The increase in mutual exports will help Russia and China to further strengthen not only political, but also economic cooperation. For both countries, the expansion of settlements in national currencies plays an important role in this process.
On July 5, 2021 China celebrated the 100th anniversary of the founding of the Communist Party of China ( CPC).
In China, great attention is paid to achieving the Chinese dream of the revival of the Chinese nation, which consists of three stages. The first stage is wenbao
(absence of hunger and poverty), the second stage is xiaokang
, the construction of a “middle income” society, and the third stage is datong
, the ideal society of “great harmony”.
The task of building a “xiaokang”
society was put forward at the 16th Congress of the CPC in the report of the President of the People’s Republic of China Jiang Zemin in 2012, as the main task for the next 20 years. At the 19th Plenum of 2020, it was noted that the 14th five-year plan is the first five-year plan when the task of building the xiaokang society has been achieved.
The foundations of China’s socio-economic development are laid down in the country’s five-year plans. They contain targets for economic growth, guidelines for economic reforms and industrial modernisation. In 1953, the first five-year plan (1953-1957) was formed, and focused on the transition from an agricultural economy to the development of advanced industrial production; special emphasis was placed on the development of heavy industry. In total, 13 five-year plans were implemented.
The first five-year plans traced a planned approach to economic development; it contained specific quotas and production rates — grain, steel, etc. In the 1980s, China moved to form a socialist market economy, with Chinese touches. In this regard, the importance of central planning has been downgraded.
Since the 2010s, more and more attention has been paid to technological development by the Chinese authorities. The main task of the 12th five-year plan (2011-2015) was the development of science, education, and high technology. For the first time, close attention was paid to the environment. In the 13th five-year period (2016-2020), the main emphasis was placed on stimulating the development of innovations
From October 26 to October 29, 2020, the Fifth Plenum of the 19th CPC Central Committee was held in Beijing. The plenum was chaired by the Politburo of the Central Committee. The Plenum discussed China’s 14th Five-Year National Socio-Economic Development Plan (FYP) (2021-2025) and long-term goals for 2035. Xi Jinping, General Secretary of the CPC Central Committee, outlined the main directions of China’s development in the coming years. Xi Jinping’s ideas about socialism with Chinese aspects in the new era are rapidly developing in modern China.
First of all, the task is to achieve the socialist modernisation of China by 2035. It includes the development and strengthening of China’s economic and technological potential, as well as the development of new industrialisation. Much attention was paid to the modernisation of the Chinese management system, as well as to the issues of green development and ecology, the concept that “green mountains and emerald waters are priceless treasures
.” An important aspect is the deepening of reforms and openness, including in the field of competition, reform in the system of property rights and market-oriented distribution. The development of agriculture and rural areas has also received close attention. It is also planned to create a modern fiscal, tax and financial system, including the development of research and development in the field of digital currencies.
Strengthening China’s strategic scientific and technological power, education and culture, developing the nation as a scientific and technological power, increasing the innovation factor in the economy, including the key technologies, as well as increasing the efficiency of innovation chains are on the agenda. Research centres are actively being developed, support is being provided to Beijing, Shanghai and the Greater Bay Area, Guangdong-Hong Kong-Macau, in the creation of an international centre for scientific and technological innovation. In China, there are many not only national, but also international technology parks, for example, the China-Singapore Industrial Park in the city of Suzhou. In this regard, the development of projects in the field of fundamental science and applied research between Russia and China has great potential. However, the further improvement of legislation in the field of intellectual property, trademarks and other areas of intellectual law in China will allow for the development of such projects more efficiently, including the development of joint technology parks. For example, a large project has already been implemented in neighbouring Belarus — a joint technopark with China, called “Great Stone”.
Despite the positive dynamics of growth, there are some difficulties. On July 26-27, 2021, shares of Chinese companies listed in the United States experienced their strongest decline since 2008. The Nasdaq Golden Dragon China Index fell 15% (in general from the peak in February — by 45%), and the assets of Chinese companies, including IT-companies, lost about $ 800 billion. The Shanghai Stock Exchange Index fell by 8.5%. The market value of Tencent, Alibaba and many others has dropped. Also in China itself, regulatory proceedings are ongoing against Alibaba and Didi Global (the Chinese equivalent of Uber). Currently, there is a certain decline in the volume of industrial production as a whole.
The drop in indices had a particular impact on the educational services sector in China. The securities of the Chinese educational platform TAL Education, New Oriental Education & Technology Group, China Beststudy Education Group, Koolearn Technology, Scholar Education Group actually depreciated
, losing 40-87% of the market value in two days. It is not known whether the shareholders will be able to return their funds in the future on the growth of securities, since the Chinese authorities may prohibit companies in this sector from making IPO, and there are fears of investors that these companies will become non-profit. The sharp drop in the Chinese stock market affected not only Chinese but also foreign shareholders, including Russian shareholders, who also actively invested in China’s rapidly growing and lucrative education sector. One of the reasons, the Chinese authorities say, is that with the growth of paid educational platforms, children from wealthy families are given greater priority, since they can use these platforms, while less well-off children often cannot, which will make it difficult for them to enter good universities. Nevertheless, the Chinese stock market remains promising for both Chinese citizens and foreign investors.
In the new five-year plan, great emphasis will be placed on developing the domestic market, expanding domestic demand and deepening structural reforms on the supply side. Digital platforms such as B2B, B2C, C2C, G2C, G2B and G2G are actively developing both in the domestic and international markets. The advancement of artificial intelligence (AI) technologies will further develop the platform economy in China and around the world.
China’s international initiatives
The initiative launched by Chinese President Xi Jinping in late 2013 consists of two concepts — the Silk Road Economic Belt and the 21st Century Maritime Silk Road. Together, they comprise the Belt and Road Initiative (BRI), which is of great importance in the development of Eurasia. This initiative, billed in China as the “Project of the Century”, covers about 78 countries and is aimed at building trade routes between China and the countries of Russia, Central Asia, Europe and the coastal countries of the Indo-Pacific region with a network of roads, railways, oil pipelines, electrical networks , ports and other infrastructure projects. Within the framework of this initiative, Beijing will pursue the development of trade relations, not only with the countries of the Eurasian continent, but also with Africa, Latin America, and other regions.
Within the framework of the Belt and Road Initiative, it is planned to build new land transport corridors in the coming years, such as the China-Mongolia-Russia Economic Corridor (CMREC), New Eurasian Continental Bridge (NELB), China-Central Asia-West Asia Economic Corridor (CCWAEC), China-Indochina Economic Corridor (CICPEC), China-Pakistan Economic Corridor (CPEC) and Bangladesh-China-India-Myanmar Economic Corridor (BCIMEC).
The first two corridors run through Russia.
An important goal of the Belt and Road Initiative is not only to stimulate the development of the western regions of China, but also to significantly strengthen economic ties with neighbouring countries, which will contribute to stability in Eurasia. In this context, the development of Russian-Chinese relations in the Eurasian region has great potential for linking the Belt and Road Initiative (BRI), the Eurasian Economic Union (EAEU) and the Greater Eurasian Partnership (GEP).