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China Reform Monitor - No. 1311

New anti-terror restrictions foreshadow squeeze on foreigners;
The PLA deploys in Doklam

Edited by Joshua Eisenman
January 9, 2018

December 4:

Pakistan, Nepal, and Myanmar have shelved three major hydropower projects – worth a combined $20 billion – that were planned as part of the Belt and Road Initiative. Pakistan canceled the $14 billion Diamer-Bhasha Dam project citing Beijing's tough financing terms. The chairman of Pakistan's Water and Power Development Authority told parliament that China's conditions would have required pledging the new dam and an existing dam as collateral. "Chinese conditions for financing the Diamer-Bhasha Dam were against our interests," he said. Meanwhile, Kathmandu announced it will scrap the $2.5 billion Budhi Gandaki hydropower project after "financial irregularities" were discovered in the Chinese firm, Gezhouba Water and Power Ltd. Myanmar, which halted a $3.6 billion Chinese-backed dam three years ago, said that it is no longer interested in big hydropower projects, and instead is investing in natural gas and small dams, the
Voice of America reports.

December 6:

The Institute of Intelligent Computing Industry Research has been established in Beijing,
the official Caijing reports. The new institute's president, Zhang Hao, has said that over the next ten years the center aims to incubate 50 influential intelligent computing companies, with a projected market value of 10 billion yuan ($1.5 billion). The institute was initiated by SmartCore, and co-founded by the Institute of Computing Technology of the Chinese Academy of Sciences and Beijing's Zhongguancun Shunyi Park Management Committee. SmartCore's Chairman, Fan Dongrui, said that the institute is intended to create "an ecosystem in the high-throughput intelligent computing industry covering smart devices, smart cars, smart finance, etc."

December 7:

China's State Council has released new regulations clarifying and refining the country's counter-espionage law, adopted in 2014. According to the new regulations, it is illegal for foreigners to have contact with "groups that harm China's national security," including those that challenge the party's power or China's "socialist system." Foreigners can be punished if they fabricate or distort facts, publish information that harms China's national security, do not listen to advice, or meet "hostile" individuals,
the Straits Times reports. The government can also block foreigners suspected of endangering national security from entering China, and detain any Chinese suspected of "betraying the motherland." Foreigners suspected of spying can be prevented from leaving China for a "fixed" period, while those expelled for espionage can be banned for ten years.

December 8:

Noting "disturbing reports" about Chinese influence in Australian politics and universities, Prime Minister Malcolm Turnbull has announced a series of wide-ranging reforms to tackle the issue,
the Agence France Presse reports. In response, China's embassy in Canberra issued a statement saying Australian media had "repeatedly fabricated" stories about "so-called" Chinese infiltration in Australia, and said Turnbull's remarks were "filled with cold war mentality and ideological bias, reflected a typical anti-China hysteria and (are) paranoid." A Foreign Ministry spokesperson said the comments are "full of prejudices against China and it is creating something out of thin air." Beijing called on Canberra to "immediately stop making wrong remarks that will undermine political trust and mutually beneficial cooperation between China and Australia."

[EDITOR'S NOTE: The issue of Beijing's untoward influence in Australia escalated this week after MP Sam Dastyari, the deputy opposition whip for the Labor Party, was forced to resign for telling a Chinese businessman that his phone was being tapped by Australian intelligence. In June, Turnbull ordered an inquiry following revelations that Australia's spy agency had warned politicians two years ago about taking donations from Beijing-linked billionaires. The probe reveled that China was interfering in Australian institutions and using donations to gain political access. It also raised concerns about Beijing's influence campaigns at about Australia's universities.]

December 11:

About 1,800 People's Liberation Army (PLA) troops have established a semi-permanent military presence in Doklam (Donglang), a disputed region near the Sikkim-Bhutan-Tibet trijunction,
the Times of India reports. Chinese troops have built two helipads, upgraded roads, and pre-fabricated shelters. Previously, PLA patrols came to Doklam each spring and fall to assert China's claim to the area, but would then return to undisputed territory. The new encampment,
according to the official Global Times, "was caused by India's encroachment into the Donglang region this summer. China's strengthening of management and control of Donglang is not a threat to India and is aimed at safeguarding territorial sovereignty. India needs to adapt to the changes that have occurred. It must avoid making exaggerated interpretations of the PLA's aims in stationing troops permanently in Donglang, triggering nationalism in India, and fueling further tension between the two countries in the border areas."