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China Reform Monitor - No. 1295

Beijing cracks down on VPNs;
China secures lease for Hambantota port

Edited by Joshua Eisenman
August 10, 2017

July 13:

China's government has required its three big telecoms firms — China Mobile, China Unicom, and China Telecom — to ban individuals' access to virtual private networks (VPNs) by February 1,
Bloomberg reports. In China, where the internet is confined by the Great Firewall, VPNs, which route web traffic through servers in another country, have become the only way to get full access. China first announced the crackdown on VPNs in January 2017, The Diplomat reports. On July 12, China's Ministry of Industry and Information Technology replied to the Bloomberg report, claiming that "the foreign media reported falsely," and that the ministry has not "issued such a notice." However, in another comment also carried by the official, the Ministry did confirm that: "The targets of the new regulation are those unauthorized enterprises and individuals who haven't got the license to use VPNs. Foreign trade enterprises and multinational companies who need to get access to cross-border network can rent VPNs from authorized carriers according to the law." Simply put, the Ministry would not clarify who would be authorized to buy, sell or use a VPN.

June 14:

China has warned Botswana's President Ian Khama not to host the Dalai Lama, saying the African nation should "respect" Beijing's core concerns. The 82-year-old exiled Tibetan leader is due to make a public address at the three-day "Mind and Life Dialogue" conference in Gaborone on August 19 and meet President Khama. "China firmly opposes the Dalai Lama engaging in anti-China separatist activities in any capacity or any name, firmly opposes him keeping any contact with officials of any country, and hopes the relevant country would respect the core interests and concerns of China," said a Foreign Ministry spokesman. Reports from Gaborone said Botswana is going ahead with the visit despite Beijing opposition and that President Khama will meet him,
India Today reports.

July 18:

China's Foreign Ministry spokesperson has criticized Jakarta for renaming the South China Sea (SCS) waters that lie within Indonesia's exclusive economic zone north of Natuna Islands the "North Natuna Sea." Beijing stressed that the SCS refers to a "clear geographical scope" that had been recognized as an "international standard name" so the renaming "makes no sense at all." The change was made under the updated map of Indonesia launched by the Office of the Coordinating Maritime Affairs Minister – a rebuttal against China's nine-dash line claim in Natuna's resource-rich waters,
the Jakarta Post reports. Indonesian Maritime Affairs and Fisheries Minister Susi Pudjiastuti said: "The North Natuna Sea falls within our territory, not within the South China Sea. The North Natuna Sea is ours." Susi made a name for herself by blowing up Chinese fishing vessels caught poaching in Natuna waters.

July 23:

President Donald Trump has approved a plan giving the U.S. navy greater freedom in operating in the SCS. The new plan, which was submitted by Defense Secretary Jim Mattis, involves a full-year schedule of ships sailing through contested waters. The U.S. navy will now have more freedom than it did under the Obama administration, which approved all major operational decisions,
the Times of India reports. Meanwhile, Chinese warships began moving into the Baltic Sea for a joint naval exercise with Russian navy. "By sending its most advanced guided-missile destroyers, China is expressing its sincerity to Russia and also sends a strong signal to other countries who plan to provoke us," Li Jie, a Beijing-based navy expert told the official Global Times.

July 28:

After months of local protests and political opposition, Sri Lanka has finally signed a $1.1 billion deal to lease the southern Hambantota port to China. The Hambantota port has been mired in controversy since state-run China Merchants Port Holdings, which built it for $1.5 billion, signed an agreement last year that gave it an 80 percent controlling stake. The pact sparked widespread public anger as it included a 99-year lease of 15,000 acres to develop an industrial zone. This week Sri Lanka's cabinet approved a revised deal that cut the Chinese firm's stake to 70 percent and demanded an assurance that the port would not be used for military purposes. The revised deal creates two companies to split port operations. Sri Lanka will control the firm dealing with security, while China will control the other company in charge of business.

"We will sign the Hambantota agreement tomorrow. We are giving the country a better deal without any implications on security," said Prime Minister Ranil Wickremesinghe. The deal will also help Sri Lanka manage its foreign debt better, he added, which stood at $26.5 billion in March. The previous government under Mahinda Rajapaksa had borrowed more than $6 billion from China. The Hambantota port deal was scheduled to be debated in parliament but it was adjourned after the opposition disrupted proceedings,
the Indian Express reports. "This agreement is related to long-term economy and national security. It needs to be discussed in the parliament and among the public. You should not rush to sign this without any consultation," said opposition leader Aunra Kumara Dissanayake.