November 28, 2017

China (中国) Today

Events Review (20.11–26.11.2017)

 

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

The PRC's active policy to support the processes of strengthening ties between Europe and Asia increases the role of the country as a leading center for Eurasian integration. In this regard, the 13th ASEM Foreign Ministers' Meeting on November 20–21 in Myanmar was indicative. The event, themed “Strengthening Partnership for Peace and Sustainable Development”, discussed ways to expand cooperation between Asian and European partners to achieve sustainable development, struggle against climate change, ensure food and energy security and effective water management, as well as to reduce the gap in the levels of development.

Participants of the Forum reaffirmed their commitment to focus joint efforts to secure peace, stability and prosperity in Asia and Europe. In this context, Foreign Minister of the PRC Wang Yi pointed out the importance of China's “Belt and Road” initiative, which is an effective tool for deepening integration between Asian and European countries in the trade, economic and investment spheres. According to Wang Yi, the prospects for this are created by the decisions of the 19th National Congress of the CPC, which provide for consolidating the role of China as the leading country in the world, which will give the People's Republic of China much greater opportunities to implement the idea of creating a single trade-economic and security space from the Asia-Pacific region to Europe. Within the framework of the practical implementation of the aforementioned plans, a number of China's joint activities with Eurasian countries in various spheres, including on nuclear safety and natural resource development, are planned for 2018.

As a result of the Forum, were adopted an Action Programme for 2017–2019 and a Chair's statement regarding the resolve of the members of the ASEM to take further steps towards strengthening the partnership between Asia and Europe.

13th ASEM Foreign Ministers' Meeting in Myanmar, November 20–21, 2017
13th ASEM Foreign Ministers' Meeting in Myanmar, November 20–21, 2017

On the sidelines of the meeting, Foreign Minister Wang Yi also held bilateral meetings respectively with EU High Representative for Foreign Affairs and Security Policy F. Mogherini and with Ministers of Foreign Affairs — S. Gabriel of Germany, J. Asselborn of Luxembourg, C. Abela of Malta, I. Søreide of Norway, P. Sokhon of Cambodia, V. Balakrishnan of Singapore, D. Pramudwinai of Thailand and others.

They discussed development of bilateral relations, interaction in various international organizations, as well as approaches to resolving regional problems.

 

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

The countries participating in “The Belt and Road” initiative are deepening cooperation in the investment and industrial spheres. November 21–22, the 2017 International Industrial Capacity Cooperation Forum and the 9th China Overseas Investment Fair were held in Beijing. The events were organized by China Overseas Development Association (CODA) and “B&R” Supply Chain Finance Union.

The exhibition showed mounts of more than 100 Chinese and foreign enterprises, organizations, as well as embassies from Europe, Africa, Asia, North America and Oceania. Chinese machinery and products, including of the Chinese National Nuclear Corporation (CNNC) and the Chinese Food Corporation (COFCO), were demonstrated. Besides, during the international forum, a wide range of issues was discussed with regard to the deepening of cooperation between the countries of “The Belt and Road” in the machine-building industry.

2017 International Industrial Capacity Cooperation Forum & The 9th China Overseas Investment Fair in Beijing, November 21–22, 2017
2017 International Industrial Capacity Cooperation Forum & The 9th China Overseas Investment Fair in Beijing, November 21–22, 2017

The development of cooperation within “The Belt and Road” provides for an increase in volumes and an expansion of the range of food supplies to the People's Republic of China. According to the report from the Shanghai Commercial Information Center, in recent years, food and agricultural products, in particular animal and vegetable oils, fruits, seafood and alcoholic beverages, have been a significant source of growth for the countries' participating in “The Belt and Road” exports to China. In this context, the CPR's main partners are Indonesia, Malaysia, Thailand and the Philippines. All in all, they account for 70 % of China's trade in the above-mentioned sphere. Besides, one can see high rates of growth of food products exports to the People's Republic of China from Ukraine and Russia.

 

The leadership of the People's Republic of China pays great attention to the scientific choice of the forms and methods of developing cooperation with economic partners of the country, which should increase its efficiency. November 24, at the Shanghai University of International Business and Economics, the Center for Research on “The 21st Century Maritime Silk Road” was founded. The work of the new research structure should stimulate and intensify the implementation of projects in the spheres of infrastructure construction, international trade, cross-border investments and water transport. The Center will provide advisory services to the relevant regions of China and technical support in coordinating “The Maritime Silk Road” initiatives.

The Silk Road Economic Belt & 21st century Maritime Silk Road
The Silk Road Economic Belt & 21st century Maritime Silk Road

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

3.1. Politics. Development of China's International Cooperation

According to international experts, China's growing authority in the international arena causes a change in the configuration of the global political space. To date, the People's Republic of China is a powerful geopolitical force and this leads to the emergence of a new system of world order.

First of all, in the above context, one can notice China's policy of supporting the processes of globalization, which contributes to the deepening of the integration of different countries and regions. In turn, this creates the foundation for building a common, prosperous and secure world with a single destiny for all.

Due to this, the focus is on the strategic initiative of the People's Republic of China “The Belt and Road”, which is the PRC's main tool for the implementation of its geopolitical plans. In addition, examples of China's active participation in international organizations, including the UN, BRICS, SCO, APEC and ASEAN, are international platforms for the spread of Chinese influence in the world.

 

One of the elements of this approach is the development of cooperation between the People's Republic of China and the countries of Central and Eastern Europe in the “16+1” format. In particular, the China-CEEC Think Tanks Network conference was held on November 20 2017, in Budapest, Hungary, with the participation of scientists, politicians, representatives of the diplomatic corps and business circles of the region. They discussed the results of cooperation in the above-mentioned format (established in 2012).

The China-CEEC Think Tanks Network conference in Budapest, Hungary, November 20, 2017
The China-CEEC Think Tanks Network conference in Budapest, Hungary, November 20, 2017

According to Chinese Ambassador to Hungary Duan Jielong, the “16+1” group is an important component and a useful complement to the Sino-European relations, and it also plays a significant role in deepening China's relations with the European Union. In this regard, the Ambassador of the PRC expressed the need to intensify activities within the framework of the “16+1” in political, economic, investment and humanitarian spheres.

 

Speech by the PRC's Ambassador to the UK Liu Xiaoming at the British Parliament, London, November 21, 2017
Speech by the PRC's Ambassador to the UK Liu Xiaoming at the British Parliament, London, November 21, 2017

Based on the People's Republic of China's European interests, its relations with Great Britain are rather indicative against the background of the latter's exit from the EU. For example, speaking at the British House of Commons on November 21, the PRC's Ambassador to the UK Liu Xiaoming expressed Beijing's intentions to continue active cooperation with Great Britain under any circumstances. The Ambassador of the PRC pointed out the two countries' common point of view on many issues, including the promotion of free trade, support for economic globalization and improvement of global economic management.

The preservation of positive prospects for strengthening the ties between the two countries after Brexit was also confirmed by Economic Secretary to the UK Treasury S. Barclay. According to him, the United Kingdom hopes to intensify cooperation with China, which will allow it to compensate for economic losses after leaving the EU. In this regard, the British politician emphasized the positive significance of China's “Belt and Road” initiative, which opens up a wide range of opportunities for bringing together the British-Chinese efforts to implement various trade, economic and investment projects.

 

A meeting of the Premier of the State Council of the PRC Li Keqiang with French Foreign Minister J.-Y. Le Drian in Beijing, November 24, 2017
A meeting of the Premier of the State Council of the PRC Li Keqiang with French Foreign Minister J.-Y. Le Drian in Beijing, November 24, 2017

At the same time, China continues its cooperation with France. November 24, Premier Li Keqiang met with French Foreign Minister Jean-Yves Le Drian in Beijing. The main theme of the negotiations of the parties was deepening the interaction between the two countries in the development of nuclear energy and in countering global climate change. At this, confidence was expressed in the positive significance of the Sino-French relations to strengthen ties between the PRC and the EU. Besides, the representatives of the two countries exchanged views on the situation around the Korean Peninsula, in Syria and the Middle East.

 

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

According to Chinese experts, despite a certain slowdown in the growth of the Chinese economy, its development is becoming more healthy. Evidence of this is as follows:

  • stable increase in the share of advanced capacities in the country's industry. Within the first three quarters of the current year, the volume of production in the high-tech sector grew by 13 %, which is twice the total GDP growth;
  • reduction of odd and unprofitable enterprises. First of all, it concerns heavy industry, including steel and coal;
  • strengthening the service sector. From January to October of this year incomes of the sector of ordinary services grew by 17.5 %, and of the scientific and technical ones — by 14.6 %;
  • reduction of the corporate sector's debt. Within the first nine months of 2017, the debt ratio of large industrial enterprises declined by 0.6 % to 55.7 %;
  • the stability of the employment situation. In January–October this year, 12 million new jobs were created in the cities of China, which is 1 million more than was planned. In 30 largest cities of the PRC, the unemployment rate was less than 5 %.

Besides, the high rates of innovation modernization of the Chinese economy are a key factor in maintaining the positive dynamics of its development in 2018.

 

Confirmation of these trends is the PRC's advanced positions in the world in terms of the market of logistics services. According to China Federation of Logistics & Purchasing (CFLP), the volume of the country's logistics services market amounted to 185 trillion Yuan (27.2 trillion US dollars) in the first three quarters of this year, which is more than 80 % of the total market for 2016. At the same time, the efficiency of logistics (based on the cost of services) remains two times lower than in the leading countries of the world.

 

3.3. Security and Law Enforcement Agencies

Situation around the Korean Peninsula. Given the persistence of Pyongyang's position on its missile-nuclear program, the United States is increasing pressure on the DPRK. November 21, 2017, the US Treasury Department included 13 North Korean companies/organizations and 20 vessels, in the sanction list. In addition, US President D. Trump declared North Korea a state sponsor of terrorism and announced the introduction of new sanctions against her. Such sanctions will be similar in nature to those already applied by the United States against North Korea, but will affect more actors and complicate the possibility of their avoidance through various machinations.

US President D. Trump declares the DPRK a state sponsor of terrorism, White House, November 20, 2017
US President D. Trump declares the DPRK a state sponsor of terrorism, White House, November 20, 2017

Besides, the United States continues to demonstrate military force to the DPRK. In particular, six multipurpose F-22 Raptor fighters have been sent to South Korea, which will take part in the Vigilant Ace joint exercise on December 4–8, 2017. The place of permanent deployment of these aircraft is the US Air Force's airbase Kadena, on the island of Okinawa in Japan.

 

A meeting of the China's and South Koreans Foreign Ministers Wang Yi and Kang Kyung-wha in Beijing, November 22, 2017
A meeting of the China's and South Koreans Foreign Ministers Wang Yi and Kang Kyung-wha in Beijing, November 22, 2017

On its part, China continues to call on all interested countries to peacefully resolve the situation around the DPRK. For example, commenting on the issue of Washington's having included North Korea in the list of state sponsors of terrorism, the Foreign Ministry of China urged the restoration of negotiations to find solutions to the North Korean problem.

The development of events in the Korean Peninsula was one of the main themes during the talks between China's Foreign Minister Wang Yi and Minister of Foreign Affairs of South Korea Kang Kyung-wha on the 22 November, 2017 in Beijing. The parties confirmed the common position on the necessity of denuclearization of the Peninsula through negotiations and consultations. At the same time, Wang Yi called on South Korea to properly address issues relating to the US THAAD missile defense system in its territory.

 

The PRC's Activity in Security Sphere. In line with its international commitments, China is actively pursuing peacekeeping operations in crisis and conflict zones around the world. In order to expand the capabilities of such activities, the process of creating peacekeeping forces as a separate structure of the Army in the PRC's Armed Forces continues. They will include a Rapid Reaction Brigade, a Helicopter Brigade, a Separate Infantry Battalion, Engineering and Construction, Transport and Security units.

Today, there are nine peacekeeping units in the Army of the People's Republic of China, performing tasks in Lebanon, the Democratic Republic of Congo, Mali, Sudan and South Sudan. In this regard, the creation of a special peacekeeping contingent will allow peacekeepers to be rotated, to strengthen peacekeeping contingents in case of aggravation of the situation in their areas of responsibility, and to respond promptly to the United Nations' requests.

 

3.4. Science and Technology

Based on the achievements in the development of the scientific-technological and production base of the People's Republic of China, the country's leadership plans to implement a large-scale program for the exploration of outer space. November 16, 2017, China Aerospace Science and Technology Corporation issued a Roadmap for the Development of the Space Program of the People's Republic of China for 2017–2045. In particular, it includes:

  • in 2020 — to carry out the first flight of the carrier rocket “Chang Zheng-8” (“Long March-8”) of the average load-carrying capacity of the new generation. The use of a new rocket will reduce the cost of launching low-orbit satellites, which will increase its commercial attractiveness;
  • in 2025 — to begin systematic suborbital flights (at the altitude of 20 to 100 km) of reusable airplane type vehicles for scientific and other research;
  • in 2030 — to launch the first large-capacity carrier rocket. As part of the implementation of this project, a rocket body has already been developed, and the 500-ton engine of the oxygen-kerosene class and the 220-ton acid-hydrogen engine have been tested. The rocket will be used for manned landing on the Moon and collecting Martian soil samples;
  • in 2040 — to test the space shuttle with a nuclear engine. The device will make possible interplanetary flights, and exploration and development of space resources (including deposits on small planets) and construction of space objects (in particular, a solar space station);
  • by 2045 — to have achieved the strategic goal of turning the PRC into a full-fledged space power. By then, China will be able to carry out comprehensive space research, and its equipment and technology will be in the forefront of the world.

 

At the same time, China holds leading positions in the world in the sphere of computer technologies. Thus, according to international experts, the Chinese supercomputers Sunway TaihuLight and Tianhe-2 rank first and second in the ranking of the 500 fastest computers in the world. Their processing speed is 93 and 33.9 quadrillion operations per second. In addition, China is ahead of all other countries by the number of such systems that are in use. The third is the Swiss computer Piz Daint, the fourth — the American Titan, and the fifth — the Japanese Gyoukou.

The Chinese supercomputers Sunway TaihuLight and Tianhe-2 rank first and second in the ranking of the 500 fastest computers in the world
The Chinese supercomputers Sunway TaihuLight and Tianhe-2 rank first and second in the ranking of the 500 fastest computers in the world

The development of computer technology provides a basis for the implementation in China of large-scale programs for creation of artificial intelligence systems. Last week, the Ministry of Science and Technology of the People's Republic of China launched a complex of projects in the sphere of artificial intelligence of the new generation in four directions, namely: “urban brain”, unmanned transport, medical testing and voice control of various systems. The first of these projects is carried out with the participation of Alibaba Group, the second — of Baidu, the third — of Tencent, and the fourth — of iFlyTek. According to the long-term plans of the Chinese government, by 2020, China has to achieve world-class cutting edge technology and artificial intelligence, and by 2025 — in the fundamental theory of artificial intelligence, and to make a breakthrough in this sphere.

 

IV. Plans and Prospects for Cooperation between China and Ukraine

November 21–24, 2017, the Chinese-Ukrainian International Forum “Innovation Market” took place at the International Exhibition Center in Kyiv. The event was organized under the patronage of the Cabinet of Ministers of Ukraine and supported by the Ministry of Education and Science, the National Academy of Sciences of Ukraine and the Chinese Science and Technology Exchange Center.

Within the framework of the Exhibition, Ukrainian and Chinese innovation technologies were demonstrated. A conference on urgent development issues, sources of funding and innovation in various fields of activity was held, as well as the Universities Battle — competitions of university teams in solving specific problems posed by representatives of top innovative enterprises and local authorities.

The Chinese-Ukrainian International Forum “Innovation Market” in Kyiv, November 21–24, 2017
The Chinese-Ukrainian International Forum “Innovation Market” in Kyiv, November 21–24, 2017

November 22, 2017, the Ukrainian-Chinese Industrial Capacity and Investment Cooperation Forum was held in Beijing under the auspices of the China Overseas Development Association and the Chamber of Commerce and Industry of Ukraine. In the course of the Forum, Ukrainian projects were presented that are of potential interest to Chinese investors, and bilateral meetings were organized. Representatives of both sides pointed out positive developments in cooperation between the PRC and Ukraine, and expressed confidence in its further successful development.

The Ukrainian-Chinese Industrial Capacity and Investment Cooperation Forum in Beijing, November 22, 2017
The Ukrainian-Chinese Industrial Capacity and Investment Cooperation Forum in Beijing, November 22, 2017

The ties between China and Ukraine at the regional level also keep getting deeper. Thus, last week, a delegation from Vinnytsia region of Ukraine visited the People's Republic of China and took part in the 9th China Overseas Investment Fair. As a result of meetings with representatives of small and medium-sized businesses in China, agreements were reached on establishing business contacts between Vinnytsya and Chinese enterprises. In particular, the Chinese side expressed interest in cooperation with Ukrainian producers of food products.

Presentation of the investment potential of Vinnytsia region of Ukraine at the 9th China Overseas Investment Fair in Beijing
Presentation of the investment potential of Vinnytsia region of Ukraine
at the 9th China Overseas Investment Fair in Beijing

The southern regions of Ukraine are also of considerable interest to the People's Republic of China. November 21, the leadership of Odesa region met with representatives of the Consulate General of the People's Republic of China in Odesa and major Chinese businessmen. Issues of expansion of investment cooperation and realization of joint economic projects were discussed. Taking into consideration the specifics of the region, the main attention was paid to the development of port infrastructure and transport communications. It is Odesa region that is seen by China as one of the key components of the transport system of “The Belt and Road”.