January 23, 2018

China (中国) Today

Events Review (15.01–21.01.2018)


I. Main Trends and Developments in the Development of the Situation in and around China

An important event in the political life of China was the Second Plenary Session of the 19th CPC Central Committee on 18–19 January, 2018 in Beijing.

During the Plenary Session, proposals were made to introduce amendments to the Constitution of the People's Republic of China, which consolidate the achievements of the country and determine the new challenges it faces. First of all, this concerns building the socialism with Chinese characteristics, creation of a moderately prosperous society, and realization of the historical Chinese dream of a nation's revival. According to the new provisions of the Constitution, the achievement of these goals is the main direction of the work of the Government and the Communist Party of China.

During the discussion of these issues, the leading role of the Constitution of the country in public administration and the necessity of its mandatory implementation were confirmed. In this regard, a number of decisions were taken to strengthen the control of China's state bodies' compliance with the provisions of the Main Law of the country. In addition, the Session emphasized the principled nature of the ideas of the founder of the People's Republic of China, Mao Zedong, theories of Deng Xiaoping, and the strategic ideas of the current Chinese President Xi Jinping, which have been reflected in the Constitution.


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

The Government of the People's Republic of China is paying special attention to the information support to “The Belt and Road” aimed at giving a new impetus to its development.

January 17, 2018, the Guanghua School of Management at Peking University in Beijing launched MBA Scholarships program for discussing “The Belt and Road” projects with the participation of high-level foreign diplomats. In total, the program is attended by 50 diplomatic representatives from 36 countries, including Great Britain, Germany, Sweden, Russia, Singapore, Thailand, Pakistan, Mexico, Chile, South Africa and Kenya.

The program will be implemented in two stages — in January and March this year. In particular, it is planned to organize a series of lectures, seminars, round tables and other events on discussing models of economic development of China and its partners, issues of globalization of the world economy, prospects for creation of “The Belt and Road”” industrial zones, as well as problems and obstacles in implementing joint projects.


Important for the development of “The Belt and Road” is also the Chinese initiative being widely supported by both, national and foreign financial institutions. For example, the China Development Bank intends to invest 250 billion US dollars into “The Belt and Road” projects (an amount larger than the annual gross domestic product of Greece or Finland in 2016).

Last year the Bank already allocated 110 billion US dollars for the purpose. The bank falls under the direct leadership of the country's State Council and is financially backed by the Ministry of Finance and Central Huijin Investment (China's largest investment company).


The work of “The Belt and Road” stimulates the growth of foreign trade of the PRC and individual provinces of the country. In 2017, the total volume of foreign trade of Hunan (Central China) with countries along “The Belt and Road” increased by 43.4 % compared to 2016 to 9.1 billion US dollars. In particular, the province's exports to countries such as Russia, the Philippines, Kuwait, Hungary and Poland have more than doubled. Due to this, Hunan Province ranked sixth in terms of foreign trade among Chinese regions. Favorable conditions for the expansion of trade ties of the province are created by the development of “The Belt and Road” transport infrastructure. Currently, under the China-Europe railway transport network, 10 routes have been opened connecting Hunan to the European region. In 2017 about 420 thousand tons of cargo were transported along those routes.


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

3.1. Politics. Development of China's International Cooperation

One of the main priorities of China's foreign policy is its deepening relations with the USA within the framework of building a new bipolar system of the world order. Thus, on January 15, 2018, there was the first this year telephone conversation between the President of the People's Republic of China Xi Jinping and US President D. Trump. They discussed plans for further development of trade and economic cooperation between the two countries, as well as the situation around the Korean Peninsula.

The leaders of China and the United States pointed out the stable and positive interaction of the parties, which is in the interests of both countries and their peoples, and addresses expectations of the world community. Based on this, an agreement was reached on maintaining contacts at higher and other levels, further increasing bilateral trade and strengthening cooperation in solving key international problems. In addition, the parties expressed their readiness to continue to coordinate actions on joint pressure on the DPRK over its missile and nuclear program.


At the same time, China's leadership attaches great importance to developing ties with African countries, which are important sources of resources and markets for the Chinese economy. As part of the preparation of the Forum on China-Africa Cooperation (FOCAC) in the period from 12 to 16 January 2018, China's Minister of Foreign Affairs Wang Yi traveled to Africa, where he visited Rwanda, Angola, Gabon and Sao Tome and Principe. During his meetings with the leaderships of the mentioned countries, a wide range of issues of bilateral and multilateral cooperation was discussed. The parties focused on the prospects of implementing joint projects in the energy, infrastructure and agrarian sectors, as well as the plans of the People's Republic of China to assist African countries in resolving their problems.

Summarizing the results of his visit, Wang Yi pointed out the significant progress in the development of cooperation between the People's Republic of China and the countries of the African region, which is of mutual benefit. Thus, China is expanding its ability to enter the world markets, as well as gaining access to new sources of energy and other natural resources. In turn, strengthening ties with the People's Republic of China allows African countries to attract Chinese investments, technology, and expertise to strengthen their economies and making them industrial.


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

According to experts, the Chinese government's effective actions allowed to overcome the problems in the country's economy that arose in 2016. An indication of this was the restoration of the positive dynamics of the country's economic development, shown by the results of last year.

Thus, according to the National Bureau of Statistics of the People's Republic of China, in 2017 the country's GDP for the first time exceeded 80 trillion Yuan and reached the level of 82 trillion 712 billion 200 million Yuan (11 trillion 869 billion US dollars), which is by 6.9 % more than last year. GDP growth rates exceeded the previous year's figure by 0.2 %. Thus, for the first time since 2011, there has been an acceleration of the pace of development of the Chinese economy.

Stable growth has also been shown by other indicators. In particular, last year, capital investments in China's fixed assets increased by 7.2 %, retail sales of consumer goods — by 10.2 %, foreign trade — by 14.2 %. In addition, the added value created by the leading enterprises of the country increased by 6.6 %, the index of development of the sphere of services — by 8.2 %, and the incomes of the population — by 7.2 %. A large harvest of cereals was gathered, livestock production was steadily developing. Business continued. Over the past year, more than 6 million new companies were registered in the country (about 16.5 thousand each day).

According to analysts, first of all, such achievements were reached at the expense of improving the quality of economic management, reforming the taxation system, starting the full work of “The Belt and Road”, as well as establishing closer ties between the most economically strong southern regions of the country and the northwestern provinces, where the situation remains difficult. Besides, there is a positive effect of increasing the volume of domestic consumption and competent investment in infrastructure and energy, that is, in those sectors that provide productive income.


The PRC's economic successes contributes to the implementation of the government's plans to increase the social standard of living of the population, including with the participation of leading Chinese companies. January 18, 2018, in the city of Chongqing (Central China), Alibaba Group launched e-commerce poverty relief program. The program provides assistance to local people in opening their own business on the e-commerce platform, as well as training for business. All in all, in 2018, Alibaba will build 10 model counties across the country which will overcome poverty.


3.3. Security and Law Enforcement Agencies

Situation around the Korean Peninsula A significant obstacle for resolving the problems associated with DPRK's actions in the missile and nuclear sphere is the different attitude of the leading countries of the world to the ways of solving this issue. First of all, it concerns the preservation of the differences between China and Russia on the one hand and the United States and their allies and partners on the other.

Thus, the leadership of the People's Republic of China gave a negative assessment of the Vancouver (Canada) Foreign Ministers' Meeting on Security and Stability on the Korean Peninsula on January 16, 2018. The Meeting was attended by the Foreign and Defence Ministers of the countries — participants of the UN Mission on the Korean Peninsula during the 1950–1953 war. According to the statement by the Ministry of Foreign Affairs of the People's Republic of China, such a meeting is a “relic of the Cold War” and only deepens the international disagreements over the North Korean problem. This confirmed China's position on the need to reach consensus on the North Korean issue among all the countries concerned in the Asia-Pacific region and the world.

In turn, on January 17, 2018, in an interview with Reuters, US President D. Trump accused the Russian Federation of helping the DPRK evade the UN's sanctions. According to the US President, such Russia's actions devalue other countries' (including China's) efforts to exert pressure on North Korea. In support of this he mentioned the fact that Russia continued to supply oil to the DPRK, despite the UN's ban.


Besides, a special problem of Sino-US relations remains the parties' disagreement on the issue of disputable islands in the Western Pacific.

Thus, on January 20, 2018, the Ministry of Foreign Affairs of the People's Republic of China made a sharp condemnation of the approach of the US Navy warship to the Huangyan Island (Scarborough Shoal) in the South China Sea. According to the statement by Foreign Ministry Spokesperson of the People's Republic of China Lu Kang, such actions have directly damaged the sovereignty and interests of China's national security, which preserves the right to take adequate measures in response.


China's Military Activities. Within the framework of increasing the combat potential of the People's Liberation Army of the PRC, measures to develop new types of military equipment are being continued. January 15–24, the Chinese Air Force conducted the first training with the participation of the new Chengdu J-20 fighter jets, created by the “Stealth” technology. During the training, the joint actions of Chengdu J-20 with other types of fighters, including J-16 and J-10C, were mastered. Chengdu J-20 fighter aircraft is the project of the Chengdu Aerospace Corporation. The aircraft was adopted in 2017 and is positioned as a fifth-generation fighter equipped with advanced electronics. Today, the PRC is the second after the USA country, capable of producing such aircrafts, technologically ahead of Russia in this area as well.


3.4. Science and Technology

According to the plans of the Government of the People's Republic of China, the implementation of programs of scientific and technological development of the country in various spheres continues. January 19, 2018, from the Chinese Jiuquan Satellite Launch Center, two satellites for monitoring the earth's surface were brought to a given orbit with the help of the “Chang Zheng-11” rocket carrier (the “Long March” series). The launch was carried out within the framework of an innovative project for the creation of a commercial orbital remote sensing system with a high degree of resolution “Jilin-1”. All in all, the project provides for the construction of an orbital group of more than 60 satellites.

Plans have been announced by 2023 to have set up in Beijing a technology park dedicated to artificial intelligence development programs, high-speed transmission of large amounts of data, cloud technologies, biometric identification and in-depth training. About 400 enterprises with an annual profit of over 7.7 billion US dollars will work in the park. The technological structure of the park will include a 5G mobile network, supercomputer and cloud services.

The project will be implemented under the patronage of the Zhongguancun Science Center, which was created in the 1950s to integrate science and education in the country. The total investment will amount to 2.1 billion US dollars. It is planned to establish cooperation with Chinese and foreign universities, research institutes and large companies.


IV. Plans and Prospects for Cooperation between China and Ukraine

The increase in the welfare level in the PRC stimulates the growth of the needs of the country's population in high-quality food products, especially those for children's consumption. In turn, this increases China's interest to Ukraine, which is the manufacturer of such products, which in its quality exceed European ones. Based on Ukraine's capabilities, Beijing continues to pursue a consistent policy of opening its market for Ukrainian food products.

Plans for further expansion of trade ties between the two countries in this sphere were discussed on January 18, 2018 during a meeting of representatives of the Embassy of Ukraine to the PRC with the representatives of the China Chamber of Commerce of Foodstuffs and Native Produce (CFNA). During the negotiations, an agreement was reached on CFNA's mediation between Ukrainian suppliers of food products (grain and oil products, fruits and vegetables, beekeeping products) and Chinese companies.

CFNA is accountable to the Ministry of Commerce of the People's Republic of China, one of its main tasks is to stimulate the development of international trade. The organization has over 7,000 members representing all the regions of China and covers about 60 % of the import and export of agricultural products.