March 21, 2018

China (中国) Today

Events Review (12.03–18.03.2018)


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

Last week in China there was the first session of the 13th National People's Congress (NPC). The main outcome of the event was the adoption of amendments to the country's Constitution. The main ones include provisions for: building socialism with Chinese characteristics in the country; China's assistance in building a human community of common destiny; the CPC's leading role in the state system of the country; main values of socialism; the obligation of civil servants to publicly swear allegiance to the Constitution; creation of a Supervision Commission as a new state body. At this, from the Chinese Main Law was removed the provision that the President of the People's Republic of China and his deputy may hold office for no more than two consecutive terms.

Besides, heads of key state bodies of the People's Republic of China were elected. Thus, Xi Jinping was unanimously re-elected as President of the PRC and Chairman of the Central Military Council, Wang Qishan was elected Vice President of the People's Republic of China, Li Keqiang was endorsed as Chinese Premier, and Li Zhanshu was elected Chairman of Standing Committee of the NPC. The session also elected 14 Vice Chairmen and members of Standing Committee of the NPC, Deputy Chairmen and members of the Central Military Council, leaders of the State Supervision Commission, the Supreme People's Court and the Supreme People's Procuratorate of the People's Republic of China.

President of the PRC Xi Jinping with newly elected Chinese Vice President Wang Qishan Chinese Premier Li Keqiang takes an oath of allegiance to the Constitution Members of the Central Military Commission take an oath of allegiance to the Chinese Constitution
 President of the PRC Xi Jinping with newly elected Chinese Vice President Wang Qishan Premier Li Keqiang and members of the Central Military Commission take an oath of allegiance to the Chinese Constitution

Along with this, deputies of the NPC adopted a plan for reforming the structure of the State Council (Government) of China. After the reorganization of the State Council, it will consist of 26 ministries and committees. At the same time, new institutions will be formed under the Cabinet of the country:

  • state market regulatory administration;
  • state radio and television administration;
  • state immigration administration;
  • state medical insurance administration;
  • state grain and reserves administration;
  • state forestry and grassland administration.
  • state banking and insurance regulatory commission;
  • state international development cooperation agency and others

Several plenary meetings were held within the framework of the session, including with the participation of Secretary General of the CPC, President of the People's Republic of China Xi Jinping, Premier of the State Council of China Li Keqiang, as well as delegations of provinces, cities of central subordination and autonomous districts. Members of the NPC also discussed a number of other important issues related to the country's political, economic, security and humanitarian spheres.


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

Minister of Commerce of the People's Republic of China Zhong Shan
Minister of Commerce of the PRC Zhong Shan

The theme of “The Belt and Road” was one of important issues on the agenda of the session of the Chinese Parliament. According to the Minister of Commerce of the People's Republic of China, Zhong Shan, “The Belt and Road” is a Chinese way to mutually beneficial cooperation among all countries of the world and is an open, inclusive and transparent initiative.

As of today the Chinese initiative has been supported by more than 140 countries of the world. At this, China has concluded 16 free trade agreements covering 24 countries, first of all “The Belt and Road” participants and ASEAN members. Trade-economic cooperation is especially effective, which allows to expand the scope of trade, diversify investment areas, and implement various types of large-scale projects. As Zhong Shan pointed out, the liberalization and simplification of investment and trade procedures will contribute to further development of these processes.


At the same time, measures are ongoing to implement plans for the construction of the “Maritime Silk Road”. March 10, 2018, an exhibition “Maritime Silk Road” was held in Songkhla province in southern Thailand. The exhibition showed the wide range of projects related to trade and economic cooperation between Thailand and the countries of the Asia-Pacific and ASEAN using maritime transport communications.

Deputy Prime Minister of Thailand, Wissanu Krea-ngam said that Songkhla province is ready to become a portal to ASEAN in the “Maritime Silk Road” and take an active part in its development within “The Belt and Road”. In turn, Chinese Ambassador Lyu Jian, emphasized the important role of “The Belt and Road” in establishing not only economic but also political cooperation between China and Thailand.


Leading Chinese companies are also taking an active part in the implementation of the idea of the “Maritime Silk Road”. In particular, Cosco Shipping Ports plans to further expand its network of port assets, including in Europe, Asia and the Middle East. Lately, the corporation has acquired 76 % of shares in a container terminal at the port of Zeebrugge (Belgium), as well as Noatum Port Holdings' shares, which operates container terminals in port of Valencia and port of Bilbao (Spain).


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

3.1. Politics. Development of China's International Cooperation

China's Foreign Ministry gave a positive assessment of the actions of former US Secretary of State R. Tillerson
China's Foreign Ministry gave a positive assessment of the actions of former US Secretary of State R. Tillerson

Despite the growing disagreements between the PRC and the USA, building a strategic partnership between two countries remains a key priority of Beijing's foreign policy. March 14, 2018, China's Foreign Ministry gave a positive assessment of the actions of former US Secretary of State R. Tillerson on the development of Sino-US relations and expressed readiness for constructive cooperation with the new head of the American foreign policy department, M. Pompeo. At this, they stressed the importance of continuing the implementation of already concluded agreements and contracts between the two countries.


At the same time, China' is paying special attention to deepening its interaction with the countries of the Asia-Pacific and Southeast Asia. In particular, on March 13, 2018, in his speech at the Center for Strategic and International Studies in Jakarta (Indonesia), the new Ambassador of the People's Republic of China to ASEAN Huang Xilian expressed Beijing's position on the need to strengthen the mechanism of cooperation between China and the mentioned countries, including by activating strategic contacts in the political and security spheres. In addition, he emphasized the importance of implementing the new concept of security in Asia, as well as stepping up consultations on the adoption of the Code of Conduct in South China Sea.

Ambassador of the PRC to ASEAN Huang Xilian at the Center for Strategic and International Studies in Jakarta (Indonesia), March 13, 2018
Ambassador of the PRC to ASEAN Huang Xilian at the Center for Strategic and International Studies
in Jakarta (Indonesia), March 13, 2018

Also, steps are being taken to improve China's relations with Japan. According to the Chinese Foreign Minister, Wang Yi, the PRC and Japan should reach political consensus between the two countries without threats to each other. At the same time, the possibility of such a consensus was accepted only in the case of Japan's ability to objectively assess the development of China. Under such conditions, Beijing is ready to reciprocate and contribute to deepening the positive relationship between the two countries, enshrined in the Sino-Japan peace and friendship agreement.


Against this background, sensitive for China in relations with other countries is the issue of Hong Kong (former colony of Great Britain). March 15, 2018, the Office of the Commissioner of the Ministry of Foreign Affairs of the People's Republic of China in the Hong Kong Special Administrative Region criticized the publication by the United Kingdom of the next Six Monthly Report on Hong Kong. According to a statement by the Chinese Ministry of Foreign Affairs, the Hong Kong affairs are under the exclusive competence of the People's Republic of China. In view of this, there was a demand to London to “stop irresponsible statements on the Hong Kong theme”.


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

The leadership of the People's Republic of China demonstrates firm intentions to continue the policy of openness to the outside world, expanding access to the Chinese market, and to pay more attention to the protection of intellectual property rights.

According to the statement by the Minister of Commerce of the People's Republic of China, Zhong Shan, over the past five years, China has risen by 18 positions in the rating of business convenience, which has provided a high level of investment in the economy. For example, last year, China attracted a record amount of foreign investment in the amount of 136.3 billion US dollars, having taken second place in the world by this indicator. In order to preserve the investment attractiveness of the country, the PRC government will continue to focus its efforts on increasing the openness of the financial market, innovative economic development, improving the management system and developing telecommunications.


Major economic development targets of China for 2018
Major economic development targets of China for 2018

In order to implement the above-mentioned intentions, the Ministry of Commerce of the People's Republic of China has developed a “road map” for transforming the country into a full-fledged trade and economic state. In particular, it provides for: by 2020, to strengthen the status of the People's Republic of China as a major trading and economic country; by 2035 — transform into a strong trade and economic country; by 2050 — finally become an economic and trade giant. The “road map” includes a list of specific tasks and plans, namely:

increasing the role of consumption in economic development; determining the country's preferences in foreign trade competitiveness; increasing the volume of foreign investments; strengthening regional openness; formation of a new type of international trade and economic relations; increasing the role of commerce in improving the welfare of the people;

optimization of consumption; creation of a powerful trading state; stimulating foreign investments and ensuring their innovative character; improving the effectiveness of assistance to foreign countries; deepening cooperation within “The Belt and Road”; developing regional cooperation in the trade and economic sphere; fighting poverty through expanding commerce.


The proof of China's capability of resolving these problems is to maintain positive trends in the development of the Chinese economy.

According to the State Statistical Office of China, in January–February 2018, there was a steady upward trend in the growth of all major macroeconomic indicators of the Chinese economy. In particular: volumes of industrial production increased by 7,2 % in comparison with the similar period of last year; service sector — by 8 %; investment in fixed assets — by 8.1 %, construction — by 9.9 %; retail sales — by 9.7 %.

In the first two months of the current year, the total volume of trade exports and imports amounted to 714 billion US dollars, with the growth of 16.7 % year-on-year. At this, the volume of exports amounted to 387 billion US dollars (an increase of 18 %), and imports — to 330 billion US dollars (+15.2 %). The current surplus was 57 billion US dollars (+37,2 %). The main trading partners of the People's Republic of China remained the EU, the US, ASEAN, Japan and the countries of “The Belt and Road”.


3.3. Security and Law Enforcement Agencies

Situation around the Korean Peninsula. Despite the beginning of the DPRK's dialogue with South Korea and a demonstration of readiness for talks with the United States, the official Pyongyang maintains unchanging positions on key issues that concern its interests. Last week, the official newspaper of North Korea's Workers' Party “Labor Newspaper” accused the United States of putting political, economic and military pressure on North Korea, calling it “a violation of international law and an attack on the sovereignty of the North Korean state.” At this, the emphasis was put on the fact that such actions of the United States will not be able to intimidate Pyongyang.

In its turn, the United States confirms its readiness to establish contacts with North Korea at the highest level, but only on the basis of the DPRK's conciliatory gesture. According to White House Press Secretary Sarah Sanders, the United States accepted the DPRK's invitation for talks and began preparations for the meeting. However, such a meeting will be possible only after Pyongyang's giving up nuclear weapons and the cessation of nuclear and missile tests.


Chinese President Xi Jinping meets with Chung Eui-Yong, National Security Advisor for the President of the Republic of Korea, Beijing, March 12, 2018
Chinese President Xi Jinping meets with Chung Eui-Yong, National Security Advisor for the President of the Republic of Korea, Beijing, March 12, 2018

In this situation, China continues to work as an intermediary in settling problems around the Korean Peninsula. March 12, 2018, in Beijing, China's President Xi Jinping met with Chung Eui-Yong, National Security Advisor for the President of the Republic of Korea. They discussed the possibility of China and South Korea's assistance in establishing a dialogue between the United States and the DPRK. The parties agreed on the necessity to continue work in this direction.


Major Events in the Region in the Military Sphere. As part of the technical re-equipment of the Chinese armed forces, measures are being taken to improve the multipurpose fighter jet of the 5th generation J-20 (considered to be a competitor of the American planes F-22 Raptor and F-35 Lightning II). In particular, it is planned to equip the airplane with a new system of breakthrough of the radar field of the enemy air defense system. In addition, another 5th generation FC-31 aircraft will be tested, which will be exported. China has also started developing new 6th generation aircrafts.


3.4. Science and Technology

Comparison of a future Chinese Chang Zheng-9 rocket carrier with an American Saturn V
Comparison of a future Chinese Chang Zheng-9 rocket carrier with an American Saturn V

As Minister of Science and Technology of the People's Republic of China Wan Gang, said at the press conference and on the sidelines of the session of the NPC, China has taken leading positions in the world in the strategic high-tech spheres, including the development of outer space, ocean and polar exploration, computer technology and the development of nuclear energy. In support of this, a number of facts of both national and world significance were given.

In particular, by the end of this year it is going to have completed the development of a prototype of a liquid rocket engine with a liftoff weight of 500 tons. The new oxygen-kerosene engine is designed for the first stage of the Chang Zheng-9 rocket carrier. The first flight of the rocket is expected in 2030. Its system's power will allow to bring about 100 tons of cargo to a low orbit or 50 tons of cargo per flight to the Moon's orbit, as well as to launch spacecrafts to the Mars. Such characteristics of Chang Zheng-9 bring it closer to the American Saturn V rocket.

In addition, China is developing the most powerful supercomputer “Tianhe-3” with a capacity of 1 exaflops (a million of trillions of calculations per second), which is scheduled to be put into operation by 2020. The computing power of the new computer system will exceed 200 times the existing super-powerful “Tianhe-1” computer. The new device will have a basic chip and autonomous operating system of China's own development.

The implementation of the national Chinese Antarctic research program also continues. At the beginning of March the first Chinese unmanned weather station deployed at Dome Argus in Antarctica, was successfully tested. The station has managed several times to record ultralow temperatures below -70 C. At this, the accuracy of measurements is confirmed by comparative data obtained from automatic meteorological stations of other countries. Today China ranks third among the owners of similar polar stations after Australia and the United States.


IV. Plans and Prospects for Cooperation between China and Ukraine

China and Ukraine continue active cooperation in different spheres, including energy. In particular, the Chinese oil service company Xinjiang Beiken Energy Engineering Co., Ltd, started drilling wells in Poltava region on request of “UkrHazVydobuvannya”. The well is being drilled at Yablunivka gas condensate field; the design depth is 4940 meters.

Besides, representatives of Chinese business are interested in participating in the development of wind energy in Ukraine. In particular, this issue was discussed last week during the meeting of Head of Ukrainian State Department for Energy Efficiency Sergey Savchuk and deputy director general of the Chinese company “SANY Group” Lary Wong. According to the Chinese representative, today his company is exploring the possibility of cooperation with Ukraine in the wind energy sector, namely, the joint production of wind turbines, the development of wind power projects and the attraction of investments in this sector.

Head of Ukrainian State Department for Energy Efficiency Sergey Savchuk meets with Lary Wong, deputy director general of the Chinese company “SANY Group”, March 12, 2018
Head of Ukrainian State Department for Energy Efficiency Sergey Savchuk meets with Lary Wong, deputy director general of the Chinese company “SANY Group”, March 12, 2018