December 5, 2017

China (中国) Today

Events Review (27.11–03.12.2017)

 

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

The PRC's leadership continues its active policy to strengthen China's position in the world by developing cooperation with other countries in various international formats. In this regard, very important was Premier of the State Council of China Li Keqiang's participation in the 6th meeting of the Heads of Government of the People's Republic of China and 16 countries of Central and Eastern Europe (“16+1” format), held on November 26–29 in Budapest (Hungary), and the 16th meeting of the Council of Heads of Government of the member states of the Shanghai Cooperation Organization (SCO) on November 30 – December 1 in Sochi (RF).

 

Speaking at the summit of China and CEE countries in Budapest, Li Keqiang pointed out the importance of the “16+1” format as a platform for deepening interaction between China and the countries of the CEE. According to the Head of the Chinese government, such a platform is a useful addition to China's ties with the EU and an integral part of the healthy and balanced development of the world globalization processes. In order to ensure the successful realization of such prospects, the Head of Government of the PRC put forward five initiatives including:

  • expanding the SCO scale of trade and economic cooperation between the parties, as well as promoting liberalization and facilitation of trade and investment;
  • intensification of the “16+1” format participants' measures for the development of transport communications in the region, including land, air and sea ones;
  • wider application of the practice of creating industrial parks in the areas of production capacity, energy, logistics and agriculture;
  • strengthening financial support for cooperation in the “16+1” format, in particular through the establishment of the Inter-Bank Association of China-CEE countries and the start of the second stage of the work of the China-CEE countries Investment Cooperation Fund;
  • increasing cultural and humanitarian exchanges.
The Summit of Heads of Government of China and Central and Eastern European Countries (“16+1” format)
The Summit of Heads of Government of China and Central and Eastern European Countries (“16+1” format)

According to Li Keqiang, all this will consolidate progress in strengthening the relationship between the parties, which has been achieved within five years since the “16+1” format was established, and to achieve new results.

Thus, since 2012, China and the countries of the CEE have established more than 20 institutional platforms for cooperation in the trade-economic, agricultural, health and tourism spheres. Besides, a number of important initiatives have been launched, including the construction of the Hungarian-Serbian railway and the “Sino-European land and sea express route”.

Due to this, China's investments in CEE countries have more than doubled — from 3 billion US dollars to 9 billion US dollars, and the annual increase in exports of agricultural products to the PRC has made 13.7 %. Based on this, Li Keqiang expressed China's readiness to increase the volume of Chinese investments in implementing joint projects with the countries of the region and to increase the import of their products. In particular, China Development Bank will provide a loan of 2 billion Euros to expand the financial cooperation of the parties. Another 1 billion Euros will be allocated by the China-CEE countries Investment Cooperation Fund.

 

The summit of the Shanghai Cooperation Organization (SCO) in Sochi was also indicative. During the event, the Premier of the State Council of the PRC praised high the Organization as an effective format for cooperation between the participating countries in the spheres of security and economy. Li Keqiang called the SCO a model of a new type of international relations characterized by mutual respect, fairness, justice and win-win cooperation. Based on the achievements, the Premier of the State Council of the PRC made a number of proposals for the joining of efforts, strengthening mutual trust and building a society with a single destiny. In particular, such initiatives include:

  • ensuring stability in the region, requiring the fastest implementation of the SCO anti-extremism treaty, building a legal mechanism for ensuring security, and deepening interaction in fighting drugs trafficking and cross-border crime;
  • speeding up the process of linking development strategies and transferring them to a practical level, which will help to reduce the threats of regional conflicts and increase geopolitical stability;
  • creation of a single regional market based on the Trade Facilitation Agreement, for this end to use positive trends related to the improvement of the global economy and the growth of global trade;
  • creating a convenient system of interconnectivity, including the linking of transport development plans, standardization of technologies, as well as increasing the efficiency of regional logistics;
  • intensification of interaction in the field of production capacities and innovations, including through simplification of investment procedures, construction of model industrial cooperation zones and implementation of large projects;
  • strengthening humanitarian cooperation, which should include culture, science and technology, health care, environmental protection, sports and tourism.
A Meeting of the Council of Heads of Government of the Shanghai Cooperation Organization
A Meeting of the Council of Heads of Government of the Shanghai
Cooperation Organization

To support the work of the Shanghai Cooperation Organization in these spheres, China will initiate allocation of funds from the Asian Investment Bank, the Silk Road Fund and the SCO Interbank Association.

The heads of governments of the SCO member states supported Li Keqiang and expressed their intentions to intensify the cooperation within the Organization. First of all, in this regard they named regional trade, energy, agriculture, investments, scientific innovations, digital economy, as well as peace and stability in the region.

As a result of the meeting, a joint communiqué was adopted, in which was pointed out the importance of continuing a wide-ranging international cooperation in order to provide a new momentum for the recovery of the world economy, economic and financial stability, and the maintenance of sustainable, dynamic, balanced and inclusive growth. The SCO's main task was called to raise the standard of living and ensure the safety of the population of the participating countries.

 

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

Chinese Initiative “The Belt and Road”
Chinese Initiative “The Belt and Road”

Positive results of “The Belt and Road” activity contribute to the expansion of the geography of the Organization's participants. November 24, a policy seminar on the development of this Chinese initiative took place in Bangkok, Thailand. The event was attended by over 150 representatives from 30 countries of the Economic and Social Commission for Asia and the Pacific (ESCAP). They discussed the possibilities of using the ESCAP platform to combine the development strategies of the countries of the region within the framework of “The Belt and Road”.

While considering the above-mentioned plans, the participants stressed the high level of complementarity between “The Belt and Road” initiative and the regional integration process of ESCAP, as well as the great abilities for cooperation in this area. They also expressed the ESCAP's willingness to continue to support the development of “The Belt and Road” in the region by coordinating the policy and deepening cooperation in implementing joint projects. In this context, transport, energy, trade, information technologies and humanitarian exchanges were mentioned among the priority directions of interaction of the parties.

 

Of special importance for the development of “The Belt and Road” is the founding of the target research institutions on the subject in the countries-participants of the Chinese initiative. November 22, in Sofia (Bulgaria), a memorandum was signed on the establishment of the Transportation Infrastructure and Investment Research Center of China and the countries of Central and Eastern Europe. The Research Center will specialize in providing advisory services in the above-mentioned spheres for CEE countries. According to the founders of the new structure, it will become the most important platform for promotion and expansion of the investment partnership between business structures of the People's Republic of China and the countries of Central and Eastern Europe.

 

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

3.1. Politics. Development of China's International Cooperation

The ruling Chinese Communist Party (CPC) is actively developing ties with leading political forces in other countries. November 30 – December 3 Beijing hosted “The Communist Party of China in Dialogue with World Political Parties High Level Meeting”. The event was themed “Working Together Towards a Community with a Shared Future for Humanity and a Better World: Responsibilities of Political Parties”. At the meeting were discussed the issues of consolidating the efforts of the CPC and its partners in shaping a new, safe and beneficial for the entire world system.

The Communist Party of China in Dialogue with World Political Parties High Level Meeting
The Communist Party of China in Dialogue with World Political Parties High Level Meeting

The main event of the forum was the speech by the Secretary General of the CPC, the PRC President Xi Jinping, who expressed the Chinese Communist Party's willingness to deepen interaction with all other friendly parties and sharing with them the state-building experience. At this, the PRC President pointed out the importance of the 19th CPC National Congress, which opened a new stage in the development of China and created favorable prerequisites for enhancing the openness of the country. In turn, this provided an opportunity for establishing closer relations between the CPC and political forces of other states.

At the same time, according to Xi Jinping, China respects the state and political structures of foreign countries and will not impose on them the Chinese model of development. First of all, the CPC will be contributing to the protection of peace and security in the world.

 

The development of China's international cooperation within the framework of different multilateral formats is accompanied by deepening China's bilateral ties with the leading countries of the world. November 24, the 4th meeting of China-France High Level Mechanism for Dialogue on People-to-People Exchanges took place in Beijing. The event was held under the joint chairmanship of Vice Premier of the State Council of the People's Republic of China Liu Yandong and French Foreign Minister Jean-Yves Le Drian.

A meeting of China-France High Level Mechanism for Dialogue on People-to-People Exchanges
A meeting of China-France High Level Mechanism
for Dialogue on People-to-People Exchanges

The participants of the meeting emphasized the significant progress that had been made within the four years of the work of the mentioned mechanism in the spheres of education, science, technology, culture, health care and mass media. In total, more than 180 joint projects were implemented. Based on this, the parties agreed on the expansion of cooperation, including through the development of cooperation in the sphere of scientific and technical innovations, as well as creation of new brands of humanitarian exchanges in the spheres of education, sports, youth and tourism.

 

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

Chinese government program “Made in China 2025”
Chinese government program
“Made in China 2025”

A significant component of China's economic success is the state support to national producers. At the end of November this year, the State Council of China began the establishment of demonstration zones of the state level to support the program “Made in China 2025”. The program is the first stage of Beijing's strategic plan to transform the PRC from today's industrial giant into one of the advanced countries-leaders in terms of aggregate industrial potential. During this phase, it is planned to carry out innovative modernization of the Chinese industry.

Within the framework of demonstration zones, differentiated economic development programs based on local conditions and benefits will be developed and implemented by regional authorities, business managers, representatives of business circles and scientists. At this, efforts will be encouraged to modernize traditional productions, to seek effective models of integrated military and civilian development, as well as to reveal innovative potential and to increase the volume of financing the innovation activity.

At the same time, the Chinese government is continuing its efforts to increase the openness of the Chinese market. Thus, the Chinese State Council is considering the issue of further reducing customs duties on the import of a number of consumer goods, including clothing, footwear, bags, exclusive food products, medicines, household chemicals and everyday use items. On average, the tariffs are planned to be reduced from 17.3 % to 7.7 %. This is the third lowering of the tariffs since 2015.

 

3.3. Security and Law Enforcement Agencies

Situation around the Korean Peninsula. Last week, the situation around the Korean Peninsula got more aggravated as a result of the DPRK's new missile test on the night of November 29. The “Hwasong-15” missile flew 960 km and fell 250 km off the Japanese Aomori Prefecture — in the exclusive economic zone of Japan. The maximum flight altitude was 4,5 thousand kilometers. The previous missile test was carried out by North Korea in mid-September 2017. The missile “Hwasong-12” then reached a height of 770 km and flew 3,700 km, including over Japan's Hokkaido island. Commenting on this issue, the DPRK's Central Television announced the creation of a full-fledged missile nuclear force.

According to experts, “Hwasong-15” may have a maximum range of up to 13 thousand kilometers and carry a nuclear warhead (the range of the Russian ICBM “Topol-M” is 12 thousand km). This means a threat of a nuclear attack to the whole territory of the United States (including the entire East Coast — from Boston to Miami) — and all Western Europe, including Iceland. At this, Pyongyang has about 60 nuclear warheads (including a 120 kt in a TNT equivalent hydrogen warhead), as well as the reserves of uranium and plutonium enough to produce up to six new warheads of this type within a year.

The DPRK's new missile test on the night of November 29 The DPRK's new missile test on the night of November 29
The DPRK's new missile test on the night of November 29
 The DPRK's new missile test on the night of November 29

Given these actions by the DPRK, the UN Security Council held an emergency meeting on November 29. The UN Secretary General and members of the Security Council strongly condemned the launch of a missile by North Korea, and also called it a direct violation of the demands of the international community. As a result of the meeting, an appeal was made to the leadership of the DPRK to refrain from further provocations, abandon its nuclear missile program and return to a genuine and constructive dialogue with the international community.

 

Sharp political declarations on the DPRK's next missile test were made by the USA and other leading western countries' leaderships. Thus, according to the US President D. Trump, Washington has a wide range of opportunities to increase pressure on the DPRK and apply them in practice. At the same time, the US President called on all UN member states to break diplomatic relations with North Korea and to stop trade with it. In this regard, D. Trump emphasized the need for China to stop exporting oil to the DPRK, which would make the latter sit at the negotiating table.

 

In turn, in response to the DPRK's actions, South Korea conducted military missile training with the involvement of land, naval and air forces. In particular, were used the “Hyunmoo-2” ballistic missile (300 km in range), “Haeseong-2” ship-to-surface missile (up to 1,000 km in range) and “Spice-2000” air-launched guided missile (57 km in range).

 

Unlike most other countries of the world, the leadership of the Russian Federation continues to demonstrate double standards in its policy towards the DPRK. Thus, on the one hand, Moscow has condemned North Korea's missile test, but on the other — it is against the latter's international isolation.

 

3.4. Science and Technology

The leadership of the People's Republic of China attaches particular importance to raising the country's intellectual potential as one of the main prerequisites for the successful implementation of the plans of the Chinese economy's innovation development. Last week at the in city of Zhengzhou (Henan Province, Central China) took place a ceremony of launching the “Pooling talents across the world to power the future of Zhengzhou”program. The event was attended by representatives of more than 150 companies interested in implementing innovative projects and attracting professionals from different fields (both Chinese citizens and foreigners) to the region.

According to the program, by 2020 a “pool of scientists and specialists” will be have been created, which will bring the scientific potential of the province to a qualitatively new level. In particular, more than 100 world-class professionals, up to a thousand high-level professionals and a significant number of young talents will be involved in implementing different programs and projects. To encourage specialists, one-time financial payments from 500 thousand to 5 million Yuan are being introduced. Up to 10 billion Yuan (about 1.5 billion US dollars) have been allocated to implement the program.

 

An example of the successful implementation of China's innovative projects is the development of biofuel production and technologies of its use. At the end of November of this year, the first transcontinental flight Beijing-Chicago was carried out by the Boeing 787 passenger aircraft with the use of bio-kerosene. The fuel was produced by a Chinese company by mixing the used vegetable oil with aviation kerosene in a ratio of 15:85. Using this kind of fuel helps to reduce carbohydrate emissions and to increase the safety and efficiency of flights.

The Boeing 787, with the use of bio-kerosene, arrives in Chicago from Beijing
The Boeing 787, with the use of bio-kerosene,
arrives in Chicago from Beijing

IV. Plans and Prospects for Cooperation between China and Ukraine

The main interest of China in developing cooperation with Ukraine is the importance of the Ukrainian state as one of the main components of “The Belt and Road” in Central and Eastern Europe. Based on this, the People's Republic of China takes an active part in the development of the Ukrainian transport infrastructure.

In particular, November 28, 2017, the State Road Agency of Ukraine (Ukravtodor) and the Chinese company Sinohydro Corporation Limited signed a contract on cooperation in the implementation of the reconstruction project of the Northern bypass road in Zhytomyr as part of the М06 Kyiv–Chop highway. The contract was concluded within the framework of the project “Improvement of Transport and Operational Conditions of Road Approaches to Kyiv (Pan-European Corridors)”.

The State Ukravtodor Agency and the Chinese Sinohydro Corporation Limited signed a contract for reconstruction of the М06 Kyiv–Chop highway
The State Ukravtodor Agency and the Chinese Sinohydro Corporation Limited signed a contract for reconstruction of the М06 Kyiv–Chop highway

The contract is worth 42.3 million Euros. The project is financed through a loan from the European Bank for Reconstruction and Development and the European Investment Bank. Work will start in the spring of 2018. The term of reconstruction — 2 years. The Italian IRD Engineering S.r.l. is an independent engineer for technical supervision of the work.

The М06 Kyiv-Lviv-Chop highway crosses Ukraine from East to West with access to EU countries. This is the main transit corridor across the territory of Ukraine, which provides access to Hungary, Slovakia and Poland. The road is included in the European route Е40, is part of the Pan-European Corridor III and of the international corridor Europe-Asia.

 

At the same time, the interaction between Ukraine and the PRC in the sphere of space exploration intensifies. November 20–23, 2017, the 4th meeting of the Ukrainian-Chinese Sub-Commission on Space Cooperation was held in Beijing. The event was attended by representatives of the State Space Agency of Ukraine and the Chinese National Space Administration, as well as of Ukrainian and Chinese enterprises of the corresponding profile.

A meeting of the Ukrainian-Chinese Sub-Commission on Space Cooperation
A meeting of the Ukrainian-Chinese Sub-Commission on Space Cooperation

During the meeting, were summed up interim results of the implementation of the Ukrainian-Chinese Space Cooperation Program for 2016–2020, and the Protocol was signed and an updated version of the Program was approved. Besides, the Ukrainian delegation visited several organizations and enterprises of the space industry in China, where the prospects of cooperation of the parties in the implementation of various space projects were discussed.

 

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