Geo-Strategic Trend - 127. page

The China-Russia Investment Forum held a meeting on September 15. Wang Feng, chairman of the China-Russia Regional Cooperation and Development Investment Fund, said at the meeting that the Fund has the potential for 100 some major projects including infrastructure and nuclear technology.

The total scale of the Fund is expected to be 100 billion yuan (US$ 14.6 billion), with a first phase of 10 billion yuan (US$ 1.5 billion).

The focus of the investments will be infrastructure, nuclear technology, the modern service industry, natural resources, clean energy, and agriculture.

The fund set up a policy steering committee which is composed of representatives from the National Development and Reform Commission, the Ministry of Foreign Affairs, the Ministry of Commerce, and the Central Bank. It provides macro guidance on fund investment operations, makes recommendations on key areas of fund investment, and coordinates and resolves major issues.

The initiative to establish the fund was part of the proposals made in the July 2017 Joint Statement between China and Russia on Further Deepening the China-Russia Comprehensive Strategic Partnership of Coordination, as well as an explicit requirement of the joint communique of the 22nd China-Russia Prime Ministers’ Regular Meeting in November 2017. It is included in the list of results of the “Belt and Road” International Cooperation Summit Forum in May 2017.

In June 2018, the National Development and Reform Commission of China approved the establishment of the fund. Led by the China National Power Investment Group Co., the China National Nuclear Industry Group Co. and the China Overseas Development Association were among the founding sponsors. On August 21, 2018, the Fund’s General Partnership Company and the Fund Management Co., Ltd. were formally incorporated in Shenzhen. The investors in the fund in the first phase included more than 10 organizations, including state banks, state-owned enterprises, financial institutions, and local governments.

Source: Sputnik News, September 15, 2018
http://sputniknews.cn/economics/201809151026361106/

The Australian Broadcasting Corporation (ABC) News Chinese Edition recently reported that China has blocked its website since the day after Australia banned Huawei and ZTE from participating in the national 5G communications infrastructure initiative. In the past Chinese readers could freely access ABC NewsChinese Edition via its website and mobile app without blockage from China’s “Great Firewall.” Under high pressure, the Chinese government explained that China’s internet is always “sufficiently open.” However, “some foreign websites” may be banned if the content violates Chinese laws, such as distributing information promoting pornography, gambling, and activities threatening Chinese national security. There was no example of any content in ABC News that met such criteria. In the meantime, other Australian news websites are still accessible from within China. ABC News English Edition is occasionally available in China. ABC News is a public broadcasting organization established under the Australian Broadcasting Corporation Act of 1983.

Source: ABC News Chinese, September 3, 2018
http://www.abc.net.au/chinese/2018-09-03/china-censors-abc-websites-in-china/10194504

According to an article that Deutsche Welle published, the People’s Liberation Army (PLA) will complete its operational preparations for a “full military attack against Taiwan” by 2020.” This is the main conclusion from the “Report on the Military Power of the Chinese Communist Party” that the Taiwan Defense Ministry recently submitted. The report pointed out that “unifying Taiwan” remains a constant mission for Beijing. If any of the following possibilities becomes a reality, it will trigger China’s attack of Taiwan: Taiwan explicitly declares independence, Taiwan has internal turmoil, Taiwan’s acquires nuclear weapons, a delay occurs in the peaceful cross-strait dialogue, foreign forces’ get involved in Taiwan affairs, or foreign troops are stationed in Taiwan. However, the report also mentioned that, currently, the mainland is still limited by Taiwan’s geographic environment, landing vehicles, and insufficient logistical capabilities and does not have the full combat capability to carry out the military action.

According to the Deutsche Welle article, in April of this year, the Taiwan Democracy Foundation announced its annual poll. The data showed that, if the mainland military force attacked Taiwan because Taiwan issued a declaration of independence, 55 percent of the people would be willing or very willing to defend Taiwan and 35.9 percent of the population would not. If the mainland unified Taiwan by force, 67.7 percent of the people would be willing to fight to defend Taiwan, and 24.9 percent would not be willing.

Source: Deutsche Welle, September 1, 2018
https://p.dw.com/p/348cI

On September 5, the China-Africa Financial Cooperation Bank Consortium was launched in Beijing. China Development Bank (CDB), a government bank whose primary responsibility is to raise funds for large infrastructure projects, and a dozen member banks, signed an agreement, marking the debut of multilateral financial cooperation between China and Africa.

Since the launch of financial cooperation with Africa in 2006, CDB has provided more than $50 billion in investment and financing to nearly 500 projects in 43 African countries.

The Consortium is led by CDB. The founding members from the African side include 16 regional financial institutions, such as the Amalgamated Bank of South Africa, the Attijariwafa Bank in Morocco, the Commercial and Investment Bank of Mozambique, Banque Misr (The Bank of Egypt), the Development Bank of the Central African States, the Development Bank of Ethiopia, Ecobank (pan-African Bank), the Equity Bank of Kenya, the First Bank of Nigeria, Rawbank (Democratic Republic of the Congo), the State Bank of Mauritius, the Standard Bank of South Africa, the Eastern And Southern African Trade And Development Bank, Uganda Development Bank Limited, the United Bank for Africa, and the West African Development Bank.

The Beijing Summit of the 2018 Forum on China–Africa Cooperation was held in Beijing on September 3rd and 4th. Chinese President Xi Jinping delivered a keynote address. Xi Jinping proposed that China should provide 60 billion U.S. dollars in support to Africa and exempt the interest-free loan debts that were outstanding, as of 2018, of the least developed countries that had diplomatic relations with China.

Source: Sputnik News, September 5, 2018
http://sputniknews.cn/economics/201809051026284688/

On September 3, Chinese President Xi Jinping delivered a keynote speech at the opening ceremony of the 2018 Beijing Summit of the Forum on China-Africa Cooperation.

Xi promised that, over the next three years, China will implement eight initiatives in terms of China-Africa cooperation in the fields of industrial promotion, infrastructure, trade, green development, capacity building, health, cultural exchanges, peace, and security.

China said it would establish a China-Africa Economic and Trade Expo and provide 1 billion yuan (US$146.3 million) in emergency aid to disaster-affected African countries. China will also implement 50 projects on trade facilitation and establish 50 aid projects on green development and environmental protection. In addition, China proposed that it would provide vocational training for African youth and upgrade 50 medical and healthcare assistance projects in Africa. Also, China plans to establish a China-Africa fund on peace and security cooperation for joint peacekeeping.

In total, China is to provide US$60 billion in financial support to Africa to accomplish the above initiatives.

In his speech, Xi said that China and Africa should expand their political dialogue and policy communication at all levels, strengthen mutual understanding and mutual support on issues involving core interests and major concerns, and maintain close cooperation on major international and regional issues.

Source: Xinhua, September 4, 2018
http://www.xinhuanet.com/politics/2018-09/04/c_1123374166.htm

Well-known Chinese news site Tencent News recently reported that Malaysia’s airline company Air Asia just announced it is cancelling its plan to establish a joint venture airline in Zhengzhou, Henan Province, China. In May 2017, Air Asia signed a deal with the China Everbright Group and the Henan government in Beijing to form the new airline focusing on the low-cost passenger air travel market. Air Asia was committed to investing in infrastructure construction, pilot training, airline crews, and logistics. However, Air Asia’s latest announcement said the signed memo had “expired” and it would not be renewed. The Malaysian airline did not explain the reason. The Malaysia government recently just called off two major infrastructure plans which were to be funded with loans from China. That move was widely considered as a major setback for the Chinese One Belt One Road initiative.

Source: Tencent News, September 1, 2018
https://xw.qq.com/cmsid/20180901A1M6DL00

In 2010, China overtook Japan and became the world’s second largest economy. However, Russian media commented that this happened because China artificially inflated its GDP figures.

Kommersant (The Businessman), Russia’s nationally distributed daily newspaper, published a long commentary on August 25, entitled “The Deception of the GDP.” The article claimed that some of the powerful ruling class have used GDP as a tool to achieve its goals. Although GDP shows the total economic activity of a country or a region for a period of time, can it really represent national strength?

For example, the article says that modern China is a vivid example of GDP worship. The amount of non-productive economic activity in China is huge, which artificially increases the GDP figure. To a certain extent, this is very similar to the practices of the former Soviet Union and Japan in 1980. Everyone knows what happened to those two countries.

According to the article, Beijing is using this at least discounted GDP figure to compare with and confront Western GDP figures and the results can be imagined. This is not to say that there is no unproductive economic activity in the western market economies, but it is far less than such economic activities in China.

The article explained that the growth of GDP does not mean the growth of economic strength. For example, a company built a large stadium. This investment activity did contribute a huge amount to GDP, but it did not create wealth for the company. On the contrary, it reduced the company’s wealth and even contributed to its financial difficulties. In this case, the growth of GDP negatively impacted economic power.

An economic analyst and TV show host commented on the Chinese economy, saying that it is a huge bubble and it may crash at any time. He once said at a seminar, “There is a very simple statistic to know: 75 percent of the Chinese people’s wealth is in the property market. You don’t need to explain anything else. The Chinese leaders think they are the smartest and can shrink the bubble slowly and painlessly.”

Russian experts said that many Chinese economics experts have graduated from American universities and they should understand the economy. The calculation of real economic strength should exclude non-productive financial investment from GDP, make adjustments for income distribution, and replace the GDP value with calculations of the basic assets of the society.

The problem in China is that the ruling class has its own purposes. Using data to show economic growth seems more important. Gradually, they have come to believe in the data that they themselves artificially inflated.

Source: Radio Free Asia, August 28, 2018
https://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/lxy-08282018095756.html

Global Times reported the dramatic change in Australia’s Prime Minister that took place on August 24 by celebrating the fact that Malcolm Turnbull, who completely “screwed up the China-Australia relationship,” had “finally stepped down.” However, the report immediately mentioned that “the new guy just stabbed China in the back yesterday.” That refers to the new Prime Minister Scott Morrison, who is the sixth Prime Minister in eleven years. He just announced the day before, as the Treasurer of Australia, that Huawei would be banned from participating in building Australia’s 5G communications network. Huawei complained that the “disappointing” ban was totally “political” and was completely against the “spirit of free trade.” The report further mentioned that, in 2016, Morrison had also refused Chinese bidders from participating in the Ausgrid deal. However, Morrison did emphasize the importance of the China-Australia trade partnership a few years ago. The author concluded that, it seems the future of the China-Australia relationship is still full of uncertainty and that it might be a wise idea to wait until Australia holds its general election next year.

Source: Global Times, August 24, 2018
http://world.huanqiu.com/article/2018-08/12816478.html