August 21, 2015
China Expels Brother of Former Senior Official from Communist Party Over Graft
Ling Zhengce, the former deputy head of the parliamentary advisory body in the coal-rich northern province of Shanxi, is the elder brother of Ling Jihua, a one-time senior aide to former president Hu Jintao. Ling Zhengce violated rules of self-discipline by accepting monetary gifts and exploiting his position, besides seeking benefits for relatives, the Central Commission for Discipline Inspection said. The latest move to eject him from the party and strip him of his official post is a necessary procedural step in passing the case to judicial authorities for prosecution.
KI – Former deputy public security minister Li Dongsheng and Zhou Yongkang ally is also being prosecuted for corruption.
Former Hainan Vice Governor Faces Criminal Prosecution
Former vice governor of south China’s Hainan Province Ji Wenlin will face public prosecution for allegedly taking bribes, the Supreme People’s Procuratorate (SPP) said in a statement Friday. The People’s Procuratorate of Tianjin City has completed probe into Ji’s case and is initiating a public prosecution. During his service in Sichuan, the Ministry of Public Security and Hainan, Ji took advantage of his posts to seek benefits for others, demanded and received a huge amount of bribes and should bear criminal responsibility for his wrongdoings, the indictment said.
KI – Ji Wenlin was Zhou Yongkang’s aide during Zhou’s tenure as Sichuan party secretary.
Global Witness: The Media Is Dependent on NGOs to Investigate Corruption
Media outlets are becoming more reliant on NGOs to uncover corporate wrongdoing, says Global Witness’s new executive director. Fear of retribution is one of the reasons the NGO is still reliant on its own staff and cautious about working with partners on the ground. Speaking in the relative safety of their headquarters in central London, Caldwell says companies and national governments are often colluding to obstruct their work: “Companies by virtue of collaboration with local government, police and security forces, often on their payroll, can make it virtually impossible to organise and get the jobs done.”
U.S. Told Ukraine to Stand Down as Putin Invaded
As Russian President Vladimir Putin’s forces took over Ukraine’s Crimean peninsula in early 2014, the interim Ukrainian government was debating whether or not to fight back against the “little green men” Russia had deployed. But the message from the Barack Obama administration was clear: avoid military confrontation with Moscow.
August 20, 2015
A Strange Editorial in China’s State-Run Newspaper is Spelling Trouble for Xi Jinping
In unusually strong language, the article said the reforms were at a critical stage and had encountered immense difficulties, affecting the interests of various groups. Xu Yaotong, a political science professor at the Chinese Academy of Governance, said the publication came amid concerns the anti-corruption campaign, which had targeted several top military officials and politicians, was waning and that other reforms had attracted opposition. He said the resistance could be from any of three powerful groups: retired leaders who wanted to exert influence, cadres whose power had been weakened and civil servants unhappy with austerity rules.
Wife of Moscow’s Former Mayor Retains Richest Russian Woman Title
The wife of former Moscow mayor Yury Luzhkov, and Russia’s only female billionaire, Yelena Baturina topped an annual list of the country’s 50 richest women for the third year in a row, the Russian edition of Forbes Woman reported Thursday. Baturina, 52, is president of the construction company Inteco Management. Following the resignation of Luzhkov, which Baturina has blamed on then-president Dmitry Medvedev, she sold her company and together with her husband moved abroad, where she embarked on a number of development projects.
Russian Blogger Finds Pro-Kremlin ‘Troll Factories’
A Russian blogger has discovered that by plugging search terms into the service Google Trends, apparently the location of some of Russia’s notorious “troll factories” can be discovered. Google Trends, released in 2006, shows the percentage of incidence of a search term matched to a geographic location. Otakvot on LiveJournal came up with the revelation that abnormally high number of Google searches for terms like “Right Sector,” the militant ultranationalist group in Ukraine; or “Novorossiya,” the aspirational country to be formed out of parts of Ukraine, Moldova and Belarus; or “DNR,” the self-proclaimed “People’s Republic of Donetsk”; did not come from high population centers such as Moscow but turned up in Olgino, a St. Petersburg suburb.
Twenty-Two Naval Ships to Take Part in Second Phase of Large-Scale Russia-China Exercise
Twenty-two combat ships of Russia and China will take part in the second phase of a large-scale naval exercise Joint Sea 2015 off the Far Eastern city of Vladivostok, a deputy commander of the Russian Navy, Vice-Admiral Alexander Fedotenkov, said on Thursday. “This year the scope of the exercise is unprecedented,” Fedotenov noted, saying that 20 aircraft, more than 500 amphibious soldiers and 40 pieces of armored vehicles would also take part.
Pentagon Chief: Russia is a ‘Very Significant Threat’
Defense Secretary Ash Carter is calling Russia a “very, very significant threat,” agreeing with an assessment made by top military officials. A chorus of top military officials have said recently that Russia is the top threat to the U.S.‘s national security in comparison to the Islamic State in Iraq and Syria. At a Pentagon press conference, Carter said he agreed with their assessment that Russia is an existential threat to the U.S., “by virtue simply of the size of the nuclear arsenal that it’s had.” “Now, that’s not new,” he added. “What’s new — and I think also that they were pointing to and where I agree with them — is that for a quarter century or so, since the end of the Cold War, we have not regarded Russia as an antagonist.”
Obama and Europe
Looking back, Obama’s evolving attitude toward Russia has followed a familiar arc. President Jimmy Carter started with détente and ended up arming the mujahideen in Afghanistan and boycotting the Moscow Olympics. Bush started with seeing Putin’s “soul” and ended up backing Georgia in its war with Russia, at least rhetorically. Obama, likewise, started with a reset and wound up with sanctions. The question for the next president is whether he or she can avoid repeating this pattern and find ways to engage the entire European continent in the long-term project of sustaining the Western alliance and protecting it from what could be a long era of Russian revanchism.
August 19, 2015
Chinese State Media Reports Corruption in Tianjin Safety Licensing
Voice of America
The well-connected owners of a warehouse that exploded in the northeastern Chinese port city of Tianjin last week used their relationships with officials to obtain apparently fraudulent safety licenses, according to state media. The corruption allegation, which surfaced Wednesday, is likely to prompt further outrage over the explosion, which killed 114 people and injured hundreds more. Ex-Sinochem executive Yu Xuewei and Dong Shexuan, the son of a late police chief, are the top shareholders of Ruihai International Logistics, which owned the Tianjin warehouse where the explosion occurred. According to Xinhua, Dong and Yu also attempted to hide their ownership in the company, listing their friends and relatives as shareholders instead of themselves.
Former Russian Nuclear Official to Plead Guilty to U.S. Money Laundering
Wall Street Journal
A former Russian nuclear official has agreed to plead guilty in the U.S. to charges that he conspired to launder bribe payments, according to people familiar with the matter. U.S. authorities have been investigating allegations that the official, Vadim Mikerin and other officials at Russia’s nuclear enterprise Tenex took bribe payment from contractors seeking to win millions of dollars in business related to shipping Russian uranium to America, according to court records. Mr. Mikerin was indicted last year for extortion after federal agents failed to enlist him as a covert cooperator against senior Russian officials, according to court records.
Ukrainian Film Director’s Defiant Court Statement: ‘The Greatest Sin Is Cowardice’
Ukrainian filmmaker Oleh Sentsov stood before a Russian court in Rostov-on-Don on August 19 to offer a defiant closing statement in his trial with a co-defendant for alleged conspiracy to commit terrorism in forcibly annexed Crimea in 2014. In his remarks, he challenged the legitimacy of an occupied Crimea “governed by criminals” and he spurned a path of “cowardice” that might accommodate or excuse Moscow’s actions in Ukraine. “We also had a criminal regime, but we came out against it. In the end, we won. The same thing will happen with you, sooner or later.”
Rise of New Banks Helps Kremlin Keep Russia’s Economy Afloat
Four private banks with friendly ties with the Kremlin are emerging as big winners from Russia’s economic crisis, helping out dollar-starved companies at a time when large state lenders are hampered by Western sanctions. The four, FC Otkritie, Promsvyazbank, Credit Bank of Moscow and B&N Bank, were relatively minor players only a few years ago. Now they are major beneficiaries of a bank recapitalization plan and have used central bank foreign currency refinancing tools to win business lending to state energy firms and others needing to meet big overseas debt repayments.
AVIC Capital to Inject $780 mln into Chinese Military Jets Makers
AVIC Capital Co, which helps finance China’s state aerospace firms, will lead a capital injection of up to 4.99 billion yuan ($779.91 million) into two jet fighter makers in a move aimed at shoring up key military manufacturers. AVIC Capital, in its stock exchange filing, refers to the complex security situation between China and some of its neighbours as a long-term business opportunity which could generate “high returns”.
KI – AVIC is a state-owned defense company that has close ties to the PLA.
Russia Imprisons Abducted Estonian
A Russian court sentenced Eston Kohver, an agent of the Estonian Internal Security Service, to a 15-year prison sentence on Wednesday, in a case that has further worsened already tense relations between Russia and the EU. Kohver was captured by Russian security forces last September while he was on his way to the border with Russia. The Estonians insist he was kidnapped from their territory, while Russia says he was arrested while spying on their side of the border. He was charged with carrying illegal arms and €5,000 in cash, improperly crossing the border and espionage.
August 18, 2015
Few Options for China’s Fox Hunters on U.S. Soil
Wall Street Journal
China appears to be getting more aggressive in pursuing its anti-corruption campaign — dubbed “Operation Fox Hunt” — in the U.S. But what can Chinese hunters do if they find their prey on American soil? The answer, according to legal experts, is very little. In the absence of such a treaty, China has two options in recovering economic fugitives from the U.S., according lawyers and legal scholars who have experience with such cases: find them and convince them to come back, possibly by threatening pressure on family members still in China; or get them prosecuted for a crime in the U.S. and offer a plea deal.
Former Chinese Power Company Boss Goes on Trial on Corruption Charges
South China Morning Post
Wang Yujun was put on trial on August 12 in Zhenjiang, a city in the eastern province of Jiangsu, the country’s procuratorate said in a statement on its website. Wang is accused of seeking profit for others, illegally accepting other people’s assets and embezzling public money using his various official roles.
KI – Former chairman and vice president of parent company also placed under corruption investigation in 2014.
Pentagon Report: Russia is Deploying Specially Modified Air-Defense Systems to the Arctic
Russia is moving air defense systems modified for the harsh Arctic environment to key areas near its borders with Norway and the US, the US Army’s Foreign Military Studies Office (FMSO) notes in its August 2015 report. According to the FMSO, the Kremlin is looking to place short-to-medium range antiaircraft SA-22 Pantsir-S1 battalions at Murmansk by the Norwegian border and at unspecified locations in the east of Russia facing both the US and Japan.
The Inevitable Putin/Le Pen Alliance Is So On
Russia’s outreach to right-wing and left-wing populist movements all over Europe has been well reported. In France, Marine le Pen’s National Front has received a $11.7 million loan from a Russian bank, as an apparent reward for her far right party’s support of Russian stances in the Ukrainian conflict. But is striking to see pro-Putin sentiment spreading in such spectacular fashion in a mainstream West European center-right party.
August 17, 2015
Shake-Up in Moscow as Railways Chief, a Putin Friend, Is Reported Ousted
New York Times
Vladimir I. Yakunin, the director of Russia’s national railway company and a longtime associate of President Vladimir V. Putin, has reportedly been ousted in one of the most significant shake-ups in domestic politics since the Russian economy slipped into recession last year. Mr. Yakunin, who has known Mr. Putin since the early 1990s, has accepted a mostly ceremonial political position in the upper house of Parliament, local news media reported. It was unclear whether the sanctions on Mr. Yakunin played any role in his departure. But the national railway company has frequently been embroiled in scandals and accused of mismanagement.
Confusion Mounts Over Tianjin Warehouse Ownership
China is awash with confusion over the true ownership of the hazardous goods warehouse that exploded in Tianjin last week even as the Communist party seeks to assure the public there will be no cover-up. Identifying owners of businesses in China has been complicated since exposés of the family wealth of the Communist party’s most powerful leaders led to greater restrictions on corporate ownership registries. The task is further complicated by the practice of individuals legally holding shares on behalf of other, unnamed but more powerful, people, often on the basis of a verbal agreement. Adding to the speculation, Tianjin’s online corporate registry database was inaccessible for four days after the blasts. When access resumed on Monday, a search for Ruihai Logistics yielded a curious gap. The company was registered in 2012 but its current legal owners only bought their shares in 2013. The historic list of changes that should have reflected the previous owners did not appear.
China Dismisses Warning About Agents Operating Secretly in U.S.
New York Times
Responding to an article published on Sunday by The New York Times, China’s official news agency Xinhua on Monday called the order for Chinese agents to leave the United States a “regrettable move” and accused the Obama administration of breaking bilateral law enforcement agreements. No mention was made of the Chinese agents illegally operating in America or of their use of threats and other forms of harassment against targets, actions that United States officials say they can prove.
After Wristwatch Scandal, Putin’s Spokesman Grilled Over Luxury Yacht
Fresh in the wake of a scandal about a wristwatch reportedly worth hundreds of thousands of dollars, Kremlin spokesman Dmitry Peskov appears to be in hot water again over his taste for the good life. Or to be more precise: in the temperate, cobalt-blue waters of the Mediterranean. Russian anticorruption crusader Aleksei Navalny is demanding that Peskov, Russian President Vladimir Putin’s longtime spokesman, explain the funding behind a trip he allegedly took on a luxury yacht in the Tyrrhenian Sea area of the Mediterranean.
Gazprom’s Colossal Deal with China is Already Looking Like a Terrible Deal for Russia
There was a lot of excitement in the industry when the Russian energy giant Gazprom announced a mammoth $400 billion (£256 billion), 30-year export deal to China in May 2014, but the agreement is now coming under extreme pressure on numerous fronts.
Hunt for Chinese Man in U.S. Fuels Political Intrigue
Wall Street Journal
Tommy Yuan was preparing for class at the math-tutoring center he owns in Irving, Texas, one afternoon in June when two men walked in alongside the usual group of students’ parents and then quickly left. The men returned, identifying themselves as representatives of China’s government and speaking with mainland accents. “If you want to protect your ex-wife, you’ll give us information,” the visitors said, according to Mr. Yuan, who was born in China and settled in the U.S. in the 1990s. They said they were looking for a man called Ling Wancheng. Senior U.S. officials were notified last summer that Mr. Ling was talking to U.S. authorities. But those officials weren’t told who within the U.S. government was involved in the case and what the conversations involved.
Putin Escalates Again in Ukraine
Wall Street Journal
Russian proxies in occupied eastern Ukraine shelled Ukrainian-government positions over the weekend and on Monday. The artillery barrage killed two civilians and wounded several others in Sartana, near the Sea of Azov. It’s one of the larger-scale escalations of the conflict since a winter cease-fire. Meanwhile, the Obama Administration continues to withhold a radar upgrade that would allow Ukrainian forces to protect against shelling.
China Audit Uncovers Misuse of Affordable Housing Funds
China’s state auditor said on Monday it has uncovered widespread irregularities in the country’s affordable housing programme in 2014, including the misuse of 9.4 billion yuan ($1.47 billion) of funds. The problems were uncovered after auditing 182 projects, local government financing vehicles, housing and finance departments, the National Audit Office said in a report on its website. The funds were misappropriated to pay salaries, office expenses, bank loans and invest in wealth management products, it said.
August 16, 2015
Obama Administration Warns Beijing About Covert Agents Operating in U.S.
New York Times
The American warning, which was delivered to Chinese officials in recent weeks and demanded a halt to the activities, reflects escalating anger in Washington about intimidation tactics used by the agents. The American officials said that Chinese law enforcement agents covertly in this country are part of Beijing’s global campaign to hunt down and repatriate Chinese fugitives and, in some cases, recover allegedly ill-gotten gains. American officials said they had solid evidence that the Chinese agents — who are not in the United States on acknowledged government business, and most likely are entering on tourist or trade visas — use various strong-arm tactics to get fugitives to return. The harassment, which has included threats against family members in China, has intensified recently, officials said.
Wall Street Journal
Making sense of Putinism is rather like trying to analyze a Russian salad. Unappetizing cubes of meat and vegetables lurk in a sea of gloop. Eat it and you may be ill, which is certainly the effect of 15 years of the stuff on Russia’s body politic. The country may not be quite a dictatorship, but it is certainly no kind of democracy. Vladimir Putin’s regime is more than kleptocracy crossed with cynical populism—but what is it exactly, and what does it stand for? The opening pages of Walter Laqueur’s “Putinism” take on the subject with promising panache. Putinism is not fascism, he says—that is not a “helpful” analogy; and it is not quite an ideology. He prefers to call it a doctrine. It mixes anti-Westernism, conspiracy theories, religion and nationalism to support a worldview in which Russia (along with its leadership) is virtuous, the outside world malign, and sacrifices are necessary to protect one from the other.
August 15, 2015
Chinese Companies Face Culture Shock in Countries That Aren’t Like China
Faced with slower growth at home and rising labor costs, Chinese entrepreneurs are seeking foreign markets as never before. But as they rush abroad, they are grappling for the first time with unruly trade unions, independent courts and meddlesome journalists. And for many, navigating the unfamiliar waters of multiparty politics and confronting the power of public opinion makes for heavy going. As they venture into foreign democracies, many Chinese companies experience culture shock. Having made their money in a one-party state, where political connections are the key to a successful business and the rule of law is easy to sidestep, they are finding things just aren’t as simple abroad.
5 Facts That Explain Russia’s Economic Decline
For the first time since 2009—low point of the global economic slowdown—Russia is in recession. Its economy will contract 3 percent this year, though Moscow’s $360 billion in cash reserves will cushion the immediate blow. Still, as President Vladimir Putin continues to try to assert Russian power on the international stage, it has become clear that he is now ruling a “submerging market.” In addition, endemic corruption costs the Russian economy between $300 and $500 billion each year, or roughly the cost of three Greek bailout packages combined. This year, Freedom House gave the country a 6.75 on its corruption scale; 7 is “most corrupt.”