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China (中国) Today

June 20, 2017
<p>China (中国) Today</p>

Events Review (12.06–18.06.2017)


І. Major-Profile Events and Trends in the Development of the Situation around the PRC

The second meeting of the BRICS countries' coordinators with the participation of the PRC on 14–15 June 2017 in the Chinese city of Qingdao (Shandong Province) is not without reason called an important event. The participants analyzed the results of their cooperation in the political, economic, financial, humanitarian and security spheres in the first half of 2017. They also discussed the upcoming meetings of the leaders of Brazil, Russia, China, India and South Africa, in particular on the sidelines of the G20 summit in Hamburg in July this year and the next September BRICS' summit in the Chinese city of Xiamen, Fujian Province.

Other events took place within the BRICS coordinators' meeting, in particular, the Forum of political parties, think tanks and public organizations of the member countries of the BRICS (organized by the Department of International Relations of the Central Committee of the Communist Party of China). The Forum approved the Fuzhou Initiative which provides for strengthening contacts between non-governmental organizations of the BRICS' participants. The work on this direction will focus on various humanitarian issues, including health care and poverty alleviation.

The 2nd meeting of the BRICS National Coordinator, Qingdao, June 14–15
The 2nd meeting of the BRICS National Coordinator, Qingdao, June 14–15

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

Prospects for the development of transport infrastructure of “The Belt and Road”
Prospects for the development of transport infrastructure of “The Belt and Road”

The Chinese authorities want their interaction with partners to be more effective. To this end, the Center for Financial and Economic Development Studies of “The Belt and Road” initiative was opened at the Xiamen State Institute of Accounting (Fujian Province). The Center will study financial and economic policies of the participants of “The Belt and Road” initiative, the legal and regulatory framework and the economic environment, provide the participants with a platform for contacts on issues of financial and economic policy and exchange of relevant information.

Over time, regular high-level financial and economic forums will be held at the Center's base, officials and entrepreneurs of the “One Belt — One Road”'s countries-participants will be trained. This will improve the efficiency of the financial and economic institutions of the “One Belt — One Road”, in particular the Silk Road Fund. To date, the Fund has already allocated more than 6 billion US dollars to implement various projects.

The development of “The Belt and Road” leads to the increase in the volume of cargo flows between China and Europe. Thus, by 2020, the number of container trains on the route from China to the EU via Kazakhstan will equal 3 thousand during the year. In 2016, this route was used by 1.8 thousand trains, and the total volume of freight traffic amounted to 8.29 million tonnes, which is 16 % higher than in 2015.

Proceeding from this, measures are planned to further expand the transport infrastructure of “The Belt and Road”, including within the framework of the implementation of the China-Kyrgyzstan-Uzbekistan and Harbin-Russia railway projects, as well as the PRC's participation in the modernization of container terminals in Spanish ports Valencia and Bilbao and railway terminals in Madrid and Zaragoza.


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

3.1. Politics. Development of China's international cooperation

US-China Think Tank Symposium in Des Moines, Iowa
US-China Think Tank Symposium in Des Moines, Iowa

Given the mutual interests of the PRC and USA in the spheres of politics, economy and security, the parties are searching for ways to deepen relations at all levels. Thus, last week in Des Moines (the administrative center of the American State of Iowa), a Chinese-American seminar of high-level analytical centers was held, where Chinese and American scientists discussed further development of cooperation between the two countries, including within the framework of interaction of Provinces and States.

At this, the rapid development of trade and economic ties between China and the US was pointed out, which also creates the ground for political dialogue between the parties. Preparation of reference materials and proposals and ideas to both governments for decision making was determined one of the main tasks of the centers. For example, the need to address the imbalance in trade between the PRC and the USA was stressed.


China considers establishing close ties with the countries of the European Union one of the priorities of its work. June 12, 2017, Premier of the State Council of China Li Keqiang, met with Prime Minister of Luxembourg X. Bettel in Beijing. Discussing China-Luxembourg relations in the context of China's interests in Europe, the parties agreed to continue implementing joint projects in the spheres of investment, finance, space technology, metallurgy, aviation and communications.


China's relations with countries of other regions, including the Asia-Pacific region and South America, are developing quite successfully. Thus, at the talks, the Foreign Ministers of the People's Republic of China, Wang Yi and of Singapore — V. Balakrishnan reached an agreement on the activation of cooperation within the framework of the implementation of “The Belt and Road” projects, as well as the ASEAN development programs. They agreed that it is necessary to speed up the adoption of the Code of Conduct in the South China Sea, as one of the preconditions for stability in the region.

And already on 16 June 2017 in Beijing, the 2nd Sino-Brazilian strategic dialogue was held at the level of Foreign Ministers, during which the parties exchanged views on the reasons for world and regional problems, on the future of the cooperation between the PRC and Brazil.

At the same time, the establishment of diplomatic relations between China and Panama was quite demonstrative, when the latter decided to break off diplomatic relations with Taiwan. Due to political changes, Panama also intends to deepen trade and economic ties with China.

Panama’s Foreign Minister Isabel de Saint Malo and Chinese Foreign Minister Wang Yi sign a joint communique on establishing diplomatic relations, Beijing June 13
Panama’s Foreign Minister Isabel de Saint Malo and Chinese Foreign Minister Wang Yi sign a joint communique on establishing diplomatic relations, Beijing, June 13

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

Added-value of industrial output growth in China, %
Added-value of industrial output growth in China, %

The high effectiveness of the policy of the Chinese government is proved by the basic indicators of China's economic growth. According to its State Statistical Office, in May this year the added-value of the country's industrial products grew by 6.5 %. And from January to May of the same year, the volume of retail sales in China increased by 10.7 % compared to the same period of 2016.

The volume of domestic and foreign investment into the economy of the PRC is also increasing. Thus, within the first five months of 2017, this indicator grew by 8.6 % compared to the same period in 2016 and reached almost 3 billion US dollars. At this, the PRC's government is trying to improve the country's investment climate. In particular, it was decided to provide state support and encourage private investments into the automobile industry of China. At this, preference is given to those who invest into the production of cars working on new sources of energy.

The 28th Harbin International Trade and Economic Fair and the 4th China-Russia EXPO Exhibition, which were organized in Harbin on June 15–19 2017, contributed to the attraction of foreign investments and promotion of Chinese products. The exhibitions included several dozens of presentations, conferences and round tables, a meeting of representatives of the chambers of commerce and economy of the countries participating in the Chinese initiative “The Belt and Road”.


3.3. Security and Law Enforcement Agencies

The main source of tension in the Asia-Pacific is the events around North Korea. Proceeding from the fact that the leadership of the DPRK categorically refuses to comply with the requirements of the UN Security Council on the termination of the nuclear missile program, the USA, with the help of serious events, demonstrates its power in the APR.

At the end of June this year, the second joint exercises of the Air Forces of the USA and South Korea (in which two American B-1B bombers and Korean F-15 fighters will be involved) will take place near the Korean Peninsula. In addition, on 20 June, the guided-missile destroyer USS Dewey of the 7th Fleet of the US Navy, entered the port of South Korea on Jeju Island.

B-1B strategic bomber and guided-missile destroyer USS Dewey (DDG 105)

Such actions by the United States were seen by the DPRK as “confirmation of the aggressiveness of Washington's policy in the Asia-Pacific region”, so North Korea came up with new threats about the possible use of nuclear missiles against the USA and its allies in the APR.

China has expressed its concern about the USA's military activity in the Asia-Pacific region, and urged all parties to refrain from steps that could aggravate the confrontation in the region.


On June 13th, the first high-level security dialogue between China and Germany was held in Beijing
On June 13th, the first high-level security dialogue between China and Germany was held in Beijing

Against this background, it is quite logical that China pays special attention to deepening cooperation with the leading European countries in the security sphere.

June 13, in Beijing, Secretary General of the Central Political and Law Commission of the CPC Central Committee, Wang Yongqing, met with the State Secretary of the Federal Chancellery of the Federal Republic of Germany, responsible for coordinating the special services K. Fritsche. It was the first Sino-Germany high level dialogue on security. The sides exchanged views on cooperation in the fight against terrorism, cross-border organized crime and illegal migration and agreed to work together in these aspects.


Similar questions were considered during the meeting of the Deputy Chairman of the Central Military Council of the People's Republic of China, Fan Changlong, and Spanish Minister of Defense M. Dolores on 13 June 2017 in Madrid. They touched upon the issue of strengthening inter-state relations as an integral part of interstate relations.


3.4. Science and Technology

One of the Chinese leadership's priorities is to ensure high rates of development of science and modern technologies. For example, in 2016 the city authorities of Beijing alone allocated 21.8 billion US dollars for this purpose. At this, the share of scientific and technical innovations in the growth of the city's economy exceeded 60 %. As a result, China is entering the forefront in the world in the fields of science and technology, including in the sphere of space exploration.

June 15, 2017, China launched the first X-ray space telescope — Hard X-ray Modulation Telescope (HXMT), which will track black holes. The 2.5-ton telescope was launched into a 550 km high orbit by a carrier rocket “Chang Zheng-4B” from the Jiuquan Cosmodrome located in the Gobi Desert.

June 15, China launched the first X-ray space telescope HXMT

On the same day, the cargo spacecraft “Tianzhou-1” completed the second orbital refueling of the “Tiangung-2” space laboratory, which lasted two days and became another test of Chinese technology in this sphere.

At the same time, new types of space technology are being developed, in particular, a spaceplane with horizontal take-off and landing. To date, the Chinese aerospace corporation CASIC has already completed the technical design of the machine (including the fuselage and engine) and is starting to build it. The new spaceplane will start from a conventional airfield as an aircraft, however, it has enough power to enter the near-Earth orbit and dock with the space station. Thus, the cost of delivery to the station of people and goods will be significantly reduced.


The PRC has notable successes in the development and implementation of new technologies in the field of railway communication. June 13, between the cities of Ningbo and Yuyao in Zhejiang Province (East China) was launched the first passenger train capable of a speed up to 160 km/h. In the course of time, the speed of the train will be increased to 200 km/h.

In the Beijing metro they began to research the operation of the country's first fully automated branch with trains without engine drivers.


IV. Plans and Prospects for Cooperation between China and Ukraine

The PRC is interested in cooperation with Ukraine, which has a significant scientific and technical potential and valuable natural resources. In particular, China shows great interest to the E. Paton Ukrainian Institute of Electric Welding with its modern technologies of the world level electric welding. Thus, within the framework of cooperation between the Harbin Institute of Welding and the E. Paton Ukrainian Institute of Electric Welding, are being implemented a number of joint projects to conduct research and development of appropriate industrial equipment. Besides, the Ukrainian Institute fulfills orders of Chinese enterprises operating in the spheres of aircraft and shipbuilding, space, railway and pipeline transport.

China is openly interested in establishing ties with individual Ukrainian regions. This was confirmed by the Ambassador Extraordinary and Plenipotentiary of the PRC in Ukraine Du Wei during his meeting with the authorities of Zhytomyr city and Zhytomyr region on 13 June this year. According to him, Chinese investors are ready to allocate funds for projects offered by Zhytomyr region, including for the construction of housing, transport infrastructure and a jewelry factory for processing amber. At the moment in the territory of Zhytomyr region there are two enterprises with Chinese capital — the “United System Administration” (rental of real estate) and “Production Enterprise VALS” (manufacturing of building metal structures). Zhytomyr region export-import operations with China make more than 5 % of its total commodity turnover.

Chinese Ambassador to Ukraine Du Wei meets with the leadership of Zhytomyr city and Zhytomyr region, June 13

Last week, the Cooperation Plan for 2017–2019 between the Chinese city of Ichan (Hubei Province) and the city of Zaporizhzhya was signed. The document provides for mutual visits of representatives of the administration and business circles of both cities, exchanges of teachers and students, development of ties in other sectors, including tourism and trade.


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