Skip to content

Geo-Strategic Trend - 172. page

Samsung Plans to Settle Chinese Business in RMB

Well-known Chinese news site Sina recently reported that Samsung, the largest Korean corporation, announced its plan to settle its businesses with China in the Chinese currency, RMB. The plan is to settle transactions in RMB in the Seoul Offshore RMB Settlement Market. As of March 12, the average daily inter-bank exchange amount between the Korean and the Chinese currencies in the Seoul Market was around US$1.6 billion. The daily exchange market volume between the Korean currency and the U.S. Dollar is around US$10 billion. Seoul became an official offshore RMB trading center in July of last year. The Chinese Bank of Communications is its RMB clearing bank. Before that, Hong Kong, London, Frankfurt, and Singapore had already been the official RMB trading centers. Following Seoul, Toronto, Bangkok and Sydney also became official offshore centers. 
Source: Sina, March 12, 2015
http://finance.sina.com/bg/wsj-ftchinese/ftchinese/20150312/02251224547.html
Briefings | | |   Geo-Strategic Trend

China Review News: The South China Sea Is China’s Future Economic Growth Point

According to a commentary that China Review News recently published, China’s "Maritime Silk Road" is not only an economic development plan, but also a strategic solution to breaking the U.S.’ tight control of the Strait of Malacca.

Since the U.S. stationed war ships in Singapore to control this world cargo center, China’s best counter solution is to build a deepwater port in the South China Sea, changing that area into another "Singapore" and China’s future international transportation hub.

"China can build natural deepwater ports there because the several dozen coral reefs that it controls are relatively close to each other. They can thus be used to build cities over the sea. The Paracel Islands (Xisha Islands) can be the South China Sea’s administrative service center; Dongsha Island can be the production center; and the Spratly Islands (Nansha Islands) can be the cargo center, settlement center, and the tourism center."

China has conducted large scale infrastructure construction (building airports and harbors on top of coral reefs) in the Spratly Islands area. Some important harbor cities have started to show up and take shape. China’s land creation by dumping sand and earth into the ocean is not just for fishing; nor is it just for oil and gas extraction. It is to build a future economic growth point for China.

"As China builds more and more airports on those coral reef islands and converts more and more coral reef islands into natural deepwater ports, China’s South China Sea region will replace Singapore as the world’s logistics center. The Chinese government will follow the momentum to set up financial service institutions there to serve the world’s cargo transportation enterprises. The South China Sea will no longer be a quiet ocean. … It will become the most developed area in the world."

"Besides speeding up the infrastructure development, China should create new policies to encourage the development of the South China Sea region, for example, building it as a world’s offshore center and encouraging more companies to register there. The South China Sea should also be the world’s largest duty-free zone and largest free trade zone."

Source: China Review News, February 21, 2015
http://hk.crntt.com/doc/1036/2/2/0/103622065.html?coluid=169&kindid=12098&docid=103622065&mdate=0221000747

Briefings | | |   Geo-Strategic Trend

Global Times: China, Russian, North Korea Prepare Joint Tourism Zone

Global Times recently reported that China, Russia, and North Korea reached an agreement to establish a “borderless” tourism development zone at the delta area downstream on the Tumen River, where the three countries have shared borders. The core region of the new tourism zone is located in Hun-chun City, Jilin Province, China. North Korea’s Duman River Cave and Russia’s Hasan Township both contributed 10 square kilometers of land. Tourists with valid identification documents will be allowed in without a visa. According to Chinese government officials, China first proposed the concept of this tourism zone in 2014. Russia and North Korea were both very interested in the plan. A feasibility study has already started and development planning will start in 2015. After that, the actual development will follow the “dual-nation first, multi-nation next” order.
Source: Global Times, February 13, 2015
http://world.huanqiu.com/article/2015-02/5671291.html
Briefings | | |   Geo-Strategic Trend

Chinese Students in US High Schools Up Sixtyfold over a Decade

The Chinese Social Science Academic Press and Center for China and Globalization (CCG) recently published a report on Chinese students studying in the U.S. According to the report, the number of Chinese students studying in U.S. high schools in 2013 exceeded 30,000. This number had increased sixtyfold over the past decade.
“The 2014 Development Report on Chinese Students Studying Abroad” showed that China has been the biggest source country for students in the U.S. for the fifth consecutive year. Meanwhile, the Chinese students studying abroad have become younger. High school students have become the third largest group of overseas students following graduate and undergraduate students.
The Report disclosed that Canada is the most popular destination country for Chinese high school students. Close to one-third or 32 percent of Chinese students chose to study in Canadian high schools. The U.S., Australia and the UK are in the second, third, and fourth places, following (Canada). In the past seven years, the U.S. has been the most popular destination country for male Chinese high school students (33 percent), while the most popular destination for females is Canada (34 percent). The number of Chinese students who hold F-1 student visas in the U.S. public and private middle and high schools has increased over 60 times in the past decade – from 433 in the 2003 to 2004 school year to 26,919 in the 2012 to 2013 school year.
As for the main reasons for studying abroad, most lie in the relatively flexible overseas education and exam system, more diversified evaluation criteria (for students’ performance), more emphasis on social and practical skills, and more involvement in society. A second most important reason is that many overseas high schools are cradles for world famous top colleges and universities. Those high schools that send many of their graduates to the top U.S. colleges are called “Little Ivy League” by the Chinese. Yet another reason, among others, for the Chinese parents to send their kids overseas at a younger age is that it can help sharpen the kids’ foreign language skills and help the them learn independent living faster.
Source: Qianjiang Evening News, February 26, 2015
http://qjwb.zjol.com.cn/html/2015-02/26/content_2975795.htm?div=-1
Briefings | | |   Geo-Strategic Trend

BBC Chinese: Greece to Participate in China’s New Maritime Silk Road

BBC Chinese recently reported that, during the Eighteenth Chinese Naval Escort Fleet’s four-day visit to Greece, Greek Prime Minister Alexis Tsipras boarded a Chinese Naval warship to attend a Chinese New Year’s reception. Tsipras delivered a speech that suggested the visit and the joint naval exercise represented the start of a new era. He also said his government gave a high priority to supporting China’s investments in Greece and agreed that the country will participate in the New Maritime Silk Road plan. Tsipras emphasized that he expects Greece to become the primary entry point to Europe for Chinese goods. The New Maritime Silk Road plan was first announced by Chinese President Xi Jinping in the fall of 2013. 
Source: BBC Chinese, February 21, 2015
http://www.bbc.co.uk/zhongwen/simp/world/2015/02/150221_tsipras_greece_china_cooperation
http://www.bbc.co.uk/zhongwen/simp/world/2015/02/150219_greece_china_eu
Briefings | | |   Geo-Strategic Trend

Shenzhen Becomes World’s First Friendship City with Berne of Switzerland

As Switzerland as a nation strengthens its ties with China, China’s Shenzhen has become the first Friendship City for its canton of Berne.
The free trade treaty between China and Switzerland took effect last summer. In late January this year, Chinese premier Li Keqiang visited Switzerland. Then in early February, the Swiss Treasury Minister reciprocated the visit in order to promote bilateral cooperation for the internationalization of the Chinese yuan. After two years of communication and preparation, the Swiss canton of Berne formally became a Friendship City with the city of Shenzhen, the most important industrial and economic city in southern China. Since it is the first Friendship City for Berne globally, the story was widely covered in Switzerland. Berne is the second most populous canton in the country. Its industrial structure bears high similarities with Shenzhen. Products include precision instruments, watches and clocks, medical and life sciences, finance, and technology.
Source: Radio Free Asia, February 20, 2015
http://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/gr-02202015103128.html
Briefings | | |   Geo-Strategic Trend

BBC Chinese: China-Supplied Fighter Jets May Be a Threat to the Falkland Islands

BBC Chinese recently reported that, not long ago, China signed an agreement with Argentine President Cristina [Fernandez de Kirchner] to supply her nation with fighter jets that are considered capable of attacking the Falkland Islands (also known as the Malvinas Islands). According to the British Ministry of Defense, the China-made FC-1 fighters are a concern. The British army is planning to enhance the radar system deployed at the Falkland Islands. The islands are currently under British control, but Argentina also claims sovereignty. British analysts pointed out that Argentina has been suffering a major economic downturn and President Cristina has been trying to distract domestic public opinion by introducing new conflicts with Great Britain. China sold Argentina a frigate last year and promised to invest 162 billion pounds in Argentina over the next five years. 
Source: BBC Chinese, February 15, 2015
http://www.bbc.co.uk/zhongwen/simp/press_review/2015/02/150215_press_china_argentina_fighters
Briefings | | |   Geo-Strategic Trend

Chinese Media on the “One Belt, One Road” Strategy

Recently, Chinese media have published several articles discussing the "One Belt, One Road" initiative, which is a major diplomacy and economic development strategy for China.

The term "One Belt, One Road" ("一带一路") refers to the "Silk Road Economic Belt" ("丝绸之路经济带"), which includes China, Central and West Asian countries, and the "21st Century Maritime Silk Road" ("21世纪海上丝绸之路"). It connects China, ASEAN member nations, South Asia, Africa, and Europe.

This combined economic zone contains a population of 4.4 billion. With 26 countries and regions, the size of its economy is $ 21 trillion. In the next ten years, China’s exports are expected to count for one third of the imports to these countries and China is likely to invest $1.6 trillion in this zone.

According to Baidu’s definition, "[this term] is not a physical entity or mechanism, but rather a concept involving cooperation and initiative. The purpose is to develop a partnership of economic cooperation between China and the countries in the zone and to build a community with political trust, economic integration, and a common fate and responsibility."

The following is a summary of key viewpoints from these media, some of which even contradict each other.

China Review News:
1. Investing in countries in this economic zone is more for political considerations than for economic reasons. In fact, many investments in Central Asia and South Asia involve infrastructure construction projects that have a low economic return. Though many countries have low labor costs, their poor infrastructure and strong labor unions jeopardize their investment environment.
2. The Southeast Asian region might be the first area in which China has a breakthrough, due to the large Chinese population and their stable political environments. Their exports of food and oil can help China to lower its security risk on food and the supply of resources.

Qiushi:
This strategy can enable China to develop a tight economic and trade relationship and common interest partnerships with emerging economies and developed European countries. This can counter the U.S.’ "Asia-Pacific Rebalance" strategy and relieve the pressure of China’s overproduction and of its being forced into the heavy purchase of U.S. debt.

Xinhua:
China should focus on the "belt" (land) instead of the "road" (sea). This is because on the sea side, China will face strong resistance from ASEAN countries on its exports. This relates to their own domestic policies and can’t be completely influenced by China’s investment in their countries.

Stock Times:
The globalization of the renminbi and developing renminbi offshore trading centers are critical steps in the "One Belt, One Road" plan. China has made good progress in issuing renminbi bonds, setting up renminbi offshore trading centers (e.g. in Frankfurt and London) and offshore markets (Hong Kong, Singapore, Taiwan, and London), and in signing currency swap agreements with 28 countries.

Sources:
1. Baidu
http://baike.baidu.com/view/12241799.htm
2. China Review News, January 18, 2015
http://hk.crntt.com/doc/1035/7/9/4/103579473.html?coluid=202&kindid=11695&docid=103579473&mdate=0118095339
3. Qiushi Online, January 21, 2015
http://www.qstheory.cn/freely/2015-01/21/c_1114074599.htm
4. Xinhua, January 27, 2015
http://news.xinhuanet.com/fortune/2015-01/27/c_127424890.htm
5. Stock Times Online, January 26, 2015
http://www.stcn.com/2015/0126/11988834.shtml

Briefings | | |   Geo-Strategic Trend