19th Chinese Communist party meeting and Russia’s interests

21:43 26.12.2017 • Pyotr Iskenderov , PHD in History, senior researcher at the Institute of Slavic Studies of the Russian Academy of Sciences
The meeting of the Communist Party of China that closed October 24 in Beijing became one of the most closed forums in the modern history of the Celestial, due to the serious staff issues that it was meant to solve, in the context of CPC president Xi Jingping’s fight on corruption in place. Mr. Jingping’s report was clear on the comprehensive anti-corruption component of his policy: “We will bring to light the tigers, flap the flies away and hunt the foxes,” which presumes fight on the abuse at all levels of the party and country structures. This fight and the renewal process of the CPC management staff (remember that the age limit for being a Central Committee member is 70 years) caused the Central Committee’s board to change by more than a half. The Political Board of the Central Committee and its Permanent Committee have also experienced drastic changes.
Xi Jingping also radically amended the so-called 14 principles of “Chinese socialism” that come back to the times of Deng Xiaoping. Besides the fight with corruption and ecologic problems solving, the CPC president offered to choose international influence strengthening as the key ones. In accordance with the roadmap he offered, China must “rise to the leading innovation-type countries” by 2035 and by 2050 “become a rich and powerful, democratic and civilized” country. By that year the People’s Liberation army of China should become a “world-class power”, Xi Jingping added in his long report that lasted the unusual 3 hours 23 minutes.
The international aspect of the prospective policy of China is the one that causes special interest in the contest of the current party forum, considering the evidently growing geopolitical activity of China in the region and in the world in general. Xi Jingping’s report also said that the “soft power” and international influence grew considerably, and “the international position of the country made it to an unprecedented level”. “It’s time for to go to the avant-garde in the world and start making a bigger input in the world history,” the CPC president said.
We should bear in mind that the CPC meetings don’t traditionally take program documents and make declarations on external policy issues, and the conclusions of the character of changes can be done, based on the changes in the staff as well as the global tagline of the President’s final report.
This viewpoint makes the overall staff of the 19the CPC meeting rotation a key that really increases the political weight of Xi Jingping and the young “technocrats” generation. This consequence has already given certain substance for forecasts about the China’s “moving from the collective management model to seizing power in one hand.” (vedomosti.ru)
Such situation, in its turn, leads to further China activity increasing in the international arena, both in the military and politics, and financial spheres that are a personal interest of Xi Jingping.
The economic component of China’s expansion that is a matter of special concern of the US President Donald Trump was directly related to the to the efficient usage of social and demographic factors by Beijing, first of all, cheap workforce. This has allowed the country to retain the stable growth rate over the recent years. The country’s GDP grew at the 6.8% rate per annum in the 3rd quarter this year. This is lower than the previous quarter, but still exceeds the target set by the government for this year. The GDP has grown 6.9% p.a. in the 9 months of 2017 while the government’s annual forecast only presumed 6,5%. Besides that, the Chinese economy can show increased annual growth rate, compared to the year before, for the first time since 2010 (it was 6.7% in 2016).
On October 18, in his opening address to the meeting Xi Jingping stressed that for the first time for his years in power (he became the CPC president and head of China in the previous party meeting in 2012), the GDP of China grew to the significant CHY 26 trln. that amounts to USD 3,9 trln. The Chinese leader also managed to “satisfy the basic needs of over 1 bln. citizen”.
However, the social and economic sphere will probably experience imminent changes in what is related to the national model itself. Xi Jingping called to implement the “Chinese dream of a younger nation” in his closing speech, as well as “to switch fast to the innovative economy”. These two incentives can push development of China and promotion of its global role as well as possibly increase internal instability and contradictions of domestic policy including country management.
In this context, we should consider the weight of all negative factors and indicators in China. The chairman of the People’s bank Zhou Xiaochuan see a serious danger in too high rates of companies and homes debts growth. He believes the government shouldn’t allow “extra optimism” as extra debt in the economy could cause fast fall of the markets. The debt of only the local government in the framework of mortgage loans and the growing infrastructure costs reach almost USD 6,3 bln. amounting to about 51% of GDP.
International experts confirm that the growing investment of borrowed funds increases long-term economic risks. “The recent data give us a bright picture of an economy running forward at a great speed. However, potential financial market problems are being accumulated inside though they are yet unseen,” Eswar Prasad, a Senior Professor of Trade Policy at Cornell University and former Chief of the Financial Studies Division I the IMF, says. (vedomosti.ru)
It’s peculiar that the head of China, having given an assessment to the recent economic results of China, did not cover the exact numbers including the traditional targets for such forums as to the size of the national economy and GDP level per person that can be interpreted as their possible lowering in future. “Both phrases they didn’t say should give the power a freedom of movement to solve a number of structural problems,” Christopher Johnson, an expect of the Center of Strategic International Studies (CSIS) says. (vedomosti.ru)
Xi Jingping says that the necessity to make changes in the economic road of China directly related to the wish of Beijing to be more active in its external policy. Here we need to single out the following key directions.
Direction 1, military. Strengthening the Chinese military and first of all the National Navy looks different in the light of the major items on the Beijing policy in the region (including the relations with Taiwan and territorial arguments in the East China and South China Seas). The Navy direction also includes the fact that this year the Celestial opened its first foreign military base in Djibouti. The territorial disputes between China and India in the region of Tibet are closely linked to the problems of Chinese People Liberation Army strengthening
Direction to, Eurasian.  from the moment of the previous 18th meeting of the CPC, Beijing took unprecedented effort to promote its own interests including the “Silk road economic belt” and the “Maritime Silk Road” both aimed at extending the trade, transport and economic corridors of Eurasia. Besides that the Trans-Pacific Partnership treaty that the USA threats to exit opened a unique opportunity to China to try to take a leading position in the economic integration projects (followed by political ones) in the Asian Pacific region. Trump has taken his post promising to put an end to the trade disbalance with China. And this is a very inspiring target. And what was his first step as a result? To break the Trans-Pacific Partnership, a trade agreement that would enable USA to head a trade block comprising 12 countries built under the values and interests of the USA. This would potentially remove 18000 tariffs for American products and give them control over 40% of the world GDP. China wasn't present in this block. This is called leverage,” The New York Times ironically refers to that fact. “Trump has broken the Trans-Pacific Partnership the satisfy his voters, and right now he is left with only having to beg some trade crumbs from China. “Now he needs assistance of China in the North Korea situation, so he is even less influential over the trade issues,” the paper concludes. (nytimes.com)
Key Direction 3, the North Korean nuclear problem. Here the role of China is so important and at the same time contradictory which is imposed by the fact the China is the constant member of the UN Security Council and at the same time is the leading economic partner of Pyohgyang. The USA, South Korea and Japan are insisting that Beijing should increase pressure over the North Korean government up to a full-scale economic blockade. However, such requirements contradict the principle of “soft power” in the external policy that Xi Jingping once again confirmed, and the line of strengthening the economic position of China in the region and out of it. It's evident that the external policy principles and priorities declared at the 19th meeting of CPC will undergo their first run very soon, during the Donald Trump's visit to Beijing during his Asian tour in early November. (vedomosti.ru)
The ambitious plans of the Chinese management and government declared at the current meeting of CPC, are completely in line with the interests of Russia, as they create a basis of for widening the two-party cooperation. Blades, first of all, to the energy sphere that is meant to provide the growing production volumes of China with energy. The contract concluded early September between Rosneft and the private CEFC China Energy jewelry the visit of the Russian delegation headed by Vladimir Putin visit to Beijing will provide a considerable increase in Russian oil exports to China until the end of 2017. “We will deliver 40 million tons of oil to China this year,” Igor Sechin, the CEO of Rosneft said. “Next year we will add another film million guns. and this will be the volume for the next 5 years.” (vedomosti.ru)
As a result, China will account for 20% of oil produced by Rosneft and 32% of its exports. Igor Sechin also said that Rosneft and CEFC Are drafting an additional contract of cooperation meant for a longer perspective. The key partner of the Russian oil company is yet another Chinese company, Chinese National Petroleum Corporation (CNPC). Based on the results of 2016, Russia scores first in the structure of oil suppliers to China accounting for 52,5 million tons, with Saudi Arabia lagging behind (51 million tons) as well as Angola and Iraq traditionally oriented for Chinese market.
Another perspective energy project in the Russian and Chinese cooperation is the gas pipeline “Power of Siberia” meant for gas pumping from the Irkutsk and Yakutsk gas producing regions to the consumers in the Far East and China (“Eastern” route). The respective agreement (Agreement of sale and purchase of Russian gas via the Eastern route) was signed by Gazprom and CNPC in May 2014. Its term is 30 years and it presumes 38 billion of square meters of gas exports to China per annum starting December 2019. (gazprom.ru)
Besides the political economic factors, such projects implementation, as well as expanding Russian and Chinese cooperation in other fields including the format of Silk Roads depends directly on the stability of the domestic political situation in China. The 19th meeting of CPC improved this stability situation, at least for the years coming.


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