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Economy

China joins S'pore-NZ initiative to keep supply chains open

China has pledged to uphold trade and supply chain connections during the coronavirus pandemic.

The commitment to maintaining cross-border flows of necessities was launched by Singapore and New Zealand in March.

Since then, several nations from across the world have joined the pact.

China is the 12th nation to ink the statement, Singapore’s Ministry of Trade and Industry said yesterday.

Other signatories include Australia, Brunei, Canada, Chile, Laos, Myanmar, Nauru, the United Arab Emirates and Uruguay.

The statement recognises that maintaining supply chains and trade flows amid disruptions caused by the pandemic is critical in enabling countries to emerge from the crisis stronger.

Signatories commit to refraining from imposing export controls or tariffs and non-tariff barriers, and to removing existing trade-restrictive measures on essential goods, especially medical supplies, during the virus outbreak.

Singapore Trade and Industry Minister Chan Chun Sing said: “We are encouraged that 12 countries are now on board. It sends a strong signal of our collective commitment to ensure the continuity and interconnectivity of supply chains during the Covid-19 pandemic.”

He added that Singapore, along with other signatories, would welcome other like-minded nations to join the pact.

Signatories of the joint statement have committed to maintaining open and connected supply chains as part of their collective response to combat Covid-19.

They will also work closely to address trade disruptions that could affect the flow of necessities.

The 12 nations have pledged to work with all like-minded countries to ensure that trade continues to flow unimpeded.

COLLECTIVE COMMITMENT

We are encouraged that 12 countries are now on board. It sends a strong signal of our collective commitment to ensure the continuity and interconnectivity of supply chains during the Covid-19 pandemic.

TRADE AND INDUSTRY MINISTER CHAN CHUN SING, after China became the 12th nation to ink the pledge to maintain cross-border flows of necessities.

They will also ensure that critical infrastructure, such as air and seaports, remains open to support the viability and integrity of supply chains globally.

While Singapore imposed a strict circuit breaker for nearly two months, production lines were kept open for global supply chains, including those providing critical materials for surgical masks and other medical supplies.

The country is one of the world’s largest production hubs of active pharmaceutical ingredients.

Singapore started to ease its circuit breaker measures after June 1.

Read the latest on the Covid-19 situation in Singapore and beyond on our dedicated site here.

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Business

State Department warns top U.S. firms over supply chain risks linked to China's Xinjiang

WASHINGTON (Reuters) – The U.S. State Department warned top American companies including Walmart Inc(WMT.N), Apple Inc (AAPL.O)and Amazon.com Inc(AMZN.O) over risks faced from maintaining supply chains associated with human rights abuses in China’s western Xinjiang province, according to a letter seen by Reuters on Friday.

“It is critical that U.S. companies and individuals be aware of the large-scale human rights abuses perpetrated by the PRC government in Xinjiang,” Keith Krach, Undersecretary of State for economic growth, energy and the environment wrote on July 1.

“Businesses should evaluate their exposure to the risks that result from partnering with, investing in, and otherwise providing support to companies that operate in or are linked to Xinjiang,” he said in the letter also sent to trade groups.

The United States is seeking to ratchet up pressure on China at a time of heightened tensions over that country’s treatment of Muslim Uighurs in Xinjiang and Beijing’s new national security law for Hong Kong.

It also follows a Wednesday advisory by the U.S. government that said companies doing business in Xinjiang or with entities using Xinjiang labor could be exposed to “reputational, economic, and legal risks”.

In a call with reporters, Krach said the complex nature of supply chains was making companies vulnerable to potential risks and urged them to be more vigilant. “It’s incumbent on the board of directors for each company to conduct a detailed analysis of their supply chains to reveal who their company is buying from and who it is selling to,” he said.

He did not give specific number on how many U.S. companies might have been entangled in such supply chains.

The United Nations estimates that more than a million Muslims have been detained in camps there. China has denied mistreatment and says the camps provide vocational training and help fight extremism.

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Business

China hopes India corrects actions against Chinese firms immediately

BEIJING (Reuters) – China’s commerce ministry said on Thursday that it hopes India would correct its discriminatory actions against Chinese companies immediately, after India banned Chinese mobile apps amid a border crisis between the two countries.

China has not adopted any restrictive or discriminatory measures against Indian products and services, Ministry of Commerce spokesman Gao Feng told reporters in an online briefing, adding that India’s actions are in violation of WTO rules.

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World News

China tells UK to ‘respect its position’ and stop interfering in Hong Kong affairs

China is urging the UK to stop “interfering” in Hong Kong’s affairs after Boris Johnson’s government gave millions of citizens the chance to move to Britain.

Prime Minister Boris Johnson made the citizenship offer, describing the new security legislation as a “clear and serious breach” of the deal that saw Hong Kong pass from the UK to China in 1997.

But on Thursday, the Chinese Embassy in London told the UK that it “firmly opposes” the offer to allow more than 2.9 million Hong Kong citizens who hold British National Overseas (BNO) passports to apply to live in the UK, saying it would be a breach in international law.

In a statement, a spokesperson for the Chinese Embassy in the UK said: “If the British side makes unilateral changes to the relevant practice, it will breach its own position and pledges as well as international law and basic norms governing international relations.

“We firmly oppose this and reserve the right to take corresponding measures. We urge the British side to view objectively and fairly the national security legislation for Hong Kong, respect China’s position and concerns, refrain from interfering in Hong Kong affairs in any way.”

On Wednesday evening, Foreign Secretary Dominic Raab admitted that the government would be unable to force China into allowing those with BNO passports to move to the UK.

The comments from the Chinese Embassy come as Australia’s prime minister said he was also considering offering a safe haven for those in Hong Kong.

Speaking to reporters on Thursday, Scott Morrison said: “The basic law and the safeguards that were put in place with the handover, we would expect to be upheld. I think that’s a very reasonable position and a very consistent position for the government.

“We are considering very actively and there are proposals that I asked to be brought forward several weeks ago.”

Just hours after China’s security legislation came into effect in Hong Kong on Wednesday, police began making arrests under the new law.

A man was detained for carrying a flag that called for independence, while a woman was also held for carrying a sign bearing the same message with a British flag.

Those who break the law could face life in prison, as China seeks to crack down on subversion and secessionist activity in the region.

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World News

U.S. warns firms of human rights abuse risks in China's Xinjiang province

WASHINGTON (Reuters) – The United States on Wednesday issued an advisory warning U.S. companies about the risks faced from maintaining supply chains associated with human rights abuses in China’s western Xinjiang province.

The advisory, issued by the U.S. State, Treasury, Commerce and Homeland Security departments, seeks to add more U.S. pressure on China at a time of heightened tensions over China’s treatment of Muslim Uighurs in Xinjiang and Beijing’s new national security law for Hong Kong.

The advisory said companies doing business in Xinjiang or with entities using Xinjiang labor face “reputational, economic, and legal risks” from human rights abuses, including forced labor, mass detention and forced sterilization.

“CEOs should read this notice closely and be aware of the reputational, economic and legal risks of supporting such assaults on human dignity,” U.S. Secretary of State Mike Pompeo told reporters on Wednesday.

U.S. Customs and Border Protection officers earlier on Wednesday detained a shipment originating in Xinjiang of hair products and accessories suspected of being forced labor products made with human hair, the agency said in a statement.

The products, part of a shipment of almost 13 tons of hair products worth over $800,000, indicated potential human rights abuses of forced child labor and imprisonment, the statement said.

“The production of these goods constitutes a very serious human rights violation, and the detention order is intended to send a clear and direct message to all entities seeking to do business with the United States that illicit and inhumane practices will not be tolerated in U.S. supply chains,” Brenda Smith, a senior Customs and Border Protection official, said in the statement.

The U.S. Commerce Department last month added seven companies and two institutions to an economic blacklist for being “complicit in human rights violations and abuses committed in China’s campaign of repression, mass arbitrary detention, forced labor and high-technology surveillance against Uighurs” and others.

China’s ambassador to the U.N. in Geneva, Chen Xu, told the U.N. Human Rights Council in Geneva on Wednesday that Beijing categorically rejects what he called “groundless accusations against China on the Hong Kong and Xinjiang issues” made by some countries due to political motives.

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World News

China chaos: Australia plans long-range hypersonic missile system as tensions erupt

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Prime Minister Scott Morrison pledged to boost the country’s defence budget by 40 percent over the next 10 years and announced plans to acquire long-range missiles and other capabilities to “deter” future conflicts. It comes amid deteriorating relations between Australia and China which are widely seen to be at their worst in decades.

We want an Indo-Pacific free from coercion and hegemony

Scott Morrison

Mr Morrison said the steps were needed because the region had become the “focus of the dominant global contest of our age”.

He listed several areas of tension including the border between India and China, and conflict over the South China Sea and East China Sea.

And he said Australia would pivot its military focus to the Indo-Pacific region.

He said: “We want an Indo-Pacific free from coercion and hegemony. We want a region where all countries, large and small, can engage freely with each other and be guided by international rules and norms.”

Although Mr Morrison did not name China, Australia’s muscular posturing towards the Pacific is seen as a signal that Canberra intends to be more assertive in its dealings with Beijing and less reliant on the US.

The new defence capability budget, which amounts to about 2 percent of GDP – replaces a previous decade-long strategy.

Australia will purchase from the US Navy up to 200 long-range anti-ship missiles, which can travel up to 229 miles.

It will also invest in developing a hypersonic weapons system – missiles which can travel thousands of miles.

Up to £12bn is being earmarked for cyberwarfare tools which Mr Morrison said “says a lot about where the threats are coming from”.

Last month, he warned that Australian institutions and businesses were being targeted by cyber attacks from a “sophisticated state actor”.

The remarks were broadly interpreted as aimed at China.

Mr Morrison said tensions between the US and China had been ramped up in recent years warned relations between the two were “fractious at best”.

He said the coronavirus pandemic had worsened the tensions and put the global security order at its most unstable point in decades.

And he also warned the region was seeing “military modernisation” at an unprecedented rate.

He said: “The largely benign security environment that Australia has enjoyed, basically from the fall of the Berlin Wall to the global financial crisis, that’s gone.

“The risk of miscalculation – and even conflict- is heightening.”

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Mr Morrison said Australia would vigorously defend its democratic values and those of others in the region and insisted increasing military capabilities would help “to prevent war”.

Security analysts have interpreted the shift as Australia taking a more defined opposition to China’s increasing influence in the region.

Sam Roggeveen, director of the Sydney-based Lowy Institute’s International Security Program, said: “China is the unspoken elephant in the room.

“While it’s absolutely right that we focus on our region, but buying long-range missiles – particularly ones for land targets – could invite a response from Beijing.”

Relations with its biggest trading partner have further deteriorated in recent months following Australia’s push for a global probe into the origins of the COVID-19 virus.

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World News

China warned over ‘severe consequences’ for controversial Hong Kong laws

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The law was unanimously passed by China’s National People’s Congress Standing Committee on Tuesday morning, and is due to come into force today.

The controversial legislation will make it a criminal act to commit various challenges to Beijing’s authority, including acts of secession, or breaking away from the country; subversion, or undermining central government; terrorism; and collusion with foreign forces.

Outcry over the legislation has led to China and the US enforcing tit-for-tat visa restrictions on certain people from either country.

And over the past 24 hours, various US lawmakers have spoken out in opposition to the law.

US Speaker of the House Nancy Pelosi, a Democrat, said that the passing of the legislation “signals the death of the ‘one country, two systems’ principle”, under which Hong Kong enjoys a degree of autonomy and self-governance from Beijing.

She added: “The purpose of this brutal, sweeping law is to frighten, intimidate and suppress Hong Kongers who are peacefully demanding the freedoms that were promised.

“All freedom-loving people must come together to condemn this law, which accelerates Beijing’s years-long assault on Hong Kong’s political and economic freedoms.”

Pelosi called for the US to look into visa limitations and “economic penalties” as a pushback.

The outcry against Beijing’s move seems to be something on which US Democrats and Republicans can agree.

Tom Cotton, Republican senator for the US state of Arkansas, also lambasted the move; though his rhetoric was considerably sharper.

READ: China passes major controversial Hong Kong law – ignoring global outcry

Cotton said: “Xi Jinping and his Communist thugs must face severe consequences for crushing Hong Kong’s freedoms”.

He added that the US “cannot ignore China’s draconian actions” and called for “punishing sanctions”.

Already, the US is making moves in response to the new law. Mike Pompeo, US Secretary of State and vocal critic of the Chinese Community Party, said yesterday that the US would end exports of US defence equipment to Hong Kong.

Pompeo claimed that the move was made in the interests of national security, noting that, following Beijing’s move, “we can no longer distinguish between the export of controlled items to Hong Kong or to mainland China”.

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He added: “It gives us no pleasure to take this action, which is a direct consequence of Beijing’s decision to violate its own commitments under the UN-registered Sino-British Joint Declaration.”

This ‘declaration’ refers to the agreement between China and Britain, when the former was granted sovereignty over Hong Kong from the UK in 1997 provided the aforementioned ‘one country, two systems’ principle is observed.

Under this principle, Hong Kong is able to have an independent judiciary and democratic rights which places in mainland China do not have.

Meanwhile, UK Prime Minister Boris Johnson is yet to make any comment following the official passing of the law by Beijing.

But he has made comments in the past when China was known to be considering the law.

On June 3, Johnson said that if the law were passed, “Britain would then have no choice but to uphold our profound ties of history and friendship with the people of Hong Kong”.

He said that this would involve relaxing UK immigration rules on potentially millions of Hong Kong residents if they chose to leave the region as a result and come to Britain instead.

Express.co.uk has approached the Cabinet Office for comment, given the situation has developed since then.

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World News

China passes sweeping HK security law, heralding authoritarian era

HONG KONG/BEIJING (Reuters) – Beijing on Tuesday unveiled new national security laws for Hong Kong that will punish crimes of secession, subversion, terrorism and collusion with foreign forces with up to life in prison, heralding a more authoritarian era for China’s freest city.

As the law came into force, authorities were set to throw a security blanket across the heart of the city’s financial centre on Wednesday after activists vowed to defy a police ban and rally against the measures.

Local media said up to 4,000 officers would be deployed to stamp out any protests.

China’s parliament passed the detailed legislation earlier on Tuesday, giving Beijing sweeping powers and setting the stage for radical changes to the global financial hub’s way of life.

Beijing had kept full details shrouded in secrecy, giving Hong Kong’s 7.5 million people no time to digest the complex legislation before it entered into force at 11.00 pm (1500 GMT) on June 30.

The timing was seen as a symbolic humiliation for Britain, coming just an hour before the 23rd anniversary of when Hong Kong’s last colonial governor, Chris Patten, a staunch critic of the law, tearfully handed back Hong Kong to Chinese rule.

Amid fears the law will crush the city’s freedoms, prominent activist Joshua Wong’s Demosisto and other pro-democracy groups said they would dissolve.

“The punitive elements of the law are stupefying,” Simon Young, a law professor at the University of Hong Kong’s law school and a barrister, told Reuters.

“Let us hope no one tries to test this law, for the consequences to the individual and the legal system will be irreparable.”

The legislation pushes Beijing further along a collision course with the United States, Britain and other Western governments, which have said it erodes the high degree of autonomy the city was granted at its July 1, 1997, handover.

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Britain and some two dozen Western countries urged China to reconsider the law, saying Beijing must preserve the right to assembly and free press.

The United States condemned the legislation as a violation of Beijing’s international commitments and vowed to go on acting “against those who smothered Hong Kong’s freedom and autonomy.”

Washington, already in dispute with China over trade, the South China Sea and the coronavirus, began eliminating Hong Kong’s special status under U.S. law on Monday, halting defence exports and restricting technology access.

China, which has rejected criticism of the law by Britain, the European Union, Japan, Taiwan and others, said it would retaliate.

Hong Kong leader Carrie Lam, in a video message to the United Nations Human Rights Council in Geneva, urged the international community to “respect our country’s right to safeguard national security”.

She said the law would not undermine the city’s autonomy or its independent judiciary.

Authorities in Beijing and Hong Kong have repeatedly said the legislation is aimed at a few “troublemakers” and will not affect rights and freedoms, nor investor interests.

As the law was passed in Beijing, the Chinese People’s Liberation Army garrison in Hong Kong held a drill which included exercises to stop suspicious vessels and arrest fugitives, according to the Weibo social media account of state-run CCTV’s military channel.

‘OVERPOWERING’

In their most severe form, crimes will be punishable with life in prison. Punishments otherwise largely go up to 10 years. Properties related to crimes could be frozen or confiscated.

The security legislation will supersede existing Hong Kong laws where there is a conflict and mainland Chinese authorities could exercise jurisdiction over some major cases.

Interpretation powers belong to the Chinese parliament’s top decision-making body.

Judges for security cases will be appointed by the city’s chief executive.

According to the law, a new national security agency will be set up for the first time in Hong Kong and will not be under the jurisdiction of the local government. Authorities can carry out surveillance and wire-tap people suspected of endangering national security, it said.

Those asking foreign countries to sanction, blockade or take other hostile action against Hong Kong or China could be guilty of colluding with foreign forces.

Authorities shall take necessary measures to strengthen the management and servicing of foreign countries’ and international organisations’ branches in Hong Kong, as well as foreign media and NGOs in the city, the law says.

“We can all start again,” pro-Beijing heavyweight Maria Tam, a member of China’s National People’s Congress, told reporters.

Activists and pro-democracy politicians said they would defy a police ban on a rally on the handover anniversary on Wednesday.

“We will never accept the passing of the law, even though it is so overpowering,” said Democratic Party chairman Wu Chi-wai.

A majority in Hong Kong opposes the legislation, a poll conducted for Reuters this month showed, but support for the protests has fallen to only a slim majority.

Dozens of supporters of Beijing popped champagne corks and waved Chinese flags in celebration in front of government headquarters.

“I’m very happy,” said one elderly man, surnamed Lee.

“This will leave anti-China spies and people who brought chaos to Hong Kong with nowhere to go.”

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Business

China's factory activity quickens, but pandemic drags on exporters and recovery

BEIJING (Reuters) – China’s factory activity expanded at a stronger pace in June in a boost to hopes for a quick economic recovery globally and at home, but the persistent weakness in export orders suggests the coronavirus crisis will remain a drag on growth for some time.

The official manufacturing Purchasing Manager’s Index (PMI) came in at 50.9 in June, compared with May’s 50.6, National Bureau of Statistics (NBS) data showed on Tuesday, and was above the 50.4 forecast in a Reuters poll of analysts.

The 50-point mark separates expansion from contraction on a monthly basis.

The uptick was underpinned by the quickening pace of expansion in production. The forward-looking total new orders gauge also brightened, rising to 51.4 from May’s 50.9, suggesting domestic demand is picking up as industries from non-ferrous metals to general equipment and electrical machinery all showed an improvement.

But export orders continued to contract, albeit at a slower pace, with a sub-index standing at 42.6 compared to 35.3 in May, well below the 50-point mark.

“Despite the strong recovery between March and mid-June, we believe a full economic recovery remains distant. In our view, it is too early for Beijing to reverse its easing stance,” Nomura analysts wrote in a note to clients.

In a statement, NBS official Zhao Qinghe underscored the prevailing uncertainty about the outlook, noting that small firms in China are suffering more than their larger peers.

Indeed, despite a flurry of government measures to support smaller companies, the PMI survey showed activity in these firms contracting last month.

Shanghai prime machinery (2345.HK), a Chinese manufacturer of fasteners that has been forced to close a factory in Germany this year due to the pandemic, said on Monday it expects to record a net loss of up to 40 million yuan in the first half of 2020, compared to a net profit of 114.7 million yuan in year-ago period.

DOWNWARD PRESSURE

Beijing has stepped up support measures this year to revive the economy, which contracted sharply in the first quarter.

High frequency Chinese data tracked by Nomura showed a flurry of better-than-expected indicators recently, including power production, property and auto sales, while higher spending – particularly in infrastructure – was expected to boost economic activity for the rest of this year.

A separate official survey on China’s services sector showed activity expanded at a faster clip in June. The non-manufacturing Purchasing Managers’ Index rose to 54.4, from 53.6 in May, suggesting steadily stabilising business confidence.

Still, a sub-index for construction activity, a key driver of growth, fell to 59.8 from 60.8 the previous month, highlighting the uneven nature of the recovery both in the sector and the overall economy.

Some analysts have warned against being overly optimistic about the outlook given uncertainties around the COVID-19 pandemic.

While the improvement this month might be due to easing in restrictions across some countries, export demand has remained weak overall with infections steadily rising across the world.

Some fear a worldwide recession might turn out to be more pronounced than expected in the event a second wave of coronavirus cases force many countries to reimpose strict lockdowns.

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Adding to the worries domestically is a cluster found earlier this month in a food market in Beijing, underscoring the ever present economic threat posed by the virus.

Despite stronger demand, factories reduced headcount for the second time in June since they reopened, with the survey’s sub-index falling to 49.1 from 49.4 in May.

“The contrast between rising new orders and more job-shedding shows companies were still cautious about demand recovering in the short term,” Huatai securities macro analyst Yang Chang said.

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World News

China‚Äôs ‘grooming’ of British business elites REVEALED in explosive new book

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China and the UK have seen fraught tensions in recent months, due to the ongoing coronavirus pandemic as well as exiting trade issues surrounding Huawei and Britains 5G networks. Prime Minister Boris Johnson has ramped up his anti-Chinese legislation as Beijing attempts to introduce a new security law against Hong Kong.

The Times has reported that a group of political and business leaders committed to stronger ties with China has taken legal action against a new book exposing Chinese efforts to groom Britain’s elites.

The book, Hidden Hand, is an exposé of Chinese influence networks in Britain.

It portrays Beijing’s influence in Britain through the Chinese Communist Party as far reaching and unstoppable.

They influence British elites through the 48 Group Club, which was founded in part by former deputy prime minister Lord Heseltine.

The group’s website has been taken down after the book’s publication, and Stephen Perry, a London businessman who chairs the club, has begun legal action to stop the publication of the book in the UK and Canada.

 

Australian academic Clive Hamilton, co-author of the book, said to the Times: “In our judgment, so entrenched are the [Chinese] influence networks among British elites that Britain has passed the point of no return and any attempt to extricate itself from Beijing’s orbit would probably fail.”

Hidden Hand was written in collaboration with Mareike Ohlberg, a senior fellow in the Asia programme of the German Marshall Fund.

The book says that while the club, with 500 members and headquarters in London, keeps a very low profile at home it serves as a networking hub “through which Beijing grooms Britain’s elites”.

It claims that Mr Perry had met Chinese President Xi Jinping in 2018, where the Chinese Communist Party regards the 48 Group Club as central to its influence efforts in Britain.

At their meeting Mr Xi lauded the work of the club and Mr Perry in turn praised China’s “tremendous achievement” and praised the Chinese leader’s vision “of a community with a shared future for humanity”.

The authors say their source for details on the meeting between Xi and Perry as Perry’s blog on the 48 Group Club website.

Hidden Hand contains footnotes on Mr Perry’s blog six other times as a source for it’s chapter on the club.

Mr Perry was the only Briton among ten foreigners awarded the China Reform and Friendship Medal in 2018 to mark the 40th anniversary of the economic reforms known as “Socialism with Chinese characteristics”.

An archived snapshot of the website, from December, listed current and former MPs, peers, chief executives, and prominent individuals from academia and media as “fellows”.

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When approached by The Times for comment, some MPs listed on 48 Group Club’s website were unaware of it’s existence.

Richard Graham, a Conservative MP, said he was unaware of being a fellow of the group, but said it was “very kind” of them to offer it.

Jack Straw, a former Labour home secretary, said that he had never heard of the club “so why I’m on their website I’ve no idea”.

Mr Perry declined to comment to the Times report.

Lord Heseltine has confirmed his links to the group, and said it was primarily a network for those involved in Chinese trade.
Heseltine has also defended it’s usefulness as a forum to communicate with Chinese diplomats and politicians.

He said to the Times: “I’ve spoken at a number of their big dinners, when I have made comments that are frank about Chinese activity.”

In a statement the board of the 48 Group Club confirmed that it had taken legal advice. “We were, and remain, concerned about some of its reported content, not least since at no time did the authors attempt to contact us in the course of their research.”

It added: “The 48 Group Club is not in any sense a vehicle for Beijing. It is an independent body promoting understanding of China and positive Sino-British relations, which we believe to be in the UK’s national interest.

“Any suggestion to the contrary is quite false.”

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