February 6, 2018

China (中国) Today

Events Review (29.01–04.02.2018)

 

I. Major Events and Trends in the Development of the Situation Around the PRC

The growth of the PRC's power as a leading nation in the world is used by the country's leadership to expand its spheres of influence at the global and regional levels, including in the Arctic. In particular, in this regard, at the end of January 2018, the State Council Information Office of the People's Republic of China published the White Paper titled “China's Arctic Policy”.

The document establishes the country's right to conduct scientific research, navigation, flights of planes, fishing, laying of underwater cables and pipelines, exploration and extraction of natural resources in the high seas, international seabed areas and other special sea waters and areas of the Arctic Ocean.

“China’s Arctic Policy” White Paper
“China’s Arctic Policy” White Paper

In support of these rights, the PRC makes reference to international law, including the UN Convention on the Law of the Sea, the geographical location of China as one of the continental states close to the Arctic Circle, as well as the increasing importance of the Arctic, which affects the interests of all mankind.

Besides, China' points out its role in resolving the Arctic's key problems which are a result of the negative impacts of global climate change and environmental pollution, as well as the of lack of a comprehensive economic management system in the region. Taking into consideration the above-mentioned, the document states about the direct impact of the natural conditions of the Arctic and their changes on the climate system and the environment of the PRC and Chinese interests in fishing and agriculture.

Based on these circumstances, the People's Republic of China expresses its willingness to work with other countries on the development of the Arctic and counteracting the challenges and threats in the region. At this, among the main directions of such work is the implementation of China's plans to create a “Polar Silk Road” (PSR) through developing the Arctic shipping routes. For example, Beijing will encourage entrepreneurs to get engaged in construction of infrastructure along the PSR and commercial shipping on the route.

 

In turn, the key domestic event in the PRC was the meeting (January 29, 2018) of the 32nd Session of China's National People's Congress Standing Committee of the 12th convocation. The main issue of the agenda is the consideration of amendments to the Constitution of the country, which were determined by the 19th National Congress of the Communist Party of China. First of all, it concerns the building of socialism with the Chinese characteristics and the moderately prosperous society in the country, as well as the realization of the strategic goal of the revival of the Chinese nation.

A meeting 32nd Session of China's National People's Congress Standing Committee of the 12th convocation on January 29, 2018 in Beijing
A meeting 32nd Session of China's National People's Congress Standing Committee of the 12th convocation
on January 29, 2018 in Beijing

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

According to the Chinese government, today the construction of “The Belt and Road” goes to a new level of development. According to the data of Ministry of Commerce of China (released on January 25, 2018), recently, trade and economic cooperation between the countries participating in the Chinese initiative has made significant progress.

Last year, China's trade with countries along “The Belt and Road” reached 1.15 trillion US dollars, which exceeded the previous year's figure by 17.8 %. At this, the total volume of direct investments of Chinese enterprises into the “Belt and Road” countries amounted to 14.4 billion US dollars, and the amount of contracts, which were concluded by China within its framework, reached 144.3 billion US dollars with an increase of 14.5 %.

Within the framework of the Chinese initiative, a number of important projects were implemented, including the construction and commissioning of the Mombasa-Nairobi railway (as part of the East African railway network) and the first tunnel on the China-Thailand railroad. Besides, construction of other infrastructure facilities continued, including the Hungarian-Serbian railway, the high-speed road from Karachi (Pakistan), the China-Belarusian Industrial Park and the Trade and Economic Cooperation Zone in Suez (Egypt).

In 2017, China's trade with countries along “The Belt and Road” reached 1.15 trillion US dollars
In 2017, China's trade with countries along “The Belt and Road”
reached 1.15 trillion US dollars

Along with this, China has concluded agreements on trade liberalization with Georgia and the Republic of Maldives, and started negotiations on the facilitation of trade relations with Moldova and Mauritius.

Of great importance was also the PRC's assistance to “The Belt and Road” countries. Last year, China launched a number of programs in this sphere that include poverty alleviation and resolving of other humanitarian problems in the countries participating in the Chinese initiative, as well as training specialists in different spheres.

According to the decisions of the 19th National Congress of the CPC, China will continue to actively build “The Belt and Road” on the principles of mutual benefit, trade, investment and people's exchanges, as well as a common solution to international problems. In this aspect, China will create all the necessary conditions to deepen its partners' participation in the strategic initiative and expansion of its geography.

 

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 remains to strengthen ties with leading European countries, which are powerful consumers of Chinese products. January 31, 2018 Beijing hosted an annual top-level government meeting of Prime Minister of China Li Keqiang and British Prime Minister Theresa May.

They discussed the prospects for further economic cooperation between the two countries, considering the United Kingdom's withdrawal from the European Union. According to the parties, Brexit, apart from not creating obstacles to deepening the interaction between Great Britain and China, opens new opportunities for this.

To date, Britain is China's second largest trading partner among European countries. In turn, the PRC is the UK's second largest trading partner outside of Europe. In 2017, the trade between the two countries amounted to 79 billion US dollars, with the increase by 6.2 % year-on-year. Currently, more than 500 Chinese enterprises are building their business in the UK, and Chinese investments are spreading from traditional industries such as trade, finance and telecommunications to innovation ones, including new sources of energy, high-tech manufacturing, infrastructure, research and development centers. As of the end of last year, the total amount of Chinese investments into the non-financial sector of Great Britain reached 19.14 billion US dollars.

Chinese Premier Li Keqiang and British Prime Minister Theresa May on Inaugural meeting of the UK-China CEO Council in Beijing on January 31, 2018
Chinese Premier Li Keqiang and British Prime Minister Theresa May on Inaugural meeting of the UK-China CEO Council
in Beijing on January 31, 2018

At the same time, the PRC attaches great importance to the development of relations with the countries of the Asia-Pacific region.

Chinese  Foreign Minister Wang Yi meets with Japanese counterpart Taro Kono in Beijing on January 28, 2018
Chinese  Foreign Minister Wang Yi meets with Japanese counterpart Taro Kono
in Beijing on January 28, 2018

First of all, this concerns Japan, which is the country with the largest economy in the region. January 28, 2018, negotiations between Minister for Foreign Affairs of the People's Republic of China Wang Yi and his Japanese counterpart Taro Kono took place in Beijing's state-owned residence in Diaoyutai. During the meeting, they pointed out significant achievements in the development of Sino-Japanese relations for forty years after the signing of the agreement on friendship and cooperation of the parties.

Based on this, the two countries agreed on the intensification of bilateral contacts at all levels, including in the spheres of economy, culture, media and youth exchanges. In addition, Taro Kono confirmed Japan's intentions to build relations with China and Taiwan on the basis of the “one China” principle, and also expressed his country's being interested in participating in the Chinese initiative “The Belt and Road”.

In the parties' view, deepening of the interaction between the PRC and Japan, as the countries that are in the first places by the level of development of their economies, will be good not only for the two countries, but for the entire Asia-Pacific region and the world.

 

Against this background, there are emerging new problems in US-China relations. January 31, 2018, the Ministry of Foreign Affairs of the PRC condemned the position of the US President D. Trump, who in his annual address to the US Congress called China one of the main sources of threats to American interests. In this regard, the Foreign Ministry of China once again urged Washington to give up the mentality of the Cold War and return to a course of positive attitude towards China.

 

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

“Made in China 2025” strategy
“Made in China 2025” strategy
“Made in China 2025” strategy 

According to Chinese experts, the stable work of the Chinese economy allows to conclude that it maintains positive trends in its development this year too. Thus, according to the forecast by the head of the Development Research Center of the State Council of the People's Republic of China, Li Wei, in 2018, the country's economy will grow at medium and high rates. In particular, investments will grow by 7 %; the role of consumption in the economy will increase by an average of 10 %, first of all in e-business and trade; exports will remain stable.

The same estimates were made by Vice Minister of Commerce of the People's Republic of China, Wang Shouwen. According to him, in 2018, the country's foreign trade will continue to stabilize and improve. At this, will also improve the structure of the PRC's domestic market and will expand the country's access to foreign markets, which will be a consequence of improving the quality of Chinese goods and services.

However, the experts have acknowledged the need to pay special attention to reducing the risks of China's economic development, including by strengthening the legal framework for investments, improving the quality of foreign investments and perfecting the protection of intellectual property rights.

 

As part of the support of national producers, it is planned to continue the implementation of the “Made in China 2025” strategy. According to Minister of Industry and Information of the People's Republic of China Miao Wei, this year the main priorities of the program will include:

  • creation of innovation centers for the manufacturing industry, as well as development of “smart production”, “strengthening the industry base”, “green production” and “innovation in the sphere of high-tech equipment” projects;
  • setting up “Made in China 2025” national demonstration zones, nurturing several world-class advanced manufacturing industry clusters;
  • promoting the integrative development of manufacturing sector and internet, including creation of “industrial internet”;
  • improvement of the quality of the system of proposals with the effective implementation of tasks scheduled for 2018, aimed at eliminating excess capacities in the steel industry, launching a new complex of technical reconstruction projects and improving the conditions for the development of manufacturing industry through reforms.

 

3.3. Security and Law Enforcement Agencies

Situation around the Korean Peninsula. According to the UN independent observers' confidential report, a number of countries violate international sanctions and support trade and economic cooperation with North Korea. In 2017, despite the restrictions imposed on the DPRK, it systematically shipped coal to foreign ports, including in Russia, China, South Korea, Malaysia and Vietnam, mainly using false paperwork that showed countries such as Russia and China as the coal origin, instead of North Korea. Besides, the report presents facts of cooperation between the DPRK and Syria in the sphere of chemical weapons development.

North Korean coal exports
North Korean coal exports

Based on this information, on January 30, 2018, the US Department of State once again accused Russia of supporting North Korea, which allows the latter to continue to develop missile and nuclear weapons. At the same time, the US Treasury Department imposed additional sanctions against Russian companies that maintain ties with the DPRK and facilitate the implementation of its missile and nuclear program.

At the same time, international sanctions, as well as North Korea's excessive spending on military and propaganda purposes, have already led to significant economic losses, including the actual loss of its gold and foreign exchange reserves. Despite this, the DPRK's government plans to launch new large-scale demonstrations of force, including a missilery parade against the background of the South Korean Winter Olympics.

 

Four nuclear activity international monitoring stations were certified in China
Four nuclear activity international monitoring stations were certified in China

China's Military Activities. China's Armed Forces continue efforts to create a global system for monitoring potential nuclear tests around the world.

Lately, four China-hosted nuclear activity international monitoring stations (IMS) were certified in Guangdong and Guangzhou provinces, in Beijing and in Inner Mongolia Autonomous Region.

This issue is becoming especially important in the context of North Korea's continuation of its nuclear program.

 

3.4. Science and Technology

China continues to demonstrate a high level of advancement in the development of modern technologies in a wide range of fields, including space, computer and transport spheres.

January 30, 2018, China’s Commission of Science, Technology and Industry for National Defense and the China National Space Administration announced the official launch of the first Chinese X-ray astronomic “Huiyan” satellite (after seven months of testing). During orbital tests, the “Huiyan” satellite scanned images and monitored specific celestial bodies from a fixed point. Initial results of observations on black holes and neutron stars within the Milky Way were also obtained.

Along with this, China has made significant progress in the creation of artificial intelligence (AI) systems. According to the statistical report on the development of the Internet in the PRC, in 2017, in the country there were more than 30 thousand applications for the registration of patents in the sphere of AI. All in all, about 600 research institutions, companies and enterprises operate in this sphere. Of these, 30 % work in e-commerce and Internet finance; others — in “smart” transport, online medicine, culture and entertainment.

Measures are being taken to create new vehicles. In particular, Chinese engineers suggested using a classical scheme with two bearing surfaces to create a hypersonic passenger aircraft. According to experts, such a design will provide the optimal balance between the aircraft's frontal resistance and its internal volume. At the same time, the combination of the upper and lower wings will enable them to increase their climb power and, accordingly, to reduce fuel consumption.

The PRC's government is also paying great attention to oceanographic research. In January of this year the state-owned China Shipbuilding Industry Corporation completed the development of a sketch project for a new manned deep-sea submersible vehicle. On this basis, the main equipment is selected. Sea tests of the bathyscaphe are scheduled for 2020. According to calculations, the device will become the deepest in the world and will be able to dive to a depth of 11 thousand meters. The current submersible manned bathyscaphe “Jiaolong” used in the PRC, can dive to a depth of 7,000 meters.

Chinese submersible manned bathyscaphe “Jiaolong”
Chinese submersible manned bathyscaphe “Jiaolong”

IV. Plans and Prospects for Cooperation between China and Ukraine

February 1, 2018, a presentation of the China International Import Expo (CIIE) was held in Kyiv
February 1, 2018, a presentation of the China International Import Expo (CIIE)
was held in Kyiv

One of the most important events in the development of cooperation between Ukraine and the People's Republic of China should be our state's participation in the first China International Import Expo (CIIE), which is planned in Shanghai in the fall of this year. February 1, 2018, in Kyiv was held a presentation of the CIIE, organized by the delegation of the Ministry of Commerce of China and the People's Government of Shanghai, as well as the Embassy of the People's Republic of China in Ukraine with the support of the Chamber of Commerce and Industry of Ukraine.

During the presentation, an agreement was signed between the Commerce Chamber of Ukraine and the founder of CIIE — the Chinese company National Exhibition and Convention Center (Shanghai Co., Ltd.) on Ukraine's participation in the fair. According to experts, Ukrainian producers of agricultural products will benefit most from our country's participation in the CIIE. In turn, it will help strengthen Ukraine's economy and balance its trade with the People's Republic of China.

All in all, entrepreneurs from more than 100 countries and regions of the world are planning to take part in the exhibition. Within the framework of the CIIE, Hongqiao International Trade Forum will be held, industry seminars, as well as presentations of new products.

 

A signing ceremony on the completion of works in the seaport “Yuzhny” by China Harbor Engineering Company, January 30, 2018
A signing ceremony on the completion of works in the seaport “Yuzhny” by China Harbor Engineering Company, January 30, 2018

Against this background, an illustrative example of the success of the cooperation between Ukraine and the PRC is the participation of the Chinese side in the reconstruction and development of Ukrainian port infrastructure. On January 30, 2018, an Acts of Acceptance and Delivery in accordance with the project “Reconstruction of water approaches, shunting zones and operational water areas near the berths, and the prospective cargo turnover of the seaport “Yuzhny” in Yuzhne, Odesa region was signed in the Ministry of Infrastructure of Ukraine. The works were completed by China Harbor Engineering Company in full with a pre-schedule of three months.

As part of the implementation of the project, a 16-meter approach channel was constructed to ensure the functioning of the new grain terminal of the Ukrainian company MV Cargo and the American Cargill corporation with a transshipment capacity of 5 million tons per year. Due to this, favorable conditions have been created not only for improving the port's work efficiency, but also for the overall improvement of agricultural development in Ukraine.

 

 

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