February 26, 2018

China (中国) Today

Events Review (19.02–25.02.2018)

 

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

According to the leadership of the People's Republic of China, the nuclear status of the country puts onto it a special responsibility for maintaining strategic stability in the world. The position of Beijing on this issue was confirmed by Chairperson of the Foreign Affairs Committee of the National People's Congress of China Fu Ying during the 54th Munich Security Conference on 16–18 February, 2018.

Thus, in Fu Ying's words, China has a relatively small nuclear potential and pursues a policy of self-defence and minimum deterrence. At this, Beijing adheres to two basic principles, namely — non-first-use of nuclear weapons and non-use of them against non-nuclear-weapon countries and regions.

At the Conference, Fu Ying expressed concern about the proliferation of nuclear weapons in the APR, and also expressed hope for the resumption of peace talks on the settlement of the situation around the Korean Peninsula. At this, she stressed the need to strengthen the efforts of five permanent members of the UN Security Council to maintain global stability in the world and to continue the process of nuclear disarmament.

On its part, the PRC will continue its efforts to facilitate the establishment of a dialogue between the United States and South Korea and the DPRK. According to Fu Ying, without such a dialogue, the US sanctions against North Korea will not allow the Pyongyang nuclear and missile program to be stopped.

Chairperson of the Foreign Affairs Committee of the National People's Congress of China Fu Ying at the Munich Security Conference Chairperson of the Foreign Affairs Committee of the National People's Congress of China Fu Ying at the Munich Security Conference
Chairperson of the Foreign Affairs Committee of the National People's Congress of China Fu Ying
at the Munich Security Conference

 

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 making consistent efforts to expand the geography of “The Belt and Road”. In particular, on 12 February, 2018, a seminar entitled “Strengthening cooperation to promote the construction of the Belt and Road” was organized by Nepal-China Chamber of Commerce and Industry (NCCCI) in Kathmandu.

The event highlighted the importance of the Chinese initiative, which created a wide range of opportunities to increase foreign investments in various sectors of the Nepal economy, including hydropower, agriculture, infrastructure, trade, tourism and services industry. In view of this, the participants expressed the need to intensify the involvement of Nepal in “The Belt and Road” with the participation of government structures and private businesses.

According to experts, such an approach will provide a comprehensive solution to the issue of deepening Nepal's cooperation with China and other partners. This issue is of particular relevance to Nepal due to its lack of access to the sea and the weak development of the country's economy. In this regard, within the framework of the implementation of the Memorandum of Understanding on “The Belt and Road” initiative, signed in May 2017, the Nepalese government plans to focus on reforming national legislation and improving the country's infrastructure in order to create conditions for closer cooperation between the parties.

Seminar “Strengthening cooperation to promote the construction of the Belt and Road”, Kathmandu, Nepal, 12 February, 2018
Seminar “Strengthening cooperation to promote the construction
of the Belt and Road”, Kathmandu, Nepal, 12 February, 2018

The development of transport communications of “The Belt and Road” continues.

China-Kyrgyzstan-Uzbekistan new highway
China-Kyrgyzstan-Uzbekistan new highway

For example, in February this year, a new automobile corridor China-Kyrgyzstan-Uzbekistan should be opened, which allows to significantly reduce the time of delivery of goods (from 8–10 to 2 days). In order to transport cargo along the new route, a joint transport company “Silk Road International” LLC with a fleet of about 80 lorries was created. Today, applications for the transportation of 27 thousand tons of cargo have already been received, and this figure is planned to reach 100 thousand tons within the current year.

The work of the new route will help improve the economic efficiency and increase the volume of trade of the People's Republic of China with the partner countries in “The Belt and Road”. Besides, there are plans to expand the transport corridor, in particular to construct a China-Kyrgyzstan-Uzbekistan railway, which will enable the development of China-Central Asia-Caucasus-Europe and China-Central Asia-Afghanistan-Iran transcontinental systems. In turn, this will improve logistics in the Asian region and conditions for China's cooperation with its neighbors.

 

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

3.1. Politics. Development of China's International Cooperation

China is leading an active policy of deepening relations with the G 7 and strengthening its influence on world processes through leading international organizations.

The PRC's Ambassador to the UK Liu Xiaoming
The PRC's Ambassador to the UK Liu Xiaoming

Thus, during the Lunar Year Reception at the Chinese Embassy in London, the PRC's Ambassador to the UK Liu Xiaoming emphasized the need to intensify cooperation between the two countries in all spheres. In particular, he named economy, finance, science and technology and culture. According to the Representative of the People's Republic of China, this will contribute to the implementation of the concept of building a “China–UK Golden Era”.

In this context, Liu Xiaoming pointed out the fruitfulness of the parties' cooperation in the past year, which resulted in the strengthening of political trust, achievement of “golden results” in trade, investment, nuclear energy, innovation and humanitarian spheres, as well as deepening of joint work within the framework of “The Belt and Road”.

 

Permanent Representative of the PRC to the United Nations Ma Zhaoxu
Permanent Representative of the PRC
to the United Nations Ma Zhaoxu

China takes an active part in the work of the UN Security Council. February 22, 2018, during the extraordinary session of the UN Security Council on the Syrian problem, Permanent Representative of the People's Republic of China to the United Nations Ma Zhaoxu, reaffirmed Beijing's position on the need for a speedy settlement of the conflict in Syria on the basis of peace talks.

According to the Chinese diplomat, such an approach is the only solution to the Syrian issue. Based on this, he called on the UN Security Council to unite and make a united position on Syria. According to Ma Zhaoxu, first of all, efforts should be focused on ensuring a ceasefire in the country and preventing further deepening of the humanitarian crisis there.

 

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

Statistical agencies of China continue to sum up the development of the Chinese economy.

According to the Ministry of Industry and Information Technology of the People's Republic of China, the country ranks first in the world in terms of mobile payment transactions. In 2017, the volume of such operations reached a level of 12.77 billion US dollars, which is 3.5 billion US dollars more than in the previous year and twice as much as in 2015. At this, the Chinese society has quickly moved from the practice of using bank transactions to mobile payments.

Chinese companies in the Fortune Global 500
Chinese companies in the Fortune Global 500

Along with this, there is a significant increase in the volume of assets of Chinese state-owned enterprises of central subordination. Thus, as of the beginning of this year, the total volume of such assets amounted to 8.59 trillion US dollars, the highest since 2012 (increased by 78 %). According to the volume of accumulated assets, three Chinese enterprises of central subordination have entered the top five of the world's largest companies rating Fortune Global 500.

There is also an increase in investment in the transport sector of the country. According to the Beijing Municipal Commission of Transport, over the past five years, 77.9 billion US dollars have been invested in the development of communications systems of the capital of China, by 44 % more than within the previous five-year period. Three-fourths of these investments were spent on public transport.

Chinese experts state that judging by the positive trends in the Chinese economy, in 2018 it should be expected to grow further. According to a report from the research institute of the China Council for the Promotion of International Trade (CCPIT), this year, the average retail sales of consumer goods in the country will increase by 10 % (including by 12 % in rural areas) annually and will make about 6.38 trillion US dollars. First of all, such an indicator will be reached due to innovative products and services that are of growing demand among the Chinese population. At this, the consumption input in the GDP growth will be 60 %.

The energy needs of the country will also grow. Thus, China Electricity Council (CEC) forecasts 5.5 % increase in electricity consumption in the current year. The total generating power is expected to increase to 1.9 billion kW (including 760 million kW — about 40 % — will be from non-energy resources).

 

 

3.3. Security and Law Enforcement Agencies

US Secretary of State R. Tillerson in an interview with CBS News, 18 February, 2018
US Secretary of State R. Tillerson in an interview
with CBS News, 18 February, 2018

Situation around the Korean Peninsula. Developments in the APR show the possibility of another aggravation of the situation in the region after the Winter Olympics in South Korea. According to reports from the North Korean media, the United States is preparing for new large-scale exercises aimed at demonstrating force and exerting pressure on North Korea. To this end, measures are being taken to build up US troops in South Korea and Japan.

In fact, Washington's intentions were confirmed by US Secretary of State R. Tillerson. In his interview for the media, he said that the US intends to continue pressure on the DPRK to make it negotiate and give up manufacturing missile and nuclear weapons. As part of such actions, sanctions against North Korea, which have already significantly limited its external revenues, will increase.

Thus, February 23, 2018, the United States imposed on the DPRK a new package of sanctions, which apply to 56 shipping and trading companies.

 

3.4. Science and Technology

One of the main directions of development of science and technology in the People's Republic of China is creation of various systems of artificial intelligence.

According to Deloitte's report, China ranks first in the number of “smart” cities. For example, to date, about 500 such cities are functioning in the PRC, which is half of all “smart” cities in the world. At this, projects for the creation of “smart” cities are being implemented both in metropolitan areas and in small settlements.

However, based on the four key parameters developed by Deloitte, China's “smart” cities are still lagging behind the “smart” cities in other leading countries. First of all, this is caused by shortcomings in strategic planning, management and maintenance. Nevertheless, the systematic analysis of 25 “smart” cities in the PRC has shown that their development is up to the world level.

Proceeding from the experience gained, the program of the 13th Five-Year Plan on National Economic and Social Development of the People's Republic of China includes a separate task to create new “smart” cities on the principles of openness, shared construction and use, and equal access to public services.

China’s “smart” cities index (according to Deloitte)
China’s “smart” cities index (according to Deloitte)

In 2018, it is planned to start implementation in China of about thirty mega-economic and several hundred regional projects in the total amount of 1.58 trillion US dollars. Most of them will be implemented in strategic and innovative industries, including high-tech manufacturing, development of information technology and energy and transport infrastructure (including “intellectual” airports, high-speed railways and highways).

Thus, intelligent highway, connecting Hangzhou, Shaoxing and Ningbo will be realized in 2022. The highway will be “intelligent”, environmentally friendly and safe. According to the plan, a high-speed highway will be opened before Hangzhou hosts the Asian Games in 2022.

 

China's unmanned submersible Qianlong-2
China's unmanned submersible Qianlong-2

The PRC leadership pays great attention to oceanographic research, aimed at obtaining wider access to world natural resources. Last week, within the framework of the 49th Chinese Oceanographic Expedition, a second dive of China's self-developed unmanned autonomous underwater vehicle, Qianlong-2 was carried out in the south-western part of the Indian Ocean. The device for about 30 hours was at the depth of 2920 meters (maximum depth — 4500 meters). In general, Qianlong-2 has already performed 40 dives, during which data were collected on a number of sites in the south-western part of the Indian Ocean, including photographs of the Ocean's bottom, information on anomalies of water masses and geomagnetic indices.

 

IV. Plans and Prospects for Cooperation between China and Ukraine

Deepening of cooperation with the PRC in the energy, transport and infrastructure sectors is of great importance for Ukraine.

February 8, 2018, during the meeting in Kharkiv, the representatives of the “China Machinery Engineering Corporation” (CMEC) and the Institute for Sustainable Development of Ukraine and local authorities of Pervomaisk city discussed the issue of the construction of a solar power plant (SPP) with a capacity of 50 MW on the principle of public-private partnership. For the construction of the plant it is planned to allocate a land plot of 100 hectares.

At this, the parties pointed out the existence of favorable conditions for the construction of the SPP, including legislative protection of foreign investment in the energy sector, as well as plans of the Government of Ukraine to decentralize the national energy sector. Besides, among positive conditions for the development of solar power in Ukraine are the population's growing demand for solar panels, which is due to the favorable “green” tariffs that are pegged to the Euro. For example, as of the end of 2017, more than 3 thousand households (out of the total of 6.5 million) have already switched to “clean” electricity.

Representatives of the “China Machinery Engineering Corporation” (CMEC) in Kharkiv, February 8, 2018 “China Machinery Engineering Corporation” (CMEC)
Representatives of the “China Machinery Engineering Corporation” (CMEC)
in Kharkiv, February 8, 2018

At the same time, February 14, 2018, the prospects of the participation of the Chinese company “Beijing Electric Power Automatic” in the production of electric buses on the basis of the Stryi Bus Plant together with the Ukrainian company “VEEM-Metallavtoprom” were discussed in Lviv. According to the project, the Chinese side proposes to assume the functions of producing engines, control units and accumulators. In turn, the Ukrainian company will produce body parts according to Chinese drawings, as well as supply spare parts and components.

 

www.reliablecounter.com