China Reform Monitor: No. 1115

July 10:

During a visit to Guiyang, Guizhou, Sergey Ivanov, Chief of the Presidential Administration of Russia, told Interfax that “there is a good chance that China will be the first foreign purchaser” of the new S-400 Triumf Russian air-defense missile system. “I cannot disclose the contents of this contract. This is a commercial secret,” Ivanov said. “But it will take several years to implement.” Ivanov said Sino-Russian military-technical cooperation is on the rise. “Joint projects and joint products” include a wide-body aircraft that could serve as both an airliner and a carrier, as well as a new heavy helicopter to replace Mi-26.

July 11:

Courts in seven cities and prefectures in Xinjiang including Urumqi, Aksu, Kizilsu Kirgiz, Ili, Hotan, Turpan and Bortala have issued verdicts on 32 people ranging from four years to life imprisonment for “spreading terror-related audio and video and organizing terrorist groups.” In eleven cases three were sentenced to life in jail and the remaining 29 were sentenced to 4-15 years in prison, the official China Daily reports.

The People’s Bank of China, China’s central bank, is investigating a report by China Central Television, or CCTV, accusing the Bank of China (a separate, state-owned bank) of money laundering on a massive scale. The bank was helping clients transfer large amounts of money overseas in a program that reportedly violates government regulations, which limit the amount a Chinese citizen can send abroad to about $50,000 a year. CCTV said the bank was operating Youhuitong secretly, but the Bank of China said its Youhuitong service, begun in 2011, was legal. Estimations about how much money was being funneled out of China using the service hovered around 10-20 billion RMB ($1.6 billion-$3.2 billion), the New York Times reports. Meanwhile, Spain’s ABC reports that despite having only 60 Chinese companies in the country between 2011 and 2012 the country saw a sevenfold increase in mainland Chinese investment to $556 million.

July 12:

Su Bin, a Canada-based Chinese businessman, hacked into Boeing’s computers and stole information about U.S. military aircraft and weapons, the U.S. Justice Department claims. The huge amount of data stolen makes this corporate espionage case unusual. Working with two unidentified contacts in China, Su first breached Boeing in January 2010 then spent at least two years stealing 65 gigabytes of data and trying to sell it to Chinese state-owned companies among others. The three men also stole a comparatively small amount of information related to Lockheed Martin’s F-22 and F-35 jets. Su was arrested in Canada on June 28 and while Washington works on his extradition he is expected in court for bail this month. The primary focus of the theft was Boeing’s C-17 military cargo plane, which the company will stop producing next year. The Chinese military is developing its own cargo plane, which is similar in some respects to the C-17, the New York Times reports.

[Editor’s Note: In March, Chinese hackers broke into computers that stored the personal information of all U.S. government employees. In May, the Justice Department accused five Chinese officials with hacking into Westinghouse Electric, United States Steel and other companies.]

July 13:

Under pressure from Beijing, Kathmandu has withdrawn permission to bury the body of Samarapa Rinpoche, a chief interpreter for Tibetan Buddhists, in Nepal. After learning that a representative of the Dalai Lama would accompany the body from India, the Chinese Embassy requested that Kathmandu prevent the funeral service. The decision came after a ‘no objection’ letter was issued, and then withdrawn, by the Nepalese Embassy in New Delhi, Kantipur reports. The 65-year old Rinpoche died on June 11 in Germany while on a lecture tour. Born in Darj in eastern Tibet in 1952, he was the 14th Samarapa, and the primary religious teacher of the Karma Kagyu tradition in Tibetan Buddhism.