China's Economy Seeks Stability in 2017

"Stability" has become the official watchword for China's economy, but the government has yet to define what it means.
The government says it achieved stability in the economy in 2016 and will maintain it this year, despite bouts of currency depreciation and forecasts of slower economic growth.
Stability and stabilization have become mantras for policy makers, recited repeatedly in the official press.
"In a world economy beset with increasing instabilities and sluggish recovery, China has stuck to its new development concept and the basic tone of making progress while maintaining stability," President Xi Jinping was quoted as saying after a Communist Party of China (CPC) Central Committee meeting on Dec. 9.
"China ... made stability as the basic tone for next year's economic planning," the official Xinhua news agency reported, summing up the government's annual Economic Work Conference chaired by Premier Li Keqiang on Dec. 16.
"As the Chinese economy maintains medium-high growth, the [yuan] renminbi has the conditions to remain relatively stable," the National Bureau of Statistics (NBS) said on Dec. 13, according to Xinhua.
But the government has offered few if any specifics about how it will measure stability or determine when stabilization has been achieved.
The meaning of stability
Does stability mean that gross domestic product growth rates will stay constant, stop falling, decline only slightly or perhaps resume higher levels?
Does it mean that the yuan renminbi (RMB) will halt its decline against the U.S. dollar, or only drop less than it did last year?
Will China try to slow last year's surge of capital outflows, or simply keep them from increasing?
So far, nobody knows.
One major problem in assessing what the government means by stabilization is that it has rarely if ever reported that the economy was anything other than stable.
"None of these terms that make sense in other countries make any sense in China because they don't ever officially acknowledge the need for stabilization," said Derek Scissors, an Asia economist and resident scholar at the American Enterprise Institute in Washington.
Last week in a year-end summary, Xinhua came close to conceding that the government faced serious economic trouble last year.
"China's capital market fluctuations at the start of 2016 signaled it was going to be a tough year," Xinhua said.
"However, despite the rocky start, the economy is ending the year on a firm footing, and this year's growth target will be met," it said.
China's claims that it achieved economic stability last year are backed by official GDP figures showing consistent 6.7-percent growth in all of the first three quarters.
While the rate was down from the 2015 pace of 6.9 percent, it landed within the government's target range of 6.5 to 7 percent.
Exaggerated figures
Most economists view the official GDP figures as exaggerations, useful only to indicate relative rates of growth.
Scissors estimates that actual GDP quarterly growth rates since mid-2015 may have fallen as low as three percent and have now risen to the "upper fours."
A forecast by the international bank Standard Chartered estimated a mild speedup in the fourth quarter with stronger service sector performance, giving the economy a growth rate of 6.8 percent for 2016, the official English-language China Daily reported.
If that is the case, it would suggest a recovery from the growth slowdown, although the government has been careful to avoid using the word.
Any claim of recovery would raise the question: "Recover from what?"
Instead, the government has settled on "stability" and "stabilization" as preferred terms for China's economic condition, but even these may spur misgivings.
"This is an admission on their part that there was a period of weakness and they think they've now fought it off," said Scissors. "That may actually be true."

Staging a recovery

As China begins a new year, some of the official data suggest that the government has staged a recovery in 2016 after returning to the once-scorned formula of massive stimulus spending, infrastructure projects and excessive bank loans.
In November, yuan-denominated lending jumped 22 percent from a month earlier to 794.6 billion yuan (U.S. $114.4 billion), the People's Bank of China (PBOC) reported.
Surrogate indicators like power consumption have shown signs of recovery with five-percent growth through 11 months after rising only 0.5 percent in all of 2015.
While heavy industry and trade have slumped from the heady days of the past decade, officials have taken heart from retail sales, which rose 10.8 percent from a year earlier in November, while industrial output showed a moderate gain of 6.2 percent.
Even that much industrial growth may have a dark side, since it includes sudden spurts from the high-polluting and overcapacity coal and steel industries, which the government had pledged to get under control.
Last week, the State Council punished two deputy governors in eastern Jiangsu and northern Hebei provinces for allowing previously closed steel mills to reopen, state media reported.
The unauthorized production has been blamed for last month's red-alert smog in Beijing and more than 20 other cities.
Reviews of the past year are likely to find an uneven pattern of government interventions and asset bubbles, like those in real estate, coal and steel, rather than the steady application of economic policies that stabilization implies.
The government seems to have succeeded in cooling the speculative growth of housing prices late last year, but only after urging cities to restore controls on second and third home buying that were lifted in 2015.
Given the reactions to the bubbles in property, coal and steel, the government cannot rely on those sectors for growth in 2017.
As excess liquidity seeks outlets and investment opportunities abroad, the government may have set the stage for capital flight.
Final figures for 2016 are likely to show a growing imbalance of outbound over inbound investment as capital flows toward the stronger currency and rising interest rates of the United States.
In the first 11 months of last year, China's non-financial outbound direct investment (ODI) soared 55.3 percent to 1.07 trillion yuan (U.S. $154 billion). That compares with foreign direct investment (FDI) of 731.8 billion yuan (U.S. $105.3 billion), up only 3.9 percent from a year earlier.
Government’s response
In response, the government has ordered banks to tighten foreign exchange policies in what amounts to creeping capital controls.
The yuan began 2016 at about 6.5 to the U.S. dollar and ended the year at 6.945 to the dollar, depreciating by 6.5 percent.
In November, China's foreign exchange reserves fell to $3.05 trillion (21.2 trillion yuan) in the fifth monthly decline in a row.
If the trends continue into 2017, China could come close to the minimum level of U.S. $2.8 trillion (19.4 trillion yuan) it is estimated to need for covering its imports, servicing debt and keeping confidence in the yuan.
Given the challenges, a loosely-defined stability may be as much as the government can safely promise.
The government is not expected to announce specific targets for GDP growth in 2017 until its annual legislative meetings in March. But an official rate of 6.5 percent would allow it to argue that the "new normal" of sustainable growth is continuing while the numbers are coming down at a stable pace.
A forecast by the Chinese Academy of Social Sciences (CASS) predicts 6.5 percent growth for the first two quarters, slipping slightly to 6.4 percent in the second half.
"The gap between reality and official data is narrowing, and that is a sign of stabilization," Scissors said.

http://www.rfa.org/english/commentaries/energy_watch/chinas-economy-seeks-stability-in-2017-01032017112309.html

Inflation Fuels Yuan Concerns

After years of friction over currency policy, China's inflation may become a new concern for the United States.

On Feb. 4, the Treasury Department issued a long-awaited report to Congress on China's monetary practices but declined to cite it for currency manipulation as critics have urged.

U.S. manufacturers have argued for years that China deliberately undervalues the yuan by as much as 40 percent to give its exports an unfair price advantage, causing the loss of American jobs.

But in its report, Treasury said the yuan is actually climbing faster than it seems because of China's growing inflation.

Going strictly by "nominal" exchange rates, the yuan has risen 3.7 percent against the dollar since last June, or 6 percent on a yearly basis.

But with China's greater inflation factored in, the yuan is strengthening at a 10-percent rate in "real" terms, said the Treasury report while noting that the currency remains "substantially undervalued."

U.S. officials appear to have heeded the advice of economists like Harvard's Dale Jorgenson, who told Radio Free Asia in November that Washington has been "too focused" on the yuan's nominal rate.

"It's the real exchange rate that matters," Jorgenson said.


Significant difference

Treasury estimates that inflation was 5 percentage points higher in China than in the United States in the second half of last year, making a significant difference in real terms.

If Treasury and the economists are right, China's inflation could erase more of the undervaluation in coming months.

The government has already raised its inflation target to 4 percent for 2011 after topping its 3-percent limit last year. Officially, China's consumer price index (CPI) reached
3.3 percent but economists believe it was grossly understated.

"Inflation may be substantially higher than the government is letting on," said Gary Hufbauer, senior fellow at the Peterson Institute for International Economics in Washington.

Some estimates put actual CPI growth at 10 percent or more. That figure could rise even higher this year due to drought in farming regions of China, which may drive up food costs.

According to the National Bureau of Statistics (NBS), China's CPI reached a year-on-year rate of 5.1 in November before easing to 4.6 percent in December. Last year, CPI in the United States was just 1.5 percent.

U.S. legislation

But critics aren't buying the inflation argument.

"It's as plain as the nose on your face that China manipulates its currency," said Democratic Senator Charles Schumer of New York, who has backed legislation that could lead to tariffs on imports from China.

"It's just as plain that the only way to address this problem is for Congress to act," Schumer said.

Last week, Senators Sherrod Brown, Democrat of Ohio, and Olympia Snowe, a Maine Republican, introduced legislation that would direct the Commerce Department to "treat currency undervaluation as a prohibited export subsidy."

Hufbauer said Congress is more likely to look at numbers like the U.S. trade deficit with China in considering whether to pass currency measures this year.

In 2010, the trade deficit with China soared over 20 percent to a record $273.1 billion, the Commerce Department reported last week.

Alan Tonelson, research fellow at the U.S. Business and Industry Council in Washington, argued that currency policy should not be based on China's "unreliable" CPI figures.

"It's only the latest smokescreen," said Tonelson. "We're focused on getting Washington to move against a long-standing problem."

Export dependent

Tonelson rejected Treasury's argument that inflation is eating away at the exchange rate gap as a suggestion that "the problem will take care of itself."

"We dismiss that as cynical and self-serving nonsense," he said.

Tonelson argued that China's economy is even more export dependent than it was eight years ago when U.S. industry began its campaign against the exchange rate policy.

The reason is that China's consumer market is not yet developed enough to keep its huge labor force employed. The result is that the government shifts from one export-driven tactic to another, regardless of short-term exchange rate trends, said Tonelson.

While Treasury sees some positive movement on closing the currency gap as a result of inflation, both economists and critics are on guard in case Beijing tries to turn the argument around.

If its prices keep rising this year, China may be able to make the case that it no longer needs to let the yuan appreciate in nominal terms because inflation is doing the job.

Chinese argument

Hufbauer said he has already started to hear the argument from Chinese economists.

"In my meetings, they've already begun to talk about it, and I think it will feature more heavily," he said.

On Sunday, Yi Gang, vice-governor of the People Bank of China (PBOC), argued that the exchange rate is now at "an appropriate level," the official Xinhua news agency reported, citing the Treasury's estimate that the yuan had risen 10-percent in inflation-adjusted terms.

"So far, the International Monetary Fund at least is not buying that argument as a reason to back off from urging China to appreciate," said Hufbauer.

"The Chinese will use that argument but I don't think it will sway the rhetoric to a completely hands-off attitude, which China would love to see," he said.

Tonelson was asked whether his group would accept rising inflation as a valid reason for slowing appreciation.

"Absolutely not," he said.

Treasury has been trying to make the opposite case to China, arguing that appreciation will help to control inflation by reducing pressure to convert dollars into yuan.

http://www.rfa.org/english/commentaries/energy_watch/currency-02142011122225.html

China Clamps Down on Currency Flows

China is plugging holes in its foreign exchange rules to keep its currency and reserves from sinking below key levels as worries about U.S. policies grow.
Regulators have been cracking down on all forms of capital outflow in an effort to keep the yuan from dropping below the psychological barrier of seven to the U.S. dollar while foreign exchange reserves approach the U.S. $3-trillion (20.6-trillion yuan) mark.
The twin defenses appear to be behind the Jan. 1 notice from the State Administration of Foreign Exchange (SAFE) requiring individuals to justify currency conversions, even within the legal limit of U.S. $50,000 (343,820 yuan) per year.
Under the new rules, banks have been ordered to report all transactions of over 50,000 yuan (U.S. $7,271), compared with earlier limits of 200,000 yuan (U.S. $29,085).
Citizens must sign a pledge that the funds "will not be used for overseas purchases of property, securities, life insurance or any other insurance of an investment nature," the official English-language China Daily reported.
Applicants must confirm compliance with money-laundering rules and other restrictions under penalties of losing the right to convert currency for three years and the threat of possible investigation, the paper said.
"These are not new rules. They are simply more stringent enforcement of the existing ones," China Daily asserted.
But the pledges and potential investigations may have a chilling effect on individuals who have been investing abroad to protect their savings against the falling value of the yuan, which depreciated against the U.S. dollar by about 6.5 percent last year.
The shrinking value of the currency has taken its cue from China's economy. Last week, the National Bureau of Statistics reported that gross domestic product growth fell from 6.9 percent in 2015 to 6.7 percent last year, the slowest pace in 26 years.
Surge in foreign deals
The targeting of individual transactions follows a November announcement by SAFE and three other agencies of plans to "tighten screening of overseas investment projects" following a 53-percent surge in foreign deals in the first 10 months of last year.
Outbound direct investment (ODI) by Chinese companies has dwarfed foreign direct investment (FDI) in China since late 2015, raising government concerns that capital is leaving the country as interest rates rise and the dollar strengthens in the United States.
China's non-bond ODI soared 46 percent last year to U.S. $170 billion (1.1 trillion yuan), according to an initial estimate by the China Global Investment Tracker, published by the American Enterprise Institute and the Heritage Foundation in Washington.
In the past week, the Ministry of Commerce reported similar results. Non-financial ODI jumped 44.1 percent last year to U.S. $170.11 billion (1.17 trillion yuan), while FDI of 813 billion yuan (U.S. $118.2 billion) rose only 4.1 percent, the ministry said.
The government has sent a series of signals that concern is rising over the net outflows.
In December, a People's Bank of China (PBOC) official announced an inter-ministerial effort with 22 government agencies to block illegal money transfers under the government's "One Belt, One Road" (OBOR) initiative for developing trade routes and infrastructure overseas.
PBOC Vice-Governor Guo Qingping said the crackdown was aimed at "combating the financing of terrorism regimes," but the enforcement coincides with attempts to halt capital flight through ordinary investment activities.
"Real estate and precious metal trading have become new avenues for such crimes, with internet finance and third- party payment channels dealing a further blow," China Daily quoted Guo as saying.
Government’s vigilance spreads
The government's vigilance has gradually spread from big investment deals to individual transactions with the growth in capital leaving the country.
"The move aims to fix loopholes in the current management and curb foreign exchange purchase violations and other illegal activities, such as fraud, money laundering and underground banks," said SAFE, as quoted by the official Xinhua news agency.
Last week, the agency that controls state-owned enterprises (SOEs) also announced new rules aimed at cutting capital outflow.
Under the rules, 102 large SOEs will be barred from investing abroad in sectors including real estate, iron ore, petroleum and non-ferrous metal, the State-Owned Assets Supervision and Administration Commission (SASAC) said, according to state media.
The Rhodium Group, a New York-based consulting firm, estimated that net outflows under the non-reserve capital account reached U.S. $379 billion (2.6 trillion yuan) in the first three quarters of last year.
The multi-front buildup of capital controls comes as China's foreign exchange reserves dropped in December for the sixth month in a row to U.S. $3.01 trillion (20.7 trillion yuan), raising concerns that the PBOC can't keep the yuan from falling below the seven-to-the-dollar barrier without slipping under the U.S. $3-trillion mark.
State media have stressed that both are only psychological thresholds while insisting that there are no new capital controls.
"Despite continued drops in China's foreign exchange (forex) reserves, economists believe there is no need to panic as reserves are still abundant for the country to fend off external risks," a Xinhua news analysis said on Jan. 9.
"Enforcing forex rules not currency control," said a China Daily headline on Jan. 5.
Last week, a SAFE official argued that China still has "ample" reserves, suggesting that the government may choose to break the U.S. $3-trillion barrier in defense of the yuan.
There is no need to "create excessive hype over a certain number," SAFE spokesperson Wang Chunying said, according to Xinhua.

Currency concerns
The government's currency concerns are believed to be the reason behind the abrupt rise and fall of the yuan's value on the successive trading days of Jan. 6 and Jan. 9.
Currency speculators in Hong Kong were stunned on Jan. 6 when the PBOC's daily "fixing" of its central parity rate jumped by 639 basis points, or hundredths of a percentage point. The sudden rise against the dollar came after weeks of smaller declines.
The boost was accompanied by a spike in yuan overnight interbank interest rates to over 60 percent, making short trading positions against the currency indefensible.
The move was apparently orchestrated by the PBOC to punish speculators as part of an effort to stop the yuan's downward spiral. But the depreciation resumed on Jan. 9 when the PBOC's fixing fell by 594 basis points to 6.9262 to the U.S. dollar.
"Our impression is that the PBOC is very sensitive about the key 7.0 level for the yuan," said Liu Weiming, chief investment officer at Fu Xi Investment Management, according to The Wall Street Journal. "Once 7 is broken, people will expect 8 and it will get even worse."
But defending the yuan could become unaffordable if the PBOC treats the U.S. $3-trillion reserve level as equally inviolable. Tighter capital controls may be the only option.
"We're starting to see more and more of a negative cycle being created," Benjamin Fuchs, chief investment officer at BFAM Partners in Hong Kong, told Bloomberg News. Attempts to curb outflows are "just making people want to take money out quicker," he said.
Gary Hufbauer, senior fellow at the Peterson Institute for International Economics in Washington, said that China's capital outflows began with its anti-corruption campaign before economic troubles became the major motivation.
"That caused a lot of people to become quite frightened and they moved their capital abroad," Hufbauer said.
Cushioning the yuan’s fall
The PBOC has tried to cushion the currency's fall by buying yuan until its reserve levels suffered.
China's foreign exchange reserves hit a high of U.S. $3.99 trillion (27.43 trillion yuan) in mid-2014.
"By now, you have the psychology feeding on itself and people wondering if they can get out at all," said Hufbauer.
The PBOC has also been pushed into supporting the yuan by U.S. President Donald Trump's charges that China manipulates the currency's value to gain an export advantage.
"Then, other forces within the government said they can't continue to spend their foreign exchange reserves on this attempt to placate Trump," Hufbauer said.
"So, here you've got, I would say, kind of a mess going on," he said.
China's tightening of capital controls is unlikely to be what the International Monetary Fund had in mind when it approved the yuan's inclusion in its Special Drawing Rights (SDR) basket of major freely-traded currencies in 2015.
"I think the IMF decision was essentially political to begin with, so on political grounds, they will probably not say very much. But it's very troubling what's happened," Hufbauer said.

http://www.rfa.org/english/commentaries/energy_watch/china-clamps-down-on-currency-flows-01232017104537.html

China's Investment in U.S. Faces New Challenges

Chinese investment in the United States is headed for a steep drop this year after a record surge in 2016, analysts say.
The expected decline is the result of a combination of factors including political concerns in Washington and increased vigilance in China over capital outflows.
Even without those influences, Chinese investment in the United States may be due for a downward correction after an unprecedented buying binge last year.
Two leading investment data services have reported similar totals for the 2016 bonanza.
According to initial estimates by the China Global Investment Tracker compiled by the American Enterprise Institute (AEI) and the Heritage Foundation, China's investment in the U.S. market nearly tripled last year to U.S. $55 billion (378 billion yuan).
The China Investment Monitor of the New York-based Rhodium Group counted U.S. $45.6 billion (313.7 billion yuan) in 2016. Despite different definitions, the analysts agree that China's spending in the United States last year was equal to about half of all its previous investments in the country since tracking began over a decade ago.
China's appetite for American assets including hotels, real estate, entertainment and technology is even more remarkable when measured against the Ministry of Commerce official global total of U.S. $170.1 billion (1.1 trillion yuan) in non-financial outbound direct investment (ODI) last year.
The jump in U.S. investment accounted for as much as a third of China's worldwide ODI and two-thirds of its 44-percent increase.
But the big wave of Chinese money flowing into the U.S. market seems unlikely to be repeated this year.
"The investment in the United States is going to drop. No question," said Derek Scissors, an Asia economist and AEI resident scholar in Washington.
"We won't allow it. Even if the Chinese allowed it, we wouldn't allow it," he said.
The Rhodium Group sees some spillover from 2016, since Chinese companies are awaiting final regulatory approvals or financing for U.S. $21 billion (144 billion yuan) of U.S. deals. But these will have to overcome greater resistance this year.
"While the economic fundamentals and the deal pipeline suggest that 2017 will be another boom year for Chinese investment in the U.S., the political realities on both sides pose a major downside risk to both pending transactions as well as the pace of newly announced investments in coming months," Rhodium analysts said in a report.
A slowdown in deals
The slowing of deals in the United States is only part of the expected decline in China's total ODI.
In interviews with The Wall Street Journal, economists at the Chinese Academy of Social Sciences estimated that ODI would return to the 2015 level of about U.S. $118 billion (812 billion yuan), a drop of some 30 percent from last year.
One major reason is China's concern about capital outflows, which have pressured both its currency and its foreign exchange reserves.
As Chinese capital is drawn toward the stronger currency and rising interest rates of the United States, the People's Bank of China (PBOC) has spent heavily on defending the yuan, dragging forex reserves down to U.S. $3.01 trillion (20.7 trillion yuan) from a high of U.S. $3.99 trillion (27.4 trillion yuan) in mid-2014.
To slow the outflow, the PBOC and government agencies have ordered close reviews of overseas investments to bar currency speculation.
On Jan. 1, the State Administration of Foreign Exchange (SAFE) extended the curbs to individuals, requiring citizens to pledge that exchanges of yuan for foreign currency would not be used for overseas purchases of "property, securities, life insurance" or other investments.
It is unclear how effective such restrictions will be.
On Jan. 16, a report by the Hurun Research Institute found that nearly half of Chinese citizens with assets valued at over 10 million yuan (U.S. $1.45 million) already own an average of 2.3 houses overseas, the official Xinhua news agency said.
Over half of the investors in foreign property cited access to schooling as a reason for their purchases but also noted "the need to hedge against risks," the report said.
How big a part similar risks played in last year's major investments in the United States is anyone's guess, but Scissors estimated that currency risks could have accounted for as much as 35 percent.

Hotel and entertainment acquisitions
An examination of the deals listed chronologically by the China Global Investment Tracker suggests that a flurry of U.S. investments came together at intervals, roughly corresponding to spikes in China's currency concerns.
While technology acquisitions were most likely to have been pursued for strategic reasons, those in other sectors like hotels and entertainment have come under scrutiny.
Late last year, the PBOC and SAFE said they were "closely monitoring the tendency of 'irrational' overseas investment in some areas."
In a joint statement, the agencies pointed to outbound investments in real estate, hotels, cinemas, entertainment, and sports as "examples of this tendency," Xinhua reported at the time.
China's big investments in hotels may have been especially influenced by currency fluctuations, said Scissors.
"Tourist demand and the profitability of the hotel industry did not change that dramatically in one year," he said. "What happened was, ... once somebody bought one, a number of people bought them and they started soliciting the Chinese for hotels. And that's a way to get money out of the country."
Even without the currency crackdown, China's investments in the United States may face greater resistance this year under the administration of President Donald Trump, who has threatened to charge it with currency manipulation and impose tariffs on its exports.
China's acquisitions are expected to face tougher scrutiny by the Committee on Foreign Investment in the United States (CFIUS), a government agency that reviews foreign deals for national security implications.
The Rhodium Group cited "serious efforts underway on Capitol Hill to prepare legislation that would expand the mandates of CFIUS to review Chinese and other foreign transactions."
Last September, a bipartisan group of U.S. House members led by Rep. Robert Pittenger, Republican of North Carolina, urged the Government Accountability Office (GAO) to determine whether the authority of CFIUS should be updated to keep pace with the "growing scope of foreign acquisitions" in sectors of concern, including telecommunications, media and agriculture.
In particular, the group cited investments by "Chinese companies designated as 'state champions' that often benefit from illegal subsidies to gain strategic access to markets like the U.S." On Oct, 4, the GAO agreed to conduct the review.
Greater restrictions
It is unclear whether China's big investors in the U.S. market have gotten the message that they may face greater restrictions or whether they expect them to be enforced.
On Jan. 19, Reuters reported that the Paramount Pictures subsidiary of Viacom Inc. will receive U.S. $1 billion (6.8 billion yuan) in investment from Shanghai Film Group and Huahua Media. The cash will finance 25 percent of Paramount's films for the next three years, Reuters said, citing a "source familiar with the situation."
But reactions to last year's surge in spending suggest that China's investment in the United States will face rising pressure from both sides.
Ironically, the higher hurdles for foreign investment could slow the pace of China's capital flight and depreciation of its currency, perhaps easing pressure for retaliatory trade measures against its exports.

http://www.rfa.org/english/commentaries/energy_watch/chinas-investment-in-us-faces-new-challenges-01302017105151.html

The Mekong Part 4: Blasting the Rapids in Thailand

Thailand, after suspending action for more than a decade, has decided to support China’s blasting of rapids in the Mekong River.
China wants to remove rocks and islets in the Mekong in order to clear the way for large cargo ships, effectively turning Southeast Asia’s longest river into a Chinese trade and shipping lane.
Thailand’s military government meanwhile has plans to build a multimillion dollar freight transport hub in the country’s northern province of Chiang Rai. The aim is to link Chinese shipping with Thai land transport.
The city of Chiang Rai would be promoted as a logistics hub for Thailand and both China and neighboring Laos. Construction is scheduled to begin next year, according to The Bangkok Post.
The Post says that the blasting will cover a 392-mile route from the China-Myanmar border to Luang Prabang in Laos.
But nongovernmental groups in Thailand argue that the loss of the rapids will further damage the Mekong’s declining fish stocks, which have long been the major source of protein for villagers living near the river.
Pianporn Deetes,  Thailand campaign coordinator for the NGO International Rivers, said that the ecosystem in question is one of  the most complex in the world. It includes many fish species,  rapids, whirlpools, and sand dunes as well as vegetation supporting farmers, fishermen, and wildlife.
The rapids and rocks provide sanctuaries and breeding grounds for migratory fish. They also provide a refuge for the endangered giant catfish.
Deetes  said in an interview that to place commercial shipping ahead of the needs of  millions of farmers and fishermen depending on the Mekong for their living would be “senseless .”
She said that export products from China can reach Thai markets within 24 hours by road and that existing shipping by smaller cargo ships is working well. In addition, she noted that China has plans to build a railroad inside Laos that will be able to carry freight to Thailand.
Thai villagers protest
Over the past year, Thai villagers living along the Mekong have boarded Chinese survey boats to protest plans to destroy the rapids located near their homes.
Living on the Thai side of the Mekong, which forms a border between Laos and Thailand, the villagers have demanded that the survey boats halt their work.
At the same time, a group of Thai villagers led by a Thai teacher called Kru Tee  filed a lawsuit in Thailand calling for a judgment against several Thai government agencies regarding the negative environmental and social impacts created by Laos’s Xayaburi Dam.
The plaintiffs argued that the hydropower dam wouldn’t have been economically viable without an agreement by the Electricity Generating Authority of Thailand (EGAT) to purchase 95 percent of the electricity generated by the dam.
The case came under investigation by Thailand’s Supreme Administrative Court, but  according to Thai media, it was rejected  in late December, 2015.
A history of debate
In the year 2000, China, Laos, Burma, and Thailand signed an agreement to allow the blasting of  rocks and reefs  in the Mekong River.
According to a report by the Worldwatch Institute based in Washington, D.C., blasting began in December 2002.
But in 2003, after completing an early phase of  the project, China halted the dynamiting due to a Thai border dispute with Laos over the location of the two countries’ shared water boundary.
Thai officials feared that changes in the flow of the river resulting from the blasting could shift the location of the Thai-Lao border, which is supposed to be set at the lowest elevation within the river.
Meanwhile, China had undertaken an environmental impact study which concluded that the impact of the blasting would be negligible.
But a Thai environmental watchdog group and scientists who reviewed the Chinese findings said that the study’s analysis was deeply flawed. They said, moreover, that it was based on a field investigation that had lasted only two days.
The Mekong River Commission (MRC), which is supposed to review major changes in the flow of the Mekong, has called for a halt to the plan to blast more rapids until a more complete study can be made. But the MRC’s findings are not binding, and China isn’t a member of the commission.
The new blasting is not likely to commence until three years from now under a framework that called for a first phase from 2015 to 2020. That phase has required a survey and another assessment of the project’s impact.
But some critics argue that even the smaller ships that currently carry cargo down the Mekong are already causing erosion of the riverbanks along parts of the river.
“Without the blasting of  more rapids, local people feel  the shipping traffic is already very destructive,” said former Thai Senator Kraisak Choonhavan, who has studied the issues involved for several decades.
Dan Southerland is RFA’s founding executive editor.
http://www.rfa.org/english/thailand-mekong-01272017104723.html 

China in Final Push to Eliminate Anonymous Phone Users

China will begin a fresh attempt to enforce real-name-only mobile phone use starting Feb. 1, according to the country's Ministry of Industry and Information Technology.

Under regulations first issued in 2013, anyone signing a new phone contract or buying an SIM card must produce a valid identity document and their address and contact details, the ministry said in a statement earlier this month.

"When the operator of telecommunications business enters into the agreement with the user, the telecommunication service operator shall require the user to present a valid identity document," the regulations, which take effect on Wednesday, say.

Service users must also provide supplementary information to confirm their details, it said.

"Telecommunications companies shall not provide services to the unidentified or to those who refuse to provide verification of identity," the ministry said in a statement on its official website.

Similar restrictions will apply when someone sets up a phone contract for another person, it said.

The move is the latest in a series of attempts to ensure that nobody can access communications services in China without being easily traceable by the authorities.

Early attempts fail

Attempts to force pay-as-you-go SIM card customers to register using their real names began as early as 2010 in some parts of China, but weren't widely implemented because sales personnel allowed people to buy cards using other people's identities.

China also has a market for land-line users who top up their credit in advance, some of whom commented on social media that the crackdown has already begun.

"They suddenly cut off our fixed-line phone at home, which we've been topping up in advance for years by going to the local branch," one user posted on a Twitter-like Weibo platform on Tuesday.

"They said it was because there's a real-name system now, so I had to go back down there, otherwise they wouldn't switch it back on again ... complaining was no use."

Users of Chinese social media sites are already required to link their mobile phone numbers to their accounts, and only those verified are allowed to post messages.

The ministry currently estimates that upwards of 95 percent of phone users in China are now registered with their real names, and that this proportion will rise to 100 percent by the end of June.

Loopholes to close

Shenzhen-based rights activist Huang Meijuan said the new rules will likely close any remaining loopholes in the system, making life harder for activists and civil society groups who wish to remain free of official harassment.

"It's very clear that the government are setting up an information technology regime which will allow them to have total control over all of their citizens within China's borders," Huang said.

The ruling Chinese Communist Party has warned that terrorists, separatists, and extremists are using communications networks "to incite, plan, organize, and carry out violent terrorist activities, directly threatening the security of people’s lives and possessions, as well as social order."

It has also warned that "hostile foreign forces" could use such networks to try to subvert its rule.

Huang said the aim of exerting such control is to shore up the party's grip on power.

"Their aim ... is to try to consolidate what is a very shaky regime," Huang said. "Basically anyone who tells the truth about what is happening is accused of spreading rumors."

Reported by Yang Fan for RFA's Mandarin Service, and by the Cantonese Service. Translated and written in English by Luisetta Mudie.

http://www.rfa.org/english/news/china/push-01312017141532.html 

Anger of Jungle People

https://www.youtube.com/watch?v=xGWX05FNb3Y