October 24, 2017

China (中国) Today

Events Review (16.10–22.10.2017)


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

October 18, 2017, the 19th National Congress of the Communist Party of China, which is the main event in the political life of the country over the past five years, began in Beijing. The agenda of the Congress includes the hearing and adoption of the report of the Central Committee of the CCP of the 18th convocation, the report of the CCP Central Commission for Discipline Inspection and amendments to the Statute of the CPC as well as the election of the CCP Central Committee and Central Commission for Discipline Inspection of the 19th convocation.

The Congress was opened by the President of the People's Republic of China, the CPC Secretary General Xi Jinping, who, on behalf of the Central Committee of the CPC of China, delivered a speech entitled “Secure a decisive victory in building a moderately prosperous society in all respects and strive for the great success of socialism with Chinese characteristics for a new era”. The report summed up the development of China since the previous party forum and set goals for the next period.

According to the Chinese leader, the 19th National Congress is extremely important and takes place at the crucial stage of building a moderately prosperous society and in the key moment of socialism with Chinese characteristics entering a new era. Based on this, implementation of further development plans of the People's Republic of China is envisaged, which include: in 2020–2035 — completion of socialist modernization and China's coming top the level of innovative countries; over the next 15 years — turning China into a rich and powerful, democratic and civilized, harmonious and modernized, socialist state of the world level. At the expense of the above-mentioned, the main historical goal of the revival of the Chinese nation will be achieved.

The 19th National Congress of the Communist Party of China The Secretary General of the Communist Party of China Xi Jinping delivers a speech at the 19th CPC National Congress
The Secretary General of the Communist Party of China Xi Jinping delivers a speech
at the 19th CPC National Congress

Based on the peculiarities of the current situation in and around China, Xi Jinping determined the ways to achieve these goals, the main of which were as follows:

  • modernization of the country's economic system by improving the quality and efficiency of production of goods and services, liberalization of labor relations, structural reform of the consumption system, wider attraction of innovations, revival of villages, improvement of coordination of regional development, and balanced use of socialist and market methods of economic processes management;
  • strengthening the unity of the country by promoting the autonomous regions of Hong Kong and Aomen (Macau) to the general scheme of China's development while maintaining the broad rights of local self-government; continuation of the peaceful return of Taiwan to the People's Republic of China through deepening the dialogue of the parties, expanding cultural and economic exchanges and cooperation in other fields;
  • increasing confidence in the Chinese culture, as well as stimulating the prosperity of socialist culture with Chinese characteristics; intensifying ideological work on the basis of renewed Marxism; cultivating and implementation of the basic values of socialism; intensifying ideological and moral construction; promoting the development of literature and arts;
  • continuation of the policy of China's openness within the framework of deepening bilateral and multilateral relations; giving a new impetus to China's “Belt and Road” initiative; supporting the processes of globalization of the world economy; intensifying China's participation in the United Nations' and other international organizations' measures to enhance global and regional security.

The approaches determined by Xi Jinping were fully approved by the participants of the Congress.


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

Despite the general slowdown in the growth of Chinese investments outside the country, China remains the main “player” in the investment markets of the “Belt and Road” initiative. According to the StateAdministration of Foreign Exchange of the People's Republic of China, in the first half of this year, Chinese enterprisers invested into the economies of 47 countries along the “Belt and Road” 6.6 billion US dollars, which is by 6 % more than in the same period last year. Besides, by 2016, the volume of cross-border payments between the “Belt and Road” countries and the most developed areas of China (Beijing, Shanghai, Guangdong, Jiangsu and Zhejiang) reached 761.6 billion US dollars, which made 60 % of the total volume of this indicator for the People's Republic of China.

At the same time, China's leadership continues efforts to create a joint “Belt and Road” information space. October 16, 2017, Beijing hosted a media seminar of representatives from 27 countries participating in the Chinese initiative. During the event, were discussed the issues of deepening interaction of the parties in the information support of the “Belt and Road” initiative, including through creation of joint media channels. The participants of the seminar were introduced to China's achievements in the development of the latest information technologies.

Great importance is paid to the development of transport infrastructure along the “Belt and Road”. October 17–19, 2017, the first meeting of the joint working group of the China-Europe railways was held in Zhengzhou (capital of Henan Province). More than 70 representatives of different railway companies from the PRC and other countries took part in the event. The participants discussed improving interaction during the organization of cargo transportation on that route.

An indication of the global importance of “The Belt and Road” is the support of the Chinese initiative by leading world institutions. October 12, 2017, on the sidelines of the annual session of the International Monetary Fund (IMF) and the World Bank (WB), a high-level seminar “The Belt & Road Initiative: Building Bonds Across Asia, Europe and Beyond” was organized, with the participation of high-level government officials, politicians and businessmen. During the seminar, Deputy Minister of Finance of China Shi Yaobin stressed the importance of the “Belt and Road” initiative as an open and inclusive platform that facilitates the sharing of China's experience in the sphere of development and effective deepening of international business cooperation, as well as the development of processes of globalization of the world economy. In this context, emphasis was placed on the key role of the IMF and WB in supporting these processes through loans and investing into the “Belt and Road” projects.

A high-level seminar “The Belt & Road Initiative: Building Bonds Across Asia, Europe and Beyond”
A high-level seminar “The Belt & Road Initiative: Building Bonds Across Asia, Europe and Beyond”

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

3.1. Politics. Development of China's International Cooperation

The National Congress of the Communist Party of China is accompanied by the active measures for the development of the country's international cooperation. October 17–18, the 1st High Level Academic Forum of China and the Community of Latin American and Caribbean States (CELAC) was held in Santiago, Chile. The proposals and plans to stimulate cooperation between the People's Republic of China and the countries of those regions in different spheres, including the “Belt and Road” initiative, were discussed. At this, was pointed out China's growing importance for Latin American and Caribbean countries as one of the largest trade and economic partners.

1st High Level Academic Forum China-CELAC (Community of Latin American and Caribbean States)
1st High Level Academic Forum China-CELAC (Community of Latin American and Caribbean States)

Besides, the PRC's delegation, headed by Vice Chairman of the Standing Committee of the National People’s Congress of China, Zhang Ping participated in the 137th Assembly of the Inter-Parliamentary Union on October 14–18, in St. Petersburg. In his speech, Zhang Ping advocated the need to adhere to the principle of cultural pluralism and emphasized the importance of its significance in peaceful coexistence between different peoples. According to Zhang Ping, such an approach is one of the key elements of the Chinese initiative to create a human society with a single destiny. As part of its implementation, China is ready to unite with other countries to create an open and comprehensive human civilization and a multifaceted world culture.

On the sidelines of the Assembly, Zhang Ping met with heads of delegations from other countries, including Belarus, Russia, Vietnam, Pakistan and Brazil. They discussed issues of strengthening and deepening bilateral and multilateral relations.

Deputy Permanent Representative of China to the UN Wu Haitao at the inaugural event of “Africa Week 2017”
Deputy Permanent Representative of China to the UN Wu Haitao at the inaugural event of “Africa Week 2017”

China continues its active work at the UN. Thus, during the opening ceremony of the “Africa Week” at the United Nations, Deputy Permanent Representative of China to the UN, Wu Haitao called on the world community to focus on solving the socio-economic problems of African countries. In particular, in this regard, he spoke about the need to increase the volume of investments into the economy of the countries of the region and to help them improve their independent development. As pointed out by Wu Haitao, the above-mentioned needs successful implementation of the UN's decisions on the 2030 Agenda for Sustainable Development of Africa and the Agenda 2063, which will promote the development of infrastructure sectors, as well as modernization of agriculture, fuel and energy complexes and the transport system in Africa.

Along with this, through the UN World Food Program it is planned to provide emergency food aid to Afghanistan in the amount of 1 million US dollars. This is China's real contribution into the stabilization of the situation in the Afghan territory, and into building a common just world.


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

China's economic achievements since 18th CPC National Congress
China's economic achievements since
18th CPC National Congress

China's economy continues to show a steady tendency for positive development. According to the General Administration of Customs of the People's Republic of China's report, within the nine months of this year, the total volume of foreign trade in China reached 3.08 trillion US dollars, with an increase of 16.6 % compared to the same period of 2016. This, exports increased by 12.4 % to 1.7 trillion US dollars, import — by 22.3 % to 1.4 trillion US dollars. Within the framework of these processes, China's trade with the main partners of the country has been fully restored. In particular, Chinese exports to the EU grew by 16.4 %, to the United States — by 18.7 %, to Japan — by 14.9 %.

Against this background, interesting is the fact of a reorientation to the PRC of the share of agricultural exports of the EU, which was previously supplied to the Russian Federation before its introduction of counter-sanctions against European countries. Thus, according to the European Commission, in the pre-sanctions year 2013, the export of this type of products from the EU to Russia was 12 billion euros, and to China — 7 billion euros. In 2016, the PRC had already 11.4 billion euros, and Russia — only 5.6 billion euros. Thus, despite the declaration of a strategic partnership with the Russian Federation, China virtually mitigates the latter's attempts to exert pressure on the EU.

According to the Ministry of Commerce of the People's Republic of China, in September 2017 the volume of direct foreign investments into the Chinese economy increased by 17.3 % compared to the same month in 2016 — to 10.7 billion US dollars. In August 2017 this indicator was 9.1 %. On the whole, given a certain decline in the first half of this year, within the first nine months of this year the inflow of foreign direct investments to the PRC grew by 1.6 %.

China's economic achievements allow to improve the living standards of the country's population. According to the results of sociological surveys conducted by the “People's Daily” (Renmin Ribao) newspaper, 82 % of Chinese citizens recognize the improvement in their quality of life, while 86 % report a decline in poverty levels in the country over the past five years. This is confirmed by an increase in real incomes of the Chinese population in the first three quarters of this year by 7.5 %, which exceeds GDP growth (6.9 %).


3.3. Security and Law Enforcement Agencies

Situation around the Korean Peninsula. Last week the situation in the region got aggravated again, resulting in the DPRK's sharply negative reaction to the joint military exercises of the United States and South Korea. In the exercises participated the US Navy Carrier Strike Group led the aircraft carrier “Ronald Reagan” and the naval ships from South Korea, a total of about 40 warships of different types, as well as fighters and helicopters. In addition, “Tucson” and “Michigan” nuclear submarines of the US Navy, equipped with “Tomahawk” cruise missiles, arrived in the Japanese Sea.

The US Navy Carrier Strike Group led the aircraft carrier “Ronald Reagan” in the Japanese Sea
The US Navy Carrier Strike Group led the aircraft carrier “Ronald Reagan”
in the Japanese Sea

The actions of the United States and South Korea were condemned by the leadership of the DPRK, which called them “a direct threat to the Korean Peninsula”. In particular, according to Kim In Ryong, Deputy Permanent Representative of the DPRK to the United Nations, “...the nuclear war in the region can begin at any moment”. Proceeding from that, he stressed North Korea's right to self-defense and also emphasized the DPRK's capability of “carrying out missile strikes on the United States” and “taking revenge on other countries backing the United States of America”. According to Kim In Ryong, in 2017, the DPRK “has passed the final stage in the formation of nuclear forces”, and today has various means of delivering nuclear weapons, including intercontinental ballistic missiles.

Deputy Permanent Representative of the DPRK to the United Nations Kim In Ryong
Deputy Permanent Representative of the DPRK to the United Nations Kim In Ryong

The ability of North Korea to inflict missile nuclear strike on American territory was in fact confirmed by Director of the CIA of the United States Michael Pompeo. According to his estimation, in a few months in the DPRK measures will be completed for the installation of a nuclear warhead on a ballistic missile. In addition, US intelligence found out about construction of a new submarine in the DPRK, capable of carrying ballistic missiles.

Against this background, on 22 October 2017, US President D. Trump made a clear statement about the possibility of Washington's using any, including “shocking”, options to deter North Korea. He also gave a positive assessment of China's efforts to influence the DPRK.

In support of the United States' resolute desire to protect the country's security, steps have been taken to bring strategic aviation aircrafts to a higher level of alert. According to the Chief of Staff of the US Air Force, General D. Goldfein, the reason for this is the increased threat to the United States of America by countries that have nuclear weapons.

In view of Pyongyang's continuing its missile-nuclear program, the leading countries of the world and international organizations keep putting pressure on North Korea. In particular, on October 16, 2017, the European Union decided to impose a total ban on the EU's investments into the DPRK and on North Korea's sales of crude oil and refined petroleum products. In addition, the maximum level of private money transfers to the DPRK has been reduced from 15 to 9 thousand euros.


In its turn, Russia continues to lead a “dual policy” against North Korea. For example, within the framework of the demonstration of support of the UN's position on the DPRK, on October 14, 2017, the RF President V. Putin signed a decree on the imposition of sanctions against North Korea, which were approved by the UN Security Council a year ago — November 30, 2016, and are of limited character. At the same time, the leadership of the Russian Federation continues to refrain from imposing sanctions against the DPRK, which were adopted by the UN Security Council in September this year and are indeed critical for North Korea.

As the DPRK's international isolation grows, the Russian leadership gives it broad media support to justify its policy before the world community. In particular, an example of this was the reception at the DPRK's Embassy in Russia on the occasion of the 69th anniversary of the establishment of diplomatic relations between the two countries on October 12. During the event, Ambassador of the DPRK Kim Yong Jae publicly accused the United States of the “escalation of nuclear threats in the Korean Peninsula”, and also called the build-up of American troops in the region as a “blackmailing North Korea”. At the same time, he stressed the DPRK's readiness to destroy all its opponents with the use of powerful weapons. A similar statement was made by An Tong Chun, Vice Chairman of the North Korean parliament, during the opening ceremony of the 137th Assembly of the Inter-Parliamentary Union in St. Petersburg.


3.4. Science and Technology

Against the background of the successful economic development, the People's Republic of China demonstrates new achievements in the sphere of development of innovative technologies. October 18, 2017, Siasun Robot & Automation Co Ltd, China's leading robot manufacturer, opened a new industrial park in Shenyang, administrative center of the Liaoning Province (Northeastern China). The park includes an office building, a robot demonstration center, a research and development center and manufacturing centers for digital equipment and large machinery. The factory is designed to reach an annual production capacity of 10,000 robots and intelligent manufacturing equipment units annually.

Along with this, measures are being taken to deploy the Chinese national satellite navigation system “BeiDou” (“Northern Dipper”). October 10–14, at the airport of Dongying, Shandong Province (Eastern China), successful flight tests were carried out on the possibility of using this system to provide the flights of a regional civilian aircraft of national production ARJ21-700. The test confirmed the actual matching of the characteristics of the Chinese “BeiDou” system to the American GPS system.

Flight tests of the “BeiDou” navigation system for the ARJ21-700 aircraft Flight tests of the “BeiDou” navigation system for the ARJ21-700 aircraft
Flight tests of the “BeiDou” navigation system for the ARJ21-700 aircraft

IV. Plans and Prospects for Cooperation between China and Ukraine

China continues to actively cooperate with Ukraine both at national and regional levels, as well as in the implementation of some joint projects. In particular, last week First Vice Prime Minister of Ukraine — Minister of Economic Development and Trade S. Kubiv met with a delegation of Chinese investors. During the meeting were discussed the plans to build a line of the Kyiv metro from Troyeshchyna to the Kyiv airport (Zhulyany). The preliminary cost of the project is estimated at 2 billion US dollars, of which 85 % will be provided by the Chinese side (a loan for 20 years at 2 % per annum), and 15 % — by Kyiv city state administration.

A meeting of the First Vice Prime Minister of Ukraine Stepan Kubiv with the delegation of Chinese investors Visit to the Lviv of a delegation from the Academy of Social Sciences of the PRC

October 18, 2017, a delegation of scientists from the Academy of Social Sciences of the People's Republic of China visited the city of Lviv. Chinese representatives got acquainted with the achievements of Lviv region in the economic, educational, tourist-recreational and socio-political spheres. The main attention was paid to the development of alternative energy engineering, infrastructure development, as well as the logistics connection of the region with Europe. As a result of the visit, it is planned to prepare appropriate recommendations for Chinese investors.

China is showing interest in Dnipropetrovsk region of Ukraine. According to Secretary General of the China Overseas Development Association He Zhenwei, it is quite realistic to establish closer links between the People's Republic of China and Dnipropetrovsk region in the economic sphere. At this, he acknowledged the importance of the region, which, like the whole of Ukraine, is on the “Belt and Road” route.

To date, about 40 % of all-Ukrainian exports to the PRC is precisely from the Dnipropetrovsk region. First of all, it includes products of agro-industrial and mining complexes. In general, by the results of 2016, the volume of Dnipropetrovsk region's trade turnover with China was more than 1 billion US dollars.