinese Ministry of Public Security specializing in economic crimes have joined agents from the nation’s securities regulator on inspections of investment funds and brokerage firms. The authorities are combing records and questioning transactions that appear to profit from or contribute to a falling market. […] At the end of August, Wang Xiaolu (王晓璐), a journalist for the respected financial newsmagazine Caijing, was detained by the police and shown on state television apologizing for an article suggesting the government might scale back its bailout of the market. Nearly 200 others have been punished in a special police campaign against “spreading rumors,” including some detained for discussing the stock market.// (Source: New York Times, 2015-09-07)
• On Wang Xiolu’s arrest and his televised ‘confession’ on China Central Television, David Bandurski commented that he is more like a scapegoat or being set as an example to others. // It is hardly reassuring to tell ourselves that Wang Xiaolu is not a scapegoat, but rather the chicken of Chinese proverb, murdered to frighten the monkeys. But I think, unfortunately, that the writer of the Global Times article is making a valid point here. As the newspaper is careful to remind us, we still do not have all of the facts in Wang’s case, and “the court will need to obtain evidence of his guilt before it can ultimately convict him.” (Apparently, the Global Times cannot imagine his innocence). But I have little doubt that Wang’s predicament will send a very strong message to Chinese journalists. And that is troubling news indeed, particularly given the already overbearing climate for media under Xi Jinping.// (Source: China Media Project, 2015-09-08)

Warehouse filled with dangerous chemicals exploded in Tianjin

• Background: After an explosion that killed at least a hundred of civilians and firefighters on August 12, residents nearby the explosion organized protests against the location of the dangerous chemicals warehouse and demand compensations from the government. President Xi Jinping vowed to hold relevant officials accountable. The ruling Communist Party’s graft watchdog began an investigation into Yang Dongliang (杨栋梁), and removed him from the position of chief of the State Administration of Work Safety (国家安全生产监督管理总局) as well as the vice mayor of Tianjin on August 25. Several employees of the company involved in the disaster, Rui Hai International Logistics, were also criminally arrested.
• // A brief statement carried by Xinhua, citing the party’s organization department which is responsible for personnel decisions, said Yang had been stripped of his position as chief of the State Administration of Work Safety. He is suspected of « serious breaches of discipline and the law », the report said, using the usual euphemism for corruption. It gave no other details and it was not possible to reach Yang for comment. Officials are almost always fired soon after announcements of party graft investigations. The government has not explicitly linked Yang’s case to the Tianjin incident, but the company that operated the chemical warehouse that blew up did not have a license to work with such dangerous materials for more than a year.// (Source: Reuter, 2015-08-26)

• Lax enforcement of regulations that keep dangerous chemicals storage in check was cited as the cause of The Tianjin’s explosion. Not only the involved government officials have not followed proper procedures required by the law before letting Rui Hai to do the storage business, but Rui Hai was also reported to have paid the Company that reviewed its safety level of its operations. In addition, the two owners of the Company were reported to have connections with government officials in order to shield the Company from normal inspections. In return for such convenience, the municipal-level officials could push for faster level of economic growth and thus promotion. //The Beijing News reported that in the instance government officials’ misconduct is suspected. The firm was not equipped to store dangerous chemicals, but the bureau allowed it to do so on a trial basis from April to October 2014, the report said, citing a government document that marked the approval as « not for public review ». The newspaper accused the bureau of violating regulations by granting Ruihai approval before the company was adequately prepared to do so. Ruihai obtained its safety review certification only in August last year.// (Source: SCMP, 2015-08-20)

• // In interviews with more than a dozen of Rui Hai’s former clients and associates — and unusually critical reports in China’s state-controlled news media — a picture has emerged of a company that exploited weak governance in one of the party’s showcase economic districts and used political connections to shield its operations from scrutiny. Rui Hai began handling hazardous chemicals before it obtained a permit to do so, and it secured licenses and approvals from at least five local agencies that conducted questionable reviews of its operations. Local authorities outsourced one safety review required for a storage permit to a private contractor that Rui Hai selected and paid.// (Source: New York Times, 2015-08-30)

• //Through the decades of rapid growth, however, the Communist Party has struggled to strike a balance between cutting red tape and enforcing rules to protect the environment, workers and public health. With little public scrutiny of their work, party officials are only occasionally punished for neglecting the latter, usually only after an accident. But they can count on being rewarded for pushing the limits for economic growth, with promotions — and opportunities for graft. Even before the explosions, the Port of Tianjin, at the center of the Binhai district, had a reputation for lax oversight compared with its competitors. One state media report said it acted as “an independent kingdom.” To Rui Hai’s founders, Dong Shexuan and Yu Xuewei, it was the perfect place to set up shop in November 2012.// (Source: New York Times, 2015-08-30)

• // One of the two owners of Rui Hai International Logistics warehouse, which was responsible for the Tianjin explosions, is the son of a former police chief, Chinese state media Xinhua reported. Xinhua said that the former police chief’s son used his connections to obtain licences for the hazardous goods facility despite it violating safety rules.The other owner of Rui Hai, a former executive at a state-owned chemical company, is also said to have used his connections to gain approval for the Tianjin warehouse.// (Source: SCMP, 2015-08-19)

• Richard Macauley observed that some website had been shut down after the blast for ‘spreading rumors’, but the media crackdown was not well supported by state media, which openly called the Tianjin’s municipal government for being more transparent with journalists. // Soon after a fire caused multiple explosions at a warehouse storing dangerous chemicals in Tianjin, the Chinese government shut down 50 websites, including news sites, for “spreading rumors.” These included ones carrying inaccurate reports that over 1,000 people had died, which wouldn’t have helped the rescue effort, but they were unlikely to hinder it either—the heavy-handed approach seemed typical of the government’s response to disasters. […]Chinese state media is calling for greater government transparency, and even launching serious investigations of its own into the companies involved in the disaster. The Chinese government’s relationship with journalists should be more like the relationship Western governments have with reporters, some of the largest state media outlets now say. The People’s Daily, an official newspaper of the ruling Communist Party, has at least twice criticized the Tianjin municipal government for not being more open with journalists. The government needs to provide the public with an honest assessment of the potential damage caused by the blast, not play down health fears, death tolls, or bury news that made it look bad, the People’s Daily wrote on Aug. 19. It also argued for more and better press releases and a more professional spokesperson to keep real information flowing.// (Source: Quartz, 2015-08-19)

• Editor of the China Media Project David Bandurski analyzed that the sheer scale and magnitude of the destruction of Tianjin’s blast prompted the public to make sense of the disaster, but the authorities continue its practice of internet censorship and instructing media to follow the state media’s reporting line. // For Chinese propaganda officials, the objective on day one, August 13, would have been to slow the momentum of non-official information and speculation. And one of the first levers was the propaganda release instructing traditional media and websites to stick to the official narratives as presented by trusted state media outlets, chiefly Xinhua News Agency and China Central Television. […] And of course the Cyberspace Administration of China, the new super-agency dealing with information and the internet, moved quickly to expunge accounts spreading “rumours” about events in Tianjin, noting that a few “’big Vs’, or star bloggers, had also posted ‘irresponsible’ comments about the blast.” […]The primary objective of China’s leadership can be summed up in a single phrase that will most probably make its way (or already has) into propaganda directives: “Do not do reports of a reflective nature” (不做反思性报道). “Reflecting back,” or fansi, refers to any reporting of a probing or profound nature — anything, essentially, that asks the deeper questions of who, why and how (leaving us with a hobbled half of the basic 5Ws-1H of journalism 101).// (Source: Medium, 2015-08-17)

• Maria Repnikova argued that there might be some hopes for a more dynamic, tolerant, bottom-up media environment in China after the Blast. //The state’s limited tolerance for these investigations suggests that amidst the increasing censorship, the openings for media supervision or yulun jiandu remain present under Xi. As in the past, some bottom-up feedback appears to be tolerated and maybe even encouraged so long as it doesn’t target the center or instigate public mobilization. In the case of these reports, thus far, they are looking at specific failures associated with the disaster, targeting primarily the company and local officials, though some reports also delved into Rui Hai’s connections with state-owned Sinochem, a topic that touches on central-level interests. The Tianjin disaster further demonstrates that China’s media landscape is becoming increasingly dynamic, with new media and official outlets brushing up against the boundaries of the permissible, previously the near-exclusive domain of news outlets such as Caixin and Southern Weekly. This leaves some hope for the state of investigative reporting, which many have argued has been in decline since the 1990s.// (Source: ChinaFile Conservation, 2015-08-18)

• Some remedy measures were taken across Mainland China. Not only chemical plants are to be re-located, but an amendment to China’s air pollution law has also been adopted so that environmental emergencies such as the disaster at Tianjin should be monitored and the details made public. The success of implementation remains to be seen. // China’s industry minister, Miao Wei, said local governments were finally moving ahead to implement plans to relocate and upgrade chemical plants. “We started to work with State Administration of Work Safety last year to make arrangements for the relocation and revamping of chemical plants in densely populated urban areas. Frankly, our work is not actively supported locally in the past year,” Miao was quoted by the Communist party-run People’s Daily newspaper. He said he wanted to “accelerate the relocation and revamping”, which would help to improve pollution and emission levels. […] Meanwhile an amendment to China’s air pollution law has been adopted in an attempt to clean up the country’s toxic air pollution. The law also provides for greater environmental transparency and stipulates that air pollution following environmental emergencies such as the disaster at Tianjin should be monitored and the details made public.// Source: The Guardian, 2015-08-30)

China’s military parade to commemorate the 70^th Anniversary of victory over Japan as well as the end of WWII

• Background: On September 3, China held a massive military parade to commemorate the 70^th anniversary of victory in the War of Resistance against Japan as well as the end of World War II. President Xi took this opportunity to remind nationals, including those in Taiwan, of the common destiny in 1945.

• //Xi, also general secretary of the Communist Party of China (CPC) Central Committee, said during the meeting that victory in the counter-Japan war was « China’s first complete victory against foreign invasion in modern times » and that it was only possible through the efforts of the entire nation, including those of Taiwan…The president told his guests that the compatriots in Taiwan share a common destiny with their motherland, and their struggle against Japanese invasion was « an important part of the entire Chinese struggle. »// (Source: Global Times, 2015-09-01)

• Oh Ei Sun, a senior fellow at the S. Rajaratnam School of International Studies at Singapore’s Nanyang Technological University argued that the parade is to showcase China’s military power and its geo-political position in Asia. // In staking such a leadership claim in the region, China was trying to resume its central position in Asia – a position it had held long before the Japanese aggression in the last century, said Dominic Ziegler, a London-based Asian affairs commentator and the Asia editor ofThe Economist. “Beijing is seeking a change in the geopolitical order in China’s region, particularly East Asia,” he said. “China was at a central position and made all its neighbouring countries fall into its orbit. But that position was interrupted by Japan.” […] “We can get a glimpse of today’s geopolitical order through the turnout – the [attendance of the] Russian delegation is an implicit exhibition of its alliance with China, while most of the US allies consolidate themselves in not attending,” said Oh Ei Sun, a senior fellow at the S. Rajaratnam School of International Studies at Singapore’s Nanyang Technological University.// (Source: SCMP, 2015-09-03)

The continued struggle over the demolition of Christian churches in Zhejiang Province

• Background: On August 25, rights lawyer Zhang Kai (张凯) who have been active in protecting the legal rights of churches against illegal demolition was taken away by the members of National Security Bureau, with charges of endangering state security and ‘assembling a crowd to disrupt social order’. He was scheduled to meet United States Commission on International Religious Freedom the day after.

• //自由亞洲電臺刊出一張由溫洲公安局發出、寄予張凱家屬的通知書，指張凱因涉「聚眾擾亂社會秩序」、「為境外竊取、刺探、收買、非法提供國家秘密、情報」兩罪 […] 美國國務院的「國際宗教自由」無任所大使David Saperstein週三曾表示，他原定於上月26日與張凱會面，但張凱卻於約定見面的前一晚，被當局帶走。Saperstein批評，中方帶走張凱「令人髮指」，要求中方釋放張凱及其他被捕的宗教領袖。 Saperstein上月20-28日曾出訪中國。他指，是中方官員鼓勵他訪華在先，又指要設法讓他接觸國內不同的觀點。// (Source: the Stand News, 2015-09-04)

• //在浙江，張凱組織了30多人的律師團介入各地教案，全部是來自全國各地的基督教律師。截止至7月，張凱向端傳媒透露，他是溫州4個教會的代理律師；在浙江湖州，他組織了6個人的律師團隊；在浙江金華和麗水，教會也紛紛找張凱諮詢法律。成立「強拆十字架」維權律師團、代理各式維權案件，不是張凱唯一的行動。他同時寫大量的文章、微博，與浙江各地的信徒、基督教「兩會」（基督教協會 和三自愛國運動委員會）見面，致力於向信徒普及強拆發生時，應有的法律權利。「我算了下差不多包括九項，申請示威遊行、聽證、罷免、覆議、訴訟、資訊公開 等等」，張凱說。「法律代理不一定能夠阻止強拆，但至少會把非法性表露出來，就算是違章建築，也應該有合理合法的方式拆，不然合法性在哪裡? […] 今年7月，浙江省通過新的《浙江省宗教建築條例》，《條例》嚴格限定了「十字架」的外觀：「貼在教堂主體建築正立面上、比例不超過主體建築的1/10」。 也就是說，十字架不能立在頂上，而只能貼在牆上。多位元分析人士認為，這個規範就是為拆除全省十字架做鋪墊的，有了這個規範，不需要證明建築「違法」就可以 拆。// (Source: The Initium Media, 2015-08-27)

• There was no official document to explain the cause of the forced demolition, but the Chinese authorities are determined to exert greater control over Christian churches. //去年掀起拆十字架風暴的浙江，今年風暴升級，全省估計將有近兩千座教堂的十字架被強拆。越來越多的信徒不再願意被動挨打，發動大抗爭，捍衛信仰。在被稱為「中國的耶路撒冷」的溫州，出現十字架重立、被拆、再重立的現象，更有「滿城盡帶十字架」行動。律師張凱的團隊編訂《教會維權手冊》。浙江當局對基督教的「五進五化」政策引起信徒警惕。 […] 由於強拆十字架一開始就沒有正式政府檔公佈，事件發展至今仍無法知曉具體是哪方面的力量在主導。[…] 中國基督教協會總幹事闡保平就撰文指，中國教會長久以來一直處於「半自我、半寄生」的狀態，並未完全擺脫洋教的思維方式和行為方式，基督教要中國化，就要 改變這一點，從改造社會到服務社會。在二零一四年三月浙江省「三改一拆」工作電視電話會議中，也可以看到類似表述。根據披露的會議記錄，要「糾正宗教發展過快、場所過多、活動過熱」現象；「要看清十字架背後的政治問題、抵禦意識形態的滲透」；「掌控意識形態主導權」。 // （Source: Yazhou Zhoukan, 2015-09-06)

• Chris Buckley argued that the detention of Zhang Kai was a case that shows the restrictions imposed under Xi Jingping. // Zhang’s case combines two aspects of tightening restrictions on civic life in China under President Xi Jinping that have alarmed human rights advocates: an intense drive against human rights lawyers and restrictions on religion.Since July, hundreds of lawyers and activists who took on politically contentious causes, like abuse of police power and restrictions on expression, have been detained and questioned by the police, and several in Beijing have been charged with exploiting public grievances to undermine the government and enrich themselves. Their supporters have called the charges a travesty.// (Source: New York Times, 2015-09-01)

Appointment of pro-vice chancellor of HKU and concerns over the loss of academic freedom

• Background: In the past months, the appointment of pro-vice chancellor of HKU was said to be delayed by pro-government members of HKU Council (highest governing body of HKU) as they were allegedly barring pro-democracy candidate from taking up the post. On August 25, the delay in the appointment of the managerial post raised concerns over the loss of academic freedom among scholars at tertiary institutions in Hong Kong. In response to the controversy, an extraordinary general meeting of the University of Hong Kong Convocation was called in to express graduates’ views on this issue. Most of the motions initiated by the HKU Alumni Concern Group were endorsed by the majority of the 9,298 participants (persons and proxies) on September 2, 2015.

• //Nearly 300 academics have joined forces to voice opposition to the delay in appointing a pro-democracy scholar to a key managerial post at the University of Hong Kong, saying they feel compelled to speak up because the city’s « academic freedom is under unprecedented threat ». A petition signed by the academics and led by University of Science and Technology political scientist Dixon Sing Ming says signatories share the concerns of HKU teachers and students that the government is « interfering » in university affairs. It said they feared similar conflicts may beset their own institutions should they stay silent.// (Source: SCMP, 2015-08-24)

• //University of Hong Kong alumni have voted overwhelmingly to support calls for the institution’s governing body to appoint a pro-vice-chancellor within 30 days. They also voted to revise the law so that the chief executive should no longer be the chancellor of the university, or that his role should be ceremonial.//( Source: SCMP, 2015-09-02)

Future of One Country Two Systems after the Umbrella Movement

• Background: After almost a year, key student leaders involved in the Umbrella Movement were prosecuted by the police. Meanwhile, they continued expressing their views about how to further democracy in Hong Kong.

• Joshua Wong advocates the need of re-thinking of strategies and propose the establishment of referendum mechanism by the civil society for the sake of self-determination in the future. //Any movement for democracy is a long-term struggle. Yet many retain the threadbare fixation on gaining seats in Legco or the Election Committee or champion joining hands with civil society as if they have discovered the New World. Empty “anti-red” and “core values” rhetoric is ultimately unable to identify the concrete goals of political struggle. To persevere for the sake of persevering does not help those who have experienced the disappointment of Occupy. That is why democrats must return to the original point and revisit the big debates in order to move towards five-, 10-, 15-year visions for constitutional reform. Only then can civil society be liberated from its disempowerment. […]It is admittedly unrealistic to expect the achievement of self-determination within the next stages of the democracy movement. But if the people of Hong Kong are to be prepared to confront the ‘second question of the future’ by around 2030, we must, setting self-determination and the continuation of autonomy as our ultimate goals, work backward to the starting point, the recent failure of the democratic transition in Hong Kong’s return to China, and establish the roadmap for the next 15 years of the democratic movement. Towards those goals, we must foster in Hong Kong the consciousness of a referendum for self-determination. That said, if referendums are applied immediately to complex issues like sovereignty, they will undoubtedly encounter an unprepared populace and will be ineffective in generating consensus. Hence the democrats should set as their short-term goals establishing the mechanisms for referendums and legislating referendum law.// (Source: the Medium , originally in Chinese MingPao, 2015-08-02)

• Pan-democrats in Hong Kong open dialogue with central government officials behind closed doors, in hope of resuming dialogue between the two groups after the defeat of political reform in the Legislative Council in June. //Wednesday’s meeting between five leaders and up-and-coming stars of the Democrats and Feng Wei, deputy director of the State Council’s Hong Kong and Macau Affairs Office, is seen as a sign of Beijing offering an olive branch to the camp after pan-democrats voted down the government’s reform plan in June. // (Source: SCMP, 2015-08-28)

• Legislative Council president Jasper Tsang Yok-sing warned that it would spell the demise of One Country Two Systems if the central government decided to intervene in local affairs more frequently. He suggested the next Chief Executive to establish a platform that includes representatives from various sectors. //Tsang suggested the winner of the 2017 chief executive election should set up a platform comprising representatives from various sectors to discuss the future of the governance formula and how to restart the political reform process. […] he was surprised and disappointed that the central government had not conducted a thorough review of the implementation of « one country, two systems » in the past 18 years, particularly in regard to serious setbacks like the failed electoral reform.” […] If Hong Kong is on the decline and the central government steps in on Hong Kong’s internal affairs more frequently, resulting in Beijing governing Hong Kong directly, it could spell the demise of ‘one country, two systems.’” He cited the failure to enact national security legislation in 2003 and implement the national education curriculum in 2012 as examples of setbacks in the implementation of the concept under which Hong Kong enjoys autonomy.// (Source: SCMP, 2015-08-30)

• A pro-establishment academic Lau siu-kai said Beijing hoped to nurture ‘loyal opposition’ in Hong Kong, asking the pan-democrats to consider the possibility of cooperation with the central government in a way prescribed by the latter. // The central government hopes to turn Hong Kong’s pan-democrats into a “loyal opposition” after the city’s political reform proposal was voted down, […] He said a loyal opposition was allowed to have opposing views on many issues as long as it upholds some fundamental principles – such as the “one country, two systems” concept and the political structure it lays down, as well as the Communist Party’s rule in the country […] He quoted a speech by the State Council’s Hong Kong and Macau Affairs Office director Wang Guangya before the political reform was voted down in Legco as saying the central government would only take on hardliners but seek cooperation with moderate pan-democrats. // (Source: SCMP, 2015-08-31)

Local religious leader summoned by officials from the State Administration for Religious Affairs in China

• Hong Kong pastors were summoned by the State Administration for Religious Affairs (国家宗教事务局) for his involvement in mainland programs. //In recent months, Chinese officials have barred mainland residents from attending some religious conferences in Hong Kong, increased oversight of mainland programs run by Hong Kong pastors, and issued warnings to outspoken leaders like Mr. Woo. […]As a spiritual revival has swept through China in recent decades, the Communist Party, which is officially atheist, has generally grown more tolerant of people exercising their faith outside party-controlled churches and temples. Christianity is China’s fastest-growing religion, with at least 67 million followers, many of whom worship in independent, underground or unofficial churches, often with the acquiescence of the government. But Mr. Xi has presided over a crackdown on civil society, with a focus on individuals and organizations with ties to foreigners, including lawyers, nonprofit groups and religious leaders. The party has long associated Christianity with subversive Western values, and over the past year, officials have accelerated efforts to demolish churches, shutter Christian schools, and remove crosses. […] After meeting with the officials, Mr. Woo signed a letter saying that he had violated a Chinese law that prohibits foreigners from conducting religious training without permission, and he was allowed to return home. […] Despite the recent tension, some Christian leaders said they did not believe China was tightening its grip on religion in Hong Kong and that Mr. Woo’s situation was unusual. “The Chinese are friendly with some churches and unfriendly with others,” said the Rev. Lo Lung Kwong, a theology professor at the Chinese University of Hong Kong. He added, “They have their list.”// (Source: New York Times, 2015-08-26)

 KMT veteran joining the 70^th WWII Victory Parade in Mainland China

• Background: Former Kuomintang chairman Lien Chan (连战) went to Beijing and join the Communist leaders in marking Japan’s surrender in the WWII, despite strong opposition from Taiwan’s politicians, including President Ma Ying-jeou. The Mainland Affairs Council of Taiwan and the Presidential Office of Taiwan both expressed concerns and discouragement to anyone from Taiwan to participate in the Communist-led commemoration. Upon Lien’s arrival, President Xi emphasized the shared faith between Mainland China and Taiwan under the name of Chinese nation.

• //中国大陆将于9月3日举行纪念抗战胜利70周年的大阅兵，国民党前主席连战已获邀并确定出席。除了亲赴阅兵典礼之外，连战将与中共总书记习近平会晤。…对于连战出席9月3日在北京举行的大阅兵活动，台湾“总统府”人士在昨日（8月26日）晚间表示：对于台湾有人可能受邀参加中共阅兵，陆委会已有原则性谈话，“总统府”支持陆委会的立场。陆委会曾多次呼吁受邀到大陆参加阅兵等抗战纪念活动的台湾民众，审慎考虑社会观感，最好避免出席。// (Source: SCMP, Chinese edition, 2015-08-27)

• //While Lien is expected to attend all the activities commemorating the 70th anniversary of the end of WWII, former Premier and Chief of the General Staff of Taiwan’s military Hau Pei-tsun said Thursday that he has not been invited to the parade on Sept. 3 and that he would not attend even if he had been invited. Speaking through his office, the retired four-star general who fought communist forces during the Chinese civil war as well as the Japanese during China’s War of Resistance said that he has stated several times in public that he does not endorse the version of the Sino-Japanese war history as presented by the Chinese government. The KMT government of the Republic of China has maintained that the communists played only a minor role in China’s war efforts led by the KMT government at the time.// Source: The China Post, 2015-08-27)

• //习近平强调，中国人民抗日战争胜利是近代以来中国抗击外敌入侵的第一次完全胜利，是包括台湾同胞在内的全民族团结奋斗的结果。两岸同胞要牢记历史、缅怀先烈、团结一心、维护胜利成果，携手推动两岸关系和平发展，为实现中华民族伟大复兴共同努力。// (Source: Xinhua, 2015-09-01)

• Back in November 2014, an associate professor in Taiwan郭正亮 regarded Lien’s participation in the parade as adding fuel to the ongoing accusation of Lien being the agent for the Chinese Communist Party and also publicizing the differences in Taiwan’s policy towards Mainland China within the KMT. //正当连战盟友郝柏村大喇喇喊出「连胜文台北市长输了，中华民国就亡了！」的高调时刻，前国安会秘书长、原属马英九团队的苏起，却选在此时发表新书《两岸波涛二十年纪实》，惊爆2008年5月连战可能涉嫌将当时列为绝对机密的马英九总统就职演说内容，提前泄密给对岸！ […] 马连两人在两岸路线的分歧与较劲，早从2008年马上任以来，就是台湾政坛的公开秘密。由于连战率先在2005年以国民党主席身份启动两岸破冰之 旅，率先推动连胡会共同催生「国共论坛」，大陆对连战始终情有独衷，连胡会提出的「五项共同愿景」，马英九在执政后也被迫照单全收。 但马对于连老是假借体制外的「国共论坛」压迫马政府两岸决策，以及连战人马逐渐聚集形成两岸政商联盟，早就颇不以为然。2008年马担任总统不久， 即公开表示「两岸事务我说了算」，警告连要自我节制，但连却不予理会。2009年大陆给予连战特殊礼遇，首度允许卸任副总统代表台湾出席APEC，连战即 在会上自作主张「两岸政治议题难以避免」，引起马极大不快，立刻强调两岸仍将是「先经后政」。// (Source: SCMP, Chinese Version, 2014-11-08)