July 18, 2017

China (中国) Today

Events Review (10.07–16.07.2017)


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

The leadership of the PRC pays special attention to the development of cooperation with the countries of Central and Eastern Europe (CEE), which are of great importance for China’s accessing to the EU. July 15–17, 2017, the “2017 China-CEE Countries Political Parties Dialogue” was held in Bucharest, Romania. The event was attended by Liu Yunshan, a member of the Standing Committee of the Political Bureau of the CPC Central Committee, member of the Secretariat of the CPC Central Committee as well as by representatives of the leaderships, political parties and business circles of the countries of Central and Eastern Europe, Baltics and the Balkans.

The participants of the meeting discussed directions for deepening interstate cooperation in the “16+1” format as part of the Chinese initiative “The Belt and Road”.

Members of the “16+1” formatNote:

The “16+1” format is China's initiative, the essence of which is to intensify cooperation with 11 EU member countries and 5 Balkan countries (Albania, Bulgaria, Bosnia and Herzegovina, Hungary, Latvia, Lithuania, Macedonia, Poland, Romania, Serbia, Slovakia Slovenia, Croatia, Montenegro, Czech Republic, Estonia) in the spheres of investment, transport, finance, science, education and culture.

Within this format, China has identified 3 priority areas for potential cooperation in the sphere of economy: infrastructure, high technologies and green technologies.

Speaking at the forum, Liu Yunshan expressed China's being interested in developing cooperation with the CEE countries in the trade, economic, science, technology and humanitarian spheres. In this connection, he pointed out the role of political parties and other public organizations, which create platforms and channels for dialogue at both, bilateral and multilateral levels.

The “2017 China-CEE Countries Political Parties Dialogue” was held in Bucharest, Romania
The “2017 China-CEE Countries Political Parties Dialogue” was held in Bucharest, Romania

The importance of intensifying the dialogue in the “16+1” format was also confirmed by representatives of the CEE countries’ political parties, including Chairman of the Chamber of Deputies of the Parliament of the Czech Republic, Deputy Leader of the Social Democratic Party Jan Hamáček, Secretary of the Central Executive Committee of the Polish People's Party Piotr Zgorzelski, President of the National Assembly of Serbia Maja Goiković and others. In their speeches they recognized the importance of the PRC as one of Europe's largest partners, and also summed up the preliminary results of the implementation of the Action Plan for Cooperation within the framework of the “Belt and Road” initiative, signed last year in Riga.

Also, on the sidelines of the forum, Liu Yunshan had had separate meetings with President of the Chamber of Deputies of the Romanian Parliament, the leader of the Social Democratic Party of Romania Liviu Dragnea and the Prime Minister Mihai Tudose. During the talks, Liu Yunshan gave a positive assessment of the bilateral relations between China and Romania, and of the results of joint economic projects. At this, both sides expressed interest in expanding Romania's participation in the Chinese initiative “The Belt and Road”, which was named the most important development strategy of the 21st century.


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

The leadership of the PRC is carrying out activities to increase the effectiveness of the implementation of the projects of the “Belt and Road” initiative by expanding the opportunities for information exchange among the countries-participants. Thus, in the Chinese city of Xi'an, Shaanxi Province, the Consortium for Broadcasting of the countries of the “Silk Road” has been established. According to the constituent documents, the Consortium is a public organization and unites 27 Chinese and 10 foreign broadcasting and television stations. It is planned to create a platform for communication and information exchange, and to prepare joint programs on important issues related to the activities of the “Belt and Road”.

The implementation of joint projects to develop the infrastructure of transport communications between Europe and China continues as well. In particular, last week the government of Kazakhstan decided to join the transit corridor “Western Europe — Western China”. Within three years, it is planned to reconstruct roads in the East Kazakhstan region on the following directions: Almaty — Ust-Kamenogorsk and Omsk — Maikapchagai. The work will be carried out at the expense of the China's Eximbank. Within the framework of the project it is also planned to develop Kazakhstan's regions adjacent to this highway.

Kazakhstan’ section of the transit corridor “Western Europe — Western China”
Kazakhstan’ section of the transit corridor “Western Europe — Western China”

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

3.1. Politics. Development of China's International Cooperation

2017 BRICS Friendship Cities and Local Governments Cooperation Forum
2017 BRICS Friendship Cities and Local Governments Cooperation Forum

Along with the USA and the EU, one of the priorities of China's foreign policy is to strengthen ties with the countries of the BRICS group, including at the regional level. Thus, on 11–13 July 2017, “2017 BRICS Friendship Cities and Local Governments Cooperation Forum” was held in the Chinese city of Chengdu, Sichuan Province. As a result of the forum, the “Chengdu Initiative” was adopted, which provides for creation of more flexible mechanisms for international contacts in the humanitarian, trade, economic, scientific, technology and tourism spheres.


At the same time, China's relations with other leading countries continue to develop. July 13, 2017, in Beijing, President Xi Jinping met with Governor General of Canada John David Johnston. During the talks, they pointed out common interests between the two countries, that create the basis for building relations of strategic partnership between them. In this regard, an agreement was reached to speed up the work on the preparation of an agreement on the establishment of the Sino-Canadian Free Trade Area. Besides, the parties agreed on deepening cooperation in resolving world and regional problems, and on intensification of exchanges in the spheres of education, culture and sport.


Chairman of the Standing Committee of the National People's Congress of the PRC Zhang Dejiang with Portuguese President Marcelo Rebelo de Sousa, July 12, 2017
Chairman of the Standing Committee of the National People's Congress of the PRC Zhang Dejiang with Portuguese President Marcelo Rebelo de Sousa,
July 12, 2017

Interparliamentary contacts between the PRC and partner countries also continue. July 10–12, 2017, Zhang Dejiang, Chairman of the Standing Committee of the National People's Congress of the PRC, paid an official visit to Portugal. While in Lisbon, he met with President of Portugal Marcelo Rebelo de Sousa, the Prime Minister of the country Antonio Costa and the President of the Assembly of the Republic Eduardo Ferro Rodríguez. During the talks, the sides stressed the importance of intensifying the Sino-Portuguese dialogue in the context of strengthening cooperation between China and the European Union.

Zhang Dejiang emphasized the importance of Portugal as the final destination of the “Belt and Road” on the Atlantic coast. With this in mind, the Chairman of the NPC Standing Committee announced the PRC's intention to increase the investments into the Portuguese economy. In turn, the leadership of Portugal guaranteed the support for the work of the Chinese business on the Portuguese territory, including through the adoption of relevant laws by the country's Parliament.

Against this background, quite illustrative was the opening on 11 July 2017 of the first direct flight between Portugal and China on the Lisbon-Beijing-Hangzhou route. According to statistics, an average of about 200,000 Chinese citizens visit Portugal annually.


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

China's Foreign Trade
China's Foreign Trade

The PRC's economy continues to show stable trends of positive development. Thus, according to the China Customs statistics, in the first half of 2017 China’s exports increased by 15 %, imports increased by 25.7 %. The consequence of this was also the increase in financial revenues to the state budget of the PRC. According to the Ministry of Finance of China, in June this year, the budget received 1.7 trillion Yuan (251.8 billion US dollars), which is 8.9 % more than in June 2016.

Besides, the volumes of investments into the Chinese economy are also growing. In June 2017, foreign direct investments into enterprises of the Chinese mainland amounted to 14.82 billion US dollars, which is by 2.3 % more than in June last year. During the same period, loans issued in national currency amounted to 7.97 trillion Yuan, which is 436.3 billion Yuan more than in the first half of 2016.

Chinese President Xi Jinping addresses the National Financial Work Conference in Beijing
Chinese President Xi Jinping addresses the National Financial Work Conference in Beijing

In order to consolidate these trends, the PRC's government continues to take measures to support business activity in the country. July 12, 2017, the State Council of the People's Republic of China adopted a directive containing a list of activities aimed at promoting the growth of mass entrepreneurship to ensure the country's innovative development. Among other things, it is planned to take measures to improve management practices, to eliminate bureaucratic barriers, and to allocate additional funds to support businessmen.

At the same time, the PRC's leadership is paying special attention to improving the work of the country's financial system. This issue was discussed during a National Financial Work Conference in Beijing on 14–15 July 2017, with the participation of President Xi Jinping. The leader of the PRC pointed out the key importance of the stability of the work of financial bodies as the basis of the country's social and economic development, and also set tasks to improve the efficiency of financial support for the Chinese economy, prevent financial risks, and conduct financial reforms. In order to resolve these problems, it is planned to carry out a set of measures to improve financial regulation, financial markets, the rule of law in the financial sphere and to speed up the transformation of the financial development model.


3.3. Security and Law Enforcement Agencies

The main source of instability in the Asia-Pacific region remains the worsening of problems around North Korea's nuclear missile program. Thus, in response to the next series of missile launches in the DPRK, the United States and South Korea conducted a joint exercise of the air forces of the two countries with the involvement of the US B-1B Lancer strategic bombers. Besides, the United States prepared a draft resolution of the UN Security Council to tighten sanctions against the DPRK for missile testing. The text of the resolution was submitted for considering and approving by the members of the UN Security Council.

On July 10, Chinese Ambassador Cui Tiankai attended the 7th US-China Civil Strategic Dialogue
On July 10, Chinese Ambassador Cui Tiankai attended the 7th US-China Civil Strategic Dialogue

For its part, China continues to advocate for a peaceful solution of the situation around the Korean Peninsula. This position of the PRC was confirmed by the Chinese Ambassador to the US Cui Tiankai during the 7th US-China Civil Strategic Dialogue on 10 July, 2017. According to him, China and the United States have common goals to prevent North Korea's creation of nuclear weapons. However, the PRC does not support the USA's methods of putting force pressure on the DPRK.

At the same time, as the tension in the APR grows, China maintains a high level of its own military activity in the region. In particular, last week in the South China Sea and in the western part of the Pacific Ocean a large-scale exercise was conducted by the PLA Air Force with mastering the Chinese aviation's actions in remote maritime zones. In the exercise were involved fighters and bombers (including strategic Xian H-6K), as well as aircrafts of airborne early warning and control. According to the PLA leadership, the exercise confirmed the high level of readiness of the Air Force of the country, as well as its ability to ensure China's security in remote zones.

China is also expanding its military presence in important regions of the world. July 12, 2017, China’s PLA logistics base in Djibouti in the area of the Horn of Africa was officially opened. The task of the base is to provide logistics for Chinese military units involved in escorting ships on ocean routes past East Africa, as well as in peacekeeping and humanitarian missions in Africa. The decision to create the base was made on the basis of an agreement between the governments of the PRC and Djibouti.

China’s PLA logistics base in Djibouti
China’s PLA logistics base in Djibouti

3.4. Science and Technology

China is leading in the world wind energy production
China is leading in the world wind energy production

The PRC's government pays special attention to the development of alternative energy technologies, aiming at reducing the country's dependence on energy carriers imports and the negative consequences of the use of hydrocarbons for the global ecology. According to international experts, to date, China has already reached the first place in the world for the production of such energy and in fact has overcome the United States. In particular, in 2016, China accounted for 40 % of the global increase in the production of alternative energy, including 100 % — the increase in nuclear power. Due to this, China for the second year in a row keeps reducing the amount of greenhouse gas emissions.

At the same time, the PRC continues to implement a wide range of space programs. Since 2018, China is planning to provide commercial launch services for space vehicles (SV) from the offshore platform. Such a platform will be created on the basis of a cargo ship with the possibility of launching missiles of the “Chang Zheng” (”Long March”) type. The creation of a floating spaceport will allow launching missiles from the equatorial zone, which will reduce the cost of bringing the spacecraft into the Earth's orbit. To date, China has already committed more than 60 commercial launches of space crafts on the orders of other countries, including the use of rockets of the “Chang Zheng” type, which, according to independent experts, are among the most reliable in the world.

Besides, the leadership of the PRC pays special attention to conducting ocean scientific research. July 12, 2017, with participation of the research vessel “Xiang Yang Hong-03”, the 45th Chinese ocean scientific expedition started. During the expedition it is planned to conduct research in nine topics, including the study of natural resources on the shelves of the seas and oceans, as well as deep-water environment. The expedition was organized by the State Oceanic Administration, and the scientific research staff mainly come from the Institute of Oceanography, Guangzhou Marine Geological Survey, and the Institute of Geochemistry of the Chinese Academy of Sciences.


IV. Plans and prospects for cooperation between China and Ukraine

One of the main spheres of cooperation between China and Ukraine is investment activity. In particular, the plans for such activities were considered during the meeting of the First Vice Prime Minister / Minister of Economic Development and Trade of Ukraine Stepan Kubiv with the delegation of the Export-Import Bank of China on 12 July, 2017.

Meeting at the Ministry of Energy and Coal Industry of Ukraine with the representatives of the Chinese “TBEA International Ltd” company
Meeting at the Ministry of Energy and Coal Industry of Ukraine with the representatives of the Chinese
“TBEA International Ltd” company

The main attention of the parties was paid to the projects of organization of the railway communication between Kyiv and the airport “Boryspil” (“Air Express”), construction of the M-22 road “Poltava-Alexandria” (on the section of by-passing the city of Kremenchug) with a bridge across the Dnipro, and development of the infrastructure for transportation and storing the grain.

July 13, 2017, Deputy Minister of Energy and Coal Industry of Ukraine N. Boyko and representatives of the Chinese company “TBEA International Ltd” discussed the issues of joint implementation of the project for the construction of a 500 MW wind farm in Mykolayiv region. The project is part of the state program to increase the share of renewable energy in the energy balance of Ukraine. Within the framework of the project, it is planned to create about a thousand jobs at the stage of construction of the power plant and a hundred for its maintenance.