January 9, 2018

China (中国) Today

Main Trends and Developments in the Development of the Situation in and around China in 2018


I. The Main directions of the PRC's Leadership's Actions to Implement of the Country's Development Strategy

The leadership of the People's Republic of China shows firm intentions to continue the course of reforms set by the 19th National Congress of the Communist Party of China (CPC) last autumn. In the words of the Chinese President, CPC Secretary General Xi Jinping in the New Year's address to the Chinese people, 2018 will be of great importance to China as the initial stage in implementing strategic plans for the country's reaching a qualitatively new stage in its historical development. First of all, among these plans, the President of the PRC mentioned building in China of socialism with Chinese characteristics and moderately prosperous society, as well as consolidation of China's leading role in the world.

Besides, the main tasks of the Chinese government include having completely resolved the problem of poverty in the country by 2020. In this regard, special attention will be paid to villagers in remote areas of the People's Republic of China whose life is still extremely difficult. As pointed out by Xi Jinping, achieving this goal will be important for both the Chinese nation and all of the humanity.

According to the views of the President of the PRC, the possibility of further success in the country's development is already shown by the achieved results, including the increase in GDP in 2017 to 12.3 trillion US dollars, creation of more than 13 million new jobs, basic health insurance for about 1.35 billion citizens, and the withdrawal from below the poverty line of about 10 million rural residents.

At the same time, Xi Jinping acknowledged the shortcomings in the government's activities in a number of important spheres, including in improving the efficiency of industry, social security, health care and education, protecting natural environment.

Chinese President Xi Jinping delivers 2018 New Year Address

Based on the main tasks facing the Communist Party and the Government of China, in 2018 key events in the political life of the country will be as follows:

  • the Second Plenary Session of the 19th CPC Central Committee in January. It is planned to discuss the proposals for amending the Constitution of China, as well as listening to the report of the CPC Central Commission for Discipline Inspection, determination of tasks for the improvement of the party style and creation of incorruptible government apparatus;
  • the First Session of the 13th CPC National People’s Congress in March. The Congress will elect the new Parliament and the leaders of the highest bodies of executive power.


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

In 2018, the implementation of “The Belt and Road” strategic initiative will remain one of the priorities of the leadership of the People's Republic of China. In this regard, the main focus of the Chinese government will be on implementation of the agreements concluded last May during Belt and Road Forum for International Cooperation and in other bilateral and multilateral formats. All in all, in 2017 China signed more than 100 such agreements with 86 countries and international organizations.

Besides, China will continue the steps on key directions such as capacity development, promotion of mutual trade and investment, building up communication systems and integration of information spaces of the countries participating in the Chinese initiative, as well as joint efforts in scientific research and development of modern technology.

The economic development along the Belt and Road in 2017
The economic development along the Belt and Road in 2017

Special attention will be paid by the parties to further expansion of the transport network from the Asia-Pacific region to Europe. To date, a significant achievement in resolving this issue is the opening of about 60 railway routes between China and Europe, connecting 35 Chinese cities with 34 foreign ones, 12 of which are in the European Union.

Within the six years since the launch of the project for rail freight transportation between China and Europe, 6235 trains were sent in both directions, including 3271 in 2017. At this, the assortment of goods transported has grown considerably. In 2018, the “China Railway” corporation plans to send to Europe 4,000 trains.


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

3.1. Politics. Development of China's International Cooperation

According to strategic plans to strengthen China's international positions and its role in the world, in 2018 it is planned to continue implementation of the concept of promoting the diplomacy of a great power with Chinese characteristics. Therefore, the PRC's main efforts in the foreign policy will be aimed at building new international relations based on trust and mutually beneficial cooperation among all peoples and countries. Due to this approach, China will contribute to the establishment of shared destiny for all humankind.

First of all, the efforts of the People's Republic of China to achieve these goals will include support for globalization of the world economy, deepening cooperation within China's “The Belt and Road” initiative and expanding its geography, strengthening ties with other countries both bilaterally and in different international formats. In this context, in 2018, the PRC's main diplomatic events will be the Boao Forum for Asia, the SCO Summit, Forum on China-Africa Cooperation and China Import and Export Fair (CIEF).

At the same time, the PRC will continue to pursue a consistent policy of implementing the “One China” principle for the sake of consolidating the country. In this regard, Beijing will fully contribute to the expansion and deepening of exchanges and cooperation between Mainland China and Taiwan in different spheres and between different communities of the societies. The PRC will also strongly oppose all attempts of external support to independent Taiwan.


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

Based on the positive results achieved by China in the economic sphere in 2017, the government plans to continue the chosen course of development of the national economy, taking into account current changes. The main directions of action in this area were clarified during China's Central Economic Work Conference in December last year and will include:

  • deepening of the structural reform of the country's economic complex. One of the main tasks in this sphere is the elimination of surplus capacity. Last year, China achieved its goals, having reduced production capacity in the steel and coal industry by 50 million and 150 million tons, respectively. Besides, debt burdens and overheads of enterprises were reduced. In 2018, the efforts of the PRC leadership to implement the above-mentioned plans will be supplemented by measures to improve the quality of the Chinese economy;
  • maintaining strict control over the financial market. In 2017, real steps were taken to overcome the most widespread violations in the financial sector. Thus, for non-compliance with the financial rules, a significant number of banks, insurance and financial companies, as well as other institutions were fined. Given the importance of this issue, the PRC's government will continue to resolutely struggle against illegal activities in the financial sector;
  • improvement of the real estate market regulation system. Last year, due to the introduction of restrictions on the acquisition of real estate, the Chinese authorities managed to have “cooled” this segment of the Chinese market, which contributed to solving the problem of overproduction in the construction industry. To consolidate the results achieved, measures will be taken to build a long-term mechanism for regulating the real estate market and stabilize it by ensuring an optimal balance between demand and supply;
  • speeding up the process of reforming state-owned enterprises. In 2017, 69 % of state-owned enterprises of central subordination were transferred to a mixed form of ownership. In the current year, the PRC's government will continue its efforts to attract private investments into the public sector, which will aim at both increasing the efficiency of its work and facilitating a structural reform of the country's economic complex;
  • raising the level of openness of the Chinese economy. For this purpose, in 2018 it is planned to further increase the volume of imports and to reduce customs duties on a number of imported goods, which will facilitate the balance of foreign trade. Besides, the country's government intends to extend the powers of the pilot free trade areas, and to open a network of free ports;
  • strengthening the fight against environmental pollution. Within the next three years, the priority tasks of the PRC's government in this sphere will include transition to clean energy sources, introduction of more strict pollution control, and increased responsibility for violations of environmental norms.


The Chinese government is also paying much attention to the development of agriculture. Thus, China's Central Conference on Rural Work at the end of last year pointed out the significant progress made in providing the country with the main types of food. In particular, in 2017, the gross harvest of cereals in the PRC reached 617.9 million tons, which was one of the largest indicators of yield. According to the Chinese government, a stable agricultural situation laid the foundation for the overall improvement of the socio-economic situation in the country.

Chinese President Xi Jinping Chinese Premier Li Keqiang
Chinese President Xi Jinping and Premier Li Keqiang at the Central Conference on Rural Work,
late December 2017

At the same time, the Conference acknowledged a number of problems in the agricultural sector of the country, the main of which are: uneven development of urban and rural regions, low labor productivity, insufficient competitiveness of Chinese agricultural products at the world level, as well as limited opportunities for further growth of peasants' income.

Taking into consideration the above-mentioned circumstances, the main tasks and aims of the rural development strategies were determined, including:

  • by 2020 — development of a concrete plan of political, economic and financial measures (decisions and steps) on systemic and innovative modernization of agriculture of the country;
  • by 2035 — achievement of decisive progress in the practical implementation of the plan;
  • by 2050 — building a new type of agriculture at the level of the most developed countries of the world.

According to the estimates by the Ministry of Industry and Information Technology of the People's Republic of China, the implementation of these plans will ensure China's stable economic development and will turn it into the most powerful trading state in the world.


3.3. Security and Law Enforcement Agencies

Situation around the Korean Peninsula. In view of the DPRK leadership's commitment to continue the implementation of the country's nuclear and missile program, the situation in the Asia-Pacific region will keep getting aggravated. For example, the United States and their partners will expand pressure on North Korea, which will increase Pyongyang's aggressiveness. At this, both sides will intensify their military activity in the APR. Such a situation will trigger a mixed reaction from China, which, on the one hand, will also expand pressure on the DPRK over the latter's nuclear and missile program, on the other hand, China will show its negative attitude to the USA's military activity in the region.

In turn, Russia will continue to use the above-mentioned problems for its purposes in order to provoke a conflict between the United States and the DPRK and China. Based on this, Moscow will try to build an anti-American strategic partnership with the PRC, which would distract the world community's attention from the Ukrainian issue. The consequence of such a policy of Russia will be an increased threat of exacerbation of military confrontation in the APR.


China's Military Activities. Based on the geopolitical interests of the People's Republic of China, as well as tensions in the Asia-Pacific region, China's leadership will continue to take consistent steps to increase the combat capability of the national Armed Forces. Thus, during the mobilization meetings held by the Central Military Commission of the CPC on January 3, 2018 on the occasion of the start of the new training period of the PLA, PRC President Xi Jinping set the task of strengthening the combat training of the troops and ensuring the Armed Forces' readiness to win a decisive victory over any enemy.

To this end, China is going to continue the comprehensive reform of the People's Liberation Army of China, including the implementation of measures to optimize its combat and numerical strength with the increasing role of High-Mobility Forces, Air Forces, Navy and Missile Forces. Besides, special attention will be paid to strengthening China's military presence in the areas of disputable islands and on important transport communications in the APR.

Chinese President, Chairman of the Central Military Commission Xi Jinping inspects troops on January 3, 2018 Chinese President, Chairman of the Central Military Commission Xi Jinping inspects troops on January 3, 2018
Chinese President, Chairman of the Central Military Commission Xi Jinping inspects troops,
January 3, 2018

3.4. Science and Technology

In 2018, China will be implementing a wide range of scientific and technical programs in the spheres of space exploration, commissioning of modern passenger and transport aircrafts of its own development and production, development of computer technologies and creation of various systems of artificial intelligence, development of new types of fuel, as well as conducting oceanographic and arctic research.


China’s space exploration activities planned for the next 5 years
China’s space exploration activities
planned for the next 5 years

In 2018, the China Aerospace Science and Technology Corporation (CASC) is going to conduct 35 launches of space rockets, which will be the largest indicator in its history. In particular, heavy-type rocket carrier “Chang Zheng-5” and the new “Kuaizhou-11” rocket carrier will be launched on solid fuels, and into space will be sent “Chang'e 4” lunar probe (to land on the reverse side of the Moon), a high-resolution Earth observation satellite “Gaofen-7” and to launch 18 satellites leading up to the formation of the “Beidou-3” global navigation network, to provide basic services to countries alongside “The Belt and Road” initiative.


At the same time, in 2018, it is planned to produce China’s “Xinzhou-700”, a new short-haul aircraft. Manufacturing of components of the aircraft has already been set up at aviation enterprises of Chinese corporations AVIC Aircraft and AVIC SAC Commercial Aircraft Co. in the cities of Xi'an and Shenyang. The aircraft is fully developed by Chinese specialists and meets the modern requirements, including 80–85 passenger seats, a take off weight of 27.6 tons and a maximum commercial load of 8.6 tons. To date, 11 clients have already ordered 185 planes of the type. The first flight of the “Xinzhou-700” aircraft is scheduled for November 2019, and in 2021 the aircraft will have to undergo certification and enter the market.


It is also planned to continue active measures to develop new types of fuel. In particular, according to the program of the China National Energy Administration, by 2020, the consumption of geothermal energy in the country will have been brought to 70 million tons of coal equivalent per year. Besides, Wuhan City (the capital of Hubei province, Central China) is launching the construction of China's first industrial park for the development and production of hydrogen fuel cells for vehicles. The total investment in this project is 1.75 billion US dollars.


Within the framework of the development of international cooperation in the sphere of geophysical research, for November 2018, the first United Nations World Geospatial Information Congress is scheduled to be held in the Chinese city of Deqing (Zhejiang Province, East China). During the event, key global achievements in the field of topography and geo-information will be considered and demonstrated, and will be discussed the prospects of cooperation in these spheres.


IV. Plans and Prospects for Cooperation between China and Ukraine

The resumption of positive dynamics in the development of cooperation between China and Ukraine in 2017 has created a favorable ground for further deepening of the interaction of the two countries. Thus, this year it is planned to continue the implementation of already started projects and to expand the parties' cooperation on a number of new directions. In particular, it is planned:

  • to continue bilateral dialogue at all levels. Contacts will be maintained between the governments of both countries and government agencies, local governments, large corporations and companies, representatives of small and medium businesses, as well as science, education, health care, culture and youth exchanges;
  • to increase the volume of the bilateral trade. In 2017 trade volumes between the PRC and Ukraine increased by almost 15 % to 5.6 billion US dollars. Based on objective circumstances, in 2018, these indicators could increase substantially. The basis for this is the agreement reached on increasing the export of Ukrainian agricultural products to China, especially sunflower oil, dairy and confectionery products, as well as juices and baby food;
  • China's participation in the development of Ukrainian infrastructure. This year, the work on the construction of a grain terminal in the Ukrainian port “Pivdennyi” and the deepening of its water area will continue. In addition, the implementation of construction/reconstruction projects of a number of highways, including Kyiv-Kharkiv-Dovzhanskyi and Stryi-Ternopil-Kirovograd-Znamyanka, as well as a by-pass road around Zhytomyr, will begin. In the future, it is also planned to involve China in the construction of the fourth (Podilsko-Vygurovska) metro line in Kyiv and a new bypass road around the capital of Ukraine;
  • to deepen cultural ties between China and Ukraine. In 2017, Sino-Ukrainian cooperation in the cultural sphere was especially active, due to the celebration of the 25th anniversary of the establishment of diplomatic relations between the two countries. In turn, this became a catalyst for intensifying the Chinese society's interest to Ukraine, which has created the basis for intensifying human contacts. In 2018, such contacts will further grow and help the friendship of the peoples of the two countries and enhance cooperation between them in all possible spheres.