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China passes law to counter foreign sanctions

China passes law to counter foreign sanctions
China passes law to counter foreign sanctions


China passed a law on Thursday to counter foreign sanctions, as it strives to diffuse U.S. and EU pressure over trade, technology, Hong Kong and Xinjiang.

The new law is China’s latest and most wide-ranging legal tool to retaliate against foreign sanctions and is intended to give Chinese retaliatory measures more legitimacy and predictability, according to local experts.

Foreign companies, however, worry about the dampening impact it might have on foreign investment.

China’s top legislature, the National People’s Congress standing committee (NPC) passed the law on Thursday, according to state television CCTV. But details of its contents have not yet been released.

All 14 vice-chairpersons of the committee are under U.S. sanctions for passing the National Security Law last year that critics say has crippled political freedoms in Hong Kong. Beijing says it was needed to restore stability in the city.

President Xi Jinping called last November for the ruling Communist Party to use legal means to defend China’s sovereignty, security and interests against foreign parties.

The NPC said in its annual work report in March that it wants to “upgrade our legal toolbox” to address the risks from foreign sanctions and interference.

In January, the commerce ministry announced mechanisms to assess if foreign restrictions on Chinese trade and business activities were justified, and for Chinese individuals or companies to sue for compensation in a Chinese court.

The United States and its allies have increasingly sanctioned Chinese officials to express concern about how China treats its Muslim Uyghur minority in Xinjiang and pro-democracy activities in Hong Kong, triggering countersanctions by China on U.S. and EU politicians and officials.

Washington has also targeted Chinese companies such as Huawei and ZTE for violating U.S. sanctions on Iran or North Korea, an act China called “long-arm jurisdiction”.

The bill underwent a secret first reading in April, and was passed on Thursday, barely two days after NPC announced that it was doing a second reading of the bill. It skipped a third reading normally needed for other bills.

The European Union Chamber of Commerce said its members are alarmed at the lack of transparency about the passing of the bill.

“China seems to be in a hurry. Such action is not conducive to attracting foreign investment or reassuring companies that increasingly feel that they will be used as sacrificial pawns in a game of political chess,” Joerg Wuttke, the Chamber’s president, said.

Foreign companies looking to do business in China may find themselves up against increasing scrutiny from Chinese regulatory authorities in relation to their operations both locally and abroad, said Shaun Wu, from Paul Hastings, a law firm in Hong Kong

Chinese experts say Beijing is simply taking a page from the playbooks of the United States and European Union, which in recent years have passed various acts to serve as a legal basis for their engagement with China.

“China previously has neither the economic power nor the political will to use legal means to retaliate against U.S. sanctions. It now has both,” said Wang Jiangyu, a law professor at City University of Hong Kong.

“Cooperation is the best option but the U.S. doesn’t want it. So retaliation, such as with this new law, is the second best option. Sucking it up is the worst,” he said.

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China squeezes bitcoin mining and trading

China squeezes bitcoin mining and trading
China squeezes bitcoin mining and trading


This article is an on-site version of our #techFT newsletter. Sign up here to get the complete newsletter sent straight to your inbox every weekday

China has taken another bite out of bitcoin’s potential, stepping up restrictions on cryptocurrency mining and ordering banks to block crypto-related transactions. The news drove bitcoin’s price 10 per cent lower to a two-week low today.

China’s central bank warned several of its largest state-owned banks and Jack Ma’s Alipay to “investigate and identify” bank accounts facilitating cryptocurrency trading and block all corresponding transactions, reports our Beijing bureau.

It had called in the Agricultural Bank of China, China Construction Bank and ICBC among others to discuss “providing services for cryptocurrency transaction speculation”. The regulator wants the financial groups to identify and block all transfers to accounts held by cryptocurrency exchanges and other offshore middlemen. The central bank is steering citizens towards using its own digital currency, which it has started testing in large-scale pilots.

“Bitcoin trading in China will continue but become less liquid, and spreads will increase,” said Leo Weese, co-founder of the Hong Kong Bitcoin Association. “People will limit themselves to trading with their friends and trusted friends-of-friends.”

Line chart of $ per coin showing Bitcoin slides on fears of regulatory crackdown

Elsewhere, officials in all of China’s hubs for mining operations followed Inner Mongolia and released further measures targeting bitcoin creators. Sichuan, a hydropower-rich province in south-west China, has ordered the 26 largest local mines to stop operating while an investigation is carried out. Sichuan was seen as a last resort location for mining operations pushed out of provinces that rely on coal-fired power plants for electricity.

Meanwhile, the central banker overseeing the European Union’s development of a digital euro has been speaking to the Financial Times about its advantages. Fabio Panetta, an executive board member at the European Central Bank, told us it would boost consumers’ privacy and protect the eurozone from the “threat” of competing cryptocurrencies that could undermine the bloc’s monetary sovereignty.

The Internet of (Five) Things

1. German regulator launches Apple probe
Germany’s antitrust watchdog has launched a probe into whether Apple has established market dominance through its “digital ecosystem”, making it the fourth US tech giant the agency has targeted this year. The Federal Cartel Office said on Monday it would look at whether Apple exerted market dominance through its integration of hardware products with digital services such as the App Store, iCloud, or Apple Music. Meanwhile, Margrethe Vestager, the EU’s head of digital and competition policy, has rejected the idea that its forthcoming Digital Markets Act (DMA) will only target American tech companies.

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#techFT brings you news, comment and analysis on the big companies, technologies and issues shaping this fastest moving of sectors from specialists based around the world. Click here to get #techFT in your inbox.

2. Tech investor says UK still in 19th century
A “deep sickness” in UK capital markets has stifled the growth of homegrown tech entrepreneurs and left London’s blue-chip FTSE 100 looking like an index from the 19th century, according to James Anderson, joint manager of Baillie Gifford’s Scottish Mortgage Investment Trust. His early bets on Facebook, Amazon and Tesla have made him one of the world’s most successful investors.

3. Volvo and Northvolt to build gigafactory
Volvo Cars and Northvolt will set up a joint venture to build a new battery gigafactory in Europe and develop energy cells for the Swedish premium carmaker and its electric-only sister brand Polestar. Northvolt, Europe’s great battery hope founded by former Tesla executives, is backed by investors including Volkswagen and Goldman Sachs and valued at about $12bn.

4. Malaysian mobile megamerger
Malaysia’s Axiata and Norway’s Telenor have agreed to merge their mobile operations in the south-east Asian country, creating a $12bn entity that will seek to capture rising demand for digital services. The deal, announced on Monday, comes two years after the pair abandoned plans to merge their regional operations in a deal that would have created the biggest telecoms operator in south-east Asia.

5. Ackman Spac invests in music catalogues
A blank-cheque company backed by hedge fund billionaire Bill Ackman is to buy a 10 per cent stake in Universal Music Group, Taylor Swift’s label, for $4bn. The deal is the first of its kind for a special acquisition company and comes as music catalogues soar in value.

Tech week ahead

Monday: Activision Blizzard faces a contentious vote on its chief executive’s $155m pay package after delaying the showdown in what critics say was an effort to avoid an embarrassing rebuke.

Tuesday: Amazon’s two-day Prime Sale ends.

Wednesday: The new UK £50 note enters circulation and features Alan Turing, one of the UK’s greatest scientists, on his birthday. Masayoshi Son, SoftBank chairman and CEO, will address the company’s annual meeting amid rising calls for share buybacks after the company recorded a $45bn net profit for the year to March 31.

Thursday: Microsoft unveils its “next generation of Windows” at an event presented by Microsoft CEO Satya Nadella and chief product officer Panos Panay.

Friday: Days after an independent investigation found that Toshiba executives colluded with Japan’s trade ministry to pressure shareholders over their votes at last year’s general meeting, investors will gather again to elect a new board of 11 directors.

Tech tools — Angell e-bike

The Angell e-bike has élan, which seems appropriate given its French design and origins. It is sleek, stylish and one of the lightest bikes of its kind, weighing in at 15.9Kg. I was able to test ride it recently and relished the surge from its three power-assisted settings — the battery-saving Fly Eco, a regular Fly Dry mode and a Fly Fast one for maximum assistance. The handlebars have integrated buttons that switch between those power modes and turn the left and right indicators and the front and rear lights on and off. A central cockpit display links to your smartphone using Bluetooth and shows speed, battery life, time, distance, weather conditions, and power settings.

I had some quibbles with the battery, which slides on to a rear rack and sometimes became disconnected when riding, unless I kept the key in it so it was fully locked. If you leave the battery off the back for a few days when charging it, the central cockpit console can lose its own charge and curtail any power-assisted rides. I would also prefer a smartphone mount in the centre rather than have both an Angell app and the console screen. Like other smart e-bikes, the Angell has the ability to send a fall alert via text to a chosen contact, as well as automatic locking, motion sensing and geolocation features. It is another £2,000-plus e-bike, costing £2,600, compared to the new Cowboy 4 at £2,290.

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US punts negotiation ball back to North Korea

US punts negotiation ball back to North Korea
US punts negotiation ball back to North Korea


SEOUL – Echoing a classic Martini advert of the 1970s, the US special envoy to North Korea says American negotiators are ready to meet their North Korean counterparts and talk anytime, anywhere.

“We continue to hope that [North Korea] will respond positively to our outreach and our offer to meet anywhere, anytime without preconditions,” Ambassador Sung Kim said in Seoul on Monday.

His comments came three days after North Korea signaled, via comments from national leader Kim Jong Un, that it was ready to either talk to or confront the United States. Experts told Asia Times then that the implied emphasis was on “talk”, an analysis that appears to be born out by the US response.

The US envoy arrived in South Korea on Saturday for discussions with his South Korean and Japanese counterparts. None of the three states are currently engaged in negotiations with North Korea.

Talks between the US and North Korea, and collaterally South Korea and North Korea, have essentially dwindled away to nothing after a high-potential Pyongyang-Washington summit in Hanoi, Vietnam, ended without a deal in 2019.



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China cracks down on iron ore market

China cracks down on iron ore market
China cracks down on iron ore market


Beijing has launched a review into record prices for key steelmaking ingredient iron ore, opening a new front in its campaign to suppress high commodities prices.

In a statement issued on Monday, the National Development and Reform Commission, China’s top economic planning agency, said it would investigate “malicious speculation” in the iron ore market and “severely punish” any wrongdoing.

The move marks the latest step by Chinese policymakers to cool soaring commodity markets, which have pushed up factory gate prices in China to their highest since the 2008 financial crisis and threatened to squeeze industry profits.

Chinese authorities made a pledge last week to release government stockpiles of industrial metals to tackle concerns over shortages and high prices. China is the world’s biggest consumer of seaborne iron ore, absorbing more than 70 per cent of global production.

“What [this intervention] tells me is they’re very very frustrated, they’re trying to reduce the inflation risk that high commodity prices pose to the economy,” said Tom Price, head of commodities strategy at Liberum.

Iron ore futures tumbled on the news, with the most active contract on the Dalian Commodity Exchange down 9 per cent to $173 a tonne.

In the physical market, where miners and steel mills buy and sell, iron ore was down 5 per cent at $206.55, according to a price assessment from S&P Global Platts.

The price of iron ore surged to a record high of more than $230 a tonne in May on strong demand from China and supply disruptions in Australia and Brazil. That delivered a huge windfall to big producers, a group that includes Rio Tinto, BHP Group and Vale.

The NDRC said in a statement it would “closely scrutinise changes to spot prices, swiftly investigate irregular transactions and malicious speculation, and . . . will severely punish and publicly expose acts such as monopolistic behaviour, spreading around information about price increases, driving up prices and hoarding”.

High metals prices and falling consumer growth have squeezed Chinese heavy industry, with the producer price index climbing 9 per cent in May while consumer prices have remained unchanged.

However, commodity prices have suffered a sharp retreat over the past week, hit by the hawkish shift in tone from the US Federal Reserve and China’s interventions to try and curb inflation. Copper hit an all-time high of $10,500 a tonne on the London Metal Exchange last month but has since come back to about $9,000 a tonne.

The Bloomberg Commodity index peaked earlier in June but has since fallen off 5 per cent, with a drop in the gold price also contributing to its decline.

UBS analyst Myles Allsop said the iron ore price was approaching an “inflection point” through China’s tightening of credit and supply.

“Steel demand is also set to moderate in the second half [of the year] with China tightening credit,” he said. “Brazilian supply is lifting with Vale’s shipments up 14 per cent year to date.”

In London, shares in Rio fell as much as 3 per cent on the news before rebounding, as the FTSE 100 index rose as much as 0.7 per cent in morning trading.



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Up to 10,000 fans to be allowed in Tokyo Olympics

Up to 10,000 fans to be allowed in Tokyo Olympics
Up to 10,000 fans to be allowed in Tokyo Olympics


Up to 10,000 fans will be allowed at Tokyo Olympic events, organizers said Monday, warning competition could move behind closed doors if infections surge.

The decision, only weeks before the opening ceremony, ends months of speculation about whether spectators will be allowed at the pandemic-postponed Games. Overseas fans were banned in March.

“In light of the government’s restrictions on public events, the spectator limit for the Olympic Games will be set at 50% of venue capacity, up to a maximum of 10,000 people in all venues,” organizers said in a statement.

A decision on spectators at the Paralympics will be delayed until July 16, a week before the Olympics open.

And officials left open the possibility of a reversal if the virus rebounds.



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Olympic venues to cap number of spectators at 10,000

Olympic venues to cap number of spectators at 10,000
Olympic venues to cap number of spectators at 10,000


Japan will limit spectators at the Olympic Games to 50 per cent of a venue’s capacity capped at 10,000 people, a move that flies in the face of the country’s official medical advice.

The decision to push ahead with spectators at the games, even though most of the Japanese public will not be vaccinated against Covid-19, suggests prime minister Yoshihide Suga is willing to risk some extra infections in order to deliver a successful Olympics.

It marks a rejection of last week’s request by Shigeru Omi, the doctor leading Japan’s Covid-19 response, for organisers to hold the Olympics behind closed doors.

“We have prepared for the last eight years and we would like to make these games successful,” said Seiko Hashimoto, president of Tokyo 2020, in a press conference on Monday.

She said there were many examples of spectators attending sports events during the pandemic, both in Japan and abroad, and insisted the event could be held in safety.

Last week, Omi warned that the televised spectacle of stadiums full of spectators would send a contradictory message to the Japanese public that it was safe to relax their precautions against Covid-19.

If the Olympics were held with spectators, Omi said there should be tighter restrictions than for other sporting events, and they should be limited to Tokyo residents to avoid an increase in people travelling.

But while the organisers appeared to reject Omi’s requests, they said the rules could be changed if the coronavirus situation worsened.

“In the event a state of emergency is implemented at any time after July 12, limitations on spectator numbers will be based on the content of the state of emergency,” said Hashimoto. That could yet mean holding the games behind closed doors.

A state of emergency was lifted in Tokyo and Japan’s other big cities at the weekend with new nationwide Covid cases running at about 1,500 a day. Doctors are worried about a fresh wave of the disease, especially as the Delta variant becomes more prevalent.

The Olympics are due to start on July 23. Japan has so far given a first dose of vaccine to sixteen in every 100 people, with priority going to medical personnel and then the elderly.

Only one in ten Olympic events will be affected by the 10,000 maximum on capacity, said Hashimoto. That will include showpiece athletics finals in the Olympic stadium.

Restricting spectator numbers will mean a financial hit to the organisers. Hashimoto said ticket revenue would be less than half of the budgeted ¥90bn ($820m).

She said the organisers, the city of Tokyo and the Japanese government would discuss how to fill the gap in the budget. However, according to the contracts underpinning the games, the burden is likely to fall on Tokyo taxpayers.



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‘The Serpent’: Serial killer linked to murders across Asia still haunts four decades on

‘The Serpent’: Serial killer linked to murders across Asia still haunts four decades on
‘The Serpent’: Serial killer linked to murders across Asia still haunts four decades on


Nearly half a century after he sowed fear along the 1970s “hippie trail,” French serial killer Charles Sobhraj, the “Serpent” of the hit TV drama series, still haunts the lives of those who crossed his path.

Now 77 and jailed in solitary confinement in Nepal since 2003, Sobhraj is suspected of involvement in at least a dozen murders around Asia in the 1970s.

His modus operandi was to charm and befriend his victims — many of them starry-eyed Western backpackers on a quest for spirituality — before drugging, robbing and murdering them.

The TV series, made jointly by the BBC and Netflix, conjures the seedy, steamy Bangkok of the 1970s with sepia tones, flared trousers and traffic-clogged streets.

French star Tahar Rahim plays Sobhraj, oozing mesmerizing, manipulative menace — in a frighteningly familiar way for one of those who knew him.

The neighbor

When Nadine Gires visited the set of the series in 2019, seeing Rahim in character as Sobhraj brought the past flooding back.

“I was terrified. I thought he had escaped from prison, that he was coming back to do evil,” she said.

“Everything came back: anger, fear.”

Sobhraj — a Frenchman of Vietnamese and Indian parentage — arrived in Bangkok in October 1975 with his Canadian girlfriend and an Indian associate.

They moved into a flat in the same building as Gires, near Bangkok’s notorious Patpong red light district.

What became the Serpent’s lair was demolished years ago, but the disused apartment block that stood in for it in the TV series has become a minor tourist attraction.

Gires, age 22 at the time, was impressed by Sobhraj — not least when he told her he was a gemstone trader, a tactic he used to lure cash-strapped backpackers.

“He was cultured, courteous. As neighbors, it didn’t take long for us to get to know each other,” she said. But doubts soon arose.

“Many people were getting sick in his home. I jokingly said to Charles: ‘You’re putting a curse on them.’”

But Gires, now 67 and running a hotel by the beach in southern Thailand, says she had no idea what Sobhraj was really up to.

Nadine Gires walks on Khanom beach in Nakhon Si Thammarat. | AFP-JIJI
Nadine Gires walks on Khanom beach in Nakhon Si Thammarat. | AFP-JIJI

“We thought it was weird, but how could we imagine such a scheme?” she says.

But everything changed at Christmas 1975, when a young Frenchman staying with Sobhraj showed them a safe full of forged passports.

“He told us: ‘He poisons people.’ He was terrified,” she explains.

“He was not only a swindler, a seducer, a robber of tourists, but an evil murderer. It had to stop.”

Together with Dutch diplomat Herman Knippenberg, she set about gathering evidence on the slippery Sobhraj, a conman with a host of different identities and adept at covering his tracks.

Gires searched Sobhraj’s apartment and went around backpacker haunts looking for clues about missing persons.

In one of the most dramatic, high-tension scenes of the TV show, Sobhraj bumps into her unexpectedly.

The moment in March 1976 that formed the basis for the scene is still seared into Gires’s memory.

“In a hotel lobby, someone tapped me on the shoulder,” says Gires, who traveled to London to help the show’s scriptwriters.

“It was him. It was the most terrifying moment of my life.”

Fearing for her life, she agreed to let him take her home, hoping to avoid arousing his suspicions.

“My heart was beating 100,000 times a minute but he didn’t notice anything,” she says.

Even now, barely a day goes by without Gires thinking about Sobhraj, and the fear lingers.

“I need to know he is held within four walls. The thought of him being free terrifies me. What could he do now that he knows I knew?” she says.

The policeman

Sompol Suthimai is 90 now, but the memories of his “most interesting” case still burn bright.

As a Thai police officer working with Interpol, he was on holiday in early 1976 when — under pressure from Knippenberg — the Bangkok Post published photos of murdered tourists.

“I said to myself: this is a joke — how is it possible that so many people have been killed without it being known by the police?” Sompol says.

He rushed back to Bangkok and met Knippenberg, who was initially suspicious, having tried and failed to get the Thai police to take an interest in the case.

Eventually the diplomat passed Sompol the dossier of evidence he had amassed with Gires — diaries and plane tickets belonging to the victims found at Sobhraj’s flat.

But Sobhraj had managed to flee the kingdom a few days earlier. Sompol issued an international arrest warrant.

Sobhraj was arrested in New Delhi in July 1976 and spent two decades in an Indian jail for manslaughter and drugging and robbing tourists.

Former police officer Sompol Suthimai speaks about his personal involvement in the investigation of the murders of tourists by French serial killer Charles Sobhraj, now the subject of the television drama series
Former police officer Sompol Suthimai speaks about his personal involvement in the investigation of the murders of tourists by French serial killer Charles Sobhraj, now the subject of the television drama series “The Serpent.” | AFP-JIJI

He went to France after his released and lived there quietly until 2003 before returning to Nepal, where he was jailed for two murders, and has been behind bars ever since.

Sobhraj’s alleged crimes in Thailand have long passed the statute of limitations, and Sompol is left to rue his colleagues’ failings four decades ago.

“The police did not pay much attention. They made a mess,” he sighs.

The writer

From his jail cell, Sobhraj sold his story to a publishing house, and in July 1977, Australian journalists Julie Clarke and Richard Neville were dispatched to meet him.

They paid guards to get regular access to him, and a strange relationship developed.

“We’d been down the hippie road too, so we were obsessed with this case,” Clarke said.

Over the course of their meetings, Clarke says, the “charming” Sobhraj recounted the murders in chilling detail, keeping nothing back.

At one point he described pouring petrol on a young Dutchman and setting him on fire after beating him.

“He despised backpackers, he saw them as poor young drug addicts,” says Clarke, now retired and living in Sydney.

“He considered himself as a criminal hero.”

Clarke and Neville’s book, “On the Trail of the Serpent,” became a best-seller and was the basis of the TV serial.

Since then, Sobhraj has denied the crimes, and his French lawyer Isabelle Coutant-Peyre says the confessions in the book are “fabricated.”

But Clarke says Sobhraj is trying to “rewrite history” in the hope of getting out of jail.

The few months she spent in the shadow of the killer left her with “traumatic memories.”

“We had nightmares. From his prison, he wrote us missives and dictated us his orders. He had also sent people to watch us,” she says.

Building manager Puengpis Ruerkroji prays to a shrine at the Baan Bellawin apartments, where parts of the television series
Building manager Puengpis Ruerkroji prays to a shrine at the Baan Bellawin apartments, where parts of the television series “The Serpent” were filmed, in Bangkok on May 20. | AFP-JIJI

But his magnetism was obvious.

“If you were a student traveler on the hippie trail, how could you not trust this man who was into Buddhism and Hinduism, who dropped Nietzsche into the conversation and gave you tips on where to stay?” she says.

Sobhraj’s days of high living are far behind him, and the prison governor in Nepal has told him he will die behind bars, according to his lawyer.

But Clarke says his resilience is remarkable — while in prison he has survived open heart surgery.

“He won his bet with his mother — to die old,” she says.

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