September 26, 2017

China (中国) Today

Events Review (18.09–24.09.2017)


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

Last week, there continued the work of the 72nd Session of the UN General Assembly, which China uses as an important platform for demonstrating and advancing its strategic interests. First of all, it supports globalization of the world economy as one of the main mechanisms for spreading China's influence in the world.

Thus, the issues of integrating the economies of the countries of different regions were touched upon by the Minister of Foreign Affairs of the People's Republic of China, Wang Yi, in his speech at the UN General Assembly, and at other events held under his chairmanship. The main of them were as follows: an informal meeting of the Foreign Ministers of member countries of the Conference on Interaction and Confidence Building Measures in Asia (CICA); political consultation between Chinese and African Foreign Ministers; a meeting of the Foreign Ministers of the Shanghai Cooperation Organization (SCO) member countries and the BRICS Group.

On the sidelines of the session, Wang Yi had bilateral meetings with UN Secretary General A. Guterres, Chairman of the 72nd Session of the UN General Assembly, M. Lajčák, US Vice-President M. Pence, Foreign Ministers of Russia, Great Britain, France, Germany, Japan, South Korea, Indonesia, Venezuela, Ecuador, Cyprus and other countries. They discussed cooperation between the PRC and the UN, ways and prospects for the development of China's cooperation with the above-mentioned countries.

During the negotiations with Wang Yi, A. Guterres expressed the UN's support to President of China Xi Jinping's initiatives to create a community with “common destiny for all mankind”, to form an open world economy and deepen the processes of economic globalization. For his part, Wang Yi stressed that Beijing is ready to strengthen cooperation with the United Nations on the basis of common approaches, consistently uphold the goals and principles of the Charter of the United Nations, increase contributions to the UN programs, enhance the effectiveness of peacekeeping activities and more actively confront world challenges. At this, Wang Yi emphasized the importance of the issues on the agenda of the 72nd Session of the UN General Assembly, first of all in determining the ways of global world development until 2030.

As part of the practical implementation of such approaches, September 22, 2017, the Memorandum of Understanding on the Belt and Road Initiative between the Ministry of Foreign Affairs of the PRC and the UN Department of Economic and Social Affairs (UNDESA) was signed at the UN headquarters.

Against this background, the meeting between Wang Yi and Minister of Foreign Affairs of Ukraine P. Klimkin was indicative. The Foreign Ministers discussed the results of the meeting between the Presidents of Ukraine and the PRC in Davos in January of this year, the date and agenda of the 3rd meeting of the Commission for Cooperation between the Governments of Ukraine and the PRC, the prospects for expanding trade and economic cooperation between the two countries and the directions of their interaction within the framework of international organizations, first of all the UN Security Council. The initiative of the President of Ukraine on the deployment of the UN peacekeeping operation in the Donbas was also considered. According to Wang Yi, Ukraine is China's partner, interested in deepening bilateral relations, including within the framework of “The Belt and Road” initiative.


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

The leadership of the People's Republic of China is taking measures to develop mechanisms for the activities of the “Belt and Road”. For example, networks of payment systems are being created, which should cover all countries participating in the Chinese initiative. At the moment, China has already concluded agreements on cooperation in this sphere with more than 340 organizations from the participating countries. At this, the Chinese payment system “China UnionPay” operates in about 50 countries, and the total number of bank cards of this system has exceeded 25 million units.

The Chinese government pays much attention to unifying the information spheres of “The Belt and Road” participants. Last week, in the Chinese city of Dunhuang (Gansu Province, northwest China), the “2017 Media Cooperation Forum on Belt and Road” was held with the participation of representatives of more than 300 media from 126 countries. At the Forum, at the initiative of the Chinese media holding “People's Daily” (Renmin Ribao), a project was launched to create a center to strengthen interaction among local and international media within the framework of “The Belt and Road”. The “People's Daily” holding announced plans to promote media cooperation along the “Belt and Road”, which include the publication of the Blue Book on Media Cooperation, establishment of an International Study Center and opening of a Media Cooperation Center, formation of a Cross-border Joint Reporting Project, and publication of a collection of works on the “Silk Road”.

Measures are being taken to attract countries from other regions to the “Silk Road”. September 18, 2017, an international conference “The Black Sea Regional Dimension of the One Belt, One Road Initiative” was held in Bulgaria, where the Chinese Ambassador to Bulgaria Zhang Haizhou spoke on the importance of the Black Sea region and its role in the development of transport communications between Europe and the Asia-Pacific Region.

According to the Chinese representative, the activation of the integration of the countries of the region into the space of “The Belt and Road” meets the interests of all interested parties. Deputy Minister of Foreign Affairs of Bulgaria G. Georgiev emphasized the economic consequences of expanding the participation of Black Sea countries in “The Belt and Road” projects. In his opinion, this will help to increase the openness of their economies, wider accession to the world economic system and the growth of the volume of foreign investments.

”The Belt and Road” positively influences the development of the interior regions of the PRC. Thus, thanks to the participation of the central Chinese province of Sichuan in the projects of “The Belt and Road”, within the past five years, foreign investments into its economy have exceeded 5 trillion Yuan. To date, in the countries of “The Belt and Road” there are 250 enterprises with capital from Sichuan, and 935 joint ventures have been opened on its territory with a total investment volume of over 7 billion US dollars.


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

3.1. Politics. Development of China's International Cooperation

Against the background of China's participation in the 72nd Session of the UN General Assembly, the development of the country's international cooperation in bilateral formats continues. September 18, 2017, the leaders of the People's Republic of China and the United States discussed in a telephone mode the details of D. Trump's visit to China planned for the end of this year. They pointed out a wide range of common interests of the two countries in different spheres. The parties also agreed that the forthcoming visit of the US President to the PRC is fundamentally important, as it will become a catalyst in the activation of Sino-US relations.

Besides, on 20 September 2017, Xi Jinping met in Beijing with the Prime Minister of Singapore Lee Hsien Loong, who arrived in China on an official visit. During the talks, they shared the commonness in seeing many issues related to economic globalization, trade liberalization and simplification of investment activity, an agreement was reached on coordinating the development strategies of both countries. At this, the priority of bilateral cooperation was called the expansion of Singapore's participation in the projects of “The Belt and Road”.


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

A special place in the development of China's economy is given to the country's energy supply, which is carried out both on its own and by deepening international cooperation in this area. September 18, 2017, the 1st International Petroleum and Natural Gas Enterprises Conference was held in Hangzhou (Zhejiang Province, eastern China), in which representatives of leading energy companies (in particular Chevron, DuPont, BP, Statoil and Sinopec) from more than 40 countries (in particular, from the USA, Russia, Saudi Arabia and Venezuela) took part. As a result of the Conference, contracts were concluded for the implementation of more than 20 projects for a total of 8.7 billion US dollars, including in production, transportation, storage and refining of petroleum products.

On the 20th of September 2017, Beijing hosted the 14th meeting of the China-Russia Commission on Energy Cooperation, headed by the member of the Politburo of the CPC Central Committee, Vice Premier of the State Council Zhang Gaoli and Deputy Prime Minister of Russia A. Dvorkovich. The sides discussed plans to deepen cooperation between the two countries in the oil, gas and coal industries, as well as in nuclear energy and using new energy sources. All in all, about ten energy projects were considered.

The development of cooperation ties between China and other countries in the aviation sphere also continues. September 20, 2017, “Airbus” corporation inaugurated its A330 Completion and Delivery Center (C&DC) in Tianjin — the first outside Europe center for assembling and production of wide-bodied A330 airplanes. At the moment, narrow-body aircrafts A319 and A320 are already produced in Tianjin.

Last week, the Chinese company “AECC Commercial Aircraft Engine Co., Ltd.” (AECC CAE) signed a memorandum with the Russian “United Engine Building Corporation” on cooperation in creating a gas turbine engine for the Chinese-Russian wide-body long-range aircraft. China and Russia intend to implement plans to create such an aircraft by 2025–2027. It is assumed that a new aircraft with a capacity of 250–300 passengers will compete with planes of other leading aircraft manufacturers — “Airbus” and “Boeing” and will cover a large part of the market not only in China and Russia, but also in other countries. The cost of the program is estimated at 13–20 billion US dollars.


3.3. Security and Law Enforcement Agencies

The situation around the Korean Peninsula. The theme of North Korea was one of the issues touched upon by the participants of the 72nd Session of the UN General Assembly. US President D. Trump, in his speech at the Session, stated that if Pyongyang continued to threaten the United States of America, then they would have no choice but to destroy North Korea. At this, he expressed the hope that this would not happen. In this regard, D. Trump called on Pyongyang to understand that giving up nuclear weapons is the only acceptable future for the DPRK.

D. Trump's speech was perceived by the leader of the DPRK Kim Jong-un as “the actual declaration of war to North Korea”. At this, he voiced a number of rude remarks about D. Trump, and also warned of Pyongyang's intentions to “resolutely answer at the highest level”.

Political statements by the United States and North Korea are accompanied by measures for mutual pressure and demonstration of force. In particular, on 21 September, 2017, President Trump issued a new Executive Order imposing additional sanctions with respect to North Korea, which allows to toughen sanctions against the persons and companies having trade connections with DPRK. According to him, this will cut off “sources of revenue that fund North Korea's efforts to develop the deadliest weapons”.

Last week, another joint exercise of the Air Forces of the USA and South Korea took place with the participation of two US B-1B strategic bombers and four fifth-generation F-35B fighters and South Korean F-15K fighters. At this, a group of B-1B bombers escorted by fighters flew over neutral waters along the coast of the DPRK.

For his part, commenting on Kim Jong-un's statement on the “US response”, North Korean Foreign Minister Ri Yong-ho did not rule out the possibility of North Korea's testing the hydrogen bomb in the Pacific and voiced yet another threat that North Korea could carry out a missile strike against the United States.

China is also increasing its pressure on North Korea. Thus, within the framework of the implementation of the UN Security Council's resolution of September 12, the Chinese authorities completely gave up importing textile products from the DPRK and limited the supply of oil products to it. Sanctions will be in force from October 1 this year. Until now, China has been buying about 80 % of North Korean textiles, which was an important source of hard currency for it. In turn, as a result of international restrictions on the supply of petroleum products to the DPRK, gasoline prices in the country have already grown by 20 %.

As for Russia, against this background it takes a double position in relation to North Korea. On the one hand, Moscow condemns its nuclear missile tests, and on the other hand it continues active cooperation with it in the trade and economic sphere. In particular, eight tankers with oil were sent from ports Vladivostok and Nakhodka last week to North Korea. At this, the officially registered destination of the cargo was China.


Activities of the PRC's Armed Forces. Last week, the second stage of joint exercises of the Chinese and Russian Navy “Marine Interaction 2017” was held. From the Chinese side, the guided-missile destroyer “Shijiazhuang”, the guided-missile frigate “Daqing”, the comprehensive supply ship “Dongpinghu”, the submarine rescue ship “Changdao” with the deep-water vehicle, two decked helicopters and marines took part in the exercises; from the Russian side — a large anti-submarine ship “Admiral Tributs”, corvette “Perfect”, a rescue ship “Igor Belousov” with a deep-water vehicle, two decked helicopters and a marines division. They mastered joint rescue and anti-terrorist operations at sea.

Until September 27, 2017, in the territory of China, a 3-week joint Sino-Pakistani exercise of the Air Force of the two countries “Shaheen-6” is held. From China, J-11 fighters, JH-7 fighter-bombers, KJ-200 AWACS aircraft as well as ground forces, including air defense units, are participating in it. Pakistan sent to the exercise JF-17 Thunder fighter jets and early warning aircrafts. All in all, about 40 aircrafts were involved. They are mastering conducting air battles and striking at ground targets. According to some estimates, the political goal of the exercise is to demonstrate to India the common positions of China and Pakistan in the military sphere.


3.4. Science and Technology

One of the leading high-tech industries in China is nuclear power. For example, the State Nuclear Power Technology Corporation (SNPTC) has developed the first in the country system for controlling nuclear reactors of the type SAR-1400. Today, China is the fourth country in the world capable of producing systems that can stop reactors in earthquakes, tsunamis and other emergencies. The system received licenses from the National Nuclear Safety Administration of the PRC and the US Nuclear Regulatory Commission, which allows China to supply it to the world market.

China has notable achievements in the exploration and production of shale gas. According to the Ministry of Land and Resources of the People's Republic of China, in 2016 production of this type of energy in the country reached 7.882 billion cubic meters. By this indicator, China ranks third in the world, behind only the USA and Canada. According to China's Ministry of Land and Resources' estimates, today the country's shale gas reserves suitable for development exceed 20 trillion cubic meters. The explored geological reserves are about 1 trillion cubic meters. Proceeding from the available technical opportunities, by 2030 the volume of shale gas production in the PRC is expected to be 80–100 billion cubic meters per year.

China also continues implementation of large-scale space programs. September 19–22 in Beijing was held the 3rd Beijing International Forum on Lunar and Deep-space Exploration (LDSE 2017), where China announced its intention to launch a spacecraft into the orbit of Mars in 2020. At this, a self-propelled automatic device will be landed on the surface of the planet.

The PRC's government pays special attention to the country's transport industry, in particular, to the development of the railway communication. China's achievements in this sphere already allow high-speed trains to compete effectively with civil aviation. According to experts of the largest air companies of the country (“Air China”, “China Southern Airlines” and “China Eastern Airlines”), within the next five years, civil aviation in China will face serious challenges from the railway transport. The reasons are as follows: the increase in the speed of trains and the range of traffic (from 800 to 1000 km), lesser dependence of the railway's work on weather conditions and low transportation costs.

Besides, urban rail services continue to be modernized with the use of the latest technology. By the end of this year, the first stage of the S1 magnetic railway line with a total length of 10.2 km is planned to be commissioned in Beijing. Ten trains will run on the line, carrying up to 1,000 passengers each at a speed of 80 km/h. Compared with the existing metro trains and light rail trains, the trains on the magnetic levitation are safer and cheaper.


ІV. Plans and Prospects for Cooperation between China and Ukraine

Ukraine and China are actively developing cooperation in the industrial, energy, agricultural and humanitarian spheres. Thus, the Ukrainian company “Motor Sich” together with Chongqing “Tianjiao” Aerospace Engine Company took part in the “Aviation Expo China 2017”, which opened on September 19, 2017 in Beijing. Six aircraft engines of joint development and production were presented. Taking into account what has been achieved, at the next stage of cooperation between Ukrainian and Chinese companies, it is planned to organize the assembly of AI-322-25 turbofan engine in China for the PLA Air Force’ L-15 training and combat aircraft. This aircraft is designed to train pilots of third-fourth generation aircraft.

September 18, 2017, Deputy Minister of Energy and Coal Industry of Ukraine N. Boyko had a meeting with the leadership of the China Atomic Energy Authority. The parties discussed the expansion of cooperation between Ukraine and China in the atomic industry complex. In this regard, was stressed the importance of the Memorandum of Cooperation signed between the Ministry of Energy and Coal Industry of Ukraine and the “China National Nuclear Corporation” (October 2016), which contributes to the implementation of joint projects for the extraction of uranium and production of nuclear fuel. Proceeding from the above-mentioned, an agreement was reached on further cooperation between the companies of the atomic industry complex of Ukraine and the PRC in the above-mentioned spheres.

In September of this year, the Ministry of Agrarian Policy of Ukraine and the General Administration of Quality Supervision, Inspection and Quarantine of China signed the protocols of sanitary and phyto-sanitary requirements for export of sunflower meal and beet pulp to China. Commenting on this fact, Deputy Minister of Agrarian Policy and Food O. Trofimtseva pointed out the importance of China as Ukraine's strategic partner in the agricultural sector. This year, thanks to active cooperation between the two countries, Ukrainian producers have the right to export frozen beef to the Chinese market. In addition, nine Ukrainian enterprises producing dairy products have the right to supply their products to the People's Republic of China.

The relations between Ukraine and China in the humanitarian sphere are also deepening. September 18, 2017, during the 7th International Forum “Kyiv Media Week” a framework agreement was signed on cooperation between the parties in the production and distribution of film and television programs. The agreement provides for the broadcasting of Chinese films on Ukrainian television and provides the basis for joint production of television programs.