Preview Newsletter
Project Dory Monitoring 24 August 2017
-
China demands U.S. immediately withdraw N. Korea sanctions, warns they will damage ties
Aug 23, 2017 | The Washington Post
By Simon Denyer
BEIJING — China demanded Wednesday that the United States immediately withdraw new sanctions on companies and individuals trading with North Korea, saying that such punitive measures will damage Sino-U.S. ties. -
Chinese firm sanctioned by US over links to North Korea claims it sells garden products
Aug 23, 2017 | South China Morning Post
By Kinling Lo and Kristin Huang
One of the five Chinese firms targeted for sanctions by the United States for their alleged links to North Korea said on Wednesday its core business is supplying gardening products. -
With Chinese Support, Pakistan Can Ignore Trump on Afghanistan
Aug 24, 2017 | Bloomberg
By Iain Marlow and Ismail Dilawar
A key plank of U.S. President Donald Trump’s new strategy to turn around the 16-year conflict in Afghanistan will probably falter for a reason few of his voters would realize: China. -
Balance of Power: China Extends Its Reach
Aug 24, 2017 | Bloomberg
By Daniel Ten Kate and Iain Marlow
Conquerors like the Persians, Mongols, Brits and Russians all packed up and left — just as the U.S. has tried to do. Next in line to try its luck may be China. -
China state media says US will 'pay' for 'unjust' sanctions
Aug 23, 2017 | CNBC
By Huileng Tan
China has come out strongly against new U.S. moves to pressure North Korea with its foreign ministry opposing the "long-arm jurisdiction" of President Donald Trump's administration, arguing that Beijing has always met international obligations in containing its reclusive neighbor. -
China Rumored to Win Mega-Container Ship Order
Aug 23, 2017 | Maritime Executive
China Daily reports that CMA CGM has chosen Chinese yards to build nine of the world’s largest container ships.
Port Mentions - There are no relevant clips to report at this time.
City/Province Mentions
Competitor Mentions - There are no relevant clips to report at this time.
US - China Relations
Industry News
-
China demands U.S. immediately withdraw N. Korea sanctions, warns they will damage ties
Aug 23, 2017 | The Washington Post
By Simon Denyer
BEIJING — China demanded Wednesday that the United States immediately withdraw new sanctions on companies and individuals trading with North Korea, saying that such punitive measures will damage Sino-U.S. ties.
The Treasury Department imposed sanctions Tuesday on 10 companies and six people from China and Russia that it said had conducted business with North Korea in ways that advanced the country’s missile and nuclear weapons program.
But China’s Foreign Ministry said its government had fully implemented U.N. Security Council resolutions on North Korea and would punish anyone caught violating the Security Council sanctions under Chinese law.
It added that it opposed sanctions outside the framework of the Security Council.
“China especially opposes any country conducting ‘long-arm jurisdiction’ over Chinese entities and individuals,” spokeswoman Hua Chunying said at a routine news conference. “Measures taken by the United States are not helpful in solving the problem and unhelpful to mutual trust and cooperation. We ask the United States to stop the relevant wrong practices immediately.”
Despite China’s professed opposition to unilateral sanctions, however, it has not hesitated to punish countries through trade if they refuse to do Beijing’s bidding.
China is engaged in a major blockade of South Korean companies because it opposes the deployment of a U.S. missile defense system, known as Terminal High Altitude Area Defense (THAAD), in South Korea.
Among the sanctioned Chinese companies is Dandong Zhicheng Metallic Material, also known as Dandong Chengtai, one of the largest importers of North Korean coal, while its main shareholder also was individually targeted.
In a related complaint the Justice Department filed Tuesday, the U.S. government is seeking $4 million from the company, accusing it of importing North Korean coal and sending an array of products — cellphones, luxury items, rubber and sugar — to North Korea.
In August, the Security Council agreed to a total ban on coal imports from North Korea; in the past, a limited trade had been allowed, provided the coal was not purchased from a sanctioned North Korean company and was proven to befor “livelihood purposes.”
In practice, though, experts say, that loophole was exploited to facilitate a trade that generated $1 billion a year for North Korea.
In a June report by the Washington-based research group C4ADS, Dandong Zhicheng was cited among those Chinese companies that are pivotal to North Korea’s ability to circumvent international sanctions and buy illicit goods. The report said targeting those companies could cause North Korea’s entire overseas network to collapse.
Dandong Zhicheng alone accounted for 9.2 percent of North Korea’s total exports to China last year, according to documentation that C4ADS reviewed. Almost all — 97 percent — of this was North Korean coal, totaling about $250 million annually.
The company’s website says it has several interests, including metals, chemicals, rubber, furniture, computing equipment, office supplies, clothing and toys. It says it does a “small amount of business” in North Korean border trade.
Chi Yupeng, the company’s main shareholder, won an award from the Dandong city government as a leading entrepreneur in 2005, another award for his “remarkable contribution to enterprise” in 2008 and a third for “starting a foreign trade enterprise” in 2009.
Two other Chinese companies, Dandong Tianfu Trade and Jinhou International Holdings, were sanctioned for their part in the coal trade. Together, the three companies imported nearly $500 million worth of North Korean coal between 2013 and 2016, the Treasury Department said.
Dandong Rich Earth Trading was sanctioned for buying vanadium ore from a company connected to North Korea’s atomic energy agency, while Mingzheng International Trading was accused of facilitating dollar transactions on behalf of North Korea’s proliferation network. The companies either declined to comment, hung up or did not pick up the phone when contacted by The Washington Post. The Dandong city government declined to comment.
The Global Times, a nationalist tabloid, argued that the United States could face retaliation if it continued to impose sanctions considered a “serious violation of international law” and “certainly unacceptable” to China.
“As far as we are concerned, Washington wants to use such unilateral sanctions to smear China and Russia’s international image on issues regarding sanctioning North Korea, painting China and Russia as the destroyers of U.N. sanctions,” it wrote.
Chen Weihua, deputy editor of the U.S. edition of China Daily, argued that the U.S. decision would undermine cooperation between Washington and Beijing.
“The U.S. has long believed that sanctions are a silver bullet,” he wrote in a column. “But its past track records have shown that the majority of sanctions not only failed but caused humanitarian disasters in other countries.”
There is little doubt, he added, that such secondary sanctions will have little or no effect in persuading North Korea to change course.
Chen also wrote that the Obama administration’s decision to help topple Libyan leader Moammar Gaddafi after he abandoned his nuclear weapons program — and his subsequent death at the hands of a mob in 2011 — had damaged the U.S. government’s credibility.
Beijing is not averse to using economic pressure to get its way: It significantly cut salmon imports from Norway for years after imprisoned democracy activist Liu Xiabo was awarded the Nobel Peace Prize, has encouraged consumer boycotts of Japan, and punished countries for hosting the Dalai Lama, the exiled Tibetan spiritual leader.
Nevertheless, Lu Chao, a Korean Peninsula expert at the Liaoning Academy of Social Sciences, said Washington’s decision to impose unilateral sanctions on China was inappropriate, unacceptable and “very domineering.”
“China is strictly implementing the U.N. resolution. Though we can’t 100 percent exclude the possibility of individuals having underground deals violating the Ministry of Commerce’s regulations, the United States being so far away doesn’t have a proper reason to take sanction measures unilaterally,” he said. “They should inform the Chinese government and let the latter deal with it.”
China accounts for about 90 percent of North Korean trade but announced this month that it was suspending imports of iron ore, iron, lead, coal and seafood products from North Korea, to comply with U.N. sanctions.
China’s imports from North Korea fell to $880 million in the first six months of the year, down 13 percent from a year earlier, official figures show. But Chinese exports rose 29 percent, to $1.67 billion, in the first six months of the year, increasing total trade between the two countries by 10 percent.
China is reluctant to do anything that might destabilize North Korea, a long-standing ally. It says U.S. hostility toward Pyongyang forced the regime to develop its nuclear program, and it urges dialogue to reduce tensions.
Yang Xiyu, a North Korea expert at the China Institute of International Studies in Beijing, called the U.S. move counterproductive and said Washington should have worked more closely with Beijing.
“I think this shows the frustration from the U.S. toward Beijing, that China won’t play as the U.S. wanted,” he said, arguing that it would do nothing to dissuade North Korea from pursuing nuclear weapons. “It’s a superfluous measure that may only worsen the Sino-U.S. relationship and destroy the foundation of trust for cooperation between the two countries.”
Cheng Xiaohe, a North Korea expert at Renmin University of China in Beijing, said the U.S. government did not have factual evidence that these companies were violating sanctions.
“The Chinese government will not sit by and do nothing if the sanctions are implemented without strong evidence,” he said.
Shirley Feng and Luna Lin contributed to this report.
https://www.washingtonpost.com/world/china-bristles-at-us-imposed-sanctions-on-north-korea-trade/2017/08/23/32bfba3c-87ba-11e7-9ce7-9e175d8953fa_story.html?utm_term=.565faee35c0c
-
Chinese firm sanctioned by US over links to North Korea claims it sells garden products
Aug 23, 2017 | South China Morning Post
By Kinling Lo and Kristin Huang
One of the five Chinese firms targeted for sanctions by the United States for their alleged links to North Korea said on Wednesday its core business is supplying gardening products.
Dandong Rich Earth Trading Co was accused by the US Treasury Department of importing vanadium ore from Korea Kumsan Trading Corporation, which is controlled by the General Bureau of Atomic Energy in Pyongyang.
Li Xiaoguang, a manager at the Chinese company said he was “surprised” to hear it had been sanctioned.
“We stopped trading with North Korea two years ago. We only sell gardening products now [in the Chinese market],” he said.
Li said that the company used to export building materials to North Korea and imported products made of vanadium from there, but got out of the business two years ago because of the rising tensions. He was keen to clarify that the metal products the company bought were all perfectly legal.
“What we imported were vanadium products, not vanadium ore,” Li said. “We only imported the products after going through customs clearance.”
The US on Tuesday announced it would sanction five Chinese companies and one individual – as well as two Singapore-based companies and three Russian citizens – that it accused of supporting North Korea’s nuclear weapons development.
China’s Foreign Ministry on Wednesday demanded Washington drop the sanctions, saying its action was not conducive to building trust between the two countries.
Three of the Chinese companies on the sanctions list – Jinhou International Holding Co, Dandong Zhicheng Metallic Materials and Dandong Tianfu Trade Co – were accused by the US Treasury of importing nearly US$500 million worth of North Korean coal.
A manager surnamed Lan at Jinhou was reluctant to discuss the issue, but said he was unaware that the company had been sanctioned.
According to its website, the company mostly trades in coal, hard coke, rubber and other minerals, but is also involved in shipping, storage and investment.
The only Chinese individual named on the sanctions list was Zhicheng’s director Chi Yupeng, whom the US described as “using a network of companies to engage in bulk purchases, wire transfers, and other transactions on behalf of North Korean interests”.
A 2015 document from quarantine and inspection authorities in Korla, a city in western China’s Xinjiang province, showed Zhicheng, which is registered both in the Chinese mainland and Hong Kong, was a recipient of North Korean coal.
Calls to Zhicheng and Tianfu went unanswered on Wednesday.
The fifth Chinese company facing sanctions was Mingzheng International Trading, which was accused of acting as a front for North Korea’s Foreign Trade Bank to facilitate transactions in US dollars.
The company is registered in Hong Kong, but its contact details were unavailable on Wednesday.
The sanctions announced by the US on Tuesday were the second against Chinese companies accused of having business relations with North Korea and sponsoring its nuclear programme since President Donald Trump came to power.
In June, the US Treasury sanctioned Bank of Dandong, Dalian Global Unity Shipping Co and two Chinese nationals for their alleged links to the North Korean government.
In a press briefing on Wednesday, Chinese Foreign Ministry spokesman Hua Chunying slammed Washington’s latest move.
“The US action will not help find a solution to the problem ... We urge the US side to stop this wrongdoing and correct it,” she said.
http://www.scmp.com/news/china/diplomacy-defence/article/2108002/chinese-firm-sanctioned-us-over-links-north-korea
-
With Chinese Support, Pakistan Can Ignore Trump on Afghanistan
Aug 24, 2017 | Bloomberg
By Iain Marlow and Ismail Dilawar
U.S. Afghan strategy leans on Islamabad to stop terrorists
Chinese investments, diplomatic support bolster Pakistan
A key plank of U.S. President Donald Trump’s new strategy to turn around the 16-year conflict in Afghanistan will probably falter for a reason few of his voters would realize: China.
On Monday, Trump outlined an open-ended commitment to the conflict in Afghanistan that pledged more troops and diplomatic outreach to the Taliban. Importantly, Trump publicly tried to pressure Pakistan to end safe havens for terrorists who are striking at Afghanistan. A day later, U.S. Secretary of State Rex Tillerson followed up Trump’s comments, adding that Pakistan “must adopt a different approach.”
But this aspect of the Afghan strategy is likely to founder because of China’s increasingly close economic ties with Pakistan, which reduces American leverage.
With more than $50 billion in planned infrastructure projects and strong diplomatic support for its positions, American threats to withdraw billions in military aid are becoming less worrying for the powerful army, which dominates foreign policy. With China’s role increasing, Pakistan’s forces have fewer incentives to stop covertly supporting insurgent groups that strike inside Afghanistan and arch-rival India, while targeting outfits that threaten its own domestic security.
“China is the shield now behind which Pakistan can be expected to continue to play its double game,” said Harsh Pant, an international relations professor at King’s College London. “The more aid America will cut, Pakistan will be expecting China to fill the vacuum.”
Pakistan has long denied it harbors terrorists. But despite rising frustration from U.S. lawmakers over designated terrorist groups such as the Haqqani Network -- who strike Afghanistan allegedly from inside Pakistan -- China’s support for its ally means Pakistan doesn’t need to alter course.
In the last four fiscal years, China has directly invested $2.8 billion in Pakistan compared with the $533 million inflows from the U.S., according to Pakistan’s central bank. Chinese banks have also helped Pakistan plug its widening deficits. Pakistan received $848 million in loans from China in the six months through December 2016 to finance the country’s “growing current account gap,” according to the central bank.
Pakistan’s foreign ministry released a defiant statement after Trump’s speech saying China’s Foreign Minister Wang Yi “lauded Pakistan’s contributions and great sacrifices made in the fight against terrorism” and the “international community should fully recognize these efforts.”
Later that evening, the foreign ministry released another statement calling Trump’s comments part of a “false narrative.” It also said Trump’s strategy will likely fail as U.S. military action hasn’t brought peace to Afghanistan in 16 years and probably won’t “in the future.”
“China is at the moment supporting and helping Pakistan’s economic development and neutralizing part of the American argument” pressuring Islamabad, said Hasan Askari Rizvi, a political analyst based in Lahore. Waning Aid
Amounts paid out to Pakistan under a U.S. coalition support fund have fallen 62 percent from $1.44 billion in 2013, with hundreds of millions blocked in the past year as American officials said Pakistan wasn’t doing enough to root out groups like the Haqqanis.
Threats to withdraw U.S. military aid entirely aren’t going to have much impact, since the U.S. needs Pakistan for its broader efforts in South Asia, Rizvi said. Even if Washington chooses to get tough on Islamabad, “Pakistan can survive even without any American assistance.”
On Wednesday, Pakistan’s army chief, Qamar Javed Bajwa, told U.S. Ambassador David Hale the military isn’t looking for funding, but wants recognition of its contribution in the fight against terrorism. At the same time, Pakistan’s government stressed it doesn’t want to alienate the U.S.
We won’t “turn our back on the rest of the world on the back of Chinese support,” said Miftah Ismail, an economic adviser to Prime Minister Shahid Khaqan Abbasi. “We want to be friends with every country and America has a role to play.”
Some hope China might use its clout to end regional instability. In an interview this month, Omar Zakhilwal, Afghanistan’s ambassador to Pakistan, said he hopes Beijing will use its influence to push for a permanent peace deal.
“China could only be genuinely interested in peace in Afghanistan for its investments in Pakistan,” Zakhilwal said. “Instability in any of these countries does not serve China’s interest.”
And China has huge interests in Pakistan.
The China-Pakistan Economic Corridor projects form the cornerstone of Chinese President Xi Jinping’s so-called ‘One Belt, One Road’ Initiative. And the Chinese funded port of Gwadar gives Beijing a deep sea port in the Arabian Sea, close to mutual rival India -- with whom China is currently engaged in a Himalayan border dispute.
There are also about 20,000 Chinese workers in Pakistan, double the number two years ago, and Pakistan’s military is firmly behind CPEC, said one senior Chinese official, who asked not to be named as they aren’t authorized to speak to the media.
“Pakistan’s pivot towards China, particularly under the CPEC initiative, has been clear for some time,” said Bilal Khan, a senior economist at Standard Chartered Plc in Karachi. “It remains unclear what the future U.S.-Pakistan economic relationship could look like.”
After being spurned by Trump’s criticism, Pakistan is even less likely to agree to a U.S.-directed policy, even if it is accompanied by threats.
“It’s nothing new for U.S. leaders to vow to get Pakistan to change its ways,” said Michael Kugelman, a senior associate for South Asia at the Washington-based Woodrow Wilson Center. “What remains to be seen is how Trump intends to compel Pakistan to alter its behavior. In all likelihood, Pakistan is unlikely to change its ways regardless of what threat or punishment Trump comes out with.”
https://www.bloomberg.com/news/articles/2017-08-23/with-chinese-support-pakistan-can-ignore-trump-on-afghanistan
-
Balance of Power: China Extends Its Reach
Aug 24, 2017 | Bloomberg
By Daniel Ten Kate and Iain Marlow
Afghanistan has long been known as the “Graveyard of Empires.”
Conquerors like the Persians, Mongols, Brits and Russians all packed up and left — just as the U.S. has tried to do. Next in line to try its luck may be China.
President Xi Jinping is spending more than $50 billion in an economic corridor in Pakistan, Afghanistan’s neighbor. The highways and gas pipelines, designed to provide China an alternative land route to the high seas, also give it an interest in stabilizing the volatile region.
China’s money is a boon for Pakistan, allowing its leaders to ignore President Donald Trump’s pressure to get tougher on militant groups that operate on its porous border with Afghanistan. In a defiant statement rebuffing Trump, Pakistan’s foreign ministry cited China’s praise of its counterterrorism efforts.
But China isn’t just a rival power source to America — its rising influence in the region can help Washington too. The U.S. and China have already joined together to try and start peace talks with the Taliban.
While China has traditionally avoided the Great Game, its broadening array of foreign investments is making it a player. Afghanistan is a perilous place to start.
https://www.bloomberg.com/news/articles/2017-08-24/general-kelly-commands-white-house-but-he-can-t-control-trump
-
China state media says US will 'pay' for 'unjust' sanctions
Aug 23, 2017 | CNBC
By Huileng Tan
China has come out strongly against new U.S. sanctions to pressure North Korea
China says it opposed "long-arm jurisdiction" imposed by any other country on Chinese entities and individuals
China has come out strongly against new U.S. moves to pressure North Korea with its foreign ministry opposing the "long-arm jurisdiction" of President Donald Trump's administration, arguing that Beijing has always met international obligations in containing its reclusive neighbor.
The Treasury Department on Tuesday announced new penalties against 10 entities and six individuals, mostly Chinese and Russian, for providing support to North Korea in ways that aided the rogue state's missile and nuclear weapons programs. The Treasury characterized the targets of its new sanctions as "third-country companies and individuals."
The decision came just a few weeks after Beijing and Moscow agreed to fresh United Nations sanctions on the North. It also came less than two months after the Treasury imposed sanctions on a bank, a shipping company and two individuals from China.
"The Chinese side opposes the unilateral sanctions outside the framework of the UN Security Council, especially the 'long-arm jurisdiction' imposed by any other country on the Chinese entities and individuals based on its own domestic laws," Chinese foreign ministry spokeswoman Hua Chunying said at a press conference on Wednesday.
"Long-arm jurisdiction" is a term for when authorities exercise jurisdiction over foreign entities. There has been considerable debate over the U.S. use of that practice.
China, Hua said, "always" implements North Korea-related resolutions of the United Nations Security Council "in their entirety" and fulfills its international obligation.
"Our efforts are there for all to see. We will investigate and deal with the Chinese enterprises and individuals in accordance with our own domestic laws and regulations provided that they are suspected of violating the relevant resolutions of the UN Security Council," she said.
State media joined the fray with, China Daily on Thursday saying the sanctions are "not a silver bullet."
"The US has long believed that sanctions are a silver bullet. But the majority of sanctions have not only failed but also caused humanitarian disasters in other countries," the newspaper said, adding that such "secondary sanctions" will have "little effect" in persuading North Korea.
Nationalistic Global Times was more aggressive, saying the U.S. will "pay for unjust ban on Chinese firms," which it claimed "severely violates international law."
"So far the U.S. sanctions have exerted little impact on China, but it breaks the rules and offends China," it added.
"The U.S. has acted beyond its authority and its unilateral sanctions are unreasonable. For one thing, how could Washington be confident about the illegal trade between China and North Korea? For another, who grants Washington the right to make judgments on which companies violate UN Security Council resolutions?" asked the paper.The U.S., it said, aims to "tarnish the international image of China" and is not acknowledging its own responsibility in the issue.
"China has made the most efforts in sanctioning North Korea, while the U.S. has never shown appreciation to Chinese companies which suffered losses from the sanctions," it added.Washington, Global Times warned, "had better restrain itself" as China "can choose whether and how to retaliate against the U.S. given how Chinese companies are hurt. The Chinese government has the obligation to speak for the country's legitimate companies."
While there may be contention about the fresh U.S. sanctions, IHS Markit's Asia-Pacific chief economist Rajiv Biswas said the superpower "can argue that it is acting to uphold sanctions on North Korea approved by UN Security Council Resolutions in its recent rounds of secondary sanctions announced in June and August."
This is as the third-country entities and persons targeted were assessed by the U.S. government to have breached the UN Security Council sanctions, which have to be implemented by all member states.
Meanwhile, China's strong response came as data pointed to a sharp slowing of trade between the two allies.
China imported and exported goods worth $456 million in July, down from $489 million in June.
The data, released by China's General Administration of Customs and analyzed by Reuters, showed that just 120 tonnes of gasoline were shipped from China to North Korea in July, 97 percent lower than a year ago. By comparison, the June figure was 8,262 tonnes.
Capital Economics said in a Monday note, however, that "China does not have a good record of maintaining sanctions on North Korea."
"China's 'carrot-and-stick' approach to North Korea is well documented," Capital Economics chief commodities analyst Caroline Bain wrote, citing a drop in petroleum product exports after missile tests.
"China has also banned imports at times to register its displeasure at North Korea's military aggression, only for trade to quietly resume after a cooling-off period," she added.
—Nyshka Chandran contributed to this article.
https://www.cnbc.com/2017/08/24/china-state-media-says-us-will-pay-for-unjust-sanctions.html
-
China Rumored to Win Mega-Container Ship Order
Aug 23, 2017 | Maritime Executive
China Daily reports that CMA CGM has chosen Chinese yards to build nine of the world’s largest container ships.
Shanghai Waigaoqiao Shipbuilding and Hudong-Zhonghua Shipbuilding have reportedly received a letter of intent from CMA CGM for the 22,000 TEU ships. Both yards are owned by state-run China State Shipbuilding Corporation.
Currently OOCL Hong Kong has the highest box capacity of any container ship built to date with a capacity of 21,413 TEU.
Reports earlier this year indicated that South Korea’s Hyundai Heavy Industries was in the running for the $1.44 billion contract.
Yang Hyeong-mo, Analyst at eBest Investment & Securities, told Pulse: “The client was seeking $160 million per vessel with a dual-fuel option, but Korean shipbuilders offer such vessels at $175 million.”
Shipping financing from the Chinese government may also have had an impact on the deal.
The CMA CGM Group has 445 vessels with a combined capacity of 2.208 million TEUs, according to the corporate website. Since 2012, the group has taken delivery of some of the largest container ships in the world including, CMA CGM Benjamin Franklin, CMA CGM Kerguelen and CMA CGM Bougainville.
As of 2017, the fleet includes over 26 container ships with capacities topping 12,700 TEUs. The fleet includes vessels of all sizes, with container ships whose capacities range from 133 to 18,000 TEUs.
According to July figures from Clarkson Research, South Korea's three major shipyards, Daewoo Shipbuilding & Marine Engineering, Samsung Heavy Industries and Hyundai Heavy Industries, have retained their top global ranking in terms of order backlog. Next was Shanghai Waigaoqiao.
South Korean yards overtook China in July with the highest number of new orders. The Korean yards received orders for nine vessels (306,000 CGT) and Chinese yards received orders for 13 vessels.
https://maritime-executive.com/article/china-rumored-to-win-mega-container-ship-order
Port Mentions - There are no relevant clips to report at this time.
City/Province Mentions
Competitor Mentions - There are no relevant clips to report at this time.
US - China Relations
Industry News
Add recipients
Suggested