• US soldier Travis King in US custody after expulsion from North Korea to China
• China says drills near Taiwan target “arrogance“ of separatists
• US investors want clarity on Biden“s vague curbs on China tech
• Pressure on China Evergrande intensifies; chairman under police watch, risk of liquidation
• Chair of China’s Evergrande reportedly put under police surveillance
• Military exercises near Taiwan aimed at combating ‘arrogance’ of separatists, says China
• Pressure piles on China Evergrande with report chairman under police surveillance
• [World] Maldives: The presidential poll with India and China on the ballot

US soldier Travis King in US custody after expulsion from North Korea to China

https://reuters.com/article/northkorea-usa-travisking/us-soldier-travis-king-in-us-custody-after-expulsion-from-north-korea-to-china-idUSKBN30X0OW

Private Travis King, the U.S. soldier who ran into North Korea in July, is in U.S. custody after being expelled by North Korea into China, U.S. officials said on Wednesday.

North Korea's KCNA state news agency said King had been expelled after admitting to entering North Korea illegally as he was "disillusioned about unequal U.S. society."

A U.S. official told Reuters King was in U.S. custody after being expelled by North Korea into China, but did not offer further details.

The expulsion decision was contained in the final results of an investigation into King's July border crossing published by KCNA. Last month it reported interim findings that he wanted refuge in North Korea or elsewhere because of maltreatment and racial discrimination within the army.

"King confessed that he illegally intruded into the territory of the DPRK as he harbored ill feeling against inhuman maltreatment and racial discrimination within the U.S. army and was disillusioned about the unequal U.S. society," KCNA said.

DPRK are the initials of the North's official name, the Democratic People's Republic of Korea.

Authorities have decided to expel King under the country's law, KCNA said, but did not specify how, when or to where he would be expelled.

The U.S. State Department and the White House could not be immediately reached for comment. U.S. Forces Korea and the United Nations Command did not immediately respond to requests for comment.

King, an army private, made a sudden dash into North Korea from the South on July 18 while on a civilian tour of the Joint Security Area on the heavily fortified border between the neighbours.

There have been several attempts by U.S. soldiers stationed in South Korea to desert or defect to North Korea, but King's expulsion decision came relatively quickly: others have spent years before being released from the reclusive country.

Jonathan Franks, spokesperson for King's family, said: "No substantive comment expected. We need time."

King's uncle, Myron Gates, told ABC News in August that his nephew, who is Black, was experiencing racism during his military deployment, and that after he spent time in a South Korean jail, he did not sound like himself.

King, who joined the U.S. army in January 2021, faced two allegations of assault in South Korea. He pleaded guilty to one instance of assault and destroying public property for damaging a police car during a profanity-laced tirade against Koreans, according to court documents. He was due to face more disciplinary measures when he arrived back in the United States.

King had finished serving military detention and had been transported by the U.S. military to the airport to return to his home unit in the United States. Instead, he left the airport and joined a tour of the border area, where he ran across despite attempts by South Korean and U.S. guards to stop him.

Lim Eul-chul, a professor of North Korean studies at South Korea's Kyungnam University, said Pyongyang could have felt that any diplomatic and propaganda value in keeping King was outweighed by the likely U.S. pressure it would face.

"It seems likely that North Korea saw little value in him as a countermeasure to a U.S. human rights campaign against themselves by highlighting racial issues in America," he said.

"The decision could also mean that the political burden from detaining him for a long term would be greater than any political benefits it might bring."

China says drills near Taiwan target “arrogance“ of separatists

https://reuters.com/article/china-taiwan/china-says-drills-near-taiwan-target-arrogance-of-separatists-idUSKBN30X04J

China said on Wednesday its recent series of drills near Taiwan aimed at combating the "arrogance" of separatist forces, while the frontrunner to be Taiwan's next president said China was trying to "annex" the island.

Taiwan, which China claims as its own territory, has said this month that it had observed dozens of fighters, drones, bombers and other aircraft, as well as warships and the Chinese aircraft carrier Shandong, operating nearby.

The increased frequency of China's military activities has raised the risk of events "getting out of hand" and sparking an accidental clash, the island's defence minister has warned.

Asked about the spurt in drills, and Taiwan's concerns about increased risk, Zhu Fenglian, the spokeswoman of China's Taiwan Affairs Office, acknowledged the drills by the People's Liberation Army.

"The purpose is to resolutely combat the arrogance of Taiwan independence separatist forces and their actions to seek independence," Zhu told a regular news briefing in Beijing.

"The provocation of Taiwan independence continues all day long, and the actions of the People's Liberation Army to defend national sovereignty and territorial integrity are always ongoing," she added.

She urged people in Taiwan to distinguish between "right and wrong", resolutely oppose independence for the island, and work with China to maintain peace and stability in the Taiwan Strait.

China has a particularly strong dislike of William Lai, the frontrunner to be elected president at the island's January elections for previous comments in support of independence.

However, he says he does not seek to change the status quo and has offered talks with Beijing.

The situation across the Taiwan Strait had "not improved due to the passage of time", said Lai, now the island's vice-president.

"China's attempts to annex Taiwan have not changed," he said at an event in Taipei on Wednesday for the 37th anniversary of the founding of the ruling Democratic Progressive Party, or DPP.

China's armed forces have not explicitly mentioned or commented on the drills at a time when Chinese Defence Minister Li Shangfu has gone missing from public view. Sources have told Reuters he is being investigated for corruption.

Taiwan's democratically elected government says only the island's people can decide their future, and has repeatedly offered talks with China, which Beijing has rejected.

On Wednesday, Taiwan's defence ministry reported further Chinese military movements, saying it had detected and responded to 16 Chinese aircraft entering the island's air defence identification zone over the prior 24 hours.

Of those, 12 crossed the median line of the Taiwan strait, which had served as an unofficial barrier between the two sides until China began regularly crossing it in August last year.

On Thursday, Taiwan is set to launch the first of eight domestically made submarines as it bolsters its defences against China.

In Beijing, when asked about the submarines, Zhu said efforts by Taiwan's DPP to "seek independence with force" would only exacerbate tensions and "push the Taiwanese people into a dangerous situation".

In an unusual revelation last week, Taiwan's defence ministry said it was monitoring China's drills in the southern province of Fujian, opposite Taiwan. Normally Taiwan provides details only of drills in the skies and waters around it.

A senior Taiwan official familiar with security planning in the region told Reuters the information was released to show Taiwan's surveillance and intelligence capacity.

"We can see the details and we are prepared," the source said, speaking on condition of anonymity as they were not authorised to speak to the media.

China's military has also not commented on the Fujian exercises.

---

US investors want clarity on Biden“s vague curbs on China tech

https://reuters.com/article/usa-china-tech-investors/us-investors-want-clarity-on-bidens-vague-curbs-on-china-tech-idUSKBN30X0NF

U.S. financial firms are pushing for greater clarity on proposed new rules curbing U.S. investments in some China technology sectors which they say are too vague and put the onus of compliance on investors.

Aiming to protect national security and prevent U.S. capital from aiding China's military, President Joe Biden issued an executive order last month restricting new U.S. investments in sensitive Chinese technologies. The Treasury Department subsequently kicked off a rule-making process to implement the order, and financial firms have been rushing to meet a Sept. 28 to provide input. The rules are expected to be implemented sometime next year.

The proposed rule applies to U.S. persons - including U.S. citizens, residents, businesses and U.S. units of overseas businesses. They must notify the Treasury when making certain investments in China in the semiconductors and microelectronics, artificial intelligence and quantum information technologies sectors, and bans other such investments altogether.

In addition to venture capital and private equity firms, hedge funds, banks and potentially funds that track indexes are likely to be affected by the proposal, which financial industry executives and lawyers complain is broad and ambiguous.

Among their key concerns: how the rules would apply to U.S. persons; which specific Chinese entities would be subject to the restrictions; and better defining a proposed exemption for publicly traded securities.

"The scope is pretty broad," said Timothy Keeler, a partner at law firm Mayer Brown, noting it applies to Chinese entities operating beyond China. "It could apply to companies that are outside of China but are subsidiaries of Chinese companies or controlled by a Chinese person."

While the U.S. already has restrictions on some Chinese investments in the U.S. and U.S. investments in China, the order creates a new program. Unlike a process conducted by the Committee on Foreign Investment in the United States, a panel comprising U.S. government agencies, the new program will not involve case-by-case reviews of investments. And in contrast to sanctions, it does not envisage a list of restricted entities or companies.

That means investors have to figure out which investments come under the scope of the new rule and how to comply, creating significant compliance costs and legal risks.

"That puts a fair amount of burden on an investor," said a former Treasury official.

They may also bar U.S. persons from "knowingly directing" covered transactions by non-U.S. persons. But the threshold for knowledge, or what directing means, is unclear.

"We are hearing a lot about the issue of a U.S. person directing the activities of a non-U.S. person," said Jen Fernandez, a partner at law firm Sidley Austin.

"At what level does 'directing' kick in and what does that mean for these non-U.S. private equity funds that may have a dual national sitting as a partner?"

The program proposes exempting publicly traded securities and index and mutual funds, but financial firms want those securities to be more tightly defined. One key question is whether shares in initial public offerings allocated prior to trading would be carved out.

To address these and other issues, some firms plan to push for a list of restricted entities and investments, similar to a sanctions regime. Former Securities and Exchange Commission chair Jay Clayton, now an adviser with law firm Sullivan & Cromwell, voiced this idea when he told a House of Representatives committee on China this month that "Wall Street responds very quickly" to lists of barred entities.

Some sources, though, said they doubted the Treasury would go that route, which would reduce the program's flexibility and, since the target is cutting-edge technology, quickly become outdated. "That just doesn't appear to be where this process is heading," said Keeler.

A Treasury spokesperson did not respond to a request for comment but said in the proposal that it welcomes input. The rules are necessary because U.S. investments can be exploited to accelerate the development of sensitive technologies that threaten U.S. national security, the Treasury and administration has said.

Financial firms say they support the administration's national security goals but worry about increased liability and the economic costs of restricting capital flows. U.S.-China tensions have already seen acquisitions of Chinese companies by U.S. firms sink almost 60% from January this year through early August compared with the same period last year.

"Protecting U.S. national security is a paramount obligation of the federal government, but as the Treasury states, maintaining global capital flows need not be inconsistent with that," said Peter Matheson, a managing director at the Securities Industry and Financial Markets Association, a financial industry lobby group.

Lobbying to contain the rules, however, is politically sensitive, especially because China hawks in Congress are pushing bills to make the restrictions tougher. Given the uncertainty, companies may start avoiding the covered sectors altogether, said Fernandez.

"I do think we’re going to see a lot of de-risking," she added.

Pressure on China Evergrande intensifies; chairman under police watch, risk of liquidation

https://reuters.com/article/china-property-debt/pressure-on-china-evergrande-intensifies-chairman-under-police-watch-risk-of-liquidation-idUSKBN30X02E

The chairman of China Evergrande Group (3333.HK) has been placed under police surveillance, Bloomberg News reported on Wednesday, raising more doubts about the embattled developer's future as it grapples with mounting prospects of liquidation.

Citing people with knowledge of the matter, the report said Hui Ka Yan, who founded Evergrande in 1996 in the southern city of Guangzhou, was taken away by police earlier this month and is being monitored at a designated location.

Evergrande is the world's most indebted property developer and has been at the centre of an unprecedented liquidity crisis in China's property sector, which accounts for roughly a quarter of the world's second-largest economy.

It was not clear why Hui was placed under residential surveillance, Bloomberg News said, adding the move was a type of police action that falls short of formal detention or arrest and does not mean Hui will be charged with a crime.

Reuters could not immediately verify the report. Evergrande, the police department in Guangdong province, whose capital is Guangzhou, and the public security ministry did not immediately respond to requests for comment.

A person close to Evergrande said Hui had stopped contacting staff over the past few days, while an industry source said he had become totally inaccessible. Both of them declined to be identified as they were not authorised to speak to the media.

The reported action against Hui comes after police in southern China said earlier this month that they have detained some staff at Evergrande's wealth management unit, which raised funds from individual investors by selling investment products.

Once China's top-selling developer, Evergrande's financial crisis became public in 2021 and since then it and a string of its peers have defaulted on their offshore debt obligations amid slowing home sales and fewer new avenues for fundraising.

Adding to its woes, Evergrande's offshore debt restructuring plan, the key to its survival amid a stifling cash crunch, looks set to falter and the prospects of the firm being liquidated are gathering momentum.

The company is "very likely to fail on debt restructuring, and with negative equity Evergrande may go into bankruptcy, which includes bankruptcy reorganisation and bankruptcy liquidation," UOB Kay Hian wrote in a research note on Wednesday.

As the developer's already sold but unfinished apartments will pose a risk to "social stability", there is a good chance that Evergrande will likely seek bankruptcy reorganisation, said the brokerage.

Reuters reported on Tuesday that a major Evergrande offshore creditor group was planning to join a liquidation court petition filed against the developer if it does not submit a new debt revamp plan by the end of October.

That plan comes after the company rattled markets on Sunday with its announcement that it could not issue new bonds as part of its debt restructuring plan because of a regulatory investigation into its main Chinese unit, Hengda Real Estate.

Hengda, in a separate filing on Monday, said that it had failed to pay the principal and interest on a 4 billion yuan ($547 million) bond due by a Sept. 25 deadline.

Shares in Evergrande sank as much as 18% in afternoon trading in Hong Kong on Wednesday, while an index tracking Hong Kong-listed mainland developers (.HSMPI) 0.3% lower.

Evergrande grew rapidly through a land-buying spree backed by loans and by selling apartments quickly at low margins. But with its overall liabilities ballooning to more than $300 billion it came under pressure as the property market weakened.

The structure of Evergrande and the way the business operated under Hui came under scrutiny as the property empire began to unravel amid growing pressure to meet repayment obligations and finish apartment construction.

Investors are also focused on problems at another major Chinese developer, Country Garden (2007.HK), which is facing a new bond coupon repayment deadline on Wednesday.

The $40 million coupon, with a 30-day grace period, is tied to an 8%, $1 billion dollar bond that matures in January and is the latest payment challenge facing Country Garden, as the developer strives to avoid default.

The country's No.1 private developer, whose financial woes worsened the property sector outlook and prompted Beijing to unveil a raft of support measures in the last few weeks, scrambled to successfully dodge defaults this month.

Offshore creditors widely expect Country Garden to delay the coupon payment due by Wednesday, while making use of the grace period to come up with plans to restructure all of its offshore debt.

A Country Garden spokesperson declined to comment.

"The fall of industry stalwarts in China's property space has been alarming, to say the least," said Fiona Kwok, Asian Fixed Income portfolio manager, First Sentier Investors.

"Until Chinese regulators come through with stimulus significant enough to inject optimism into the property market and increase property sales, default risk remains high among private and mixed ownership developers."

Related Galleries:

---

Chair of China’s Evergrande reportedly put under police surveillance

https://www.theguardian.com/world/2023/sep/27/chair-china-evergrande-reportedly-put-under-police-surveillance

The chair of China’s Evergrande Group has reportedly been put under police surveillance as another missed bond payment casts further doubt over the future of the world’s most indebted property developer.

Hui Ka Yan, who founded Evergrande in 1996, was taken away earlier this month and is being monitored at a designated location, according to Bloomberg.

It is not clear why Hui might have been placed under residential surveillance, which falls short of a formal detention or police arrest and does not mean he will be charged with a crime.

Earlier this week, Hengda Real Estate, Evergrande’s primary unit in mainland China, missed principal and interest payments on a 4bn yuan (£450m) bond.

Evergrande said it was unable to sell new debt, a key part of its proposed restructuring plan, because the unit is being investigated by Chinese authorities.

The company, once China’s top property developer, was found in 2021 to be struggling with more than $300bn in liabilities, as government officials tightened scrutiny on the real estate sector. Its liquidity crisis soon made it a symbol of the country’s property sector woes.

Earlier this year it laid out a plan to compensate investors with notes linked to its listed Hong Kong subsidiaries, which include an electric vehicle company and a property management business.

Evergrande, which has cancelled meetings with creditors scheduled for this week, cannot now issue new notes against those businesses.

The company faces a court hearing in Hong Kong on a winding up petition that could force it into liquidation. The hearing, which was scheduled for July, is now due to take place on 30 October.

In August, Evergrande filed for chapter 15 bankruptcy protection in New York to protect its US assets as the company hopes to restructure its finances.

Military exercises near Taiwan aimed at combating ‘arrogance’ of separatists, says China

https://www.theguardian.com/world/2023/sep/27/china-military-excercises-near-taiwan

China’s government has said that recent drills near Taiwan were aimed at combating the “arrogance” of separatist forces, after Taipei reported a rise in military activity in recent weeks, including exercises on land facing the island.

Taiwan, which China claims as its own territory – a claim Taipei rejects – has said this month that it had observed dozens of fighters, drones, bombers and other aircraft, as well as warships and the Chinese aircraft carrier Shandong, operating nearby.

The increased frequency of China’s military activities has raised the risk of events “getting out of hand” and sparking an accidental clash, the island’s defence minister said on Saturday.

Asked at a regular news briefing in Beijing about the rise in Chinese drills, and Taiwan’s concerns about increased risk, China’s Taiwan affairs office spokesperson Zhu Fenglian said the People’s Liberation Army had carried out a “series” of drills.

“The purpose is to resolutely combat the arrogance of Taiwan independence separatist forces and their actions to seek independence,” Zhu said.

“The provocation of Taiwan independence continues all day long, and the actions of the People’s Liberation Army to defend national sovereignty and territorial integrity are always ongoing,” she added. “I hope that the majority of Taiwanese compatriots will clearly distinguish between right and wrong, resolutely oppose Taiwan independence, and work with us to maintain peace and stability in the Taiwan Strait.”

China’s armed forces have not explicitly mentioned or commented on the drills, which have been taking place as Chinese defence minister Li Shangfu has gone missing from public view. Sources have told the Reuters news agency he is being investigated for corruption.

Taiwan’s democratically elected government says only the island’s people can decide their future, and has repeatedly offered talks with China, which Beijing has rejected.

Taiwan’s defence ministry on Wednesday reported further Chinese military movements, saying that in the previous 24 hours it had detected and responded to 16 Chinese aircraft entering the island’s air defence identification zone.

Of those, 12 crossed the median line of the Taiwan strait, which had served as an unofficial barrier between the two sides until China began regularly crossing it in August of last year.

On Thursday, Taiwan is due to launch the first of eight domestically made submarines as part of its plans to bolster defences against China.

Zhu, asked about the submarines, said efforts by Taiwan’s ruling Democratic Progressive Party to “seek independence with force” would only exacerbate tensions and “push the Taiwanese people into a dangerous situation”.

Taiwan’s defence ministry last week also took the unusual step of announcing it was monitoring Chinese drills in Fujian province, opposite Taiwan. Taiwan normally only gives details on drills in the skies and waters around the island.

Pressure piles on China Evergrande with report chairman under police surveillance

https://reuters.com/article/china-property-debt/pressure-piles-on-china-evergrande-with-report-chairman-under-police-surveillance-idUSKBN30X02E

The chairman of China Evergrande Group (3333.HK) has been placed under police surveillance, Bloomberg News reported on Wednesday, ratcheting up pressure on the embattled developer whose outlook has already darkened significantly this week.

Citing people with knowledge of the matter, the report said Hui Ka Yan was taken away by police earlier this month and is being monitored at a designated location.

It was not clear why Hui was placed under residential surveillance, Bloomberg News said, adding the move was a type of police action that falls short of formal detention or arrest and does not mean Hui will be charged with a crime.

Reuters could not immediately verify the Bloomberg report. Evergrande did not immediately respond to a Reuters request for comment.

Evergrande is the world's most indebted property developer and is at the centre of a crisis in China's property sector, which has seen a string of debt defaults since late 2021 that has dragged on the growth of the world's second-largest economy.

The company rattled markets afresh when it said on Sunday it could not issue new bonds as part of its offshore debt restructuring plans because of a regulatory investigation into its main Chinese unit, Hengda Real Estate.

Then Hengda said on Monday it had failed to pay the principal and interest on a 4 billion yuan ($547 million) bond due by a Sept. 25 deadline.

Reuters reported on Tuesday that some of Evergrande's offshore creditors were planning to join a liquidation court petition filed against Evergrande if it does not submit a new debt revamp plan by end of October.

Markets are also focused on another major Chinese developer, Country Garden (2007.HK), which is facing a new bond coupon repayment deadline on Wednesday.

[World] Maldives: The presidential poll with India and China on the ballot

https://www.bbc.co.uk/news/world-asia-66909240?at_medium=RSS&at_campaign=KARANGA