March 21, 2017

China (中国) Today


Events Review (06.03–20.03.2017)

China: Events Review 20.02–05.03.2017:



The main political event in the PRC was the 5th Session of the 12th National People's Congress (NPC), the supreme legislative body of China, whose work lasted from March 5 to March 15, 2017.

During the parliamentary session, lawmakers summed up the results of 2016, and also adopted a plan for the country's social and economic development and the budget for 2017. Besides, reports were heard on the work of the National People's Congress, the Supreme People's Court and the Supreme People's Procuratorate. A number of laws were adopted, in particular, the main provisions of civil law, as well as the decision on the procedure of the elections to the National People's Congress of the 13th convocation.

During the final press conference, Premier of the State Council of the People's Republic of China Li Keqiang pointed out China's intention to continue supporting the processes of economic globalization and freedom of world trade. In this regard, the PRC will continue its activities to implement the project “The Belt and the Road” (”Silk Road Economic Belt and 21st Century Maritime Silk Road”). In general, China has already invested 50 billion US dollars in the economies of participating countries. In 2017, it is planned to hold an international conference on this issue with the participation of leaders of more than 20 countries, heads of about 40 international organizations, as well as 1,2 thousand other delegates.

At the same time, Li Keqiang expressed China's being interested in building relations of strategic partnership with other leading states of the world, first of all the United States. According to the head of the Chinese government, despite a number of difficulties in Sino-US relations, they are confidently moving forward on the basis of a wide range of common interests.

The Premier of the State Council of China also pointed out the prospects for increasing trade between China and Russia. In this regard, he stressed the need for practical implementation of agreements and treaties concluded by the leaderships of both countries in recent years.

Li Keqiang paid special attention to the problems concerning North Korea's nuclear program. According to him, the PRC stands for denuclearization of the Korean Peninsula, stability in the region, and for resolving existing problems through dialogue and consultations. That is why China is clearly concerned about the tensions that have arisen in the region, and which also spreads to North-East Asia and threatens with armed conflicts.

March 17, 2017, the plans and ways of implementing the decisions of the 5th Session of the National People's Congress were considered at a special meeting of the State Council of the People's Republic of China. Li Keqiang determined the task of the government to implement the country's social and economic development plan unconditionally for 2017.


At the same time, the PRC continues to actively develop cooperation with the world's leading states and neighboring countries.

The PRC's main priority is to maintain constructive relations with the USA as China's main economic partner. For example, on 18–19 March 2017, President of China Xi Jinping and Foreign Minister Wang Yi met with US Secretary of State R. Tillerson. They discussed the future meeting of the countries’ leaders.

The sides reaffirmed the readiness of the PRC and the USA to further deepen cooperation in the spheres of diplomacy, security, economy, trade, law and humanitarian exchange. An agreement was reached on strengthening cooperation in solving problems around the North Korea's nuclear program, Afghanistan and Syria, as well as deepening ties within the UN and the G20.

At the same time, representatives of the PRC and the USA confirmed the existence of disagreements between the two countries on certain important issues, including restrictions on the access of Chinese goods to the US market, Washington's position with regard to Taiwan and the disputed islands in the South China Sea, the USA's deploying a missile defense system in South Korea. Despite this, there were strong hopes for the possibility of reaching compromises in all these spheres.

In particular, the leadership of the PRC called for resumption of the six-party talks on the DPRK's nuclear program, as a basis for resolving the situation in the Korean Peninsula. Besides, the Chinese side suggested that the USA should consider the possibility of stopping American exercises in the area of the Korean Peninsula in exchange for the DPRK's refusal from further launches of ballistic missiles.


China also pays great attention to deepening relations with the leading EU countries. Thus, on 16 March 2017, President of China Xi Jinping and German Chancellor Angela Merkel discussed by phone the preparations for the G20 summit in Hamburg (July 2017). At this, the commonality of the sides' positions was confirmed in the issues of supporting the globalization processes of the world economy and the need to build an open system of international trade. Besides, the leaders of the two countries expressed their intentions to continue the development of China-Germany relations in the trade, economic and humanitarian spheres, as well as to implement plans for bringing them to the level of strategic partnership (in 2017 is the 45th anniversary of the establishment of diplomatic relations between China and Germany).


Of great importance for the PRC are the countries of the Persian Gulf, which play a significant role in supplying China with oil. This issue was the main topic of the meetings between President Xi Jinping and Premier of the State Council of China Li Keqiang with King of Saudi Arabia S. Al Saud on 16–17 March 2017 in Beijing. Along with this the prospects for the implementation of the Chinese project “One Belt — One Road”, plans for strengthening cooperation between the parties in the fight against terrorism, as well as the situation in Yemen and Syria were discussed. Special attention was paid to deepening cooperation between the two countries in the field of telecommunications and space, as well as in the spheres of mutual investment and security. In particular, the leadership of the PRC confirmed its readiness to mediate in the settlement of the differences between Saudi Arabia and Iran.

As a result of the talks, 14 agreements and arrangements were signed in the above-mentioned spheres for about 65 billion US dollars. The largest of these were a memorandum of understanding between China North Industries Group (NORINCO) and Saudi Aramco for the construction of chemical plants in China and an agreement between Sinopec and Saudi Basic Industries (SABIC) on the development of petrochemical projects in China and Saudi Arabia.


The development of regional relations between the PRC and the countries of the Asia-Pacific region, South-East and Central Asia also continues. In this regard, one of China's partners is Pakistan, which is the key link within the transport corridor between the PRC and the Persian Gulf. The problems of guaranteeing the security of such a corridor were considered during the talks of the member of the Standing Committee of the Political Bureau of the CPC Central Committee, Vice Premier of the State Council of the People's Republic of China Zhang Gaoli and the Chief of Staff of the Land Forces of Pakistan Qamar Bajwa. The main issue of the meeting was to find out the possibility of strengthening the Chinese military presence in Pakistani territory (currently the naval base of the PRC is already functioning in Pakistan).

Besides, last week there was State Councilor, Defense Minister Chiang Wanquan's meeting with Chief of the General Staff of the Kyrgyz Republic R. Duyshenbiev. Issues of regional security were discussed in the context of strengthening flows of Islamic extremism from Afghanistan. In this connection, the sides focused on countering the threats to security of transport communication between the Asia-Pacific region and Europe through Central Asia.



An effective policy of the PRC's government ensures a positive development of the Chinese economy, despite the growing external and internal problems in its functioning.

Thus, according to the Ministry of Finance of the People's Republic of China, in January–February this year, China's financial income reached 3 trillion 145.6 billion Yuan (456 billion US dollars), which is 14.9 % more than in the same period last year. In particular, financial revenues to the central budget of the country have amounted to 1 trillion 526.7 billion Yuan (221 billion US dollars, increased by 19.1 %), and revenues to local budgets — 1 trillion 618.7 billion Yuan (235 billion US dollars, grown by 11.1 %). In turn, the total expenditure amounted to 2 trillion 486 billion Yuan (360 billion US dollars, increased by 17.4 %), including from the central budget — 340 billion Yuan (49.3 billion US dollars, increased by 8.1 %) and from local budgets — 2 trillion 146 billion Yuan (311 billion US dollars, increased by 19.1 %).

At the same time, according to the information of the Ministry of Commerce of China, in January–February of this year, 3860 new enterprises with the participation of foreign capital were created in China, which is 13.7 % more than in 2016. During the same period, the total amount of foreign investments actually used was 138.7 billion Yuan (20 billion US dollars).

Evidence of the positive dynamics of the development of the Chinese economy is the increase in the volume of foreign exchange reserves of the PRC in January–February by 6.9 billion US dollars — to 3 trillion 5.124 billion US dollars (in 2016, China's reserves decreased by 319.8 billion US dollars). In the same period, China's gold reserves increased to 74.38 billion US dollars in value terms.


The PRC's further strategy in the economic sphere was determined by the leadership of the country during the high-level economic summit “Development of China-2017”, which began on 18 March, 2017 in Beijing. Vice Premier of the State Council of the People's Republic of China Zhang Gaoli said that China would continue to implement the plan of innovative stimulation of the development of the Chinese economy, first of all its real sector. To this end, the PRC's government will promote the development of new technologies and their application in the leading sectors of the Chinese economy.

In turn, Vice President of the Development Research Center of the State Council of the PRC Wang Yiming, pointed out the importance of further expanding the processes of global globalization in the economic sphere. This was determined by the main prerequisite for the restoration of the stable development of the world economy. In this regard, Wang Yiming stressed the important role of China as a world producer and one of the largest markets. In particular, over the next five years, the volume of China's exports is planned to grow to 8 trillion US dollars.


In order to create favorable conditions for the development of the PRC, consistent measures are being taken to expand the country's transport infrastructure. According to the plans of the Civil Aviation Administration of China, in 2020, 74 new civilian airports will be built on the territory of the country. Due to this, the annual passenger flow will increase to 720 million people.


There also continues the implementation of joint economic projects with foreign countries. In particular, in early March 2017, the Chinese company “China Gezhouba Group Corporation” and the Department of Hydropower Development of Pakistan signed a commercial agreement on engineering and construction work at the HPP “Dasu”. The hydroelectric power plant is to be built in the Ind River basin in Khyber Pakhtunkhwa province. The project is one of the largest in Pakistan in terms of investments and provides for the construction of a dam, a generator house and other technological buildings. The HPP's capacity will be 12 billion kilowatt-hours.


Security and Law Enforcement Agencies

Despite the PRC and the USA's being interested in deepening their strategic partnership, their disagreements in the Asia-Pacific region are growing.

Thus, in connection with North Korea (DPRK)'s development of nuclear weapons and the Pyongyang's moving to practical launches of medium-range ballistic missiles, in early March this year the USA began deploying the THAAD missile defense system in South Korea (Republic of Korea; ROK).

Besides, in order to strengthen the US reconnaissance capabilities in the Korean Peninsula area, it is planned to deploy two or three MQ-1C Gray Eagle unmanned aerial vehicles at the military base of Kunsan in South Korea in 2017. Similar UAVs will be deployed in other US allies' territories in the Asia-Pacific region. Other countries in the region that have contradictions with the People's Republic of China are resorting to building up their military presence in the conflict-dangerous APR. In May of this year, the largest naval ship of the Naval Self-Defense Forces of Japan, the “Izumo” helicopter carrier (the ship's length is 250 meters, the air group includes up to 28 helicopters) is planned to enter the South China Sea. The campaign will last three months and will be Japan's largest demonstration of military force since the Second World War.


Joint operational and combat trainings of the United States and its allies are also being conducted. A joint US, Japanese and South Korean missile defense training (“Missile Warning Exercise”) began on 14 March 2017, during which countering DPRK's missile strikes is being mastered. At the same time, since the beginning of March this year, the joint military exercise of the USA and Japan have been continuing in the East China Sea. In the exercise is engaged an American aircraft carrier strike group, led by the aircraft carrier “Carl Vinson”, Japanese destroyers and other ships. In addition, a joint exercise of the Armed Forces of the USA and the Republic of Korea “Key Resolve” is taking place in South Korea.

The actions of the USA and its allies cause a negative reaction from China, which sees this as a violation of the balance of power in the APR in favor of the United States of America. The Ministry of Foreign Affairs of China has expressed its official protest over the deployment of the US missile defense system in South Korea, and also reserved the right to take measures to protect its national interests. At the same time, the Foreign Ministry of the People's Republic of China has blamed the USA for aggravating the situation around the Korean peninsula. A similar assessment was also given to Japan's plans to organize an expedition of the “Izumo” helicopter carrier to the South China Sea.

The PRC's position in these matters has been supported by Russia, which hopes to create a “common front” with China to oppose the United States. March 7, 2017, Chairman of the State Duma Committee on International Affairs L. Slutsky condemned the USA's measures to deploy the THAAD missile defense system in South Korea. According to him, “the emergence of a new segment of the US global missile defense system near the eastern border of Russia poses a direct threat to the security of the Russian Federation”.


Given the difficult situation in the Asia-Pacific region, as well as other threats to China's security, its leadership is paying special attention to strengthening the country's Armed Forces. On March 13, 2017, at the Session of the National People's Congress, Chinese President Xi Jinping urged the delegates from the People's Liberation Army of China (PLA) to intensify measures to introduce new technologies in the troops. To this end, in early 2017, the Central Commission for Integrated Military and Civilian Development was established in China.

At the same time, measures are being taken to strengthen China's military capabilities in the Asia-Pacific region. It has been decided to increase the number of forces of the Marine Corps of the People's Liberation Army of China from 20,000 to 100,000 servicemen. Apart from the APR, Chinese Marine Corps units will also be deployed on Chinese naval bases in other regions of the world, in particular in Djibouti in the Horn of Africa and in Gwadar in the South-West of Pakistan.

In addition, the PLA continues its operational and combat training in the Asia-Pacific region. From February 20 till March 7, 2017, there was a naval expedition of a group of warships of the South Fleet of the Navy of the People's Liberation Army, during which the destroyers “Changsha” and “Haikou” passed along the route the South China Sea — the Eastern part of the Indian Ocean — the Western part of the Pacific Ocean — the East China Sea.


Against this background, we should not rule out a possibility of further growth of the confrontation between the PRC and the USA over the Korean Peninsula, which can reach a critical level. For example, in connection with the increase in nuclear missile threats from North Korea, US Secretary of State R. Tillerson does not exclude that a decision would be made to deploy American nuclear weapons in South Korea. He also has confirmed the possibility of military actions against the DPRK.

Such USA's steps would inevitably provoke a sharply negative reaction from China, which would take adequate measures to prevent a change in the balance of power in the region. In turn, this would increase the risk of an armed conflict in the Korean Peninsula, including with the use of nuclear weapons.

This situation is highly likely to be used by Russia both for combining efforts with the PRC for actions against the USA, and for diverting Washington's attention and efforts from Ukraine.


Science and Technologies

One of the main directions in the development of science and technologies in China is to ensure the country's energy independence.

In March of this year, the world's largest semi-submerged floating platform “Lanjing-1” was put into operation in China. The platform is designed to develop oil fields in the South China Sea and is able to drill wells to a depth of 15.2 km below the seabed (ocean) at a depth of 3.6 km. The cost of the platform is 700 million US dollars.

Besides, the country continues the development of technologies for the use of renewable energy resources. In March of this year in the province of Zhejiang (East China) a new wind farm of the “Huadian” energy corporation began its work. The new station includes 11 wind turbines that can operate under low-speed winds, and is the largest in the North of the province. At the same time, a solar power plant with a capacity of 35 MW has been commissioned in Jiangsu Province (East China).


The PRC continues to implement large-scale space programs, including military ones.

For this year China has planned to launch 6–8 spaceships of the Chinese global navigation system “Beidou-3”. Until 2020, 35 such satellites will operate in orbits, which will cover the entire territory of the planet. Besides, in 2018 it is planned to put into orbit the main block of the new space station, which will begin to function fully in 2022.

Along with this, a number of promising scientific and technical projects on space issues are being implemented. Thus, the development of nuclear power plants, which will be placed on space probes intended for flights to other planets of the Solar system. Besides, work is underway to create a military unmanned aerial vehicle of low visibility for near space. Studies are also continuing on the possibility of reusing the rocket carrier elements following the model of the American “Falcon” missile. Over the next few years, they are going to start using a launching system of special launch vehicles with Chinese military transport aircraft Y-20.

They also continue the development of a reusable manned spacecraft of a new generation, capable of delivering to the Moon up to 4 astronauts. The expedition is planned to be held before 2036.

In early March this year, China began constructing one of the world's largest observatories for the study of cosmic radiation. The LHAASO Observatory will be located in Sichuan Province at an altitude of about 4.4 km above sea level.


China is also developing and putting into service new models of military equipment. In particular, new aircraft engines are being developed to equip the Chinese fighters of the 5th generation “Chengdu-20” (J-20). This will allow the People's Republic of China to abandon similar engines of Russian make.


Development of Cooperation between China and Ukraine

China's strategic plans for implementing “The Belt and the Road” program create favorable prospects for establishing a qualitatively new level of ties between Ukraine and China.

As part of the events dedicated to the 25th anniversary of the establishment of diplomatic relations between China and Ukraine, in March 2017, the first annual festival “The Silk Road of Ukraine” started in China. In particular, on 13 March 2017, the representatives of Ukraine and the Association of Chinese cities met at the Center for Development of Relations with China. An agreement was reached on holding a Sino-Ukrainian Friendship Forum within the framework of the global project “The Belt and the Road”.

At the same time, March 14, 2017, the Hospitality Industry Association of Ukraine hosted in Kiev a forum of tourism operators “Ukraine — China”. Representatives of the tourism business of Ukraine, China, Latvia and Georgia took part in the forum.