May 17, 2017

China (中国) Today

Events Review (10.05–16.05.2017)

 

Major Events and Trends in the Development of the Situation around the PRC

A key event in China, also affecting the interests of other countries in the region and the world, was the High-Level Forum on International Cooperation under the Chinese initiative “The Belt and Road” (May 14–15, 2017), in which about 1.2 thousand people took part, including 29 heads of state and government, entrepreneurs, experts and journalists from more than 100 countries, as well as representatives of 60 international organizations. In particular, the Forum was attended by the UN Secretary General A. Guterres, World Bank President J. Kim and the head of the International Monetary Fund C. Lagarde. The composition and the status of the Forum participants is actually commensurate with the G20 summit in the Chinese city of Hangzhou (September 2016), which once again confirms the PRC's growing role in the world arena.

The main theme of the event is the discussion of ways to implement and practical filling of joint projects within the framework of the “One Belt — One Road” initiative. As Chinese President Xi Jinping said at the opening of the Forum, the Chinese initiative would stimulate the development of trade and economic ties between the countries of Asia, Africa and Europe. To this end, China intends to deepen cooperation with those countries that, within the framework of “The Belt and Road” initiative, will participate in the implementation of the projects for which specific agreements already exist. Among such projects, scientific and technical exchanges, as well as creation of joint scientific and technical parks, will be a priority. In general, within the next few years, China plans to invest 124 billion dollars into creation of the “New Silk Road”. In particular, the Chinese government intends to allocate 14.5 billion US dollars for the Silk Road Fund. Another 380 billion Yuan are promised to be allocated by the Import-Export Bank of China and the State Development Bank of China.

Plans for the development of “The Belt and Road” were supported by most of the forum participants, who at this pointed out the role of the PRC as a single state capable of offering a global positive project that contributes to the growth of the living standard of about 60 % of the world population. Thus, according to the founder and Executive Chairman of the World Economic Forum K. Schwab, actually, a new integrated world is being built on the spaces of “The Belt and Road”, and the initiative itself is a model for regional cooperation, development and growth.

At the Forum there were also bilateral meetings of the leadership of the PRC with leaders of other countries. All in all, more than 30 agreements and contracts on bilateral and multilateral cooperation concerning the implementation of joint projects have been concluded. In addition, the leaders of the countries participating in the Forum signed a Joint Communique to support “The Belt and Road”. As pointed out by the head of the National Development and Reform Commission of the China, He Lifeng, all this will serve as a basis for further deepening pragmatic relations between all parties and will be a guarantee for the implementation of the Chinese initiative.

The Forum also showed some differences between the PRC and the European Union in the issues of social and environmental standards, transparency of trade and support of national producers. Because of these disagreements, the EU's representatives refused to sign a final Joint Communique. Besides, India refused to work in the Forum, which indicates an aggravating regional confrontation between Delhi and Beijing.

Russia tried to use the Forum in the PRC to promote its foreign policy and economic interests, as well as to create a counterweight to the US and EU sanctions by strengthening relations with the PRC. This is what President V. Putin meant by speaking at the international meeting in Beijing.

By the way, according to experts, the Chinese initiative “The Belt and Road” creates direct competition to Moscow's plans to build the Eurasian Union, and in fact neutralizes the tasks of the Shanghai Cooperation Organization. This is evidenced by quite moderate comments in the Russian media regarding the participation in the forum of the leaders of Central Asian countries and signing agreements on expanding cooperation with China. In this context, it is pointed out that as a result of a significant reorientation of the countries of the region to China, the threat to Russian interests in Central Asia is increasing.

 

Important were also other trends and events that influenced the state of affairs in and around China.

 

Politics

On the eve of the Forum “The Belt and Road”, in China arrived leaders of those countries that are interested in diversified cooperation with China. Thus, on 11–14 May 2017, President of the People's Republic of China Xi Jinping and other representatives of the Chinese leadership met with the Presidents of Uzbekistan Sh. Mirziyev, Vietnam — Chan Kuang, Chile — M. Bachelet, Czech Republic — M. Zeman and Turkey — R. Erdogan, as well as with the heads of government of Ethiopia — H. Desalegn, Hungary — V. Orban and Greece — A. Tsipras. Issues of development of ties between the parties in many spheres, including political, economic and security were considered.

 

Economy

One of the factors that stimulate the development of the Chinese economy is China's trade, economic and investment cooperation with other countries. In this regard, the most important was the May 11's trade agreement between China and the United States, providing for mutual expansion of market access. In particular, the quotas for the supply of agricultural and biotechnological products from the USA to China have increased, and the work of American financial companies, payment systems and rating agencies has been improved in China. The United States have cancelled the restrictions on the supply of its natural gas to China, and the import of meat products from China.

The signing of the agreement was the first practical step in realizing the reached by the President of the PRC Xi Jinping and US President D. Trump at the meeting on 6–7 April 2017 agreements on the settlement of trade and economic problems between the two countries. This shows the resumption of positive dynamics in the development of cooperation between China and the United States, that had somewhat worsened after the election of D. Trump as President of the United States of America.

 

Also bilateral economic agreements were concluded during the meetings of the President of the People's Republic of China Xi Jinping and Premier of the State Council of China Li Keqiang with the President of Uzbekistan Sh. Mirziyev. These are ten oil and gas documents totaling 5 billion US dollars, including a contract for the supply of natural gas from Uzbekistan to China, an agreement on China's financing the construction of a synthetic liquid fuel plant in the south of Uzbekistan. An agreement was reached on China's participation in the development of hydropower in Uzbekistan (including modernization of about 300 pumping stations), international road communications and stimulation of interaction between small business entities of both countries. In general, the volume of signed agreements and contracts exceeded 20 billion US dollars.

At present, China is one of the largest trade, economic and investment partners of Uzbekistan. In 2016, the volume of mutual trade amounted to 4.25 billion US dollars, including Uzbekistan's exports — 2 billion US dollars, imports — 2.25 billion US dollars. Uzbekistan's supplies of raw materials (natural gas, cotton, uranium) remain the main part of the mutual trade. The volume of Chinese investments in Uzbekistan's economy have reached 8 billion US dollars. There are more than 650 Chinese enterprises in Uzbekistan, including 90 with 100 percent Chinese capital.

 

China is developing trade and economic ties with other countries. Last week, with the participation of Chinese investors, the construction of the “Hinckley-Point C” NPP in the UK began. The project is considered the key one in the development of cooperation between the PRC, Great Britain and France. It is financed by the Chinese concern CGN and the French state company EDF. The Chinese side will own 30 % of the shares of the future nuclear power plant, which should supply 7 % of electricity to the UK.

 

May 11, 2017, China and Bangladesh signed an agreement to provide China with gratuitous financial assistance for the development of Bangladeshi transport infrastructure, in particular, for the construction of the ninth “bridge of friendship between China and Bangladesh”. Today, China has already provided financial assistance for the construction of seven such bridges.

 

Security and Law Enforcement Agencies

The main factor that destabilizes the situation in the APR and affects the interests of the PRC and other countries of the region is the North Korea's activity in the nuclear missile sphere. For example, on the night of May 14, 2017, the DPRK conducted another test launch of the “Hwasong-12” ballistic missile, which, at the altitude of almost 2,000 km, in 30 minutes flew 787 km and fell into the Sea of Japan (by the way, it was the maximum distance for the entire test period). Experts believe that the trajectory of the rocket's movement shows that it could have been launched at a range of up to 4,500 km.

Commenting on this missile launch, North Korean leader Kim Jong-un said that despite the pressure from the international community, the DPRK is determined to continue implementing its missile program. He blamed Washington for “pushing the Korean Peninsula towards a nuclear war that would have catastrophic consequences for the United States itself”. According to him, “the mainland of the United States and the operational area of the Asia-Pacific region are already within the reach of the powerful means of the DPRK, ready to launch a retaliatory strike”.

Such actions of North Korea are condemned by the United States, Japan, South Korea, NATO and the EU, who called them a threat to stability in the APR and a challenge to the whole world. Under such circumstances, on 16 May 2017, the UN Security Council held an extraordinary meeting, which examined the situation that arose due to the DPRK's missile launches, and studied the possibility of influencing it. Besides, the Ministry of Foreign Affairs of China made another statement urging all parties to solve peacefully the problems arising from the DPRK's nuclear missile program. It was also stressed that it is necessary to avoid any provocations that could provoke conflict in the region. At the same time, the PRC expressed its willingness to cooperate with the United States in this sphere.

 

As for the well-known problems due to the disputed islands in the South China and East China Seas, they, as the saying goes, remain on the agenda. In early May 2017, the Philippines deployed its military contingent on the disputed Thitu Island of the Spratly Archipelago in the South China Sea. On the islands of this archipelago, China is actively constructing its military facilities, and this may lead to armed incidents in the area.

 

Besides, a new source of instability in the APR is Russia's active provocative activity against the United States. Such as the resumption of the systematic flights of long-range (strategic) bomber aircrafts of the RF Aerospace Forces towards Alaska with the approach to the United States' border (in particular, such flights with the participation of two Tu-95MS bombers and two Su-35 fighters were observed on 18 April and 4 May). In response to such Russia's actions, last week the United States conducted a large-scale “Northern Edge” exercise for its Air Force in the airspace of Alaska. During the exercises for the first time they mastered the issues of joint actions of the F-22 Raptor fighter aircraft of the US Air Force and the F-35 Lighting of the US Marine Corps.

 

Given the difficult situation in the Asia-Pacific region, and also striving to maintain strategic parity of forces, the leadership of the PRC continues to consistently strengthen the country's military potential. In particular, last week the PLA Missile Force conducted a combat test of a new missile system. The type and parameters of the system are not disclosed.

The PLA's command pays special attention to the issue of strengthening the protection of classified information, developing special automatic means for listening to Chinese military's mobile phones and tracking their work on the Internet, where secret data may be disclosed.

 

Science and Technology

The consistent policy of the Chinese leadership in the development of science and advanced technologies ensures the PRC's advanced position in this field. Thus, according to the decision of the State Committee for Development and Reform of China, in May 2017, in the city of Hefei, China's first National Laboratory for the Development of “Brain-like” Artificial Intelligence Technologies was opened. The Laboratory is considered a structural unit of the Chinese Scientific and Technical Institute, which, in particular, is engaged in creation of quantum computers and communication facilities. In April 2017, the Institute was the first in the world to demonstrate a computer prototype, whose power is an order of magnitude higher than that of computers with conventional processors.

 

The Chinese government is also continuing to implement a large-scale ocean research program. May 10, 2017, in the second phase of the 38th scientific expedition, the Chinese manned “Jiaolong” bathyscaphe immersed for the ninth time near Poyuan submarine mountain in the South China Sea. The device stayed under water for 9.5 hours at the depth of 1,900 meters, and, rising to the surface, delivered bottom seawater, samples of bottom sediments, photographs and high-quality video.

The 38th Oceanological Expedition started on 6 February, 2017. As part of its first phase, “Jiaolong” performed a dive in the northwestern Indian Ocean. At the second stage, studies of the South China Sea are carried out, and in the third stage, the Japanese and Mariana Trench will be surveyed. The “Jiaolong” bathyscaphe went down to the deepest depth of 7062 meters in June 2012 in the Mariana Trench.

 

Some Aspects of the PRC-Ukraine Cooperation

The PRC's participation in the development of the Ukrainian transport infrastructure is very important for our country. According to the Ministry of Economic Development and Trade of Ukraine, in May 2017 Ukraine and the PRC decided that the China Road and Bridge Corporation (CRBC) would take part in the construction of a bridge near Kremenchuk and in the reconstruction of the Shulyavsky overpass in Kiev.

In the future, the Chinese company can participate in the implementation of other infrastructure projects in Ukraine, which will facilitate its accession to the China-Europe transport corridor as part of the Chinese strategic initiative “The Belt and Road.” This was also discussed at the High-Level Forum in Beijing.