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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

Three Goals of Beijing’s Military Diplomacy

Chinese leader Xi Jinping said on January 29th that, as part of its overall foreign diplomacy, China will pay more attention to its military diplomacy. Xi’s remarks were made at a meeting with the military attaché and other military diplomats.
China Review News (中国评论通讯社), a Hong Kong based and Beijing backed Chinese language news organization, lists three goals of China’s military diplomacy.
First, Beijing’s military diplomacy certainly includes deterrence. When Xi advocated the expansion of military diplomacy, he also called for military officers "to make new and greater contributions to the China dream and dream of a strong army." Instead of showcasing military might, it is perhaps more important for China to become a military leader – not only technically but also ideologically. In other words, Beijing’s military diplomacy is a natural consequence of the ever growing role of leadership it has been playing in the international arena.
In addition to showcasing its military strength, agenda setting is an equally important goal. For this reason, Beijing has been attempting to upgrade the Xiangshan Forum (香山论坛) to a channel equivalent to the Shangri-La Dialogue as the primary platform for regional security issues. The official media have listed the upgrading of the Xiangshan Forum as one of the top ten "breakthroughs" in military diplomacy.
A third goal is to eliminate the "China threat" theory and to dispel the outside suspicions of the People’s Liberation Army’s intentions and strategies. By letting its military communicate with the outside world, China’s ultimate hope is to convince its neighbors (and potential opponents) that its "peaceful rise" is sincere.
Source: China Review News, February 2, 2015
http://hk.crntt.com/doc/1036/0/2/2/103602217.html?
Briefings | | |   Geo-Strategic Trend

China’s Capital Outflow Exceeds Inflow for the First Time

According to the latest statistics from the Commerce Ministry, in 2014, China’s total outbound foreign direct investment amounted to US$116 billion, an increase of 15.5 percent over the figure for 2013. If reinvestment after financing in the local foreign countries were included, the total scale of China’s outbound investment would be US$140 billion, exceeding the total inbound foreign investment by US$20 billion. 2014 marked the very first year that China became a country of net capital exports. As of 2014, China’s outbound foreign investments had increased by almost 40 times in the past 12 years, with its annual outbound investment ranking third place in the world for two consecutive years.
In 2013, China’s outbound investments spanned 6128 overseas enterprises in 156 countries and regions, covering transportation, storage, and postal services. In addition to traditional natural resources and energy projects, Chinese investments in manufacturing and agriculture are increasingly active.
Source: People’s Daily, January 26, 2015
http://paper.people.com.cn/rmrbhwb/html/2015-01/26/content_1526312.htm
Briefings | | |   Geo-Strategic Trend

Swedish University to Close Its Confucius Institute

Well-known Chinese news site Sina recently reported that Stockholm University announced that it will soon close its Confucius Institute. This Confucius Institute was established in 2005 and was the first one to be established in Europe. According to Stockholm University’s website, the Confucius Institute project is “unnecessary.” The University’s Vice Chancellor suggested that it is “problematic” if an organization in a university is funded by a foreign government. A large number of U.S. professors consider that this type of arrangement interferes with academic freedom. Fox News also traced some of the publicly available records that showed the Chinese government paid for numerous travel and lodging expenses for some U.S. university decision makers so as to influence the negotiations. The same evidence was found in the founding of the Confucius Institutes in Northern Europe. Some Chinese experts expressed the opinion that these anti-China opinions are just biased Western views. However the Stockholm University Confucius Institute is the first closure of a Confucius Institute in Europe, which is a warning sign.
Source: Sina, January 12, 2015
http://news.sina.com.cn/c/2015-01-12/052131387284.shtml
Briefings | | |   Geo-Strategic Trend

Global Times: High-Ranking Vietnamese Official Berates Chinese Company

Global Times recently reported that the Vietnamese Minister of Transportation went on national TV to berate the representative of a Chinese company. The company was responsible for a light rail project which caused an accident in which someone died. After that the Vietnamese government sent a diplomatic note to the Chinese Embassy in Vietnam and threatened to blacklist this Chinese construction company. The Vietnamese Minister asked the Chinese company to replace the Chief Executive and the Advisor on that project with Vietnamese citizens. The Vietnamese national TV report had a large number of viewers and the publicity was very damaging. The light rail project was based on a priority loan of US$300 million that China provided. The new incident has apparently cast a negative shadow on the already unfriendly relationship between China and Vietnam. 
Source: Global Times, January 10, 2015
http://world.huanqiu.com/exclusive/2015-01/5375506.html
Briefings | | |   Geo-Strategic Trend

First China-CELAC Forum Ministerial Meeting Concludes in Beijing

The first ministerial meeting of the Forum of China and the Community of Latin American and Caribbean States (CELAC) concluded in Beijing on January 9 with the announcement that the forum’s next meeting will be held in Chile in 2018.
The two-day meeting, co-chaired by Chinese Foreign Minister Wang Yi and his Costa Rican counterpart, Manuel Gonzalez Sanz, passed three documents: the Beijing Declaration, a five-year cooperation plan, and the regulations for the China-CELAC forum. China and CELAC have also reached a consensus on deepening political mutual trust, expanding cooperation, and promoting development of the forum. Wang said that President Xi Jinping’s remarks at the opening ceremony will guide the development of the China-CELAC forum. Gonzalez said that the historical meeting has launched overall cooperation between China and the countries in Latin America and the Caribbean region, which will build a closer CELAC-China relationship.
Source: Xinhua, January 9, 2015
http://news.xinhuanet.com/world/2015-01/09/c_1113939483.htm
Briefings | | |   Geo-Strategic Trend

People’s Daily: Japan Strengthens Naval Blockade over China

On January 7, People’s Daily reported on the Japanese government’s plan to strengthen its defense forces. In response to China’s growing naval power, Japan will officially launch its 2015 plan for the Southwest area. In an interview with CCTV, military experts said that the reason for the Japanese to launch this program is out of consideration of Abe’s policy and domestic economic situation. The plan for the defense program is to increase Japan’s defense deployment in the Southwest and its ability to control the sea and air. [As a result], the possibility of misfires between China and Japan will increase. 

Yang Bojiang, the Director of the Institute of Japan Studies at the Chinese Academy of Social Sciences, said that Japan has two reasons for launching its National Defense Program. The first is that Abe’s policy requires it. Abe has been implementing Japan’s "full normalization." Japan has made significant changes in its defense concepts, relevant policies, institutional settings, military deployment, and procurement of weapons systems. The second is that Japan is not optimistic about its current economic situation. It needs to use this program to handle its internal contradictions. 
In recent years, the Japanese have continued to strengthen their efforts to develop a naval blockade against China. Du Wenlong, a researcher at the PLA Academy of Military Sciences, noted that China has an urgent need for naval training. In the future, China’s underwater submarines and its surface or air combat fighter fleet will all pass through the first island chain. Japan also has military deployment in these areas and does not rule out the deployment of an air defense weapons system in the future. As a result, Japan will increase its frequency and its capacity to monitor and interfere with Chinese ships and planes. In response, China will carry out counter measures, causing friction and conflict. The scope and intensity of the friction will increase. 

Source: People’s Daily: January 7, 2015 
http://military.people.com.cn/n/2015/0107/c1011-26339168.html

Briefings | | |   Geo-Strategic Trend