American Foreign Policy Council

China Reform Monitor: No. 721

November 4, 2008 Joshua Eisenman
Related Categories: Cybersecurity and Cyberwarfare; Democracy and Governance; Energy Security; Central Asia; China; Russia

September 27:

The China Business Post (Caijing Shibao) made a public announcement on September 25th, saying the publication's supervising organ had decided to punish the online magazine by closing it for three months. The Wen Wei Po reports that a bogus report that appeared in the July issue of Caijing had violated official news propaganda disciplines stipulating that "the media cannot conduct foreign supervision," and "reporting should be carried out by following the standard reporting procedure," i.e. "verification and exchange of views with the reported parties are required before major and sensitive news articles are published."

[Editor’s note: While censorship in Chinese political publications is common, such overt punishment for a respected business journal is worthy of note.]

October 3:

Skype (operated in China as Tom-Skype, a joint venture involving eBay and the Chinese company TOM-Online) is "engaging in extensive surveillance with seemingly little regard for the security and privacy of Skype users" according to Citizen Lab, a Canadian research group based at the University of Toronto. Citizen Lab’s report, entitled "Breaching Trust," and reviewed by the BBC, detailed a surveillance system that selected and stored messages sent through the online telephone and text messaging service that included words such as "democracy" and "Tibet" and phrases relating to the banned spiritual movement, Falun Gong. The database held more than 150,000 messages "containing personal information stored on insecure publicly accessible web servers," the report said. Skype president Josh Silverman said that Tom Online had merely "established procedures to meet local laws and regulations".

October 10:

Russia's Ministry of Energy has said a proposal to build the Altai gas pipeline from Russia to China's Xinjiang region is still under discussion, according to Forbes. The announcement comes in response to Russian media reports that the pipeline project, designed to ship 30 billion cubic meters of natural gas per year from western Siberia to China, was excluded from Russia's recently released blueprint for gas industry development through 2030. The new plan says Russian gas from the proposed pipeline would be less competitive in the China market than gas from Turkmenistan, which has already agreed to supply China with 30 billion cubic meters of gas per year. The central Asian nation's gas is cheaper due to lower exploration costs and shorter pipeline distance, the Russian blueprint said. China and Russia signed a memorandum on Russian gas shipments to China in 2006, but they have been unable to reach an agreement on pricing. China had initially hoped to begin receiving natural gas from Russia in 2011.

October 15:

China and Russia held a ceremony at Heixiazi (Bolshoi Ussuriisky) Island to unveil the boundary markers delineating the eastern section of their border, and Russia transferred one island and part of another to China as part of a border agreement with its neighbor. The transfer of two minor islands from Russia to China has officially settled all border disputes between the two countries, Andrei Ostrovsky, deputy director of Russia’s Far East Studies Institute and head of China Economic and Social Studies Center, told Russia’s Interfax News Agency. On July 21st, Russian Foreign Minister Sergei Lavrov and his Chinese counterpart Yang Jiechi signed the final border agreement, which settled the demarcation of their 4,300-kilometer (2,672-mile) border, the longest land frontier in the world. Under the agreement, the border divided the disputed areas, some 145 square miles (375 square kilometers), between Russia and China almost equally. Part of Bolshoi Ussuriisky Island and the whole of the Tarabarov Island were handed over to China, the Jamestown Eurasia Monitor reports. "This has ended absolutely all disputes between our countries and finally closed the border issue," Ostrovsky said. The transfer of the islands caps a complicated and painful set of talks on the final demarcation of the border.

October 18:

During his four-day visit to China, Pakistan’s President, Asif Ali Zardari, has secured Beijing’s support for his country’s development of a civilian nuclear industry the Associated Press of Pakistan reports. Both sides have agreed to go ahead with Pakistan’s Chashma-III and Chashma-IV nuclear power plants, which will generate 680MW electricity for Islamabad. In all, Chinese companies pledged $1.2 billion in investment in various sectors in Pakistan. Official invitations were delivered to a delegation from China’s four leading state-run banks to visit Pakistan to lay the groundwork to open branches as well as to the heads of several Chinese companies working on IT, Telecom, energy, mineral development. Chinese firms will soon begin work on projects in various fields including hydro power, high efficiency irrigation systems. Trade relations remained a sticky point in the talks, however, as China exports around $5 billion annually to Pakistan and imports only about $1 billion.

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