China Reform Monitor: No. 990

September 10:

Five years ago, amid spiking food prices, Beijing opened talks with Moscow about investing in Russian farmland. Due to depopulation (Russia’s population has shrunk to 141 million), Russia has the world’s largest reserve of arable land lying fallow. This year the China Investment Corporation created a $1 billion fund to invest in Russia’s agriculture and timber. Chinese companies will lease 1 million acres of farmland along the border and about 2 million acres of Siberian forests, where Chinese lumberjacks fell timber for export to China. Some Chinese have privately purchased land in Russia. There are nine Chinese farms in the Sverdlovsk region and more in the Chelyabinsk region. They also operate outside Moscow and St. Petersburg, the New York Times reports. One Chinese manager had a quota for 70 Chinese farm laborers this year but said he could use many more. About 400,000 Chinese migrants live in Russia, a tiny portion of all immigrants, but Chinese immigration is growing quickly. Salaries of $650 a month for field hands in Russia are five times the pay in China.

The New York Times reports that In Hong Kong’s legislative elections, pro-democracy candidates won strong voter support but failed to capture key seats because pro-Beijing parties with more money proved skillful in navigating the complex electoral system. The pro-Beijing Democratic Alliance for the Betterment and Progress of Hong Kong won half of the legislature’s seats despite a weak vote count. Party chairman Tam Yiu-chung denied accusations that he received funds from Beijing and offered elderly people incentives for their vote. Pro-democracy groups narrowly retained one-third of the legislature’s seats, the proportion needed to block fundamental changes to Hong Kong’s laws. By making it easier for small parties and independents to win at least one seat, Hong Kong’s electoral system has fragmented its political parties and limited their influence.

September 12:

China is offering Nigeria $1.1 billion in loans to help build airport terminals, a light rail line for the capital and to improve communication systems, Reuters reports. The $500 million light rail project for Abuja would link it with the suburbs, the international airport and Nasarawa state. Another $100 million loan deal for improving Nigeria’s Internet capability was signed as part of the light rail project. The 20-year loan at 2.5% interest has a grace period of seven years before payment is required. Another $500 million loan will go toward building airport terminals in Abuja, Enugu, Kano and Port Harcourt. Airports in Nigeria, most built in the 1960s and 1970s, largely sit in disrepair. China is already building road and railway projects in the oil-rich nation.

The Communist Party of China has offered an olive branch to Taiwan’s Democratic Progressive Party (DPP), but only if it abandons Taiwan independence. A spokeswomen for the State Council’s Taiwan Affairs Office called on the DPP to “gradually change its Taiwan independence” stance. The DPP should eliminate hostility and reduce disturbances in cross-Strait exchanges. The DPP should not “wear colored spectacles” and “harbor obsolete opinions” about the mainland. “Our door is always open. We are waiting to see if the DPP will change its ‘Taiwan independence’ policy and remove the hurdles it has set for itself,” she said. “As long as the DPP changes its ‘Taiwan independence’ stance, we will make positive responses,” the official China Daily reports.

September 13:

China is building a communication network linking the South China Sea islets it claims, Taiwan’s Central News Agency reports. The network, designed by the Hainan Communications Administration, will include 51 island-based stations, 104 stations on boats, and eight undersea cables. Upon completion it will cover the entire South China Sea including the Xisha, Zhongsha, and Nansha islets, aka the Paracel Islands, Macclesfield Bank and the Spratly Islands, respectively. China’s current telecommunication networks cover all territories within 70 km of the Hainan coast and other islets, including seven that contain Chinese military bases.

The senior vice presidents of Huawei and ZTE, China’s top makers of telecom gear, denied putting hidden spy code into their equipment at a public hearing of the U.S. House of Representatives Intelligence Committee. Both executives testified under oath that they operate independently from China’s government and vowed that their companies would never allow Beijing to exploit their products for espionage. “Huawei has not and will not jeopardize our global commercial success nor the integrity of our customers’ networks for any third party, government or otherwise,” Charles Ding of Huawei testified. The congressional panel is wrapping up a yearlong investigation into whether the companies’ equipment provides an opportunity for espionage and threatens U.S. infrastructure. If Huawei and ZTE are branded security threats in the committee’s forthcoming report measures could be undertaken to exclude them from the U.S. market, Reuters reports.