October 31, 2017

China (中国) Today

Events Review (23.10–29.10.2017)


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

October 18–24, 2017, in China was held the 19th National Congress of the Communist Party of China, which became the main political event in the country over the past five years. During the Congress, the main directions of China's development for the future were determined, the new governing bodies of the CPC were elected, as well as the amendments to the Constitution of the Communist Party were introduced.

The Congress highly praised the work of the Central Committee of the CPC of the 18th convocation and approved the plan of political, economic, social and cultural development set forth in the report of the Central Committee on the basis of the concept of building socialism with Chinese characteristics. At this, the resolution of the Congress confirmed the CPC's intentions to continue the struggle for fulfilling the main historical tasks, such as: stimulating the modernization of the Chinese economy, national reunification, protecting world peace and promoting common development, building a moderately prosperous society in China, as well as realization of the Chinese dream of a “great revival of the Chinese nation”.

As a result of voting, Xi Jinping was re-elected to post of Secretary General of the CPC. Besides, the Central Committee of the CPC (204 persons), the Politburo of the Central Committee (25 persons) and the Standing Committee of the Politburo of the Central Committee of the CPC (7 persons) were elected. The composition of these bodies has undergone significant changes. In particular, 5 out of 7 members of the Politburo Standing Committee of the Communist Party of China were replaced. Of these, Xi Jinping and China's Prime Minister Li Keqiang remained in their posts. New members of the Politburo Standing Committee are: Deputy Prime Minister of the State Council Wang Yang, recently appointed Secretary of the Central Commission for Discipline Inspection Zhao Leji, Director of the General Office of the CPC Central Committee Li Zhanshu, recently appointed Head of the Secretariat of the CPC Central Committee, Director of the Central Policy Research Office at the CPC Central Committee Wang Huning and former Communist Party Secretary of Shanghai Han Zheng.

Members of the Standing Committee of the Politburo of the Central Committee of the CPC (from L to R): Han Zheng, Wang Huning, Li Zhanshu, Xi Jinping, Li Keqiang, Wang Yang and Zhao Leji
Members of the Standing Committee of the Politburo of the Central Committee of the CPC (from L to R): Han Zheng, Wang Huning, Li Zhanshu, Xi Jinping, Li Keqiang, Wang Yang and Zhao Leji

According to experts, the new composition of the senior governing body of the CPC will allow Xi Jinping to maintain political continuity and stability, strengthen ideological work in the country, mobilize the party to fulfill the country's development tasks, and strengthen his party and state positions. All new members of the Politburo Standing Committee are 60 plus years old. According to analysts, they are too old to replace Xi Jinping in 2022. This suggests a conclusion that he may remain in office for a third term.

An important result of the Congress was the inclusion in the CPC Statute of Xi Jinping's idea of “building socialism with Chinese characteristics of the new era” as the country's strategic task. The implementation of this idea is determined by the leadership for the CPC's actions along with Marxism-Leninism, Mao Zedong's ideas and Deng Xiaoping's theory.

Besides, at Xi Jinping's initiative, the Congress introduced into the Statute the provisions for the preservation of the CPC's full control over the People's Liberation Army of China and other power structures of the country. The CPC will continue to carry out political construction of the army, strengthen the armed forces through reforms, promote the development of the armed forces on the basis of science and modern technology, and fully manage the army.

Besides, the CPC Statute points out the strategic importance of the Chinese “Belt and Road” initiative, which is called in it one of the priorities of the Chinese Communist Party. As the party document emphasizes, the implementation of this initiative will not only open up new horizons to strengthen China's international position, but will also create greater opportunities for the development of all countries and the global economy.

October 25, 2017, in Beijing, there was a meeting of the members of the Politburo Standing Committee with Chinese and foreign journalists. During the press conference, Xi Jinping stressed the significance of the 19th Congress of the CPC, which was held at the key stage of building a moderately prosperous society in the country and the Chinese Communist Party's turning to the direct implementation of the strategic task of the revival of the Chinese nation. In this regard, the CPC will focus its efforts on implementing the decisions of the Congress on economic reforms in the country, raising the living standards of the population, supporting Chinese culture, and enhancing China's openness and strengthening its international positions.


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

According to the report of the National Development and Reform Commission of the PRC, more than 70 countries are already involved in the “Belt and Road”, and another 100 countries have supported the initiative or have expressed a desire to join it. Within the framework of the initiative, China has signed 90 agreements with 70 countries, including 11 bilateral free trade agreements and 22 agreements on currency swaps. At this, more than 160 thousand new jobs have been created due to Chinese investments in the countries-participants of the “Belt and Road”.

Polish Prime Minister B. Szydlo at the 2nd meeting of the Ministers of Transport of the Central and Eastern European countries and China
Polish Prime Minister B. Szydlo at the 2nd meeting of the CEEC-China Transport Ministers' Meeting

At the same time, measures for the development of transport routs along the “Belt and Road” continue. October 25–26, 2017, the second meeting of the Ministers of Transport of the Central and Eastern European countries and China (the so-called “16+1” platform) was held in Warsaw and themed “Multimodal Transportations — a Guarantee of Economic Efficiency”. Participants of the forum agreed on the need to encourage and actively use the opportunities for cooperation between China and the CEEC in the field of transport and logistics.

In particular, according to Polish Prime Minister B. Szydlo, the mechanism of cooperation between the PRC and countries of Central and Eastern Europe in the “16+1” format will not only improve the development of relations between the countries, but will also be a platform for deepening of the interstate cooperation. In turn, Vice Minister of Transport of China He Jianzhong pointed out the CEEC's key role in creating a unified integrated transport system from Europe to the Asia-Pacific region.

As a result of the meeting, further directions of the parties' work were worked out to strengthen cooperation between them in the sphere of transport and logistics.


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

3.1. Politics. Development of China's International Cooperation

The decisions of the 19th National Congress of the CPC open a new stage in the development of the People's Republic of China, which has a close connection with the priorities of the country's foreign policy and its activities in the international arena. Last week, these issues were considered in the telephone talks between the President of the People's Republic of China, the Secretary General of the CPC, Xi Jinping, and the leaderships of the world's leading countries.

Thus, on October 25, during a conversation with US President D. Trump, the PRC's leader reaffirmed Beijing's intention to continue the path to peaceful development, as well as to clearly adhere to the strategy of openness and respect for mutual interests in building Sino-American relations. At this, was emphasized the importance of D. Trump's coming visit to the China (scheduled for the end of this year) which should give an impetus to further deepening the parties' interaction for the benefit of both the peoples and the whole world.

In turn, on October 26, during Xi Jinping's conversation with President of the Russian Federation V. Putin, was pointed out the positive character of the Sino-Russian relations, which was called “an example of peaceful coexistence of two states in the modern world”. Based on mutual interests, the parties expressed their intention to develop cooperation between China and Russia in all directions, as well as to maintain close ties and coordination on important international and regional issues. According to V. Putin, in the current situation, the PRC is the Russian Federation's strategic and most important partner.


China's active work at the UN continues. In the course of the 72nd session of the UN General Assembly, Deputy Permanent Representative of China to the United Nations, Wu Haitao proposed extending the right to vote on peacekeeping activities of those countries that send their contingents to participate in international peacekeeping missions. He also emphasized the need to enhance the role of the UN Special Committee on Peacekeeping Operations as a framework for peacekeeping policy. In addition, the Chinese diplomat expressed his country's intentions to intensify cooperation with the UN in the field of protection of peace and security throughout the world.


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

China's attractiveness for foreign investors
China's attractiveness for foreign investors

Positive and stable development of the economy of the PRC increases its attractiveness for foreign investors. According to the Ministry of Commerce of China, from January to September of this year, 23.5 thousand enterprises with foreign investments were registered in the country, which is by 10.6 % more than during the same period last year. At this, the total volume of de facto used investments increased by 7.5 % to 27.5 billion US dollars. Of these, 8 billion US dollars are for a high-tech industry (an increase of 27.5 %) and 13.9 billion US dollars for the segment of high-tech service (increase of 24 %).

As before, the Central region of the country has highest growth rate in terms of attracted foreign investments. Within the first nine months of the current year, the amount of actually used investments in this region amounted to 6.9 billion US dollars, which is by 46 % more than last year.

The development of the Chinese economy is supported by the government's effective policy to support of the producers, including by reducing taxes. According to the report of the National Development and Reform Commission of the PRC, in 2013–2016, administrative fees from Chinese enterprises had been reduced by almost twice. Such results were achieved at the expense of the state's lowering of electricity prices, cancellation of fees for using speed highways and regulation of fees in the financial sector.

Besides, the government of the People's Republic of China has intensified measures to harmonize fees taken from enterprises by sectoral organizations and associations, due to the controlled slowdown of the country's economic development. At present, National Development and Reform Commission of the PRC continues to develop a single state list of administrative fees, which will be made public by the end of 2017.

Nevertheless, due to the acceleration of China's economic development, there is an increase in the volume of tax revenues to the country's budget. Thus, within the first three quarters of this year, this indicator increased by 10.6 % to 1.5 trillion US dollars. Over the same period, the income of large enterprises of the People's Republic of China increased by 22.8 %.


3.3. Security and Law Enforcement Agencies

Deputy Director of the Department of North American Affairs of the DPRK Foreign Ministry Ri Yong Pil
Deputy Director of the Department of North American Affairs of the DPRK Foreign Ministry Ri Yong Pil

Situation around the Korean Peninsula. Despite the external pressure, the leadership of the DPRK is demonstrating its intention to continue nuclear missile tests. For example, on October 25, 2017, a senior official of the North Korean Ministry of Foreign Affairs, Ri Yong Pil, confirmed the statement by the country's leader Kim Jong-un about the possibility of detonation of a hydrogen bomb in the atmosphere over the Pacific Ocean. At the same time, he made new threats against the USA and its allies in the Asia-Pacific region.

Against this background, the DPRK conducted large-scale training in civil defense, during which they mastered evacuation of the population of large cities and blacking-out. According to international experts, the training is an element of North Korea's preparation for a war.


In response to Pyongyang's threats, the US Defense Secretary J. Mattis accused the DPRK of undermining world stability through nuclear blackmailing and stressed the need to focus international efforts to make the DPRK leadership to abandon nuclear weapons. Besides, the US Defense Secretary stressed the firmness of Washington's position on fulfilling its obligations to Japan and South Korea. According to J. Mattis, such commitments remain unchanged and are a cornerstone of the common security. At this, he emphasized the USA's commitment to peaceful resolving of the situation around the Korean Peninsula.

At the same time, the USA is increasing pressure on the DPRK in the financial and economic sphere. October 24, 2017, the House of Representatives of the US Congress adopted a bill on the introduction of a total ban on the opening of accounts in the American banks by foreign financial institutions associated with North Korea. Violation of the law means penalties from 250 thousand US dollars.


Other developments in the security sphere in the APR. October 23, 2017, the 11th meeting of the Defence Ministers of the Association of Southeast Asian Nations (ASEAN) took place in the Philippines. Speaking at the event, Chang Wanquam, the Minister of Defense of the People's Republic of China, pointed out his country's intentions to continue working closely with ASEAN countries in the security sphere to create a united society with a single destiny. At this, among the main directions of such cooperation were mentioned joint naval exercises and struggle against terrorism. Besides, China will continue its efforts to implement the idea of creating “hotlines” between the defence ministries of the ASEAN countries.

11th Association of Southeast Asian Nations (ASEAN) Defence Ministers Meeting in the Philippines
11th Association of Southeast Asian Nations (ASEAN) Defence Ministers Meeting in the Philippines

3.4. Science and Technology

According to the decision of the 19th National Congress of the CPC, one of the main means of speeding up the economic growth in the country is the development of innovative enterprises, as well as processing technologies for large amounts of data and artificial intelligence. In particular, by 2030 it is expected to bring the theory of artificial intelligence and corresponding software and hardware to the forefront of the world level.

To date, China has already been ranked second in the world by the number of international science-and-technology publications and by the number of patents in the field of robotics and artificial intelligence. At this, according to world experts, the People's Republic of China has all the necessary capabilities (including specialists, production facilities and other infrastructure) for fulfilling the tasks set.


China is leading in the Asia-Pacific region in digital payments
China is leading in the Asia-Pacific region
in digital payments

The development of computer technology in the PRC contributes to improving the efficiency of the work of other sectors of the country's economy as well. According to experts of the American PayPal, China is now ranked first in terms of cashless payments and has overtaken the USA by this indicator. The digital economy has already become one of the most important “drivers” of China's economic growth and has made it the world's leading country in the construction of a “non-cash community”. In total, 86 % of the Chinese population currently use cashless payments. In 2016, the volume of digital payments (including by means of mobile communication) in the PRC was equivalent to 5.5 trillion US dollars. All this makes China a leader in the development of a cashless payments in the Asia-Pacific region.


The aviation industry of the People's Republic of China is also at the world leading edge. October 25, 2017, the Malaysian airline “AirAsia” took delivery of the first A320neo aircraft, assembled at the aircraft final assembly line in the Chinese city of Tianjin (northern China). The Tianjin assembly line opened in 2008 and is the first production base of the European concern “Airbus” in the Asia-Pacific region. Due to this, China became the main center for the building of modern aircrafts in the APR. The A320neo is an upgraded version of the A320 series of planes and allows to transport 186 passengers with at least 15 % fuel savings.

The Malaysian “AirAsia” airline took delivery of the first A320neo aircraft, assembled at the Tianjin, China
The Malaysian “AirAsia” airline took delivery of the first A320neo aircraft, assembled at the Tianjin, China

IV. Plans and Prospects for Cooperation between China and Ukraine

The development of cooperation with China in the energy sector is strategically important for Ukraine in terms of reducing its dependence on Russian energy carriers.

Thus, the People's Republic of China assists Ukraine in carrying out oil and gas works on our territory. In September China's largest private petroleum service company, Xinjiang Beiken Energy Engineering Co. founded in Ukraine a subsidiary company “Beiken Energetyka Ukraina” with a registered capital of 5.2 million UAH. Earlier, between Xinjiang Beiken Energy Engineering Co. and a Ukrainian company Ukrgasvydobuvannya was signed a contract for 61.7 million US dollars on the development of oil and gas fields in Kharkiv and Poltava regions. All in all, 24 wells are planned to be drilled in 2017–2019.

Ukraine, on its part, shares with the PRC the experience of exploiting nuclear power plants. Last week representatives of the Chinese nuclear industry visited the training center of the Zaporizhzhya nuclear power plant. As a result of the visit, an agreement was reached on the Center's participation in training the maintenance staff of Chinese nuclear power plants.

Visit to the Zaporizhzhya NPP by the representatives of the Chinese nuclear industry
Visit to the Zaporizhzhya NPP by the representatives of the Chinese
nuclear industry