Tag Archives: China

New ferry links North Korea and Russia despite U.S. calls for isolation

The North Korean ferry, the Mangyongbong, is docked in the port of the far eastern city of Vladivostok, Russia, May 18, 2017. REUTERS/Yuri Maltsev

By Valeria Fedorenko

VLADIVOSTOK, Russia (Reuters) – A new ferry between isolated North Korea and Russia docked for the first time at the Pacific port of Vladivostok on Thursday, in spite of U.S. calls for countries to curtail relations with Pyongyang over its nuclear and missile programs.

The launch of the weekly service linking Vladivostok and the North Korean port of Rajin also came despite North Korea’s test-firing of a new type of ballistic missile on Sunday that landed in the sea near Russia.

The ferry’s Russian operators say it is purely a commercial venture, but the service’s launch coincides with what some experts say is a drive by North Korea to build ties with Moscow in case its closest ally China turns its back.

The service is pitched at Chinese tourists wanting to travel by sea to the Pacific port of Vladivostok, according to the operators.

China has no ports on the Sea of Japan, so traveling to North Korea and on to Vladivostok is the quickest way of reaching Vladivostok by sea.

“It’s our business, of our company, without any state subsidies, involvement and help,” Mikhail Khmel, the deputy director of Investstroytrest, the Russia firm operating the ferry, told reporters.

The new ferry link comes in spite of recent calls by U.S. Secretary of State Rex Tillerson for countries to fully implement U.N. sanctions and review their ties with North Korea to pressure it to give up its weapons programs.

“We call on all nations to fully implement U.N. Security Council Resolutions, and sever or downgrade diplomatic and commercial relations with North Korea,” a spokeswoman for the U.S. State Department, Katina Adams, said when asked about the new ferry service.

Adams noted Russia’s “obligation” under U.N. Security Council resolutions, “to inspect all cargo, including personal luggage, of any individual traveling to or from” North Korea.

Journalists were unable to see passengers disembarking from the North Korean-flagged vessel Mangyongbong at Vladivostok because Russian officials kept them away from the quayside, citing unspecified security reasons.

But Reuters television was able to speak to three passengers, who said they were representatives of Chinese tourism agencies.

One of the passengers showed a photograph on her smartphone she said had been taken on board. It showed a plaque with an inscription in Korean which, she said, bore the name of North Korea’s long-dead founder Kim Il Sung.

The United States has been discussing possible new U.N. sanctions on North Korea with China, which disapproves of North Korea’s development of nuclear weapons and ballistic missiles to deliver them, but remains its main trading partner.

Washington is looking to toughen U.N. sanctions to cut off Pyongyang’s sources of funding and to block smuggling of materials needed for its weapons programs.

Russia, especially the port of Vladivostok, is home to one of the largest overseas communities of North Koreans, who send home much-needed hard currency.

To date, there are no signs of a sustainable increase in trade between Russia and North Korea, but Russia has taken a more benign stance toward Pyongyang that other major powers.

Speaking in Beijing this week, Russian President Vladimir Putin said Moscow was against North Korea’s nuclear program, but that the world should talk to Pyongyang instead of threatening it.

Asked about the ferry, Russian Foreign Ministry spokeswoman Maria Zakharova said on Thursday she “didn’t see a connection” between the new service and political issues.

(Reporting by Valeria Fedorenko; additional reporting by David Brunnstrom; Writing by Maria Tsvetkova; Editing by Phil Berlowitz)

China installs rocket launchers on disputed South China Sea island: report

FILE PHOTO: Chinese dredging vessels are purportedly seen in the waters around Fiery Cross Reef in the disputed Spratly Islands in the South China Sea in this still image from video taken by a P-8A Poseidon surveillance aircraft provided by the United States Navy May 21, 2015. REUTERS/U.S. Navy/Handout via Reuters

BEIJING (Reuters) – China has installed rocket launchers on a disputed reef in the South China Sea to ward off Vietnamese military combat divers, according to a state-run newspaper, offering new details on China’s ongoing military build-up.

China has said military construction on the islands it controls in the South China Sea will be limited to necessary defensive requirements, and that it can do what it likes on its own territory.

The United States has criticized what it has called China’s militarization of its maritime outposts and stressed the need for freedom of navigation by conducting periodic air and naval patrols near them that have angered Beijing.

The state-run Defense Times newspaper, in a Tuesday report on its WeChat account, said Norinco CS/AR-1 55mm anti-frogman rocket launcher defense systems with the capability to discover, identify and attack enemy combat divers had been installed on Fiery Cross Reef in the Spratly Islands.

Fiery Cross Reef is administered by China but also claimed by the Philippines, Vietnam and Taiwan.

The report did not say when the defense system was installed, but said it was part of a response that began in May 2014, when Vietnamese divers installed large numbers of fishing nets in the Paracel Islands.

China has conducted extensive land reclamation work at Fiery Cross Reef, including building an airport, one of several Chinese-controlled features in the South China Sea where China has carried out such work.

More than $5 trillion of world trade is shipped through the South China Sea every year. Besides China’s territorial claims in the area, Vietnam, Malaysia, Brunei, the Philippines and Taiwan have rival claims.

(Reporting by Philip Wen; Editing by Ben Blanchard)

Chinese state media says U.S. should take some blame for cyber attack

A hooded man holds a laptop computer as blue screen with an exclamation mark is projected on him in this illustration picture taken on May 13, 2017. REUTERS/Kacper Pempel/Illustration

BEIJING (Reuters) – Chinese state media on Wednesday criticized the United States for hindering efforts to stop global cyber threats in the wake of the WannaCry “ransomware” attack that has infected more than 300,000 computers worldwide in recent days.

The U.S. National Security Agency (NSA) should shoulder some blame for the attack, which targets vulnerabilities in Microsoft Corp <MSFT.O> systems and has infected some 30,000 Chinese organizations as of Saturday, the China Daily said.

“Concerted efforts to tackle cyber crimes have been hindered by the actions of the United States,” it said, adding that Washington had “no credible evidence” to support bans on Chinese tech firms in the United States following the attack.

The malware attack, which began on Friday and has been linked by some researchers to previous hits by a North Korean-run hacking operation, leveraged a tool built by the NSA that leaked online in April, Microsoft says.

It comes as China prepares to enforce a wide-reaching cyber security law that U.S. business groups say will threaten the operations of foreign firms in China with strict local data storage laws and stringent surveillance requirements.

China’s cyber authorities have repeatedly pushed for what they call a more “equitable” balance in global cyber governance, criticizing U.S. dominance.

The China Daily pointed to the U.S. ban on Chinese telecommunication provider Huawei Technologies Co Ltd [HWT.UL], saying the curbs were hypocritical given the NSA leak.

Beijing has previously said the proliferation of fake news on U.S. social media sites, which are largely banned in China, is a reason to tighten global cyber governance.

The newspaper said that the role of the U.S. security apparatus in the attack should “instill greater urgency” in China’s mission to replace foreign technology with its own.

The state-run People’s Daily compared the cyber attack to the terrorist hacking depicted in the U.S. film “Die Hard 4”, warning that China’s role in global trade and internet connectivity opened it to increased risks from overseas.

The fast-spreading cyber extortion campaign eased for second day on Tuesday, but the identity and motive of its creators remain unknown.

(Reporting by Cate Cadell; Editing by Nick Macfie)

China hit by cyber virus, Europe warns of more attacks

A hooded man holds a laptop computer as blue screen with an exclamation mark is projected on him in this illustration picture taken on May 13, 2017.

By Cate Cadell and Guy Faulconbridge

BEIJING/LONDON (Reuters) – The WannaCry “ransomware” cyber attack hobbled Chinese traffic police and schools on Monday as it rolled into Asia for the new work week, while authorities in Europe said they were trying to prevent hackers from spreading new versions of the virus.

In Britain, where the virus first raised global alarm when it caused hospitals to divert ambulances on Friday, it gained traction as a political issue just weeks before a general election. The opposition Labour Party accused the Conservative government of leaving the National Health Service vulnerable.

Shares in firms that provide cyber security services rose with the prospect that companies and governments would have to spend more money on defenses.

Some victims were ignoring official advice and paying the $300 ransom demanded by the cyber criminals to unlock their computers, which was due to double to $600 on Monday for computers hit by Friday’s first wave.

Brian Lord, managing director of cyber and technology at cybersecurity firm PGI, said victims had told him “the customer service provided by the criminals is second to none”, with helpful advice on how to pay: “One customer said they actually forgot they were being robbed.”

Although the virus’s spread was curbed over the weekend in most of the world, France, where carmaker Renault was among the world’s highest profile victims, said more attacks were likely.

“We should expect similar attacks regularly in the coming days and weeks,” said Giullaume Poupard, head of French government cyber security agency ANSSI. “Attackers update their software … other attackers will learn from the method and will carry out attacks.”

Companies and governments spent the weekend upgrading software to limit the spread of the virus. Monday was the first big test for Asia, where offices had already mostly been closed for the weekend before the attack first arrived.

British media were hailing as a hero a 22-year-old computer security whiz who appeared to have helped stop the attack from spreading by discovering a “kill switch” – an internet address which halted the virus when activated.

SPREAD SLOWING

China appeared over the weekend to have been particularly vulnerable, raising worries about how well the world’s second largest economy would cope when it opened for business on Monday. However, officials and security firms said the spread was starting to slow.

“The growth rate of infected institutions on Monday has slowed significantly compared to the previous two days,” said Chinese Internet security company Qihoo 360. “Previous concerns of a wide-scale infection of domestic institutions did not eventuate.”

Qihoo had previously said the attack had infected close to 30,000 organizations by Saturday evening, more than 4,000 of which were educational institutions.

The virus hit computers running older versions of Microsoft software that had not been recently updated. Microsoft released patches last month and on Friday to fix a vulnerability that allowed the worm to spread across networks.

In a blog post on Sunday, Microsoft & President Brad Smith appeared to tacitly acknowledge what researchers had already widely concluded: the attack made use of a hacking tool built by the U.S. National Security Agency that had leaked online in April.

Infected computers appear to largely be out-of-date devices that organizations deemed not worth the price of upgrading. Some have also been machines involved in manufacturing or hospital functions, difficult to patch without disrupting operations.

“The government’s response has been chaotic, to be frank,” the British Labour Party’s health spokesman Jon Ashworth said. “They’ve complacently dismissed warnings which experts, we now understand, have made in recent weeks.”

“The truth is, if you’re going to cut infrastructure budgets and if you’re not going to allow the NHS to invest in upgrading its IT, then you are going to leave hospitals wide open to this sort of attack.”

Britain’s National Health Service (NHS) is the world’s fifth largest employer after the U.S. and Chinese militaries, Walmart and McDonald’s. The government says that under a previous Labour administration the trusts that run local hospitals were given responsibility to manage their own computer systems.

WARNINGS GIVEN

Asked if the government had ignored warnings over the NHS being at risk from cyber attack, Prime Minister Theresa May told Sky News: “No. It was clear [that] warnings were given to hospital trusts.”

An official from Cybersecurity Administration China (CAC) told local media on Monday that while the ransomware was still spreading and had affected industry and government computer systems, the spread was slowing.

Chinese government bodies from transport, social security, industry watchdogs and immigration said they had suspended services ranging from processing applications to traffic crime enforcement.

It was not immediately clear whether those services were suspended due to attacks, or for emergency patching to prevent infection.

“If a system supports some kind of critical processes those systems typically are very hard to patch … We don’t have a precedent for something of this scale (in China),” said Marin Ivezic, a cybersecurity expert at PwC in Hong Kong.

Affected bodies included a social security department in the city of Changsha, the exit-entry bureau in Dalian, a housing fund in Zhuhai and an industry watchdog in Xuzhou.

Energy giant PetroChina  said payment systems at some of its petrol stations were hit, although it had been able to restore most of the systems.

Elsewhere in Asia, the impact seems to have been more limited. Japan’s National Police Agency reported two breaches of computers in the country on Sunday – one at a hospital and the other case involving a private person – but no loss of funds.

Industrial conglomerate Hitachi Ltd. said the attack had affected its systems at some point over the weekend, leaving them unable to receive and send e-mails or open attachments in some cases.

In India, the government said it had only received a few reports of attacks on systems and urged those hit not to pay attackers any ransom. No major Indian corporations reported disruptions to operations.

At Indonesia’s biggest cancer hospital, Dharmais Hospital in Jakarta, around 100-200 people packed waiting rooms after the institution was hit by cyber attacks affecting scores of computers. By late morning, some people were still filling out forms manually, but the hospital said 70 percent of systems were back online.

South Korea’s presidential Blue House office said nine cases of ransomware were found in the country, but did not provide details on where the cyber attacks were discovered. A coal port in New Zealand shut temporarily to upgrade its systems.

(Writing by Peter Graff, editing by Peter Millership)

Global cyber attack slows but experts see risk of fresh strikes

An ambulance waits outside the emergency department at St Thomas' Hospital in central London, Britain May 12, 2017. REUTERS/Stefan Wermuth

By Jeremy Wagstaff and Eric Auchard

SINGAPORE/FRANKFURT (Reuters) – A global cyber attack described as unprecedented in scale forced a major European automaker to halt some production lines while hitting schools in China and hospitals in Indonesia on Saturday, though it appeared to die down a day after its launch.

Capitalizing on spying tools believed to have been developed by the U.S. National Security Agency, the cyber assault has infected tens of thousands of computers in nearly 100 countries, with Britain’s health system suffering the worst disruptions.

Cyber extortionists tricked victims into opening malicious malware attachments to spam emails that seemed to contain invoices, job offers, security warnings and other legitimate files.

Once inside the targeted network, so-called ransomware made use of recently revealed spy tools to silently infect other out-of-date machines without any human intervention. This, security experts said, marked an unprecedented escalation in the risk of fresh attacks spreading in the coming days and weeks.

The ransomware encrypted data on the computers, demanding payments of $300 to $600 to restore access. Researchers observed some victims paying via the digital currency bitcoin, though no one knows how much may have been transferred to extortionists because of the largely anonymous nature of such transactions.

Researchers with security software maker Avast said they had observed 126,534 ransomware infections in 99 countries, with Russia, Ukraine and Taiwan the top targets.

The hackers, who have not come forward to claim responsibility or otherwise been identified, took advantage of a worm, or self-spreading malware, by exploiting a piece of NSA spy code known as “Eternal Blue” that was released last month by a hackers group known as the Shadow Brokers, according to researchers with several private cyber security firms.

Renault said it had halted auto production at several sites including Sandouville in northwestern France and Renault-owned Dacia plants in Romania on Saturday to prevent the spread of ransomware in its systems.

Nissan’s manufacturing plant in Sunderland, northeast England, was also affected by the cyber assault though “there has been no major impact on our business”, a spokesman for the Japanese carmaker said.German rail operator Deutsche Bahn [DBN.UL] said some electronic signs at stations announcing arrivals and departures were infected, with travelers posting pictures showing some bearing a message demanding a cash payment to restore access.

“UNPRECEDENTED” ATTACK EASES

Europol’s European Cybercrime Center said it was working closely with country investigators and private security firms to combat the threat and help victims. “The recent attack is at an unprecedented level and will require a complex international investigation to identify the culprits,” it said in a statement.

Some experts said the threat had receded for now, in part because a British-based researcher, who declined to give his name, registered a domain that he noticed the malware was trying to connect to, and so limited the worm’s spread.

“We are on a downward slope, the infections are extremely few, because the malware is not able to connect to the registered domain,” said Vikram Thakur, principal research manager at Symantec.

“The numbers are extremely low and coming down fast.”

But the attackers may yet tweak the code and restart the cycle. The researcher in Britain widely credited with foiling the ransomware’s proliferation told Reuters he had not seen any such tweaks yet, “but they will (happen).”

Researchers said the worm deployed in the latest attack, or similar tools released by Shadow Brokers, are likely to be used for fresh assaults not just with ransomware but other malware to break into firms, seize control of networks and steal data.

Finance chiefs from the Group of Seven rich countries were to commit on Saturday to joining forces to fight the growing threat of international cyber attacks, according to a draft statement of a meeting they are holding in Italy.

“Appropriate economy-wide policy responses are needed,” the ministers said in their draft statement, seen by Reuters.

HOSPITALS IN FIRING LINE

In Asia, some hospitals, schools, universities and other institutions were affected, though the full extent of the damage is not yet known because it is the weekend.

“I believe many companies have not yet noticed,” said William Saito, a cyber security adviser to Japan’s government. “Things could likely emerge on Monday” as staff return to work.

China’s information security watchdog said “a portion” of Windows systems users in the country were infected, according to a notice posted on the official Weibo page of the Beijing branch of the Public Security Bureau on Saturday. Xinhua state news agency said some secondary schools and universities were hit.

In Vietnam, Vu Ngoc Son, a director of Bkav Anti Malware, said dozens of cases of infection had been reported there, but he declined to identify any of the victims.

South Korea’s Yonhap news agency reported a university hospital had been affected, while a communications official in Indonesia said two hospitals there had been hit.

The most disruptive attacks were reported in Britain, where hospitals and clinics were forced to turn away patients after losing access to computers on Friday.

International shipper FedEx Corp said some of its Windows computers were also breached. “We are implementing remediation steps as quickly as possible,” a FedEx statement said.

Telecommunications company Telefonica was among many targets in Spain. Portugal Telecom and Telefonica Argentina both said they were also targeted.

Only a small number of U.S.-headquartered organizations were hit because the hackers appear to have begun the campaign by focusing on targets in Europe, said Thakur.

By the time they turned their attention to the United States, spam filters had identified the new threat and flagged the ransomware-laden emails as malicious, he added.

MICROSOFT BOLSTERS WINDOWS DEFENCES

Private security firms identified the ransomware as a new variant of “WannaCry” that had the ability to automatically spread across large networks by exploiting a known bug in Microsoft’s Windows operating system.

“This is one of the largest global ransomware attacks the cyber community has ever seen,” said Rich Barger, director of threat research with Splunk, one of the firms that linked WannaCry to the NSA.

The Shadow Brokers released Eternal Blue as part of a trove of hacking tools that they said belonged to the U.S. spy agency.

The attack targeted Windows computers that had not installed patches released by Microsoft in March, or older machines running software that Microsoft no longer supports and for which patches did not exist, including the 16-year-old Windows XP system, researchers said.

Microsoft said it pushed out automatic Windows updates to defend existing clients from WannaCry. It had issued a patch on March 14 to protect them from Eternal Blue. Late on Friday, Microsoft also released patches for a range of long discontinued software, including Windows XP and Windows Server 2003.

“Today our engineers added detection and protection against new malicious software known as Ransom:Win32.WannaCrypt,” Microsoft said in a statement on Friday, adding it was working with customers to provide additional assistance.

POLITICALLY SENSITIVE TIMING

The spread of the ransomware capped a week of cyber turmoil in Europe that began when hackers posted a trove of campaign documents tied to French candidate Emmanuel Macron just before a run-off vote in which he was elected president of France.

On Wednesday, hackers disrupted the websites of several French media companies and aerospace giant Airbus. The hack happened four weeks before a British general election in which national security and the management of the state-run National Health Service are important issues.

Authorities in Britain have been braced for cyber attacks in the run-up to the election, as happened during last year’s U.S. election and on the eve of the French run-off vote on May 7.

But those attacks – blamed on Russia, which has repeatedly denied them – followed a different modus operandi involving penetrating the accounts of individuals and political organizations and then releasing hacked material online.

On Friday, Russia’s interior and emergencies ministries, as well as its biggest bank, Sberbank, said they were targeted by ransomware. The interior ministry said about 1,000 computers had been infected but it had localized the virus.

Although cyber extortion cases have been rising for several years, they have to date affected small- to mid-sized organizations. “Seeing a large telco like Telefonica get hit is going to get everybody worried,” said Chris Wysopal, chief technology officer with cyber security firm Veracode.

(Additional reporting by Kiyoshi Takenaka, Jim Finkle, Eric Auchard, Jose Rodriguez, Alistair Smout, Andrea Shalal, Jack Stubbs, Antonella Cinelli, Dustin Volz, Kate Holton, Andy Bruce, Michael Holden, David Milliken, Rosalba O’Brien, Julien Toyer, Tim Hepher, Luiza Ilie, Patricia Rua, Axel Bugge, Sabine Siebold and Eric Walsh, Engen Tham, Fransiska Nangoy, Soyoung Kim, Mai Nguyen; editing by Mark Heinrich)

China says all welcome at Silk Road forum after U.S. complains over North Korea

Chinese Premier Li Keqiang meets Uzbek President Shavkat Mirziyoyev at the Great Hall of the People in Beijing, China, May 13, 2017. REUTERS/Thomas Peter

By Ben Blanchard

BEIJING (Reuters) – China welcomes all countries to a forum this weekend on China’s new Silk Road plan, the foreign ministry said on Saturday, after the United States warned China that North Korea’s attendance could affect other countries’ participation.

Two sources with knowledge of the situation said the U.S. embassy in Beijing had submitted a diplomatic note to China’s foreign ministry, saying inviting North Korea sent the wrong message at a time when the world was trying to pressure it over its repeated missile and nuclear tests.

The disagreement over North Korea threatens to overshadow China’s most important diplomatic event of the year for an initiative championed by President Xi Jinping.

Asked about the U.S. note, the foreign ministry said in a short statement sent to Reuters that it did “not understand the situation”.

“The Belt and Road initiative is an open and inclusive one. We welcome all countries delegations to attend the Belt and Road Forum for International Cooperation,” it said.

The ministry did not elaborate. It said on Tuesday North Korea would send a delegation to the summit but gave no other details.

The United States is sending a delegation led by White House adviser Matt Pottinger.

Despite Chinese anger at North Korea’s repeated nuclear and missile tests, China remains the isolated state’s most important economic and diplomatic backer, even as Beijing has signed up for tough U.N. sanctions against Pyongyang.

China has over the years tried to coax North Korea into cautious, export-oriented economic reforms, rather than sabre rattling and nuclear tests, but to little avail.

China has not announced who North Korea’s chief delegate will be, but South Korea’s Yonhap news agency said Kim Yong Jae, North Korea’s minister of external economic relations, would lead the delegation.

‘MISGIVINGS’

Leaders from 29 countries will attend the forum in Beijing on Sunday and Monday, an event orchestrated to promote Xi’s vision of expanding links between Asia, Africa and Europe underpinned by billions of dollars in infrastructure investment.

Delegates will hold a series of sessions on Sunday to discuss the plan in more detail, including trade and finance. China has given few details about attendees.

Some Western diplomats have expressed unease about both the summit and the plan as a whole, seeing it as an attempt to promote Chinese influence globally.

China has rejected criticism of the plan and the summit, saying the scheme is open to all, is a win-win and aimed only at promoting prosperity.

Zhang Junkuo, deputy director general of cabinet think-tank the State Council Development Research Centre told reporters there were “misgivings, misinterpretations and misunderstandings” about the initiative.

“We must increase communication and exchanges so as to broaden our areas of cooperation and consolidate the basis for cooperation,” Zhang said.

In an English-language commentary on Saturday, China’s state-run Xinhua news agency said the new Silk Road, officially called the Belt and Road initiative, would be a boon for developing countries that had been largely neglected by the West.

“As some Western countries move backwards by erecting ‘walls’, China is contriving to build bridges, both literal and metaphorical. These bridges are China’s important offering to the world, and a key route to improving global governance,” it said.

Some of China’s most reliable allies and partners will attend the forum, including Russian President Vladimir Putin, Pakistani Prime Minister Nawaz Sharif, Cambodian Prime Minister Hun Sen and Kazakh President Nursultan Nazarbayev.

There are also several European leaders coming, including the prime ministers of Spain, Italy, Greece and Hungary.

Xi offered Prime Minister Alexis Tsipras of deeply indebted Greece strong support on Saturday, saying the two countries should expand cooperation in infrastructure, energy and telecommunications.

(Additional reporting by Elias Glenn; Editing by Eric Meijer, Robert Birsel)

Exclusive: Indonesian Islamist leader says ethnic Chinese wealth is next target

Chairman of GNPF-MUI, Bachtiar Nasir, arrives at a police station to testify as a witness in a money laundering case at a police station in Jakarta, Indonesia February 10, 2017 in this photo taken by Antara Foto. Antara Foto/Reno Esnir/via REUTERS

By Tom Allard and Agustinus Beo Da Costa

JAKARTA (Reuters) – The leader of a powerful Indonesian Islamist organization that led the push to jail Jakarta’s Christian governor has laid out plans for a new, racially charged campaign targeting economic inequality and foreign investment.

In a rare interview, Bachtiar Nasir said the wealth of Indonesia’s ethnic Chinese minority was a problem and advocated an affirmative action program for native Indonesians, comments that could stoke tensions already running high in the world’s largest Muslim-majority nation.

“It seems they do not become more generous, more fair,” the cleric said, referring to Chinese Indonesians, in the interview in an Islamic center in South Jakarta. “That’s the biggest problem.”

Ethnic Chinese make up less than 5 percent of Indonesia’s population, but they control many of its large conglomerates and much of its wealth.

Nasir also said also that foreign investment, especially investment from China, has not helped Indonesians in general.

Indonesia, Southeast Asia’s biggest economy, is a major destination for foreign investment in the mining and retail sectors. Jakarta is also trying to lure investors for a $450 billion infrastructure drive to revive economic growth.

“Our next job is economic sovereignty, economic inequality,” said Nasir, an influential figure who chairs the National Movement to Safeguard the Fatwas of the Indonesian Ulemas Council (GNPF-MUI). “The state should ensure that it does not sell Indonesia to foreigners, especially China.”

His group organized protests by hundreds of thousands of Muslims in Jakarta late last year over a comment about the Koran made by the capital’s governor, Basuki Tjahaja Purnama, an ethnic-Chinese Christian.

Purnama was found guilty this week of blasphemy and sentenced to two years in prison, raising concerns that belligerent hardline Islamists are a growing threat to racial and religious harmony in this secular state.

Nasir, 49, used to have a late-night religious show on one of Indonesia’s biggest TV networks. His contract was ended under government pressure after his role in the first anti-Purnama rally was revealed.

He spoke calmly during the interview, identifying other religiously motivated objectives such as restricting alcohol to tourist areas, curbing prostitution and criminalizing adultery and sodomy. He insisted he believes in a pluralist Indonesia.

“PLAYING WITH FIRE”

Former President Suharto blocked Chinese Indonesians from many public posts and denied them cultural expression, forcing them to drop their Chinese names. Marginalized politically and socially, many turned to business and became wealthy.

The ethnic wealth gap has long fed resentment among poorer “pribumi”, Indonesia’s mostly ethnic-Malay indigenous people. During riots that led to the fall of Suharto in 1998, ethnic-Chinese and Chinese-owned businesses were targeted, and about 1,000 people were killed in the violence.

There has been no blood-letting on that scale since then, but tensions have remained. President Joko Widodo was the subject of a smear campaign on the campaign trail in 2014 that falsely claimed he was a Chinese descendant and a Christian.

Bonnie Triyana, a historian who has chronicled Chinese Indonesian experiences, said Nasir was “scapegoating” the Chinese.

“It’s very dangerous for our nation. It’s playing with fire,” said Triyana, who is an indigenous Indonesian. “They are spreading bad information to convince people that their role is to save the nation.”

In the interview, Nasir said “ethnic sentiment cannot be denied” when it comes to inequality, and the economic power of Chinese Indonesians needs to be addressed.

“The key is justice, and taking sides,” he said. “Justice can be applied if there is a preferential option for indigenous Indonesians from a regulation aspect and in terms of access to capital.”

Neighboring Malaysia, also a Muslim-majority nation with a wealthy Chinese minority, has long followed affirmative action policies that grant native Malays privileges, including job reservations in the civil service and discounts on property.

Johan Budi, a spokesman for Indonesian President Widodo – responding to Bachtiar’s comments – said in a statement to Reuters that income inequality is high on the government agenda and Indonesian Chinese get no special treatment.

“It is not true this allegation that President Jokowi gives wider space to ethnic Chinese in Indonesia,” Budi said, referring to Widodo by his nickname. He said Widodo’s focus is on the poor, including “indigenous people”.

According to the Credit Suisse Research Institute’s 2016 Global Wealth Report, the top 1 percent wealthiest Indonesians owned 49.3 percent of national wealth, making it among the most unequal nations in the world.

LINK TO POLITICS?

A Saudi-trained cleric, Nasir formed the GNPF-MUI last year to target Purnama, the now-convicted Jakarta governor.

Although Nasir is not as visible as the firebrand radical cleric Habib Rizieq who led last year’s protests, his group carries significant clout because it brings under one umbrella Islamist organizations that have national reach and strong links with mosques and religious schools.

GNPF-MUI includes Salafist intellectuals like Nasir, Rizieq’s Islamic Defenders Front and their urban poor constituency, along with middle class and politically connected Islamic groups.

Nasir said GNPF-MUI is a “religions movement”, not political. However, he is widely seen as allied to opposition leader Prabowo Subianto, who lost to Widodo in the 2014 election and could be a candidate for the presidency in 2019.

Greg Fealy, an expert on Indonesian Islamic groups from the Australian National University, said GNPF-MUI is developing a national agenda following the Jakarta governor’s conviction.

“They are trying to harness that movement to link the Islamist agenda with inequality. It is, in effect, targeting Chinese non-Muslims,” he said. “This is all part of a pitched battle in the run-up to 2019.”

(Edited by John Chalmers and Raju Gopalakrishnan)

South Korea urges ‘parallel’ talks and sanctions to rein in North Korea

South Korean President Moon Jae-in speaks with Chinese President Xi Jinping by telephone at the Presidential Blue House in Seoul, South Korea in this handout picture provided by the Presidential Blue House and released by Yonhap on May 11, 2017. Blue House/Yonhap via REUTERS

By Ju-min Park and Christine Kim

SEOUL (Reuters) – South Korea’s new president launched international efforts to defuse tension over North Korea’s weapons development on Thursday, urging both dialogue and sanctions while also aiming to ease Chinese anger about a U.S. anti-missile system.

Moon Jae-in, a liberal former human rights lawyer, was sworn in on Wednesday and said in his first speech as president he would immediately address security tensions that have raised fears of war on the Korean peninsula.

Moon first spoke to Chinese President Xi Jinping and later to Japanese Prime Minister Shinzo Abe, with how to respond to North Korea’s rapidly developing nuclear and ballistic missile programs, in violation of U.N. Security Council resolutions, dominating talks.

“The resolution of the North Korean nuclear issue must be comprehensive and sequential, with pressure and sanctions used in parallel with negotiations,” Moon’s spokesman, Yoon Young-chan, quoted Moon as telling Xi.

“Sanctions against North Korea are also a means to bring the North to the negotiating table aimed at eliminating its nuclear weapons,” Yoon told a briefing, adding that Xi indicated his agreement.

Moon has taken a more conciliatory line with North Korea than his conservative predecessors and advocates engagement. He has said he would be prepared to go to Pyongyang “if the conditions are right”.

Regional experts have believed for months that North Korea is preparing for its sixth nuclear test and was working to develop a nuclear-tipped missile capable of reaching the United States, presenting U.S. President Donald Trump with perhaps his most pressing security issue.

Trump told Reuters in an interview last month major conflict with North Korea was possible though he would prefer a diplomatic outcome.

North Korea says it needs its weapons to defend itself against the United States which it says has pushed the region to the brink of nuclear war.

“Threats from North Korea’s nuclear and missile development have entered a new stage,” Japan’s Abe told Moon in their telephone call, according to Japanese Deputy Chief Cabinet Secretary Koichi Hagiuda.

“How to respond to North Korea … is an urgent issue. I would like to closely cooperate with the president to achieve the denuclearization of North Korea,” Abe told Moon.

But Abe also said “dialogue for dialogue’s sake would be meaningless” and he called on North Korea to demonstrate “sincere and concrete action”, Hagiuda said, adding that Moon shared Abe’s views.

Japan has been concerned that Moon will take a tough line on feuds stemming from the bitter legacy of its 1910-1945 colonization of the Korean peninsula and could fray ties at a time when cooperation on North Korea is vital.

Moon told Abe to “look straight at history” and not make the past “a barrier”, though he raised South Korea’s dissatisfaction with a 2015 agreement meant to put to rest a dispute over Japanese compensation for South Korean women forced to work in Japanese brothels before and during World War Two, Korea’s presidential office said.

(For a graphic on South Korea’s presidential election, click tmsnrt.rs/2p0AyLf)

‘IMPROVE UNDERSTANDING’

While South Korea, China and Japan all share worry about North Korea, ties between South Korea and China have been strained by South Korea’s decision to install a U.S. anti-missile system in defense against the North.

China says the Terminal High Altitude Area Defense (THAAD) undermines its security as its powerful radar can probe deep into its territory.

China says the system does little to curb the threat posed by North Korea’s nuclear and missile programs, which it has been pressing ahead with in defiance of U.S. pressure and UN sanctions.

The deployment of THAAD was agreed last year by South Korea’s previous administration after North Korea conducted a long-range rocket launch that put an object into space.

Moon came to power with a promise to review the system and he told Xi that North Korea must cease making provocations before tension over the deployment could be resolved, officials said.

In the first direct contact between the South Korean and Chinese leaders, Xi explained China’s position, Yoon, the South Korean presidential spokesman said, without elaborating.

“President Moon said he understands China’s interest in the THAAD deployment and its concerns, and said he hopes the two countries can swiftly get on with communication to further improve each other’s understanding,” Yoon told a briefing.

South Korea and the United States began deploying the THAAD system in March and it has since become operational.

Xi told Moon South Korea and China should respect each other’s concerns, set aside differences, seek common ground and handle disputes appropriately, China’s foreign ministry said in a statement.

As well as clouding efforts to rein in North Korea’s nuclear ambitions, the THAAD deployment has also led to recriminations from Beijing against South Korean companies.

Moon explained the difficulties faced by South Korean companies that were doing business in China and asked for Xi’s “special attention” to ease those concerns, Yoon said.

China has also denied it is doing anything to retaliate against South Korean businesses.

(Additional reporting by Ben Blanchard in BEIJING and Kiyoshio Takenaka in TOKYO; Writing by Jack Kim; Editing by Paul Tait, Robert Birsel)

New South Korea president vows to address North Korea, broader tensions

Newly elected South Korean President Moon Jae-in takes an oath during his inauguration ceremony at the National Assembly in Seoul, South Korea, May 10, 2017. REUTERS/Ahn Young-joon/Pool

By Ju-min Park and Christine Kim

SEOUL (Reuters) – South Korea’s new liberal President Moon Jae-in was sworn in on Wednesday and vowed to immediately tackle the difficult tasks of addressing North Korea’s advancing nuclear ambitions and soothing tensions with the United States and China.

Moon said in his first speech as president he would begin efforts to defuse security tensions on the Korean peninsula and negotiate with Washington and Beijing to ease a row over a U.S. missile defense system being deployed in the South.

In his first key appointments, Moon named two liberal veterans with ties to the “Sunshine Policy” of engagement with North Korea from the 2000s to the posts of prime minister and spy chief.

Moon named Suh Hoon, a career spy agency official and a veteran of inter-Korea ties, as the head of the National Intelligence Service. Suh was instrumental in setting up two previous summits between the North and South.

Veteran liberal politician Lee Nak-yon was nominated to serve as prime minister. Now a regional governor, Lee was a political ally of the two former presidents who held the summits with the North in 2000 and 2007,

Lee’s appointment requires parliamentary approval.

Moon was expected to fill the remaining cabinet and presidential staff appointments swiftly to bring an end to a power vacuum left by the removal of Park Geun-hye in March in a corruption scandal that rocked South Korea’s business and political elite.

“I will urgently try to solve the security crisis,” Moon said in the domed rotunda hall of the parliament building. “If needed, I will fly straight to Washington. I will go to Beijing and Tokyo and, if the conditions are right, to Pyongyang also.”

Spy chief nominee Suh said Moon could go to Pyongyang if it was clear the visit would help resolve the North Korean nuclear crisis and ease military tension on the Korean peninsula.

North Korea is likely to welcome Moon’s election but its state media made no mention of his victory on Wednesday.

The deployment of the U.S. Terminal High Altitude Area Defense System (THAAD) in the South has angered China, Seoul’s major trading partner, which sees the system’s powerful radar as a threat to its security.

The issue has clouded efforts to rein in North Korea’s nuclear and missile programs, and also led to recriminations by Beijing against South Korean companies.

Moon, 64, also pledged to sever what he described as the collusive ties between business and government that have plagued many of South Korea’s family-run conglomerates, known as chaebol, and vowed to be incorruptible.

“I take this office empty-handed, and I will leave the office empty-handed,” Moon said.

Moon met leaders of opposition parties before his simple swearing-in ceremony at parliament and promised to coordinate with them on national security.

Office workers and passersby lined the streets as Moon’s motorcade passed through central Seoul en route to the presidential Blue House.

Moon waved to well-wishers through the sunroof of his limousine, which was flanked by police motorbikes.

TRUST, UNDERSTANDING

Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe both congratulated Moon on Wednesday. Xi said China was willing to handle disputes with South Korea “appropriately” on the basis of mutual trust and understanding.

Abe said in a statement he looked forward to working with Moon to improve relations, describing South Korea as one of Japan’s most important neighbors.

The decision by the ousted Park’s government to host the THAAD system has already proved a headache for Moon as Seoul tries to walk a fine line between Washington, its closest security ally, and Beijing.

Moon has said the decision had been made hastily and his government should have the final say on whether to deploy it.

China hoped South Korea “pays attention to China’s security concerns” and deals “appropriately” with the THAAD issue, a Chinese foreign ministry spokesman told a briefing in Beijing.

As president, Moon must find a way to coax an increasingly belligerent North Korea to ease its nuclear and missile threats. It has conducted its fifth nuclear test and a series of missile launches since the start of last year, ratcheting up tension.

Washington wants to increase pressure on Pyongyang through further isolation and sanctions, in contrast to Moon’s advocacy for greater engagement with the reclusive North.

In one of his first acts as president, Moon spoke by telephone with Chairman of the Joint Chiefs of Staff Lee Sun-jin. Moon’s Democratic Party said he was briefed on the status of the North Korean military and South Korea’s military readiness.

Moon’s election could add volatility to relations with Washington, given his questioning of the THAAD deployment, but it was not expected to change the alliance significantly, a U.S. official said.

The White House also congratulated Moon, saying it looked forward to working with him to strengthen their longstanding alliance.

Moon must also try to mend a society badly bruised by the corruption scandal that doomed Park’s administration.

His party lacks a majority in a divided parliament. To push through major initiatives, including creating 500,000 jobs annually and reforming the chaebol, he will need to forge partnerships with some of those he fought on his path to the presidency.

Moon won with 41.1 percent of the votes but that seemingly comfortable margin belied an ideological and generational divide in the country of 51 million people.

Data from an exit poll conducted by South Korea’s top three television networks showed that, while Moon won the majority of votes cast by those under the age of 50, conservative rival Hong Joon-pyo found strong support among voters in their 60s and 70s.

(For a graphic on South Korea presidential election, click http://tmsnrt.rs/2p8kyHn)

(Additional reporting by Joyce Lee, Jack Kim, Se Young Lee, Cynthia Kim and James Pearson in SEOUL, Matt Spetalnick and David Brunnstrom in WASHINGTON, Ben Blanchard in BEIJING, and Elaine Lies in TOKYO, Editing by Soyoung Kim and Paul Tait)