February 20, 2017

China (中国) Today


Events Review (06–19.02.2017)

China: Events Review 30.01–05.02.2017: http://bintel.com.ua/en/article/obzor_sobytij_vokrug_knr_3_17/



Taking into consideration the PRC's being considered an internationally leading power and confessing national interests, China's leadership has demonstrated its willingness to cooperate with all potential partners. This was confirmed on 10 February, 2017 by Chinese President Xi Jinping in his telephone conversation with US President Donald Trump, as well as by Minister of Foreign Affairs Wang Yi during his meetings with the leaders of the leading countries at the Summit of Foreign Ministers of the “Big Twenty” (G20)'s member countries February 16-19, 2017, in Munich (Germany).

In particular, Xi Jinping and D. Trump agreed to deepen the dialogue between the two countries on issues of mutual interest. At this, D. Trump spoke respectfully about the “One China” policy. Such parties' intentions were also confirmed by China's Foreign Minister Wang Yi and US State Secretary R. Tillerson. In this regard, it was noted that there are all economic grounds for cooperation between China and the United States. In particular, China and the United States account for about 25 % of the planet's population, more than 33 % of world trade, and their bilateral trade turnover amounts to 20 % of the world total.

Politics of China
Politics of China

The PRC's leadership is also interested in strengthening ties with Russia. The Minister of Foreign Affairs of China Wang Yi said during his talks with Russian Foreign Minister S. Lavrov that China would continue strengthening the Sino-Russian relations. To this end, in May this year during the “One Belt, One Road” International Forum in Beijing, President Xi Jinping is going to meet with Russian President V. Putin. They will address a broad range of political, economic, and trade-economic issues, including the prospect of Russia's participation in the implementation of China's “New Silk Road” project.

At the same time, China cares about its relations with the EU, which, after the United States is its second largest trading partner. The European Union's leadership shows interest too. For example, the EU High Representative for Foreign Affairs and Security Policy, F. Mogherini has voiced the European Commission's intention to complete the ratification of the Article 15 of the Protocol on China's accession to the WTO (Article provides for recognition of the market nature of the Chinese economy). She has supported the policy of “One China” and expressed the EU's readiness to strengthen strategic cooperation with China in various spheres, including on Syria, Afghanistan and the Korean Peninsula.

During the Summit of Foreign Ministers of the G20, the Chinese Foreign Minister also met with Foreign Ministers of some EU member states, in particular, with B. Johnson (Great Britain). The parties confirmed their intentions concerning the implementation of joint projects in trade and economic sphere, including the construction in the UK of a French-Chinese Hinkley Point Nuclear Power Plant.

However, it was noted that there are still some problems in the relationship between China and the USA, as well as with some countries in the Asia-Pacific region due to the disputed islands in the South China and East China Seas.

Thus, on 10 February 2017, at the joint press conference with Japanese Prime Minister Shinzo Abe in Washington, US President D. Trump supported the Japanese position on the Senkaku/Diaoyu Islands in the South China Sea. In his turn, US Secretary of State R. Tillerson speaking at the US Senate, described the PRC's actions to build an artificial island in the South China Sea (near the disputed with Vietnam Spratly archipelago), as a violation of international law. In particular, he said that the PRC's access to the mentioned islands should be blocked.

In response, the PRC's Foreign Ministry “reminded” the United States about the provisions of the Cairo Declaration of 1943 and the Potsdam Declaration of 1945, providing for the return to China of its territories, including the Diaoyu Islands seized by Japan during World War II. At this, they stressed the USA's position at that time that did contribute to the restoration of China's sovereignty over the archipelago. Beijing's more severe reaction was expressed in the Chinese edition of the Global Times, which warned of the possibility of an armed conflict if the United States try to block China's access to the artificial islands in the South China Sea.

The Economy

As part of the strategy to strengthen its presence in the world economy, China increases volumes of foreign investments. For example, in 2016 the volume of China's investments in the countries of North America and Europe was 94 billion US dollars, which is by 130 % more than in 2015 (41 billion US dollars). However, Chinese experts have concluded that there are additional problems in China's investment and trading activities in the United States and Europe. Mainly due to the United States and European countries' leaderships' increased protectionist measures. In particular, in 2016 the total volume of China's exports fell by 7.7 % (to 2.097 trillion US dollars), and imports — by 5.5 % (to 1.587 trillion US dollars). Besides, by the end of January 2017 the volume of China's direct non-financial investments in foreign countries decreased by 35.7 % (to 7.73 billion US dollars) compared with the same period last year.

There is also a decrease in the foreign investors' being interested in the future work in China. According to the research conducted by Bain&Company together with the US-China Chamber of Commerce, about a quarter of US employers have shut down their businesses in China, or are going to do it soon.

The Economy of China
The Economy of China

The reasons are as follows: the increase in taxes for foreign entrepreneurs; rapid increase in labor costs; increased competition from local businesses. In addition, China has tightened the requirements for foreign investors operating in the sphere of high technologies, and also canceled a number of privileges granted to them earlier.

A negative impact on the work of American businesses in China is put by the problems in relations between the USA and China, which have escalated after the election of D. Trump President of the United States of America. This refers to the imposed by the United States financial and economic sanctions against some Chinese people and companies working in Iran. Beijing, judging by its reaction, did not like it.

Under such circumstances, China is trying to take the appropriate measures to diversify its external economic relations, including by looking for opportunities to enter the European market, as well as trying to develop cooperation with Russia and the countries of the “third world”.

Thus, February 14, 2017, China for the first time exported to the European Union energy, Chinese make equipment for nuclear power plants. In particular, for the needs of the nuclear power plant, built by the French company Electricite de France (Ed), have been supplied the low-pressure heaters, designed and manufactured by the Chinese Dongfang Electric (Guangzhou) Heavy Machine Co., Ltd.

In turn, February 15, 2017, as a result of the meeting of the member of the Standing Committee of the Political Bureau of the CPC Central Committee, Vice Premier of the State Council of China Zhang Gaoli and the head of the Russian Gazprom A. Miller, an agreement was reached on the preparation of new joint projects in the energy sphere, including producing electricity from natural gas, construction of underground gas storage facilities, maintenance of oil fields and production of technological equipment for energy engineering.

It is also planned to deepen cooperation between China and Russia in the sphere of high technologies. To this end, the two governments have signed an agreement on development and production of a heavy civilian helicopter AHL (pre-signed in May 2016). The helicopter (takeoff weight of 38 tons) is meant to be used in any environment and weather conditions. The assembling of this class helicopter is planned to be done in China, and its operation — only in China. At the same time, the Chinese side does not exclude the engines for the helicopter will be supplied by the Ukrainian Motor Sich Company.

Moreover, despite the USA's sanctions, China does not stop developing its economic relations with Iran. February 15, 2017, the Chinese Wuhan Company and the Iranian Masjed Soleyman Petrochemical Industries Co. (MIS) signed an agreement under which China will invest 3.6 billion US dollars into the MIS refinery (at the beginning of February 2017, Iran informed about its intentions to build 12 new refineries).

As part of the modernization of the Chinese economy as well as to reduce its dependence on oil and gas imports, the Chinese government is taking measures to develop the technologies of producing renewable energy sources. Thus, in the 13th Five-Year Plan (2016-2020), they are going to implement 3,150 large-scale projects related to methane production from bio-raw materials in the countryside. Total for this purpose they will spend 7.3 billion US dollars. Against this background, China reduces the volume of coal imports, and conserves its extra coal enterprises.

Security and Law Enforcement Agencies

Taking into consideration the intensified tensions over the disputed islands in the South China and East China Seas, China continues to take steps to build up its military presence in the region. According to the US Center for Strategic and International Studies, China has actually created a military infrastructure and is deploying forces in the eight disputed islands of the Paracel archipelago. In particular, it is building well-protected harbors, able to take large naval vessels and civilian ships. On the largest of the islands, Duncan, China has already deployed a complete air base, while on some other islands — helipads. By the end of this year, it is going to complete the construction of a second aircraft carrier “Type 001A” (improved analogue of the Liaoning aircraft carrier, built on the base of Varyag heavy aircraft-carrying cruiser).

Security and Law Enforcement Agencies of China

Note that the increase in China's and the USA's military activity in the South China Sea threatens with armed incidents between the parties. For example, 10 February 2017, in the airspace over the South China Sea at the dangerous distance approached each other the reconnaissance USAF aircraft P-3C Orion and Chinese KJ-200, and passed each other at 300 meters over the disputed Scarborough Reef.

At the same time, preventing the threat of international terrorism, they improve the control of foreign citizens coming to China. On the basis of the exit and entry law of the PRC, they introduced a mandatory rule to take fingerprints. At the initial stage (from February this year), the rule will work at the airport in Shenzhen (Guangdong Province), but soon it will spread to all the checkpoints. The innovation will be applied to all foreigners aged 14 to 70, arriving in China, except for holders of diplomatic passports.

Science & Technologies

The PRC's leadership continues to implement large-scale Space Development programs. In 2017, it is planned to launch:

6 telecommunications satellites for communications, including for the operation of high-speed wireless Internet; first Chinese Tyanchzhou-1 cargo ship to the Tiangong-2 space station (will deliver into orbit about 6 tons of cargo); satellite for remote sensing of the Earth's surface “Lotszya-1-01” with discriminative power of up to 100 meters.

Science & Technologies of China
Science & Technologies of China

For the first half of 2017 is scheduled the first test flight of a passenger aircraft C919 made by the commercial aircraft Corporation of China (COMAC). It has 150 seats, the standard range of the flight — 4 thousand kilometers. In the Chinese market it will have to compete with the dominant today upgraded aircraft Airbus 320 and the new generation of Boeing 737. As of the end of 2016, COMAC has received an order from 21 customers for more than 500 C919 aircraft. All in all the company plans to sell 2,000 aircraft of this type.