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‘Show Me on the Drone Doll Where China Touched You’

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China returns seized U.S. drone

Beijing has returned a U.S. underwater drone seized last week in the South China Sea by a Chinese Navy vessel after “friendly” talks between the two countries, China’s Defense Ministry said in a short statement posted to its website Tuesday.

“After friendly consultations between the Chinese and U.S. sides, the handover work for the U.S. underwater drone was smoothly completed in relevant waters in the South China Sea at midday on Dec. 20,” the statement said.

The Pentagon confirmed the handover, but criticized the Chinese Navy over the move.

“The incident was inconsistent with both international law and standards of professionalism for conduct between navies at sea,” Pentagon spokesman Peter Cook said in a statement. “The U.S. has addressed those facts with the Chinese through appropriate military channels, and have called on Chinese authorities to comply with their obligations under international law.”

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The drone was scooped up by the Chinese Navy in the strategic waterway on Thursday in a row that also drew in U.S. President-elect Donald Trump and further stoked tensions between the two rivals.

The U.S. said the unmanned underwater vehicle (UUV) had been operating in international waters.

The Chinese Defense Ministry said Saturday that a Chinese naval lifeboat had taken the drone “in order to prevent the device from causing harm to the safety of navigation and personnel of passing vessels.”

The Chinese side had criticized what it said were U.S. moves to dramatize the seizure and accused the U.S. of “frequently” dispatching vessels and aircraft to carry out “close-in reconnaissance and military surveys within Chinese waters.”

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“China resolutely opposes these activities, and demands that the U.S. side should stop. … China will continue to be vigilant against the relevant activities on the U.S. side, and will take necessary measures in response,” Yang said.

The incident drew criticism from Trump, who takes office Jan. 20, and has vowed to deal with Beijing in a more hard-line manner.

Misspelling “unprecedented,” Trump tweeted Saturday: “China steals United States Navy research drone in international waters — rips it out of water and takes it to China in unpresidented act.”

He later reissued the tweet, correcting the spelling to “unprecedented.”

After China said it would return the drone, Trump spokesman Jason Miller tweeted a link to a news story detailing the announcement, saying: “@realdonaldtrump gets it done.”

Despite the apparent claim that Trump played a role in securing the drone’s return, there has been no evidence that this was the case.

Nearly 11 hours after his first China tweet, Trump delivered another dig at China. Read the rest of this entry »

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Chinese Rush to Open Foreign Currency Accounts

A teller counts US dollars and Chinese 100-yuan notes at a bank in Hefei, east China's Anhui province on January 16, 2011

The biggest monthly rise in the foreign currency account deposits so far this year came in January when the annual $50,000 conversion quota was reset and individuals rushed to change yuan into dollars.

SHANGHAI  – Winni Zhou and John Ruwitch report: Zhang Yuting lives and works in Shanghai, has only visited the United States once, and rarely needs to use foreign currency. But that hasn’t stopped the 29-year-old accountant from putting a slice of her bank savings into the greenback.

“Expectations of capital flight are clear. I might exchange more yuan early next year, as long as I’ve got money.”

— Zhang Yuting

She is not alone. In the first 11 months of 2016, official figures show that foreign currency bank deposits owned by Chinese households rose by almost 32 percent, propelled by the yuan’s recent fall to eight-year lows against the dollar.

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“Banks under pressure to minimize outflows are also offering deals and giveaways for people who voluntarily convert their forex savings back into yuan. Bank of Communications is entering any customer who changes more than $1,000 into yuan the chance to be part of a lucky draw, with various prizes, such as portable printers.” 

The rapid rise – almost four times the growth rate for total deposits in the yuan and other currencies as recorded in central bank data – comes at a time when the yuan is under intense pressure from capital outflows. The outflows are partially a result of concerns that the yuan is going to weaken further as U.S. interest rates rise, and because of lingering concerns about the health of the Chinese economy.

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“The more you see people converting, reflected in foreign currency deposits in the banking segment, it means obviously there’s pressure on the local currency.”

— Raymond Yeung, chief economist for Greater China at ANZ

U.S. President-elect Donald Trump’s threats to declare China a currency manipulator and to impose punitive tariffs on Chinese imports into the U.S., as well as tensions over Taiwan and the South China Sea, have only added to the fears.

“Regulators have a lot of control over what happens to those deposits, and they can control the rate of inflows into onshore FX deposits.”

“Expectations of capital flight are clear,” said Zhang, who used her yuan savings to buy $10,000 this year. “I might exchange more yuan early next year, as long as I’ve got money.”

Household foreign currency deposits in China are not huge compared to the money that companies, banks and wealthy individuals have been directing into foreign currency accounts and other assets offshore. All up, households had $118.72 billion of foreign money in their bank accounts at the end of November, while total foreign currency deposits were $702.56 billion.

But the high growth rate in the household forex holdings are symbolic of a growing headache for the government as it struggles to counter the yuan’s weakness.

Since October, the government has acted to slow outflows by tightening existing measures, such as approvals for foreign currency transfers, and has leant on banks to be stricter, making it harder for companies and individuals to change money and transfer money abroad.

More measures may be in the cards. Read the rest of this entry »


[VIDEO] Syaru Shirley Lin Discusses Her Book ‘Taiwan’s China Dilemma’

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[Order the book “Taiwan’s China Dilemma: Contested Identities and Multiple Interests in Taiwan’s Cross-Strait Economic Policy” from Amazon.com]


China Complains After President-Elect Trump Speaks to Taiwan Leader Tsai Ing-wen

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Beijing (AFP) – China protested to Washington Saturday after US President-elect Donald Trump broke with decades of foreign policy and spoke with the president of Taiwan.

“It was not immediately clear whether Trump’s telephone call with Tsai Ing-wen marked a deliberate pivot away from Washington’s official ‘One China’ stance, but it fuelled fears he is improvising on international affairs.”

It was not immediately clear whether Trump’s telephone call with Tsai Ing-wen marked a deliberate pivot away from Washington’s official “One China” stance, but it fuelled fears he is improvising on international affairs.

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Xiamen University

Zhang Wensheng, of Xiamen University, was more circumspect, dismissing Trump’s use of the term ‘president’ as ‘personal greetings’ that ‘do not reflect a political position whatsoever’.

China regards self-ruling Taiwan as part of its own territory awaiting reunification under Beijing’s rule, and any US move that would imply support for independence would likely trigger fury.

[ALSO SEE – Commentary: Trump, Taiwan and China – punditfromanotherplanet]

During Friday’s discussion, Trump and Tsai noted “the close economic, political and security ties” between Taiwan and the United States, according to the president-elect’s office.

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Even before the call with Taiwan, Trump’s unorthodox diplomatic outreach had raised eyebrows, and, for some critics, in extending his hand to Taiwan, Trump crossed a dangerous line.

“President-elect Trump also congratulated President Tsai on becoming President of Taiwan earlier this year,” it said.

Beijing on Saturday offered a robust response.

“We have already made solemn representations about it to the relevant US side,” the Chinese foreign ministry said.

“There is no change to our longstanding policy on cross-Strait issues. We remain firmly committed to our ‘One China’ policy,” she added. “Our fundamental interest is in peaceful and stable cross-Strait relations.”

— National Security Council spokeswoman Emily Horne

“It must be pointed out that there is only one China in the world. Taiwan is an inalienable part of China’s territory,”ObaMao

China also urged “relevant parties in the US… to handle Taiwan-related issues with caution and care to avoid unnecessarily interfering with the overall situation of Sino-US relations.”

Trump, who had come under fire for the telephone call, hit back — on Twitter.

“Interesting how the U.S. sells Taiwan billions of dollars of military equipment but I should not accept a congratulatory call,” Trump tweeted.

– ‘How wars start’ –

President Barack Obama’s White House said the outgoing US administration had not changed its stance on China-Taiwan issues.

“There is no change to our longstanding policy on cross-Strait issues,” National Security Council spokeswoman Emily Horne told reporters. Read the rest of this entry »