March 6, 2017

China (中国) Today

 

Events Review (20.02–05.03.2017)

China: Events Review 06–19.02.2017: http://bintel.com.ua/en/article/obzor_sobytij_vokrug_knr_4_17/

 

Politics

China, as the world's leading power, continues to actively develop international relations, proceeding from its national interests.

One of the main directions of China's foreign policy is maintaining constructive relations with the United States. True, these relations have got somewhat complicated after Donald Trump's having been elected the new President of the United States.

On 1 March 2017, member of the State Council of China Yang Jiechi arrived in Washington, met with the US President and discussed with him the prospect of deepening bilateral cooperation between the countries, including Donald Trump's upcoming meeting with China's President Xi Jinping. This visit coincided with the 45th anniversary of signing the so-called Shanghai Communique, which was signed at that time by US President R. Nixon and the leadership of the PRC, and marked the beginning of diplomatic relations between the USA and China. Of course, the way was also opened for the strengthening of USA-China ties in the trade and economic sphere.

 

The PRC believes that it is very important to deepen ties with the countries of the European Union, while receiving support for China's international positions and the opportunity to expand its presence in European markets. In this regard, indicative were the visits to the PRC of President of Italy S. Mattarella (February 21–26, 2017) (the Italian delegation included Foreign Minister A. Alfano, Deputy Minister of Economic Development I. Skalfarotto and representatives of large businesses), and of Prime Minister of France B. Caseneuve (February 21–23, 2017).

During the talks (held separately) with President of the People's Republic of China Xi Jinping and the Prime Minister of the State Council of China Li Keqiang, a wide range of political, economic and security issues was discussed. At this, the parties demonstrated Italy, France and China's common positions on the construction of a multi-polar world, the rule of law of the United Nations in solving international problems, as well as support to the processes of globalization and the need to counteract all forms of economic protectionism. These issues were determined as the main areas of interaction between the parties within the framework of the UN and G20.

Politics of China

At the same time, China is developing cooperation with countries of the “third world” (both within the framework of international organizations and at the bilateral level).

For example, February 23–24, 2017, in the city of Nanjing (administrative center of Jiangsu Province), there was a meeting of representatives of the BRICS member countries, dedicated to the preparation of the 9th meeting of the leaders of the Organization. The BRICS summit is scheduled for 3–5 September this year in Xiamen (Fujian Province) under the slogan “Deepening Partnerships for a Better Future”. Due to its political weight and economic potential, China today actually takes a leading position in the BRICS.

During the same period, another round of China-India dialogue was held in Beijing under the chairmanship of China's Deputy Foreign Minister Zhang Yesui and India's Secretary for Foreign Affairs Subramaniam Jaishankar, where peculiarities of the situation in the world were discussed, as well as the development of relations between the two countries in political, economic and security spheres. The sides paid special attention to the solution of their regional contradictions. And they agreed to contact for the sake of building relations of strategic partnership.

 

In its turn, the annual session of the supreme legislative body of the People's Republic of China — the National People's Congress (the PRC's Parliament), which began its work on 5 March 2017, is the key political event in China's internal life. The 5th session of the National People's Congress of the 12th convocation, opened by Prime Minister of the State Council of the PRC Li Keqiang, was devoted to the work of the Chinese government in 2016 and to the main state tasks for 2017. It is planned to hear a report on the work of the Standing Committee of the National People's Congress, the Supreme People's Procurator's Office, the Supreme People's Court and other issues. The session will last to March 15, 2017.

 

Economy

The PRC's government seeks to ensure high rates of development of the country on the basis of modernizing the national economy and deepening its integration into the world economic system.

According to the report of Premier of the State Council of the PRC Li Keqiang at the session of the National People's Congress, China's GDP in 2016 grew by 6.7 % compared to the previous year. At the same time, the contribution of domestic consumption to the economic development of the country has increased. During the year this indicator grew by 4.9 %. In addition, among the positive factors there are as follows: the increase in added value in services — by 7.8 % (to 51.6 % of GDP); reduction of energy consumption per unit of GDP — by 5 %; increase in the level of urbanization — by 1.25 % (to 57.35 % of the total population living in cities); increase in labor efficiency — by 6.4 %.

China's direct non-financial investments in other countries also increased to 1,129 trillion Yuan, which is by 44 % more than in 2015. In turn, the volume of foreign direct investments into the Chinese economy increased to 813.22 billion Yuan (about 120 billion US dollars), which is by 4.1 % more than in the previous year.

Significant progress was made in foreign trade. In 2016, the volume of China's trade with other countries amounted to 4 trillion US dollars. At this, China's exports exceeded the USA's ones by 643.5 billion US dollars. According to the leadership of the PRC, the main driving forces of the Chinese economy that provided such indicators were:

  • rapid introduction of modern information technologies into economic processes in China. In 2016, the Internet network covered 53.2 % of the country's population, including 33.1 % of rural residents. All in all, China has 730 million users, which is 42.99 million more than in 2015. At this, last year the volume of online sales grew by 26.2 %;
  • modernization of the country's transport infrastructure. In 2016, 801.5 billion Yuan (117 billion US dollars) were invested into the development of China's railway network. A total of 3,500 km of railway lines were built;
  • rapid development of new industries and growth in the output of new high-tech products. In particular, in 2016, the output of cars grew by 40 %, and of industrial robots — by 30.4 %;
  • increase in innovative investments. In 2016, China's public expenditure on financing the needs of the scientific and technological sphere increased by 9.4 % — to 1 trillion 550 billion Yuan. 295 thousand patents were issued.

In general, these indicators have improved the standard of living of Chinese citizens. For example, in 2016, the number of low-income people in rural China fell by 12.4 million people — up to 43.3 million people. At this, the average income of farmers increased by 8.4 % compared to 2015. At this, in 2016, 13.14 million new jobs were created, while the registered urban unemployment remained at 4.02 %.

 

According to the Plan of social and economic development of China for 2017, it is planned to maintain GDP growth at the level of about 6.5 %. At the same time, the state budget deficit is planned at 2.38 trillion Yuan (about 345 billion US dollars) or 3 % of GDP, which is 200 billion Yuan (about 30 billion US dollars) more than last year. Inflation is projected at 3 %. In 2017 it is planned to create more than 11 million jobs, and to keep the number of registered unemployed among the townspeople within 4.5 % of the total number of able-bodied population.

It is also planned to continue the modernization of the transport infrastructure. In total, 15 trillion Yuan (2.18 trillion US dollars) have been allocated for this during the 13th Five-Year Plan (2016–2020). Of these, 3.5 trillion Yuan (508.6 billion US dollars) have been allocated for the expansion of the railway network, 7.8 trillion Yuan (1.130 trillion US dollars) for road construction, 650 billion Yuan (94.5 billion US dollars) — for the construction of airports, 500 billion Yuan (72.66 billion US dollars) — to increase the capacity of water transport. Of these funds in 2017, 800 billion Yuan (about 117 billion US dollars) will be used to build new railways. Investment activity will continue. In 2017, the volume of direct non-financial investments abroad is expected at 170 billion US dollars. Foreign direct investments into the economy of China will amount to 126 billion US dollars.

 

Against this background, the active development of China's economic cooperation with other countries continues. And here the USA remains the PRC's leading partner. In 2016, the volume of trade between the two countries amounted to 519.6 billion US dollars, the volume of trade in services exceeded 100 billion US dollars, and the total amount of mutual investments reached 170 billion US dollars. China is the largest importer of American Boeing aircraft (26 % of all orders), cars and soybeans.

Among the priority partners of the PRC are also the countries of the European Union. In particular, according to the Federal Statistical Office of Germany, in 2016, China was ahead of the USA in terms of bilateral trade with Germany, which amounted to about 170 billion Euros.

The Hinkley Point nuclear power plant in the UKSimilar trends are also observed in China's trade with other EU countries. In particular, during their visits to China (in late February this year), Italian President S. Mattarella and French Prime Minister B. Caseneuve reported that their countries were ready to participate in the Chinese project “Silk Road Economic Belt”. In turn, the leadership of the PRC showed interest in Italian shipbuilding, energy, aircraft-building, car-building and other high-tech industries of France. In this regard, they pointed out the joint Sino-French-British project for the construction of the Hinkley Point nuclear power plant in the UK, which is the basis for a broader access to the nuclear power world market.

As a result of the talks between the PRC and Italy, more than ten agreements (in the spheres of trade, economy, culture and health) were signed for more than 5 billion Euros. The largest of these was the agreement on the construction of two cruise ships for the PRC by the Italian shipbuilding company Fincantieri. The contract value is 1.5 billion Euros. Ordering four more such vessels is being considered. Trade and economic agreements were also concluded between the PRC and France. Besides, on 2 March 2017, the first direct route of China's railway communication with Europe was opened as part of the SSTL (Smart and Secure Trade Lanes) program in the seaside city of Xiamen (Fujian Province). The time for the trains to reach the border with Poland has been reduced from about 40 to 15 days.

China pays special attention to expanding the Chinese presence in the energy sectors of the economy of the oil and gas exporting countries. In February 2017, Chinese energy companies “CEFC China Energy” and “China National Petroleum Corp.” purchased 12 % concessions for the development of oil and gas fields in the United Arab Emirates. The total value of the transaction is 2.7 billion US dollars.

Mi-171 helicopterTrade and economic relations between China and the countries of the former USSR are also developing. In particular, in February 2017, the “Russia's Helicopters” holding company provided the Chinese company “China General Aviation Service” with two multipurpose Mi-171 helicopters designed to combat forest fires and other natural disasters. The customer of the machines is the city of Shihezi, Xinjiang-Uygur Autonomous Region of the PRC (the corresponding contract was signed in 2015). In addition, by the end of this year it is planned to create a joint venture with the participation of the Russian operator of the power networks “Rosseti” and the “State Grid Corporation of China” (SGCC). The main direction of its work is cconstruction of electric grid facilities in Russia and other countries.

Negotiations are also continuing between the governments of China and Belarus on the possibility of attracting Chinese investors to the implementation of projects for the modernization of large Belarusian enterprises, including Horizont and Vityaz (production of television and home appliances), BATE (production of auto components), and Gomselmash (production of agricultural machinery).

 

However, an increase in the presence, and therefore China's influence in the world market, causes concern among other leading states. For example, in late February 2017, German F. Ebert Foundation and the Stockholm International Peace Research Institute (SIPRI, Sweden) organized a round table on “The Silk Road Economic Belt: Considering security implications and EU–China cooperation prospects”, where the opinion was expressed about the expediency of creating a common space Europe–Central Asia–APR in the economic sphere and in the sphere of security, though, taking into account only European interests. In particular, in this regard, there was a threat of the EU's increasing dependence on China. Therefore, the conversation was about the need for a more attentive attitude to joint projects with the PRC.

This position is shared by the EU leadership. In particular, the European Commission has begun to investigate whether the agreement between Hungary and China on the PRC's construction of the Budapest–Belgrade high-speed railway is in accordance with European legislation. The contract worth 2.89 billion US dollars was signed in 2016 as part of China's “Silk Road Economic Belt” project. Under the contract, state-owned Chinese company “China Railway International Corporation” and “Export-Import Bank of China” are involved in the construction of the railway.

 

Security and Law Enforcement Agencies

The PRC's main priorities in the sphere of security are as follows: strengthening strategic stability in the world while maintaining parity with other nuclear countries; strengthening China's positions in the APR; struggle against terrorism as well as participation in international peacekeeping activities.

One of the PRC's main partners in the sphere of security is Russia. Thus, on 21 February 2017, in Beijing there began a next round of consultations between the PRC and Russia on arms control and nonproliferation. The parties discussed measures to ensure global strategic security in the world in the context of the implementation of the treaties on the non-proliferation of nuclear weapons and anti-missile defense.

At the same time, on 27 February, 2017, Moscow hosted the second round of the Sino-Russian talks on countering terrorism at the level of Deputy Foreign Ministers. An agreement was reached on the need to create a broad anti-terrorist front under the auspices of the United Nations. In addition, the officials exchanged original instruments of ratification of the bilateral Agreement on Cooperation in Combating Terrorism, Separatism and Extremism.

 

It should be noted that the rivalry between China and the United States over the influence in the APR does not stop. February 21, 2017, the Ministry of Foreign Affairs of the PRC expressed concern about the strengthening of the USA's military presence in the region, including the USA's plans to deploy an anti-missile defense system in Japan and South Korea in response to the DPRK's missile tests.

In this regard, they pointed out the need to intensify the USA's political cooperation with the PRC and North Korea for the sake of maintaining peace and stability on the Korean Peninsula. The Ministry of Foreign Affairs of China warned the United States about the inadmissibility of possible attempts to prevent China's access to its artificial islands in the South China Sea. China also reacted sensitively to Western countries' assessments on the situation around individual regions of the PRC. Thus, on 24 February 2017, the Ministry of Foreign Affairs of China criticized the UK's publishing its next semi-annual report on Hong Kong (20 years ago it was transferred from the British protectorate to China). According to the Ministry of Foreign Affairs of China, Hong Kong is an inalienable Chinese territory, and this fact makes such reports inappropriate.

A similar assessment was given to the “China Security Report 2017. Change in Continuity: The Dynamics of the China-Taiwan Relationship”, published by the National Institute for Defense Studies (under the Ministry of Defense of Japan). Commenting on the Report, the Foreign Ministry of China pointed out that it is inadmissible to treat Taiwan as a “state entity”, since it is China's territory.

 

Taking into consideration the above-mentioned problems, on 4 March 2017, the leadership of the PRC decided to increase defense spending by 7 % — up to 1.3 % of GDP. According to the official representative of the National People's Congress Fu Ying, this decision is related to “the need to protect the sovereignty, interests and rights of the PRC in the context of external interference”.

According to the Plan of Economic Development of China for 2017, it is expected that the national defense and armed forces will be reformed in order to bring them in line with the current situation and the level of threats to the PRC. The document provides for building up the country's military potential, strengthening border security, and for China's participation in peacekeeping and antiterrorist operations.

In this regard, the PRC's government pays special attention to strengthening the country's military positions in the APR.

Есмінець «Чанша»According to the Reuters agency, China is completing the equipment of the positioning areas of the long-range surface-to-air missile systems on artificial islands in the area of the Spratly archipelago, which is disputed with Vietnam. At the same time in late February 2017, in the area of these islands, the exercise of the Chinese Navy with the participation of the “Changsha” and “Haikou” destroyers, as well as support vessels, took place. In the exercise, were also engaged military units from the garrisons of these islands.

 

In turn, the United States is actively demonstrating its strength in the Asia-Pacific region. At the end of February 2017, in the South China Sea, an aircraft carrier strike group of the US Navy, led by an aircraft carrier USS “Carl Vinson”, began patrolling. One of the group's tasks is to ensure freedom of navigation in the APR. To this end, it is planned that American ships will enter the 12-mile zone of territorial waters around artificial islands that are being built by China in the area of the Spratly archipelago, which is disputed with Vietnam. Since 2015, the United States' Navy has resorted to such shares four times. The cruise of the USS “Carl Vinson” aircraft carrier in the South China Sea is the first of such actions under the new US President D. Trump. Besides, the United States continues to provide military-technical assistance to its partners in the APR. According to the Minister of Defense of Taiwan, Feng Shih-kuan, in February 2017, on the Eastern coast of the island, the deployment of anti-aircraft missile systems Patriot-3 (PAC-3), purchased from the United States, was completed. In addition, the head of the Taiwan Defense Ministry expressed intention to conduct a series of military exercises in the disputed Spratly archipelago.

 

Against this background, a separate direction of the activity of the PRC is its participation in international peacekeeping activities. In particular, on 26 February 2017, the sixth group of Chinese policemen arrived in South Sudan. All in all, since the beginning of 2000, 2 445 Chinese policemen have participated in peacekeeping missions in East Timor, Bosnia and Herzegovina, Kosovo, Liberia, Afghanistan, Sudan, Southern Sudan, Haiti and Crete.

 

Science and Technologies

China's government continues to implement a comprehensive program of space exploration.

“Tiankun-1” satelliteMarch 3, 2017, from the Jiuquan cosmodrome in the North-West of China, with the help of the “Kayto-2” launch vehicle, they launched the “Tiankun-1” satellite. The spacecraft is an independent development of the China Aerospace Science & Industry Corp. (CASIC) and is intended for experiments on remote exploration of the Earth's surface and communications.

Cargo vehicle “Tianzhou-1”In April 2017, the launch vehicle of the new generation “Chang Zheng-7 Y2” is planned to launch the cargo vehicle “Tianzhou-1” into space. The spacecraft should dock with the station “Tyangun-2” for refueling and carrying out experiments and tests. The mission of “Tianzhou-1” will mark the completion of the 2nd phase of the manned space program of the PRC.

Besides, by the end of 2018, it is planned to conduct a test flight of the new medium-capacity launch vehicle “Chang Zheng-8”. The vehicle can deliver up to 4.5 tons of payload to the solar-synchronous orbit or 2.5 tons to the geosynchronous transition orbit.

 

Heavy armed reconnaissance UAV Wing Loong II At the same time, China's military-industrial complex demonstrates significant progress in the development of modern unmanned aerial vehicles. February 28, 2017, was tested the Wing Loong II — heavy armed reconnaissance UAV, manufactured by the Chinese corporation AVIC. The device will carry out flights of up to 20 hours at an altitude of 9 km with a maximum speed of 370 km/h. The takeoff weight of the apparatus is 4.2 tons, it can carry up to 480 kg of weapons. The length of the UAV is 11 m, the height is 4.1 m, and the wingspan is 20.5 m. The Wing Loong II is an analogue of the American UAV Reaper. China Aerospace Science and Technology Corporation (CASC), which also developing the UAVs, created two Cai Hong — CH-4 and CH-5 armed reconnaissance UAV’s. Both devices are made according to a scheme similar to the Wing Loong family. Today, China is the second country after the USA where such UAVs are created, and is ahead of Russia in this matter.