May 4, 2017

China (中国) Today

Events Review (24.04–02.05.2017)


Major Events and Trends in the Development of the Situation around the PRC

In the Asia-Pacific region, the focus is on events in the Korean Peninsula, where North Korea, while continuing to implement the missile-nuclear program, has entered into a confrontation with the United States and its allies. On 25 April, large-scale artillery trainings dedicated to the 85th anniversary of the national Armed Forces, were held in the DPRK. At this, the North Korean leadership once again accused the USA of preparing for an attack on the DPRK and promised to use nuclear weapons in response.

The United States, demonstrating its strength in the region, continues to press on the DPRK. Thus, the USA placed near the Korean Peninsula an aircraft carrying strike group led by an aircraft carrier “Carl Vinson”. Recently, the largest ship of Japan's Self-Defense Forces, the “Izumo” helicopter carrier, has joined this group. Last week, the USA, together with its allies in the APR, conducted a series of joint military exercises. In particular, the joint exercises of the US and South Korea (ROK — Republic of Korea)'s Navies, where the ships from the aircraft carrying strike group “Carl Vinson” and the destroyer “Wang Geon” of the Korean Navy were involved. During the exercises, the US submarine “Michigan” entered the South Korean port of Busan. May 2, the US' and the ROK's Air Forces mastered a set of training and combat missions in the airspace of South Korea and the adjacent water areas. These exercises included the US B-1B Lancer strategic bombers from the Guam airbase in the Pacific and the deck aviation from the aircraft carrier “Carl Vinson”. In South Korea, the US missile defense system THAAD was also deployed in the position areas.

On 25 April, large-scale artillery trainings were held in the DPRK Aircraft carrying strike group led by an aircraft carrier “Carl Vinson”

True, in an interview with Reuters on 27 April 2017, US President D. Trump denied having plans to use military force against the DPRK. According to him, the United States will try to force North Korea to abandon the implementation of its nuclear and missile programs solely by intensifying diplomatic and economic measures. D. Trump also announced his readiness to meet with North Korean leader Kim Jong-un in person.

April 25, representatives of the United States, Japan and South Korea held consultations in Tokyo on the settlement of the crisis situation around the DPRK's nuclear missile program. The parties agreed to continue to cooperate in the political, economic and security spheres in order to solve this problem. It was announced about their being ready to have a full exchange of views with the PRC on these issues.


The current situation in the APR does worry the Chinese leadership. On 1 May, the Ministry of Foreign Affairs of the People's Republic of China issued a special statement in which it assessed the situation around the Korean Peninsula as “the most tense over the past fifty years”. In this regard, both, the DPRK's provocative actions in the nuclear missile sphere and the USA's measures to build up a military presence in the APR and conduct the above-mentioned large-scale exercises with Japan and South Korea, were mentioned.

A similar statement was made public by the official representative of the Ministry of Defense of the PRC — China strongly objects to the deployment of the THAAD missile defense system in South Korea, as well as against the USA's supplying it with weapons. It is reported that China will continue to actively pursue efforts to preserve peace in the region, while maintaining a high level of readiness of the national Armed Forces.

China strongly objects to the deployment of the THAAD missile defense system in South Korea 

Russia is trying to take advantage of the contradictions between the PRC and the USA and to establish partnership relations with China on an anti-American basis. On 26 April, Russian Foreign Minister S. Lavrov criticized the USA's deploying a missile defense system in South Korea, calling it “violating stability in the Asia-Pacific region and throughout the world”.

In contrast to the USA and PRC's economic pressure on the DPRK, the leadership of the Russian Federation is developing economic cooperation with it. When Japan decided to restrict trade and transport communication with the DPRK, cargo-and-passenger flows from North Korea were transferred to Russia.

Cargo-and-passenger flows from North Korea were transferred to Russia North Korean ferryboat “Manghenbon”

In March 2017, the Russian Federation and the DPRK concluded an agreement to use the North Korean ferryboat “Manghenbon” for regular voyages to the Russian port of Vladivostok (this vessel was forbidden to enter the ports of Japan). Russia will use this ferry to export to the DPRK seafood, spare parts for agricultural machinery and equipment for the mining industry. From North Korea the vessel will be transporting workers working in the Far East of the Russian Federation on a rotational basis.

Japanese experts believe that the organization of such a regular sea service will help North Korea to receive currency. Besides, there is a suspicion that weapons and ammunition, components for missiles and, possibly, nuclear materials can be secretly delivered to the DPRK.


China's strategic initiative “One Belt — One Road” in the context of Chinese and regional interests

In the first quarter of 2017, the total volume of China's trade within the framework of “One Belt-One Road” increased by 26.2 %China's leadership's consistent policy of the implementation of the project “One Belt — One Road” can increase the volume of trade and economic cooperation between China and the countries participating in the program. According to the Ministry of Commerce of China, in the first quarter of 2017, the total volume of China's trade within the framework of “One Belt-One Road” increased by 26.2 % compared to the same period of last year — up to 1 trillion 655.3 billion Yuan. At this, the volume of Chinese exports to these countries increased by 15.8 %, that is, to 937.6 billion Yuan (28.2 % of total Chinese exports), while imports — grew by 42.9 % to 717.7 billion (25 % of the total volume of Chinese imports).

The volumes of mutual investments have also increased. In the first quarter of this year, China's direct non-financial investments in the economy of 43 countries participating in the “One Belt — One Road” project amounted to 2.95 billion US dollars, or 14.4 % of all foreign investments of China's. During the same period, with the participation of these countries, about 800 joint ventures were created in China (by 40 % more than within the same period last year) with a total realized investments of 8.45 billion Yuan.

An important step in the development of this project was the decision of the Asian Union of Institutional Investors (unites the banking and credit institutions of the PRC, Japan, South Korea, India and some other countries in Southeast Asia and the Middle East) on the creation of the Joint Foreign Investment Fund for Business within the framework of the “One Belt — One Road“. The leaders of the Fund is the Chinese investment corporations CMIG (target amount of funds — 15 billion US dollars) and CCB International, Japanese corporation Orix, South Korean corporation Mirae Asset Group, Israeli investment company Cukierman and Hong Kong Sun Hung Kai Financial corporation.

The PRC also expands the range of participants in the “One Belt — One Road” project and determines new forms of interaction with them. Interestingly, the Secretary General of the China Overseas Development Association (CODA) He Zhenwei, in his interview with Xinhua, pointed out the significant potential that will allow to deepen cooperation between the PRC and the countries of Central Asia. He stressed the importance of these countries' participation in the Chinese project “One Belt — One Road”, which gives them the opportunity to get significant investments in the development of industry and infrastructure and the extraction of natural resources.

In this context, He Zhenwei gave an example of cooperation between the PRC and Kazakhstan, which is considered China's largest partner in the Central Asian region. To date, 11 rounds of dialogue have been held between China and Kazakhstan, following which an agreement was reached to implement 51 priority projects for a total of 26.8 billion US dollars. The most important of such projects are polypropylene production, car assembling, grain processing. The experience of China-Kazakhstan relations will be used to establish cooperation with Uzbekistan, Kyrgyzstan and Tajikistan.



Chinese Foreign Minister Wang Yi met with the US Secretary of State Rex TillersonAmong the priorities of China's foreign policy, deepening cooperation with the USA as part of building a strategic partnership between the two countries is considered one of the most important. Thus, on 28 April 2017, during the meeting in New York, China's Foreign Minister Wang Yi and US Secretary of State Rex Tillerson discussed plans for US President D. Trump's visit to China. They pointed out the need for an early start at the highest level of all four mechanisms of dialogue, which began at the talks of the leaders of these countries in April 2017 in the USA.

While in New York, Foreign Minister Wang Yi also met with Foreign Minister of Japan F. Kisida. The parties confirmed that Beijing and Tokyo are ready to solve all the problems of bilateral relations and to deepen cooperation in the political, economic and security spheres.


Chinese Foreign Minister Wang Yi met with the Federal Chancellor of Germany A. MerkelThe PRC is actively developing its ties with the EU countries. Last week, Chinese Foreign Minister Wang Yi visited the Federal Republic of Germany on his way to the USA. During the negotiations with the Federal Chancellor of Germany A. Merkel, he pointed out the progress in the development of Sino-German relations. At this, the parties expressed their firm intention to bring relations between their countries to a qualitatively new level. They called such contacts an example for building open economies within the framework of promoting the processes of globalization.


The PRC seeks to establish partnerships with many other countries and international organizations, but at this it steadfastly defends its interests (in the Asia-Pacific region — without any exceptions).

April 27, 2017, the Ministry of Foreign Affairs of the PRC voiced another protest against the publication of the EU reports on the situation in the special administrative regions of China — Hong Kong and Macau. According to the Foreign Ministry, after the return of these areas to the PRC, everything that happens there is exclusively China's internal affair. At this they emphasized the achievements in the development of Hong Kong and Aomyn within the framework of implementing the policy “One State — Two Systems”.

The provisions of the “Blue Book on Japan's Diplomacy”, containing criticism of China, were also negatively assessed. First of all, this concerns the assertions about “the lack of transparency in the increasing defense budget of the PRC”, as well as Japan's intention to “resolutely oppose the Chinese ships' invasion into the coastal waters of the Diaoyu Islands”. In this context, they pointed out China's sovereign rights to the Diaoyu Islands and Nansha Islands, so its activities in the mentioned coastal waters are quite legitimate.



Chinese Ambassador to the USA Cui Tiankai took part in the New York International Forum on Financial and Infrastructure CooperationThe stable growth of the PRC's economy is facilitated by the development of trade and economic cooperation with leading countries. April 24, 2017, Chinese Ambassador to the USA Cui Tiankai took part in the New York International Forum on Financial and Infrastructure Cooperation, where in his speech he stressed the consistent strengthening of China-USA relations in the trade and economic sphere, which has been observed for many years. At the same time, he acknowledged that there are many problems in this area that should be successfully addressed. In this regard, Cui Tiankai said that the PRC leadership would try to improve the investment climate in the country for the Chinese and American enterprises to compete in fairness. He suggested that the USA should soften restrictions on exports in the oil and gas sector and abandon the excessive screening of the Chinese companies planning to invest in the US economy.

April 25, the next round of the China-Canada economic and financial dialogue took place in BeijingApril 25, 2017, the next round of the China-Canada economic and financial dialogue took place in Beijing with the participation of Vice Premier of the State Council of China Wang Yang and representatives of the Government of Canada, including Finance Minister B. Morneau and Minister of International Trade F. Champagne. An agreement was reached to establish a new level of cooperation between the parties in the spheres of trade, investment, science and technology, clean energy sources, as well as infrastructure and tourism. In particular, the countries are going to continue the work to create the Sino-Canadian Free Trade Zone.


China is also actively cooperating with Russia, in particular, in the energy sphere. On 26 April 2017, a package of contracts worth about 1 billion US dollars was signed between the Chinese Nuclear Energy Corporation (CNEIC) and Fuel Company TVEL of the state corporation Rosatom. Under the concluded contracts, it is planned to supply Russian nuclear fuel, zirconium components for fuel assemblies to China, and provision of maintenance services for Tianwan NPP power units.


Security and Law Enforcement Agencies

The leadership of the People's Republic of China is carrying out a comprehensive reform of the People's Liberation Army of China (PLA). In particular, the Central Military Council of the People's Republic of China has decided to reorganize the Land Forces of the People's Liberation Army: thirteen mixed corps will be formed on the basis of the current eighteen ones.

On 26 April the first fully China-make aircraft carrier was launchedBesides, the implementation of the program for building new ships of various classes for the Navy of the PLA continues. Thus, on 26 April 2017, in China in the port of Dalian, the first fully China-make aircraft carrier was launched. Construction of the ship began in 2013, and its introduction into the Navy's combat staff after all the improvements is planned for 2020.

The length of the ship is 315 m, width — 75 m, displacement — up to 70 thousand tons, cruising speed — 31 sea knots. On the aircraft carrier can be based 36 fighters Shenyang J-15. The air group of the ship will include a new modification of the aircraft of this type — J-15B with a modern radar station with a phased array antenna instead of a pulse-Doppler radar. Due to this, the range of its action and resolution are in fact comparable with the radar of the American F-35B aircraft.


Deputy Chief of the Joint Staff of the Central Military Council of the People's Republic of China Shao Yuanmin participated in the 6th Moscow Conference on International SecurityThe dialogue between China and Russia in the sphere of security continues. On 27 April 2017, the 19th round of strategic consultations between the Armed Forces of China and Russia took place in Moscow with the participation of Deputy Chief of the Joint Staff of the Central Military Council of the People's Republic of China Shao Yuanmin and First Deputy Chief of the General Staff of the Russian Armed Forces S. Rudskoy. The sides discussed prospects for deepening the sides' cooperation in the world and region security.

While in Moscow, Shao Yuanmin participated in the 6th Moscow Conference on International Security. In his speech, he said that the Chinese Armed Forces are ready to develop constructive relations with the armies of other countries to strengthen strategic cooperation, as well as to protect peace throughout the world.


The PRC deepens cooperation with other countries of the world in the struggle against terrorism, transnational organized crime and illegal activities in cybernetic space. In particular, such issues were discussed during the meeting of State Councilor, Minister of Public Security of the PRC Goh Shenkun and State Secretary of the Security Council of the Republic of Belarus S. Zas on 25 April 2017 in Beijing. Separately were discussed the plans to strengthen the security of the Chinese-Belarusian industrial park and other joint ventures created within the framework of the Chinese project “One Belt — One Road”.


Science and Technology

China's achievements in the development of space technologies allow it to cooperate in this sphere with other leading countries. Thus, the PRC together with the European Space Agency is studying the possibility of building an international station on the Moon. By the end of this year, they plan to launch a spacecraft to collect lunar soil, and in 2018 — another ship with a landing on the reverse side of the Moon for astrophysical and geological research. As part of the national space program, April 27, 2017, the cargo ship “Tianzhou-1” carried out the first orbital refueling of the “Tiangun-2” space laboratory. The refueling was carried out under the control of the ground control center and lasted for five days. The experiment was carried out in preparation for the creation of the Chinese space station. According to Wang Zhaoyao, the head of the space flight programs of the People's Republic of China, the process of its assembly in orbit will begin in 2019 and will end in 2022.

Cargo ship “Tianzhou-1” carried out the first orbital refueling of the “Tiangun-2” space laboratory Project of the Chinese space station

China occupies leading positions in hydrographic research. In April this year, China began deep-sea exploration in the South China Sea. On 25 April, the research vessel “Xiangyanghong 09” with the manned “Jiaolong” bathyscaph and Chinese scientists on board arrived in a certain area of the South China Sea, where a second phase of scientific research is planned to be carried out within the framework of the 38th Chinese Oceanological Expedition.


Some Aspects of China-Ukraine Cooperation

Business forum “The State and Prospects for the implementation of the PRC's “One Belt — One Road” initiative in Ukraine”Favorable prospects in Ukrainian-Chinese relations are due to the possibility of expanding Ukraine's participation in the strategic project of the PRC “One Belt — One Road”. This was the main theme of the business forum “The State and Prospects for the implementation of the PRC's “One Belt — One Road” initiative in Ukraine”. The forum took place on 25 April 2017 within the framework of the exhibition “China's Culture Coming Ukraine”, dedicated to the 25th anniversary of the establishment of diplomatic relations between Ukraine and China. The forum pointed out the positive conditions for further development of trade and economic cooperation between the countries in different fields (in particular, in 2016 the trade turnover between Ukraine and China amounted to 6.5 billion US dollars).

One of the promising spheres of such cooperation between Ukraine and China is the participation of Chinese business in the development of Ukrainian infrastructure. In particular, last week during the meeting, the Minister of Infrastructure of Ukraine V. Omelyan and the Chairman of the Board of the Chinese National Complete Engineering Corporation (CCEC) agreed to continue negotiations on the implementation of the joint project “Air Express”. The project provides for laying a railway from Kyiv to “Boryspil” International Airport, which will unload the highway and create more convenient conditions for passengers. Possibilities are also considered for attracting Chinese companies to other infrastructure projects of Ukraine in the maritime and road sectors.