October 2, 2017

China (中国) Today

Events Review (25.09–01.10.2017)

 

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

The main event in China was celebration of a great national holiday, the Day of Founding of the People’s Republic of China, which has been marked since October 1, 1949. The larger-scale ceremonies — raising of the state flag of the country, laying of flowers to the monument to the fallen heroes, took place in Beijing with the participation of more than 100 thousand people. The day before — September 30, the State Council of the PRC held a solemn reception on the occasion of the 68th anniversary of the founding of the People's Republic of China. The event was attended by Chinese President Xi Jinping, Prime Minister Lee Keqiang, other representatives of the country's leadership and foreign guests.

Speaking at the event, Xi Jinping emphasized China's significant success in building “socialism with Chinese specificity”. First of all, in this regard he pointed out the transformation of the People's Republic of China into one of the most powerful countries in the world, which created preconditions for solving socio-economic problems of the country, as well as its coming to the leading edge of science and technology. Taking into consideration the above-mentioned, Xi Jinping expressed the Chinese government's plans to continue the active development of the People's Republic of China through more active use of domestic resources, as well as the increased openness of the economy and the expansion of ties with China's partners.

Reception held by the State Council to celebrate the 68th anniversary of the founding of the People's Republic of China
Reception held by the State Council to celebrate the 68th anniversary
of the founding of the People's Republic of China

Besides, Xi Jinping emphasized the importance of the 19th Congress of the Communist Party of China, which will begin on 18 October, 2017. According to the President of the PRC, the Congress will be held in the key period of the comprehensive formation of the middle class society and socialist development of the country.

 

Solemn receptions on the occasion of the 68th anniversary of the founding of the People's Republic of China were also organized by Chinese embassies in other countries, including Ukraine. Thus, the reception at the PRC's Diplomatic Mission in Kyiv was attended by more than 500 people (diplomats, politicians, cultural figures and businessmen working with China). Among the honorable guests were invited former presidents of Ukraine L. Kravchuk and V. Yushchenko. The Ukrainian government's greetings to the Chinese people on the occasion of the holiday were expressed by Minister of Culture Ye. Nishchuk. In his speech he emphasized the importance of the meeting of the leaders of Ukraine and the PRC in Davos in January 2017 which laid the foundation for the intensification of relations between the two countries.

Ambassador Extraordinary and Plenipotentiary of the PRC to Ukraine Du Wei
Ambassador Extraordinary and Plenipotentiary of the PRC to Ukraine Du Wei

In his turn, Ambassador Extraordinary and Plenipotentiary of the PRC to Ukraine Du Wei stressed the successes of his country in conducting economic and social reforms, which allowed to ensure China's stable growth. As pointed out by Du Wei, China has lifted out of poverty 790 million people and has unprecedented economic growth — an average of 10 % per year, which has made it a powerful state. At this, in its modern history China has never used war, expansion, and seizure of foreign lands to reach the level of the second by its potential leader of the world.

Du Wei emphasized a theme of the Chinese initiative “The Belt and Road”, which was called the most important tool for realizing the common interests of its participants. In particular, Ukraine's participation in the “Belt and Road” projects has already allowed to increase the volume of foreign investment in the Ukrainian economy. At the same time, Ukrainian agrarian products are steadily proceeding to the Chinese market.

 

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

The development of the strategic initiative “The Belt and Road” is consistently used by the People's Republic of China as one of the most effective mechanisms for strengthening the Chinese influence in different regions of the world and international organizations. In particular, last week the city of Xi'an (Shaanxi Province) hosted the 2017 Euro-Asia Economic Forum: a Combination of Development Strategies, the Joint Construction of the Belt and the Road. (This forum is a mechanism for economic cooperation within the framework of the SCO and is held biennially).

“2017 Euro-Asia Economic Forum” in Xi’an
“2017 Euro-Asia Economic Forum” in Xi’an

The event was attended by representatives of SCO member states and of other countries and regions, including government officials, diplomats and scientists. The ways and spheres of cooperation in the fields of industrial production, agriculture, investment, science, education, medicine and metrology were discussed. According to Deputy Prime Minister of the State Council of the PRC, Wang Yang, Beijing intends to combine “The Belt and Road” initiative with Eurasian countries' development strategies. In this regard, Wang Yang stressed the need to deepen comprehensive cooperation in the region, as well as to overcome restrictive factors in international trade. China will continue to implement support programs for such cooperation through its financial institutions, in particular through the Silk Road Foundation and the Asian Infrastructure Investment Bank (AIIB).

The forum resulted in a number of agreements signed on cooperation in technology transfer, training personnel, mining and geologic exploration, creation of joint business centers.

Besides, October 1, 2017, a Joint Statement was signed on the completion of negotiations between the People's Republic of China and the Eurasian Economic Union (EAEU, Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan) on trade and economic cooperation. It is the first systematic agreement between China and the Eurasian Economic Union. According to leading experts, the signing of the agreement will be important for the PRC and the member countries of the EAEU and will contribute to the deepening the Eurasian Economic Union's integration into “The Belt and Road”.

October 1, 2017, a Joint Statement was signed on the completion of negotiations between the PRC and the EAEU
October 1, 2017, a Joint Statement was signed
on the completion of negotiations between the PRC and the EAEU

As part of the implementation of the “Belt and Road” projects, bilateral ties between the PRC and the countries of the former USSR, including Russia's partners in the Eurasian Economic Union, are deepening. As stated by the head of the Armenian government K. Karapetyan in his interview with the media, Armenia can become one of the constituent transport corridors within “The Belt and Road”. In particular, it concerns railways and motorways connecting the Black Sea and Caspian regions through Georgia, Armenia and Iran. In this regard, he pointed out the importance of proper implementation of the agreement between the Chinese “Sinohydro” Corporation and the Ministry of Transport and Communications of Armenia on cooperation in modernizing the Armenian sections of these routes, which was concluded in 2015.

 

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

3.1. Politics. Development of China's International Cooperation

The main priority in the development of bilateral relations between the People's Republic of China and other countries is building a strategic partnership with the United States. September 30, 2017, a meeting between Chinese President Xi Jinping and US Secretary of State R. Tillerson took place in Beijing. They discussed the subject matter of US President D.Tramp's visit to China, scheduled for November this year. According to Xi Jinping, the visit is of greatest importance for the PRC and will be a key event in the development of Sino-US relations. In this regard, Chinese President stressed the positive character of the relationship between China and the United States as the largest countries in the world, based on respect for each other's interests, mutual benefits and compromises in addressing existing problems.

A meeting between Chinese President Xi Jinping and US Secretary of State R. Tillerson
A meeting between Chinese President Xi Jinping and
US Secretary of State R. Tillerson

For his own part, R. Tillerson also attached importance to the visit of D. Trump to the PRC, during which it is planned to continue the dialogue at the highest level. At this, R. Tillerson confirmed the United States' intentions to strengthen mutual trust with the People's Republic of China, to intensify contacts in different spheres, as well as together to withstand global and regional challenges.

At the same time, on 28 September 2017, the inaugural U.S.-China Social and Cultural Dialogue was held in Washington, DC, under the joint chairmanship of Vice Premier of the State Council of the People's Republic of China Liu Yandong and US Secretary of State R. Tillerson. The parties considered the issues of humanitarian exchanges between the two countries. According to Liu Yandong, Sino-US cooperation in the social and humanitarian spheres has great prospects, despite the different cultures of the two countries. In particular, this concerns the possibility of intensifying humanitarian exchanges both at the state level and through non-governmental organizations. In turn, this will contribute to the development of Sino-American ties in other spheres, including trade, economics, science and technology.

Co-chairpersons of the inaugural U.S.-China Social and Cultural Dialogue
Co-chairpersons of the inaugural U.S.-China Social and Cultural Dialogue

The development of partner relations between the People's Republic of China and the leading European countries continues. In particular, on 25 September 2017 President of China Xi Jinping and UK Prime Minister T. May discussed the prospects for deepening cooperation between the two countries in the context of the Chinese interests in the European region. At this, they pointed out the importance of Great Britain as one of the channels for bringing Chinese goods, services and investments into the European market.

 

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

Leading international institutions in the financial and economic sphere demonstrate the immutability of their estimates of China's positive economic growth. According to the Asian Development Bank, in 2017 the GDP growth of the PRC will be 6.7 %, and in 2018 — 6.4 %. The main factors contributing to the strengthening of the Chinese economy are the high levels of external and domestic demand for Chinese products, effectiveness of economic reforms, balance of state and market methods of managing economic processes, and the active fiscal policy.

Thus, during the first half of 2017 China's GDP grew by 6.9 %. At the same time, there increased the role and significance of the new innovative sectors of the country's economy, as well as the volume of consumption and services. According to leading experts, these factors will remain key drivers of China's economic development against the background of growing Chinese incomes.

Estimates of the China’s GDP growth by the Asian Development Bank
Estimates of the China’s GDP growth by the Asian Development Bank

At the same time, the leadership of China admits that there are problems in the country, in particular in the investment sphere. In this regard, Wang Yang, Vice Prime Minister of the People's Republic of China, in his interview with the media, stressed the need to step up efforts to create a more open, fair and transparent business environment, as well as to attract foreign capital. According to him, China will continue the policy of reducing the restrictions on access to foreign investment in the Chinese market and improving the conditions for foreign companies' work in the country.

In particular, to this end, the Beijing municipal government plans to ease restrictions on the access of foreign capital to the city market. First of all, this will concern radio and television, cinema, corporate governance services, as well as legal services and advocation. Today, pilot projects in Beijing's service industry with the participation of foreign capital have already begun in six spheres, namely: science and technology; internet and information; culture and education; finance; trade and tourism, as well as health care.

Besides, the State Council of the People's Republic of China has decided to release financial institutions from paying taxes on added value from income from interest on lends for small and micro enterprises, as well as individual businesses.

 

3.3. Security and Law Enforcement Agencies

The situation around the Korean Peninsula. The world community is deeply concerned about the DPRK's nuclear-missile activities. According to Director General of the International Atomic Energy Agency (IAEA), Yukiya Amano, the nuclear tests carried out by North Korea are a new global threat to all mankind. In this regard, he stressed the need for the efforts of all countries to counteract such a threat.

In his turn, US President, D. Trump, on the 27th of September 2017 expressed the United States' readiness to inflict a “devastating blow” on North Korea if it threatens US security. However, D. Trump gave priority to other methods of influencing the DPRK, namely — by further toughening political and economic sanctions against it.

In this regard, on September 26, 2017, the US Department of the Treasury announced the imposition of sanctions against eight banks and 26 citizens of the DPRK involved in the implementation of its nuclear-missile program. All of their assets located in the United States are “frozen”.

Meanwhile, the United States continues to strengthen its military presence in the Korean Peninsula. According to the results of the meeting between the US President D. Trump and President of South Korea Moon Jae-in on September 21, in New York, an agreement was reached on the deployment of US strategic forces in South Korea.

A meeting between the US President D. Trump and President of South Korea Moon Jae-in
A meeting between the US President D. Trump and
President of South Korea Moon Jae-in

Besides, in October this year it is planned to send to the area of the Korean Peninsula the carrier strike group (CSG) of the US Navy headed by the aircraft carrier “Ronald Reagan”, which will take part in joint exercises with the South Korean Navy. The CSG will include a cruiser and destroyers equipped with “Aegis” missile systems and a nuclear submarine.

 

China also intensifies pressure on North Korea. According to the decision of the UN Security Council of September 11, 2017, China closes all North Korean companies operating in the Chinese territory. Earlier, China already decided to stop supplying gas and restrict supplies of crude oil to the DPRK from January 1, 2018.

 

Activities of the People's Liberation Army. China continues active international military cooperation. September 25–30, 2017, the 26th Escort Fleet of the PLA Navy paid a friendly visit to the city of Copenhagen (Denmark). The Fleet comprised the guided-missile frigates “Huanggang” and “Yangzhou”, and the supply ship “Gaoyouhu”.

The rearming of the Chinese People's Liberation Army with new types of weapons and military equipment continues. In particular, in September 2017, the latest “Chengdu J-20” fighter was adopted by the PLA Air Forces. It was developed according to the “Stealth” technology and is a 5th (according to the Chinese nomenclature — the 4th) generation medium- and long–range fighter. “Chengdu Aerospace Corporation” started development of J-20 in January 2002; the first test flight was carried out in 2011.

 

Along with this, China plays an active role in the struggle against international crime. On September 26–29, 2017, the 86th Session of the General Assembly of Interpol was held in Beijing. The opening speeches were made by Chinese President Xi Jinping and Secretary-General of Interpol Jürgen Stock. According to Xi Jinping, in the near future, the People's Republic of China is planning to open an international academy of law enforcement agencies to train specialists from developing countries. China will also strengthen its support for Interpol's international operations in the struggle against terrorism, cybercrime and new forms of organized crime.

Participants of the 86th Session of the General Assembly of Interpol in Beijing
Participants of the 86th Session of the General Assembly of Interpol in Beijing

3.4. Science and Technology

The People's Republic of China demonstrates significant progress in the development of high technology, in particular in the space exploration sphere. According to the State Administration for Science, Technology and Industry for National Defense of China (SASTIND), on the 25th of September they officially commissioned a new geostationary meteorological satellite of a new generation “FengYun-4A”. The technical characteristics of the device are at the world top level, including identification ability, accuracy of the binding of the coordinates of the observed objects, as well as the speed of information processing.

Besides, on September 29, 2017, the first group of Earth observation satellites “Yaogan-30” was successfully launched from the Xichang Satellite Launch Center in southwest China's Sichuan Province. The launch was carried on a “Long March-2C” rocket, which launched 3 satellites into the given orbit. The satellites and the carrier rocket were designed and manufactured by the Chinese Academy of Sciences' Small Satellite Center and the Chinese Academy of Launch Vehicle Technology. This is the 251st launch of the carrier rocket of the “Long March” series.

Launch of the “Long March-2C” rocket with “Yaogan-30” satellites from Sichan Cosmodrome
Launch of the “Long March-2C” rocket with “Yaogan-30” satellites
from Sichan Cosmodrome

At the same time, the PRC is implementing a large-scale shipbuilding program. In particular, the “Fujian Mawei Shipbuilding” shipyard in Fuzhou Province (south-eastern China), has completed the assembly of the world's first vessel for deep-sea mining, and has begun installing the on-board equipment. The length of the ship is 227 meters, the length is 40 meters, and the height is about 75 meters. The vessel is able to take on board up to 40 thousand tons of the bedrock, raised from the depth of 2,5 thousand meters.

Construction of the new icebreaker “Xue Long-2” of the ocean class has begun. According to the plan, the vessel will be launched before 2019. The main design of the icebreaker was made by a foreign company, but for details, working draft and construction technology the responsibility rests with the Chinese design institutes and shipbuilding enterprises. On September 12, 2017, the Polar Research Institute of China signed a contract to purchase an AW169 helicopter from the “Leonardo Helicopters”, which for the tasks of icebreaker’s route reconnaissance.

 

The People's Republic of China has important achievements in the field of telecommunications. September 29, 2017, the world's first 2000 kilometers long quantum communication line “Jing-Hu” was opened between Beijing and Shanghai. The line includes the cities of Jinan (Shandong Province) and Hefei (Anhui Province). The telecommunication line is connected through Beijing's station to the world's first quantum science satellite “Mozi” (“Micius”), launched by China in August 2016. Quantum communications can provide a high degree of data security and exclude the ability to listen, intercept or break the transmitted information.

The opening ceremony of the world's first 2000 kilometers long quantum communication line
The opening ceremony of the world's first 2000 kilometers long
quantum communication line

 

IV. Plans and Prospects for Cooperation between China and Ukraine

The development of cooperation between the PRC and Ukraine at the state level is accompanied by the Chinese businesses active coming to Ukrainian regions. In particular, on September 21, 2017, the Ukrainian-Chinese Business Forum was held at the Kharkiv Chamber of Commerce & Industry, with participation of the PRC's Embassy in Ukraine, China's Trade Association and representatives of the Chinese business circles. The participants discussed possible directions of cooperation between Kharkiv and Chinese companies in the fields of machine building, alternative energy, information technology, telecommunications and construction. Special attention was paid to the agricultural sector, as the main producer of the Ukrainian exports to the PRC.

Participants of the Ukrainian-Chinese Business Forum in Kharkiv
Participants of the Ukrainian-Chinese Business Forum in Kharkiv

In turn, on 26 September 2017, an agreement was signed on cooperation between Sumy National Agrarian University and the Chinese University of Science and Technology (Xinxiang, Henan Province). The agreement provides for the exchange of students, training of postgraduate students and internships. The Chinese side has made proposals to create a branch of the Sumy NAU in the PRC to jointly train specialists for the educational programs “Agrarian Management” and “Agroengineering”.

Besides, the implementation of joint transport and infrastructure projects continues. September 28, 2017, “Ukraine International Airlines” received an official permission for direct flights between Kyiv and the southern Chinese city of Guangzhou (Guangdong Province). The flight to Guangzhou will be the UIA's second route to China. Today, the airline operates direct flights Kiev-Beijing. The permit for operation of the new air route entered into force on October 1, 2017, but flights will begin during the summer navigation period of 2018. It is assumed that there will be 3 flights a week.

In early 2018, with the participation of “China Road and Bridge Corporation” (CRBC), it is planned to begin construction of a new highway connecting the ports of “Great Odesa” with the ports of Mykolaiv and Kherson. According to the signed agreement, the project will be financed jointly from the state budget of Ukraine and by the Chinese State Export-Import Bank. Approximate volume of Chinese investments — 100 million US dollars.