China Reform Monitor - No. 1313

Is Beijing playing ball on Iran?;
Chinese telecom makes inroads into Nepal

January 30, 2018

January 3:

Newly appointed Chongqing Mayor Tang Liangzhi, Jilin Governor Jing Junhai, and Fujian Governor Tang Dengjie are "riding on the crest of success" with their promotions,
Hong Kong's Ming Pao reports. Tang Liangzhi is an aide to CPPCC Chairman Yu Zhengsheng. Jing Junhai is from Shaanxi, where Xi Jinping spent much time, and previously worked with Li Zhanshu and Zhao Leji. Tang Dengjie worked alongside Xi when he was Shanghai vice mayor and after he became Shanghai party secretary in 2007. Tang Dengjie is now slated to replace Yu Weiguo as Fujian party secretary when Yu reaches retirement age in 2020. Chongqing Mayor Zhang Guoqing is now acting mayor of Tianjin, and Jilin Governor Liu Guozhong is now the Shaanxi governor – lateral transfers rather than promotions.

[EDITOR'S NOTE: Governors are considered the second highest-ranking officials under the provincial party secretaries, hence they seek promotions to the provincial party secretary level.]

January 6:

Chinese banks have frozen the accounts of numerous Iranian businessmen and companies for money laundering and supporting terrorists. Pedram Soltani, vice-chairman of Iran's Chamber of Commerce, said: "China has almost banned investments by Chinese companies in Iran and hardly issues licenses for foreign investment in Iran." Masoud Khansari, chairman of the Chamber of Commerce's Tehran branch, said the issue would be discussed with Foreign Minister Mohammad Javad Zarif and called for Iran to adopt "more active diplomacy" to deal with "China's decision to sideline Iran from the Silk Road project." Previously, China had frozen the accounts of some Iranian students and businessmen "to enforce the laws and regulations on money laundering. However, recently and in a new measure, it has frozen the accounts of Iranian companies that have been active there for a long time,"
the Mehr news agency reports.

January 8:

Like Russia, Pakistan will now pay for imports from China in yuan rather than in U.S. dollars. Additionally, Pakistani and Chinese banks can open import Letters of Credit in each other's currencies, and Chinese companies investing in China-Pakistan Economic Corridor (CPEC) projects can use yuan in Pakistan and remit their profits back to China in yuan instead of dollars. The State Bank of Pakistan is in charge of ensuring that imports, exports and financing transactions are properly denominated in the Chinese currency. "The trade in domestic currencies will yield long term benefits for both countries and provide a good financial environment for bilateral economic, trade and investment cooperation, and facilitate in [the] financing of key infrastructure projects under [the] CPEC project,"
the Pakistan Observer reports. "Building an alternate system independent of [the] dollar will indeed truly make this world multipolar, free from the pre-eminence of any one particular country." The decision comes after the U.S. halted economic aid to Pakistan and amid the rupee's depreciation, which puts pressure on Islamabad's dollar-denominated foreign exchange reserves.

January 9:

Kenyan workers for the China Communications Construction Company (CCCC), the contractor on the Nairobi-Naivasha Standard Gauge Railway, are striking and blocking roads to demand higher wages and improved working conditions. The strike was sparked last week when a worker was killed on the job,
Kenya's The Star reports. CCCC has released a statement refuting claims that it has fired 1,000 striking workers, and stating that negotiations are on-going and that more than half of the workers are ready to return to work. "There are a few workers that are threatening more employees from reporting to work and are thus keeping off their work stations, fearing for their lives," the statement said. "Any employee who will not have reported by the end of 8 January, 2018 will be deemed to have absconded duty and thus have his position declared vacant."

January 12:

As part of Beijing's larger effort to build an "information-centered high-speed link" along the Belt and Road routes, China has broken India's telecoms monopoly in Nepal,
the Hindu reports
. China Telecom Global (CTG) has teamed up with Nepal Telecom to provide alternate cyber-connectivity to Nepal via a new terrestrial fiber cable launched in 2016 connecting Nepal and China through the Jilong (Rasuwagadhi) border gateway. The new fiber link extends to China's Hong Kong Data Center. Last month, CTG paired with Daily-Tech, a developer and operator of data center infrastructure across China, and Global Switch, a leading data center in Europe, to launch the state-of-the art data center in Hong Kong. CTG has also expanded internet service to Pakistan, Laos and Thailand, said CTG's general manager Deng Xiaofeng.

Related Categories: China; International Economy; China and East Asia Program

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