Over 30 central banks include RMB in forex reserves

Want China Times, CNA 2014-11-30

Hu Xiaolian. (File photo/Xinhua)

More than 30 central banks in the world have included the renminbi in their foreign exchange reserves, indicating that the currency is gaining importance in the global market, according to China's state-run Economic Daily.

Hu Xiaolian, deputy governor of the People's Bank of China (PBOC), was cited by the report as saying that after China's efforts to boost the global visibility of the renminbi, more than 30 central banks in the world had made the currency part of their forex portfolios as of the end of October, while a total of 28 central banks have signed bilateral currency swap agreements with the PBOC.

Due to the closer ties with other central banks in the world, the trading volume through currency swaps has topped 3 trillion yuan (US$489 billion), Hu said.

Hu added that 169 offshore institutions had participated in renminbi trading through the China banking system as of the end of October.

Sixteen Chinese financial institutions issued 105.5 billion yuan (US$17.2 billion) worth of bonds overseas, while foreign enterprises had sold 500 million yuan (US$81.4 million) in bonds in the China market, Hu said.

Amid the PBOC's renminbi globalization efforts, Hu said that the bank had signed agreements with 12 of its counterparts in the world in the renminbi clearing settlements as of the end of October.

Taiwan is one of the 12 countries or regions to sign an agreement to set up a renminbi clearing mechanism. The cross-strait agreement was signed in late August 2012 before the local central bank lifted a ban to allow banks in Taiwan to conduct renminbi-denominated transactions, including deposits, lending and remittances, in February 2013.

In October, renminbi-dominated remittances through the Taiwan banking system hit a new high of 200.4 billion yuan (US$32.6 billion), up more than 62% from a month earlier, as Taiwanese investors rushed to send their renminbi overseas in preparation for the Shanghai-Hong Kong Stock Connect trading platform, which kicked off Nov. 17.

While building closer ties with China, Taiwan is gearing up to transform itself into an offshore renminbi trading hub.

The paper cited Hu as saying that the PBOC has stopped its regular intervention in the Chinese foreign exchange market, so the renminbi has been moving in a larger range, either upward or downward, against the US dollar.

She said that the PBOC is determined to push for financial liberalization in a bid to allow the renminbi and domestic interest rates to fluctuate based on market conditions.

Related Articles:

How China is reshaping global development finance

Debate over monetary system grows

Arab League backs plan to seek Palestinian statehood in UN Security Council

The Arab League has backed a plan by Palestinian President Mahmoud Abbas to seek international approval for a Palestinian state at the UN Security Council. Member state Jordan is due to present the draft resolution.

Deutsche Welle, 29 Nov 2014

Arab League chief Nabil Elaraby said on Saturday that Jordan, which is currently a non-permanent member of the United Nations Security Council, would present a draft resolution setting out a timetable for the creation of a Palestinian state.

"The Palestinian issue has been circulated in the past, but what is new today is that the Arab states and Palestine decided to go to the Security Council, through Jordan, with an Arab draft resolution," Elaraby said following an extraordinary meeting of Arab League foreign ministers in Egypt's capital Cairo, according to Reuters news agency.

Arab League foreign ministers attending in extraordinary League meeting decided to press the issue and to create a follow-up committee to seek international backing for the draft resolution. It comprises Kuwait, Mauritania, Jordan and Arab League chief Nabil al-Araby.

'Internationalizing' the issue

Palestinian President Mahmoud Abbas said there had been no other option but to turn to the international community.

"The current situation in the Palestinian territories cannot continue," he told League ministers in Cairo, according to Reuters.

"There is no longer a partner for us in Israel and there is nothing for us but to internationalize the issue," Abbas said.

The proposed resolution is not likely to be passed by the UN Security Council because the United States, Israel's main ally, holds veto powers. It may also fall short of the needed number of votes.

'Jewish nation' not recognized

Elaraby also ruled out League recognition Israel as a Jewish nation, following moves by Israeli Prime Minister Benjamin Netanyahu's government to enshrine Israel's status as the Jewish national homeland in Israeli law. Israel's Knesset parliament is due to vote on the proposal on December 3.

The last round of Israeli-Palestinian peace negotiations brokered by the United States collapsed in April. Since then, relations have worsened, with Israel and Hamas militants in the Gaza Strip fighting a deadly 50-day war earlier this year.

Fatal outbreaks

That was followed by continued settlement-building by Israel on occupied territory and fatal outbreaks of violence between Israelis and Palestinians in Jerusalem and further afield.

Palestinians seek to establish a state on land captured by Israel in a 1967 war, encompassing the Israeli-occupied West Bank, blockaded Gaza Strip and a capital in East Jerusalem.

Several countries have held symbolic votes on whether to recognize Palestine as a state, including Spain and and Sweden. Parliamentarians in France are due to hold a similar vote on the issue on December 2.

se/ipj (Reuters, AP, AFP)

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Debate over monetary system grows

Nearly all money is created by commercial banks in the act of lending. They also decide whom to lend it to, and for what purposes. Is this good for the economy? A growing movement is arguing for an alternative.

Deutsche Welle, 28 Nov 2014

Where does money come from? Printing it yourself, unsurprisingly, is illegal. But in today's digital society, creating money has less and less to do with the printing of notes or minting of coins.

"If you ask people where money comes from, most of them will say it's made by the government," says Ben Dyson, founder of the UK organization Positive Money, part of a growing international movement pushing for reform to the current monetary system."But the reality is that the government is only responsible for creating three percent of the money that we use, and that three percent is the cash: the coins and the paper money."

In fact, money is created when commercial banks issue credit, or "make loans". Banks don't take money from someone else's account when they make a new loan. Rather, they enter the amount of the loan simultaneously as a debt and a credit, in equal amount, on either side of a double-entry bookkeeping ledger.

“When a bank makes a loan ... it credits the borrower's bank account with a bank deposit ... At that moment, new money is created," explains the Bank of England in its 2014 introduction to money in the modern economy.

That is how new money - and debt - enter the financial system. Conversely, when a borrower pays back a bank loan, the entries on both sides of the ledger are cancelled - both the "money" (credit record) and the corresponding debt are destroyed.

Cash is actually just a physical token
that people can obtain for money that
 originally arose as an electronic credit
record in the banking system, when a loan
was approved

So if everyone in the Eurozone paid back the principal of all their bank debts tomorrow, at the end of the day, there would be no debt, but neither would there be any money left anywhere in the system. The modern monetary system, in fact, is a scorekeeping system composed of precisely equal amounts of bank credit and bank debt.

Transferable IOUs administered by the banking system

What we think of "money" is really nothing other than transferable IOUs created and administered by the banking system, and supported by contract law.

The banking system's job is twofold: First, to keep track of exactly how much is owed to whom - by debtors to banks, and by banks to creditors.

And second, to decide on the allocation of new loans - to whom, and for what purposes. That's a powerful role - and a growing international movement is pushing for a wide social and political debate over the role of banks in making such decisions.

Creating electronic money

In the UK, 97 percent of the money that exists, Dyson says, is electronic money – money which exists only in computer banking systems and not in physical form. This is created not by the state, but by commercial banks.

In Germany, where many businesses do not accept card payments, around 85 percent of money is electronic and created by commercial banks, and 15 percent is cash, according to a German branch of the monetary reform movement called the Monetative.

While governments create money as coins and notes, commercial or high street banks create money as debt.

Financial instability, social disadvantage

"What this means for the economy is that because it is the banks that are creating the money and deciding who to lend it to, they get to choose where that money goes, for what purposes," Dyson told DW. The monetary reform movement argues that this is not only undemocratic, but damaging to the economy too.

According to Positive Money's research, in the ten years leading up to the financial crisis, around half of the money created by commercial banks was going directly into mortgage lending - loans to enable people to buy houses or commercial property - and around a third into the financial market, in order to buy existing financial assets, not to make new investments in things like factories.

"All that mortgage lending had the effect of pushing up house prices, and created a lot of instability in the market," Dyson says. Unaffordable housing has been a particular problem for the UK during the past couple of decades, as mortgage over-lending has relentlessly inflated a bubble in the price of housing.

If and when that bubble pops, many people will be left with housing debt in excess of the current market value of the house they borrowed so much money to buy. Precisely that problem - the bursting of a huge bubble in real estate prices - is what led to the economic depression in Spain after 2008. Instead of spending money on consumer goods or investment, Spaniards have been trying to pay down excessive debt accumulated pre-2008 during a decade-long era of real estate speculation.

Post-crisis public spending austerity has hit
 the UK hard - yet critics say it could be
 ended tomorrow with fresh central bank
money

Growing debate

Dyson and his counterparts around the world – the International Association for Monetary Reform lists initiatives in 20 countries – are not alone in believing in the need for change. The debate is also taking off among economists and politicians, particularly in the UK, where last week a backbench parliamentary debate took place to discuss the issue took place.

Martin Wolf, the chief economics commentator at the Financial Times, has written several recent columns in favor of stripping the banks of their monopoly on the power to create money.

Lord Adair Turner, former head of the UK's Financial Services Authority, recently wrote a Financial Times opinion article calling on the UK government to direct the Bank of England to create debt-free money to fund the government deficit.

The government could spend a carefully calibrated amount of new, debt-free money into circulation to stimulate demand - for example, by using it to build new low-carbon energy infrastructure or improved rail systems. The new infusion of cash in workers' pockets would circulate, and as it got into the hands of debtors, it would them a source of fresh funds with which to pay down excessive previously accumulated debt, Turner and others have argued.

Mervyn King, who headed the Bank of England for ten years until 2013, has also called for reform of the monetary system, saying that "of all the many ways of organizing banking, the worst is the one we have today."

Calls for monetary reform from such prominent figures remains "barely imaginable" in Germany, says Klaus Karwat of the Monetative. "The banking sector plays a much greater role in the UK economy than it does here, so the need for debate is much more pressing there," he told DW.

The movement's focus is raising awareness of how the current system of money creation works: surveys conducted by Positive Money and Monetative showed that many MPs in both countries lacked a general understanding of the monetary system.

Returning the power to create money to the state

"What we're saying is that commercial banks shouldn't have the ability to create electronic money, the deposits in your account, because they have incentives to lend recklessly. The more they lend, the more interest they can charge. So they over-lend, especially in housing, and create bubbles - debt bubbles and housing price bubbles.

Lloyds TSB was one of the UK banks
to receive a government bailout in 2007

Dyson and his colleagues propose that the power to create money should be returned to the central bank, which is owned by the government, working closely with the Treasury. The state would then control the creation of electronic money as well as notes and coins.

"But the government monetary authority's job will be to create what the economy needs, looking at the economy as a whole and on a long term basis, whereas the banks are currently looking at the very short term, and only at their opportunity to profit rather than the wider needs of the economy," Dyson said.

"We don't need banks nearly as much as we think we do," added Dyson. "And if we take the power to create money away from them, we'll need them even less, because we'll have a source of money created by public central banks which will come into the economy without debt - without anybody having to borrow it."

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How China is reshaping global development finance

This Japanese woman can reduce the price of solar energy around the world

TechinAsia, David Corbin, 27 Nov 2014

Miho Koike in her office in Tohoku University.

Solar cell makers in China, Taiwan, and Europe have bombarded Miho Koike with product orders. Koike is the CEO of Material Concept, a small solar power development company that is changing the way the world makes solar panels. Nestled away in a Tohoku University research and business center, the company is so hidden and focused on product it does not have a working website. Instead, it depends on Tohoku University web space to broadcast news. Don’t worry – this is not a fly-by-night Kickstarter campaign. The product is real, and it is selling.

Traditionally, manufacturers use a gold paste to affix solar cells to the electrodes on solar batteries and panels. Gold, being a valuable commodity, ends up accounting for almost 25 percent of all production costs. Junichi Koike (no relation) developed an alternative copper paste that Miho says is just 1/100th of the cost.

Though the breakthrough was twenty years in the making, with other researchers pursuing the same goal, the real trick that Junichi pulled off is creating a slim barrier to prevent the copper from being absorbed into the silicon used in solar panels. The cost benefits of copper had been known but the material caused silicon to degrade, making it a risky alternative.

This is welcome news to overseas solar companies. Material Concept receives a lot of attention from Europe because the European Union announced a switch over to the bronze standard by 2018. Miho mentions that they are exploring tie-ups with Chinese and Taiwanese manufacturers. The talks must be going well because she is looking for new employees who can also speak Chinese.

Although Japan’s government made a noisy but faltering push for more solar power, the reality is that Material Concept’s clients are mostly outside of Japan. “In Japan only three major companies – Sharp, Kyocera, and Mitsubishi – are producing these solar cells,” she says.

A CEO that almost never was

Junichi might have cracked the scientific code but Miho is the engine pushing the company forward. That said, she nearly missed the opportunity. For ten years she lived in the US, studying and working. Though she expected to live there for the rest of her life, family considerations led her to return to Japan. At the time of her decision she had just received a notice that her application for a permanent visa was approved.

Back in Japan, she experienced reverse culture shock. “I didn’t want to leave my home. That lasted for half a year,” she recalls. Soon enough, she picked herself up and worked in a steady government job for the next 14 years. In that role, she would sometimes interact with businesses that were launching out of universities. When the opportunity came, in 2011, to coordinate business planning and development for startups trying to launch out of top-ranked Tokyo University, she took it.

Feeling a strong desire to help the disaster-ravaged Tohoku area of Japan, she switched her role when the opportunity to lead Material Concept arose in 2013. Now she’s singularly focused on one company – Material Concept. With a deep roster of domestic and international contacts, Miho is steering a company that could be poised for a big breakout.

Local investors agree. Earlier this year, it received series A funding of approximately US$6 million from major names like Daiwa Securities and the Innovation Network Corporation of Japan.

See: Rakuten Plans to Sell Solar Panels for Home Users

Editing by Paul Bischoff and JT Quigley

The high price of freedom in Vietnam

Bloggers in Vietnam are severely repressed. A month ago, one of the country's most popular bloggers was set free, only to be immediately deported to the US. He talks to DW about his experiences and plans for the future.

Deutsche Welle, 24 Nov 2014

Vietnamese blogger Nguyen Van Hai is known by his pseudonym Dieu Cay. He was released from prison in late October and flown to the US almost immediately; Nguyen wasn't even given the opportunity to say goodbye to his family.

In 2008, he was sentenced to 12 years imprisonment after being accused of "propaganda against the state," a charge which Nguyen has always refuted.

Nguyen, a former soldier, founded the "Independent Journalists' Club" in 2007, which became a headache for Vietnamese authorities. He criticized the prevalence of rampant corruption in the country and the attitude of the communist government in the territorial conflict with China.

Nguyen believed that the government was busy filling its pockets and it needed to liberate itself from its big and influential neighbor.

In Vietnam, many suffer the same fate as Nguyen. Reporters Without Borders (RWB) describes the situation regarding freedom of opinion and expression, and freedom of the press in Vietnam as very serious.

In RWB's yearly index on press freedom, Vietnam is placed at 174, after Iran, in the list of 180 countries. China is at 175. According to RWB, around 26 Vietnamese online activists and citizen journalists like blogger Le Thi Phuong Anh of Vietnam's "Brotherhood for Democracy," an online network that campaigns for the democratization of Vietnam, are still in prison.

Nguyen received a warm welcome
in Los Angeles

Le Thi has been in jail since May 2014 in the southern Vietnamese province of Dong Nai. She doesn't even know exactly what she has been charged with.

On November 22, during his state visit to the country, German economy minister Sigmar Gabriel met with human rights activists in Vietnam. The popular blogger "Mother Mushroom" and the brother of lawyer and political prisoner Le Quoc Quan were also part of the delegation which met Gabriel.

In a DW interview, blogger Nguyen Van Hai analyzed the current situation in Vietnam from his exile in the US.

DW: You spent more than six years of your life in prison. For the last month, you have been free and living in the US. How does it feel?

I was in jail for six years, six months and two days. My release was unexpected. It is difficult to express in words all that I felt when I entered the US. After the plane took off, I was moved when I looked at the country which is shaped like an "S" (On a map, Vietnam looks like an S).

I knew that I needed to carry on with my struggle, so that I could return some day. My family and friends still live in Vietnam. They all have to live in a society where human rights are not respected.

Freedom is the dominant feeling. It is my lifelong dream, to finally have free access to the Internet, to call someone up without the fear that someone else could be listening to your conversation. On the street I don't have communist security officers following me.

When and how did you find out about your travel to the US?

In September, a representative of the US State Department informed me that they were discussing my case with Vietnamese officials. I did not, however, know of any concrete dates then.

You have organized anti-China protests regarding the territorial conflict. You have also criticized the government because of its corrupt practices. Do you see yourself as a patriot, a political activist or as an opposition member?

As a Vietnamese citizen I expressed my opinion together with my friends in order to protect the territorial integrity of my country. We demand that the government respect the interests of our country.

The interests of the people should take priority over the interests of individual groups. Every citizen of every country would react in the exact same manner as I did. I am a citizen, who takes responsibility for his country and for himself.

When you reached the US, you were greeted by people who were waving the South Vietnamese flag. There has been no South Vietnam for the past 40 years - the country was based on a market economy, but it was not a democratic state. What would you say about the welcome you received?

I was born in North Vietnam and I also grew up there. I have never lived in South Vietnam and that is why I do not want to comment on whether South Vietnam was a democracy or a state based upon rule of law. But when I went there in 1971, I saw some differences from the regime in the north.

There was freedom. Private newspapers were allowed to be published. South Vietnam had a more dynamic and prosperous economy. Citizens could trade freely. People could strike and express their opinion. Everything was different from what we had learned and heard in the North. What kind of a constitutional state was North Vietnam at the time? How can the North speak about rights and laws? Even today in Vietnam, only the law of the communist party is valid.

At the airport in Los Angeles, I was warmly welcomed the way I would have been by a family welcoming a member returning after a long time. For me, it doesn't matter which flags my countrymen welcome me with.

What matters, is that they received me warmly. The flag is a symbol. In a democratic society, I need to respect the thoughts and symbols of other human beings.

Do you have plans for the future?

In the future, I will keep doing the same as before. We started the struggle for human rights and freedom of expression in Vietnam and I will not stop doing that.

China in $45.6b Infrastructure, Energy Pledge With Pakistan

Jakarta Globe, Mehreen Zahra-Malik, Nov 23, 2014 

The Chinese government and banks will finance Chinese companies to build
 $45.6 billion worth of energy and infrastructure projects in Pakistan over the next
 six years, according to new details of the deal seen by Reuters on Friday. (Reuters
Photo/Mohsin Raza)

Islamabad. The Chinese government and banks will finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years, according to new details of the deal seen by Reuters on Friday.

The Chinese companies will be able to operate the projects as profit-making entities, according to the deal signed by Prime Minister Nawaz Sharif during a visit to China earlier this month.

At the time, officials provided few details of the projects or the financing for the deal, dubbed the China-Pak Economic Corridor (CPEC).

The deal further cements ties between Pakistan and China at a time when Pakistan is nervous about waning US support as troops pull out of Afghanistan.

Pakistan and China, both nuclear-armed nations, consider each other close friends. Their ties are underpinned by common wariness of India and a desire to hedge against US influence in South Asia.

Documents seen by Reuters show that China has promised to invest around $33.8 billion in various energy projects and $11.8 billion in infrastructure projects.

Two members of Pakistan’s planning commission, the focal ministry for the CPEC, and a senior official at the ministry of water and power shared the details of the projects.

The deal says the Chinese government and banks, including China Development Bank, and the Industrial and Commercial Bank of China (ICBC), one of China’s “Big Four” state-owned commercial banks, will loan funds to Chinese firms, who will invest in the projects as commercial ventures.

“Pakistan will not be taking on any more debt through these projects,” said Pakistan’s minister for water and power, Khawaja Asif.

Major Chinese companies investing in Pakistan’s energy sector will include China’s Three Gorges Corp., which built the world’s biggest hydro power scheme, and China Power International Development.

Sharif signed more than 20 agreements during his trip to China earlier this month, including $622 million for projects related to the deepwater, strategically important Gwadar Port, which China is developing.

The port is close to the Strait of Hormuz, a key oil shipping lane. It could open up an energy and trade corridor from the Gulf across Pakistan to western China that could be used by the Chinese Navy — potentially upsetting rival India.

Pakistan sees the latest round of Chinese investments as key to its efforts to solve power shortages that have crippled its economy.

Blackouts lasting more than half a day in some areas have sparked violent protests and undermined an economy already beset by high unemployment, widespread poverty, crime and sectarian and insurgent violence.

Under the CPEC agreement, $15.5 billion worth of coal, wind, solar and hydro energy projects will come online by 2017 and add 10,400 megawatts of energy to the national grid, officials said. An additional 6,120 megawatts will be added to the national grid at a cost of $18.2 billion by 2021.

“In total we will add 16,000 MW of electricity through coal, wind, solar and [hydro electric] plants in the next seven years and reduce power shortage by 4,000 to 7,000 megawatts,” Asif said.

The CPEC deal also includes $5.9 billion for road projects and $3.7 billion for railway projects, all to be developed by 2017. A $44 million fiber-optic cable between China and Pakistan is also due to be built.

Reuters

British-Iranian woman out on bail after volleyball arrest

The family of a British-Iranian woman jailed after watching a men's volleyball match in Tehran says she has been released on bail. Ghoncheh Ghavami had been in prison since her arrest in June.

Deutsche Welle, 23 Nov 2014

Ghavami, a 25-year-old law graduate from London, was released on bail pending a decision by the Court of Appeal on her sentence, according to media reports on Sunday.

Her brother, Iman Ghavami, told news agency AFP she had been freed "just a couple of hours ago and she will stay with my parents" in Tehran.

However, he said there was a chance she could return to jail, as the court was still to decide how she should serve out her full sentence.

"It was unexpected that she was released, it was out of the blue," Iman Ghavami said.

Ghoncheh Ghavam was first arrested at the Azadi or "Freedom" Stadium in Iran's capital on June 20, while attempting to watch a men's volleyball match between Iran and Italy.

According to human rights organization Amnesty International, Ghavami tried to enter the stadium with around a dozen other women to protest against the law banning women from attending male-only matches.

She was released after just a few hours, but was re-arrested days later. According to her family, Ghavami spent at least 41 days in solitary confinement at Tehran's Evin prison before going on trial in late October. She also staged a two-week hunger strike during her detention.

Good news: reports that #GhonchehGhavami has been released on bail today, the day before her 26th birthday http://t.co/41XAKIbqeV
— Amnesty UK (@AmnestyUK) November 23, 2014

On November 2, Ghavami's lawyer, Mahmoud Alizadeh Tabatabaei, said he had been shown a draft of the verdict stating Ghavami had been sentenced to one year in prison after being found guilty of "propagating against the ruling system." However, no verdict or sentence was issued.

Ghavami's brother told AFP that the verdict had been handed down just a few days ago, and that she had been sentenced to one year, as well as two years of "travel restrictions."

On Wednesday, the judiciary issued a statement cited by Iranian news agency ISNA saying Ghavami had been detained because of her links to the opposition, not for attending the volleyball match.

Ghavami's arrest was "not linked to her presence at a stadium where she wanted to watch a volleyball match," the statement said. "After investigation, it seems she had participated in propaganda against the regime, had links with satellite TV channels, including BBC Persian, and the opposition based abroad and participated in demonstrations against the regime."

nm/msh (AFP, AP)

Related Article:

British-Iranian volleyball woman gets one year in jail

The Vatican may answer China's prayers and build diplomatic ties

Want China Times, Staff Reporter 2014-11-22

Pope Francis greets to the crowd after he was elected the 226th reigning
pope of the Catholic Church, March 14, 2013. (File photo/ Xinhua)

China and Vatican City have had a breakthrough that may lead to the building official ties.

According to Hong Kong's pro-Chinese government Wen Wei Po, the two nations have reached a basic consensus regarding bishop ordination in China. China has proposed an institution of ordination to the Vatican, which is expected to respond by early next year, said an unnamed authority close to the negotiations.

Communist forces, which took over mainland China in 1949, rejected any exercise of power by the Catholic Church outside of China. The Vatican, in 1951, then built ties with the Nationalist Kuomintang (KMT) government that fled to Taiwan.

The current Catholic representative body in mainland China, established in 1957 by the People's Republic of China's Religious Affairs Bureau to supervise mainland China's Catholics, is led by the two supervisory institutions, the Chinese Patriotic Catholic Association (CPCA) and the Bishops Conference of the Catholic Church in China (BCCCC), which do not recognize the Holy See or Vatican mandates.

The China-Vatican relationship though has been warming in recent years, as both sides have made efforts to build ties. In March 2013, the Pope Francis phoned Chinese president Xi Jinping to greet him after he took office as the leader of the country. In August, Pope Francis's flight was granted permission to cross China's airspace for his South Korean visit.

The major disagreement between the two sides is in regard to the appointment of Catholic bishops in mainland China, who are now named by CPCA, while the Vatican mandates that bishops can only be appointed by the Pope.

According to the source, one of the two compromising solutions for both sides is that each Chinese parish may select a bishop candidate and report to the BCCCC and the Religious Affairs Bureau. Foreign affair agencies would then submit the candidate information to the Vatican for approval. No one would be ordained before both sides reach an agreement.

The other option is that a parish may present two candidates for the BCCCC to make recommendations to the Holy See, which can then pick from the two.

"It can be anticipated that the Holy See would not be satisfied with a sole agreement on appointing bishops," said the source. "They want a series of agreements, including whether the CPCA and the Catholic Congress should continue to run. China would not easily give in on these points."

As to the "Taiwan issue," or the close tie between the Vatican and Taiwan which some believe has been one of the major blocks between mainland China and the Holy See given China's "One China Policy," is "not a problem," according to the source, who added that the Vatican has made detailed plan as to how it will make "arranges" for the island after it builds official ties with mainland China.

The Vatican is Taiwan's last remaining ally in Europe.

In response to the un-verified China-Vatican consensus, Taiwan's Ministry of Foreign Affairs (MOFA) said on Nov. 20 that whereas ties between Taiwan and the Vatican remain strong and close, the authorities will follow up closely on this issue.

Anna Kao, spokesperson for MOFA, said that as a religious state, the Vatican expresses concerns for regions without the freedom of religion and aims to help improve the treatment of its believers in said areas.

Higher-ranking officials in both Taiwan and the Vatican have close ties. Taiwan will continue to make efforts to strengthen its partnership with the Vatican in promoting peace and charitable acts, said Kao.

Wang Kun-Yi, a professor with the Graduate Institute of International Affairs and Strategic Studies in Taiwan's Tamkang University, said it is no surprise that Vatican City may cut diplomatic ties with Taiwan and build them with mainland China. He is surprised, however, about the timing of the agreement talks.

This will severely damage the ruling KMT government, led by president Ma Ying-jeou, which has been trying to maintain a friendly relationship with China. If the Vatican cuts official ties with Taiwan, Ma's "viable diplomacy" policy can be declared a failure, said Wang.

The news would also potentially affect island-wide elections coming up at the end of the month, in which the KMT is perceived as having an uphill battle against candidates from opposition parties.

There has been a cross-strait consensus though, that China and Taiwan do not "attack each other in the international community," as Li Baodong, deputy minister of China's foreign ministry, stated after Gambia's president made a unilateral announcement to cut ties with Taiwan in November, 2013. Unlike precedents in which countries would soon befriend China after they cut ties with Taiwan, China has not built official ties with Gambia, said Wang.

The Vatican is a Catholic religious city state. Wang believes that the Chinese president, by actively seeking to reach an agreement and build ties with the Holy See, aims to demonstrate to the world that China is a country with religious freedoms, so as to gain more public support.

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UN children's rights convention implemented in Taiwan

Want China Times, CNA 2014-11-22

Premier Jiang Yi-huah. (File photo/Guo Ji-quan)

The Convention on the Rights of the Child, which was adopted by the United Nations Nov. 20, 1989, was officially implemented in Taiwan Thursday, the Cabinet announced that day.

Premier Jiang Yi-huah said the convention's implementation has brought Taiwan's children's rights protection measures into compliance with international standards.

Although Taiwan is not a member of the UN, the Legislative Yuan passed the Enforcement Act of the Convention on the Rights of the Child May 20, thereby adopting the treaty into domestic law.

According to the Ministry of Health and Welfare, the law is designed to protect the rights of individuals under the age of 18 and covers content such as civil rights and right to liberty, health, welfare, education, leisure, culture, care and special protection.

Also that day, President Ma Ying-jeou met with a group of children to mark the Nov. 20 Universal Children's Day and the implementation of the convention in Taiwan.

Ma said that teachers and government officials should pay attention to the personal safety of children and ensure that students receive a complete education and learn the basic knowledge they need to acquire.

For example, Ma said, he required during his stint as Taipei mayor that all students in Taipei had to learn to swim, in light of the frequent drownings involving children and teenagers unable to swim.

At present, only 55% of elementary and secondary students around Taiwan pass swimming tests on average, well below the target of 85%, Ma said.

The president also pledged to improve the problem of child abuse in the country.

In 2013, he said, there were more than 16,000 reported cases of child abuse. Although the number was 2,800 fewer than in 2012, it remained at a high level, he added.

He said that in recent years, the government has been working further to protect children even when they are still in their mothers' wombs, by allowing expectant mothers to take pregnancy leave.

In addition, Taiwan is one of the few countries in Asia that offers paid parental leave to parents, he said, adding that the policy has so far benefited 250,000 people.

(By Kelven Huang and Y.F. Low)

Indonesia's new president causes a buzz by flying economy class

Yahoo – AFP, 22 Nov 2014

Indonesian President Joko Widodo (C) and First Lady Iriana attend the high

 school graduation ceremony of their youngest son Kaesang Pangarep, at the

 Anglo-Chinese International School in Singapore, on November 21, 2014 (Photo

By Mohd Fyro/AFP)

Indonesia's new President Joko Widodo caused a stir this weekend by opting to fly economy class to watch his son's high school graduation in Singapore, drawing both praise and criticism online.

Skipping the usual heavy security protocol for heads of state, Widodo and his wife Iriana queued for check-in at Jakarta airport like ordinary passengers before taking their economy seats.

Widodo is known for his common touch, and his family have maintained a modest lifestyle since he became leader of Southeast Asia's biggest economy last month.

The presence of the president, known by his nickname Jokowi, caused a buzz at Jakarta's airport as passengers shouted and clamoured to shake his hand, with some taking selfies on their phones.

Some, though, thought it was a publicity stunt.

"Why should he go through the metal detector, join the queue, etc. Sir, stop polishing your image, just act natural," Rangga Aditya commented on news portal Detik.com.

Harry Azet tweeted: "Living a fake life is difficult: Jokowi went to Singapore flying economy but slept in an expensive hotel."

Indonesian President Joko Widodo takes a selfie with classmates of his youngest

 son Kaesang Pangarep, at the Anglo-Chinese International School in Singapore,

on November 21, 2014 (Photo By Mohd Fyro/AFP)

Widodo stayed in a five-star hotel on Orchard Road, Singapore's shopping mecca, an Indonesian embassy spokesman in Singapore told AFP.

But his choice to fly economy also won widespread praise, with many urging other government officials to follow suit.

"Jokowi sets a good example by flying economy. Hopefully other officials can follow in his footsteps," tweeted Anita Tobing.

Widodo said he did not use the presidential private jet or the VIP terminal because he was travelling for personal reasons.

"I am going for family matters, a private agenda, not a state visit -- so why should I use the facility?" Widodo told reporters.

The president and his wife were in Singapore to see their youngest son, 19-year-old Kaesang Pangarep, graduate from the Anglo-Chinese International School on Friday evening. The couple have two other children.

Widodo had breakfast with Singapore's Prime Minister Lee Hsien Loong before flying back to Jakarta on Saturday morning.

Sri Lanka's Rajapaksa facing electoral rebellion

The unprecedented presidential third term sought by Sri Lanka's leader Mahinda Rajapaska has been challenged. His health minister Mithripala Sirisena has quit, saying he will run as joint opposition candidate.

Deutsche Welle, 21 Nov 2014

Sirisena, who had also been No. 2 figure in the ruling Sri Lankan Freedom Party (SLFP), quit Sri Lanka's cabinet on Friday, accusing President Rajapaska of moving the country "towards a dictatorship."

His defection -- along with the departures of three other ministers -- coincided with the setting of January 8 as the presidential election day by Sri Lanka's Election Commission.

Rajapaksa had on Thursday announced a snap election two years before his second term ends, hoping to ride popularity from past military gains.

Has Rajapaksa overplayed his hand?

The 69-year-old came to power in 2005 and won a second term in 2010 after the island nation's military defeated Tamil Tiger separatists, ending a 26-year-war.

Abolish presidency, says Sirisena

Sirisena on Friday vowed to abolish the powerful post of president and return to a government headed by a prime minister as existed before 1978. He also promised independent bodies to appoint judges and police chiefs.

"The 18th amendment is a serious mistake," said Sirisena, referring to Rajapaksa's recent use of parliament to change the constitution and scrap a previous two-term limit for the presidency.

Kumaratunga was president from
1994 until 2005

Reports from Colombo said Sri Lanka's main opposition United National Party (UNP), along with rival lawmakers, had thrown their weight behind Sirisena.

"One family has captured the country's economy, wealth, administration and the management of the political party," Sirisena said, referring to senior public posts held by three Rajapaksa brothers.

Sirisena left the government with three other ministers and a lawmaker.

"After the war victory, the present government started veering in a direction that none of us expected," Sirisena told reporters while accompanied by former President Chandrika Kumaratunga.

ipj/tj (AP, Reuter, AFP)