July 3, 2017

China (中国) Today

Events Review (26.06–02.07.2017)


I. Major-Profile Events and Trends in the Development of the Situation around the PRC

The PRC's leading role in the system of international economic relations increases the importance of China as one of the world's leading consultative centers. June 27–29, 2017, the 11th World Economic Forum “Summer Davos — 2017” was held in Dalian (Liaoning Province), which actually became the continuation of the last January's forum in Davos. More than two thousand representatives of political and business circles from about 90 countries and regions of the world took part in the event. The issues of globalization of the world economy in the context of the “fourth industrial revolution” were discussed, namely, the formation of a global information space.

Premier of the State Council of China Li Keqiang attended the forum and presented the plan of economic reforms in China, the plan “Made in China — 2025”, the plan “Internet Plus”, as well as proposals for the development of the Chinese initiative “The Belt and Road”. Li Keqiang also met with representatives of political and industrial circles of the countries participating in the Forum, as well as with President of the World Economic Forum K. Schwab.

In his speech at the Forum, Li Keqiang urged all countries to resolutely support the process of globalization of the world economy in order to ensure its stable growth. In this regard, he expressed the PRC's government's intention to open the Chinese market more widely for foreign investors, to ease the restrictions on foreign ownership in China, and to give foreign companies equal rights with Chinese ones.

Chinese Premier Li Keqiang at the opening ceremony of the World Economic Forum “Summer Davos”
Chinese Premier Li Keqiang at the opening ceremony of the World Economic Forum “Summer Davos”

At the same time, the Premier of the State Council of China expressed confidence in China's ability to realize the main goals of economic growth in 2017 due to the stable transformation of the Chinese economy. Thus, in the first half of this year, China's GDP grew by 6.9 % year-on-year, which is higher than the planned figure, which was determined at 6.5 %. The achieved results are the greatest for the last 18 months.

Li Keqiang paid special attention was primarily with the United States. According to the Premier of the State Council of China, despite all the problems, China-US trade and economic relations remain stable and develop on the basis of the mutual interests of the two countries. At this, they not only benefit the Chinese and American peoples, but also guarantee peaceful development and cooperation of the whole world.


II. China's “The Belt and Road” Strategic Initiative in the Context of Chinese and Regional Interests

China's “The Belt and Road” Strategic InitiativeOne of the results of China's implementation of “The Belt and Road” strategic initiative is a significant increase in cargo flows between Europe, Central Asia and the Asia-Pacific region. In January–May, 2017, more than 60,000 containers passed directed to China-EU-China through Kazakhstan, which was 2.2 times more than in the same period last year. A total of 130–140 thousand containers are planned to be shipped via this route this year.


Countries in other regions also show great interest to the “Belt and Road”. Thus, on 30 June 2017, Minister of Trade of Egypt T. Kabil pointed out his country's intention to intensify activities within the framework of the project, including as a liaison with other African countries. In particular, it is planned to further develop Egypt's transport infrastructure, including in the direction of Sudan. Besides, Egypt will improve the work of the Suez Canal, as a strategically important transport route from the Indian Ocean to the Mediterranean.


III. Other Trends and Developments Influencing the Situation in and around China

3.1. Politics. Development of China's International Cooperation

The plans of the leaders of the People's Republic of China and the United States aimed at building strategic partnership between the two countries were confirmed by the new Ambassador of the United States of America to China, T. Branstad. He recognized the importance of deepening the USA's cooperation with China — as relations between the two states with the largest economies in the world. The main spheres of interaction between the sides were called the development of trade and economic ties between the countries, as well as the settlement of the situation around North Korea's nuclear missile program as the main condition for ensuring stability in the Asia-Pacific region.

A meeting of Xi Jinping and Terry Branstad in 2012
A meeting of Xi Jinping and Terry Branstad in 2012

The new US Ambassador to China has been acquainted with Chinese leader Xi Jinping since 1984. It was then that T. Branstad, who was then Governor of Iowa State, and Xi Jinping, Secretary of the Party Committee of the CCP of the Zhengdin County, Hebei Province, laid the foundations for cooperation between the United States and the PRC at the regional level. Today, such ties create the basis for establishing a partnership between the PRC and the USA at the global level. Proceeding from this, T. Branstad was appointed by D. Trump as the US Ambassador to China, which shows the thoroughness of the approaches of the leaderships of the two countries to the issues of bilateral cooperation.


15th Meeting of the EU-China “Round Table”One of the PRC's top priorities is also the European Union. June 29–30, 2017, the 15th meeting of the Sino-European “Round Table” was held in Beijing. Issues of further deepening the partnership and promoting joint development of China and Europe in the modern geopolitical situation in the world were discussed. In the keynote address at the opening ceremony, Du Qinglin, member of the Secretariat of the CPC Central Committee, pointed out the positive nature of the dialogue between the PRC and the EU, which helps deepen the integration of the two poles of the world. In this regard, the main spheres of development of partnership relations were determined, which primarily include concentration of joint efforts to ensure a stable growth of the world economy.


There continues the development of China's cooperation with countries of other regions important for the PRC. First of all, it concerns the Asia-Pacific region, as one of the main directions of Chinese interests. June 29, 2017, the member of the Standing Committee of the Political Bureau of the CPC Central Committee, Vice-Premier of the State Council of China Zhang Gaoli and Vice-Prime Minister of Singapore T. Shanmugaratnam met in Beijing. The parties specified the main spheres of cooperation between the two countries, including within the framework of Singapore's participation in the Chinese initiative “The Belt and Road” and coordination of their positions in solving problems. In this context, Singapore's important role as coordinator of China's relations with ASEAN was emphasized.

In turn, on 29 June 2017, Minister of Foreign Affairs of the People's Republic of China Wang Yi held talks with the Philippine Foreign Minister A. Cayetano. The Foreign Ministers of China and the Philippines stressed the significant progress in establishing bilateral relations, as well as in settlement of existing problems between the two countries. As a result of the talks, agreements were reached on deepening practical cooperation between the sides in the spheres of fighting terrorism and drug trafficking, developing infrastructure, trade, investment, agriculture and fisheries, and implementing the Chinese initiative “Belt and Road”. At this, Wang Yi expressed the PRC's willingness to support the activities of the Philippines during its next presidency in ASEAN.

Africa remains one of the priority regions for the PRC. June 24–29, 2017, China's Special Representative for African Affairs, Xu Jinghu, visited Rwanda and the Democratic Republic of the Congo (DRC). With the leadership of these countries she discussed prospects for the development of bilateral relations in the trade, economic and humanitarian spheres. Xu Jinghu reaffirmed China's readiness to continue providing assistance in the development of African industry, infrastructure construction and training of engineering and technical personnel. At the same time, the PRC's representative expressed China's being interested in joint projects for exploration and development of mineral resources in Rwanda and the DRC.


3.2. Economy. Some Aspects of the Economic Situation in China

In the first five months of 2017, the profits made by large industrial enterprises increased on 22.7 %
In the first five months of 2017, the profits made by large industrial enterprises increased on 22.7 %

According to the National Bureau of Statistics of China, in January-May of this year the total profit of large industrial enterprises of the country (with an annual income of over 3 million US dollars) amounted to 426 billion US dollars, which is 22.7 % more than in the same period last year. Also, in June 2017, the index of business activity in the industrial sector of China's economy rose to 51.7 points, which exceeded the planned level. According to the Chinese government, the increase in these indicators is due to increased sales and increased profitability of investments in the development of Chinese industry.

In order to consolidate these trends, the PRC's leadership continues to take measures to improve the investment climate in the country. June 28, 2017, they published an updated catalog of enterprises and sectors of the Chinese economy, which are subject to the government program to support foreign investors. The goal of the program is to simplify investment activities in the country, as well as to make the business environment in the PRC more global.


3.3. Security and Law Enforcement Agencies

The main source of instability in the Asia-Pacific region is North Korea's actions to develop nuclear missile weapons, which is of considerable concern to other countries in the region. This problem became the central topic of the talks between US President D. Trump and President of South Korea Moon Jae-in on 30 June 2017, in Washington. The parties agreed to continue cooperation in the military sphere, as well as to concentrate efforts on solving the issue of denuclearization of the Korean Peninsula. In particular, the intention was expressed to continue consistent efforts to increase pressure on North Korea by imposing new sanctions against the DPRK.

US President D. Trump with President of the Republic of Korea Moon Jae-in in Washington, June 30, 2017
US President D. Trump with President of the Republic of Korea Moon Jae-in
in Washington, June 30, 2017

The positions of the United States and South Korea on the need to denuclearize the Korean Peninsula were also supported by the PRC. At the same time, the Ministry of Foreign Affairs of the PRC urged all parties to resolve this problem exclusively by peaceful methods. In this regard, the Ministry of Foreign Affairs of China confirmed Beijing's negative attitude to the USA's building up its military presence in the APR, including the deployment of a Missile Defense Systems in South Korea.

Also, China condemned the USA's plans to supply arms to Taiwan. According to the Taiwan Affairs Office of the State Council of the PRC, this contradicts the official statements of the US leadership on supporting the “one China” policy, as the basis for building a strategic partnership between the two countries.

In contrast, the PRC's leadership is conducting its own activities to build up a military presence in the Asia-Pacific region. In particular, according to US space intelligence, China is continuing the construction of military facilities on artificial islands in the South China Sea, including the deployment of anti-ship missile systems on them.


Along with this, China continues to develop cooperation with the Asia-Pacific countries in the security sphere. June 29–30, 2017 in the Japanese city of Fukuoka, the 7th round of China-Japan high-level consultations on maritime affairs was held. Issues of politics and legislation, maritime economy and maritime security were discussed. As a result of the consultations, decisions were taken to accelerate the launching of communication mechanisms between the defense departments of the two countries on the air and sea situation, as well as to deepen the coordination of efforts in counteracting smuggling, illegal migration, drug trafficking and other types of cross-border crime.


Joint antiterrorist exercise of the SCO “Tian Shan 3”
Joint antiterrorist exercise of the SCO “Tian Shan 3”

Against this background, a separate sphere of China's security activities is deepening cooperation with the member countries of the Shanghai Cooperation Organization (SCO) on combating terrorism. June 27–29, 2017, in Kizilsu-Kirghiz Autonomous District of the Xinjiang Uygur Autonomous Region of China (north-western region of the country), a joint antiterrorist exercise of the SCO was held under the provisional title “Tian Shan 3”. The military units from the PRC, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan took part in the exercise.

During the same period, a meeting of the heads of the border services of the SCO countries was held in the Chinese city of Dalian. The meeting participants approved the plan for preparation and organization of the joint border operation “Solidarity-2017”, as well as proposals for the implementation of the Agreement on Cooperation and Interaction of the SCO Member States on Border Issues.


3.4. Science and Technology

World Intelligence Congress (WIC2017) held in Tianjin, on June 29–30The rapid development of China's scientific and technological potential determines the steady trend of the country's coming to the forefront in the world in most of the advanced spheres of modern technology. June 28–30, 2017, the Chinese city of Tianjin hosted the World Intellectual Congress (WIC2017), devoted to the consideration of the problems of creating artificial intelligence.

Wang Gang, Minister of Science and Technology of the People's Republic of China, in his speech at the opening ceremony of the Congress said that within the next 30–50 years, artificial intelligence will become the most important driving force for the development of mankind and will lead to revolutionary changes in technology and industry. In this regard, the participants of the Congress were demonstrated a wide range of various kinds of robots, automated systems and other achievements of Chinese enterprises in the field of information technology.


At the same time, the PRC's government pays special attention to the development of the country's transport infrastructure through the introduction of new high-tech vehicles. June 26, 2017, on the Beijing-Shanghai line was launched a high-speed train “Fusin” of independent Chinese development. The train, reaching a speed of 400 km/h, is included in the automated system of railway traffic control. The work of the “Fusin” train will meet the needs for passenger transportation between Beijing and Shanghai (more than 500,000 passengers per day).

One can't help noticing the PRC's achievements in counteracting unauthorized flights of UAVs. Thus, the specialists of the Chinese Academy of Engineering Physics developed a system for neutralizing unmanned aerial vehicles at low altitude, which was called the “low-altitude guard”. The system includes radar and optical means of detecting UAVs, as well as combat lasers. The laser beam burns the materials of the hull of the aircraft and causes damage to its functional blocks. Elements of the system can be deployed both on the ground and in cities on the roofs of tall houses.


IV. Plans and prospects for cooperation between China and Ukraine

Representatives of the Chinese company “Xi'an ShaanGu Power Co., Ltd.” at a meeting at the State Agency for Energy Efficiency of Ukraine
Representatives of the Chinese company “Xi'an ShaanGu Power Co., Ltd.” at a meeting at the State Agency for Energy Efficiency of Ukraine

Of great importance for Ukraine is the PRC's assistance in the development of the Ukrainian energy complex, including the development of renewable energy sources. In particular, during the negotiations between the representatives of the Chinese company “Xi'an ShaanGu Power Co., Ltd.” and the State Agency for Energy Efficiency and Energy Conservation of Ukraine, were confirmed the plans to implement a joint project for the construction of a biogas plant in Zhytomir region with a capacity of 6.7 MW. A similar TPP on bio-fuel is planned to be launched also in Lviv region. Besides, the Chinese company CNBM has invested into the construction of ten solar power plants in Ukraine with a total capacity of 265 MW. These projects are part of Ukraine's National Action Plan for Renewable Energy until 2020, which provides for improving the country's energy security by switching to its own energy resources.

At the same time, China actively participates in the investment into projects for the development of the Ukrainian transport infrastructure. In this regard, the PRC's allocating 10 million US dollars for the reconstruction of the airport in Zhytomyr is being considered. In general, to date, the Chinese investments into the agro-industrial complex, energy and other sectors of the Ukrainian economy have already reached 7 billion US dollars. One of the largest investment projects of the People's Republic of China in Ukraine is the construction of a transshipment complex of grain and oil crops in Mykolaiv seaport.