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The equilibrium between the Russian Federation and North Korea

Giancarlo Elia Valori

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Russia has never disregarded the North Korean nuclear and missile issue nor its support for North Korea.

Russia will never relinquish its safety belt against the US forces stationed in South Korea and, above all, Kim Jong-Un’s possible military shield towards the USA and its allies in Southeast Asia. If anything, the issue lies in  replacing this shield with an equally effective economic or strategic and conventional delimitation.

On August 15, 2018, Kim Jong-Un sent an important telegram for congratulating Vladimir Putin on the occasion of the 73rd anniversary of Korea’s liberation from the Japanese domination.

It should be recalled that the united Korean empire ended in 1910, but the Japanese-Korean Treaty of 1876 integrated the peninsula in the Meji Empire, the historical and cultural phase in which Japan acquired the Western technologies and cultures to expand its “co-prosperity area” throughout Southeast Asia and the Pacific Islands.

An area bound to naturally lap upon the US area of influence – at that time as now.

It is worth remembering, however, that Korea’s  industrialization began precisely in its phase of independence from Japan, while the subordination to the  Japanese Empire led not only to a massive exploitation of the Korean labour force for the Japanese purposes, but also to a radical cultural and psychological dispossession of the people in that peninsula and of their traditions.

There is no geopolitics without a geo-cultural analysis.

As Aristotle said, “Even God cannot change the past”- and the old 20th century balances of power still draw the limits of the possible strategies which can be implemented both in Korea and in the rest of maritime South Asia.

Currently the United States can also aspire to excessively expand its power to the myriad of Pacific islands, thus conquering them all to keep none, just to encircle Japan.

Or it can hold the security coordinates of the Straits of Malacca, in order to keep on controlling those areas of world trade.

However, let us revert to the telegram recently sent by Kim Jong-Un.

In the telegram he wished Russian President Vladimir Putin good luck with his plans for “building a powerful Russia” and recalled that “the peoples of the two countries struggled shoulder to shoulder against the common enemy in the arduous anti-Japanese war”.

This paves the way for renewed friendship between the Russian Federation and North Korea, which will “serve as driving force to continuously develop bilateral relations as required by a new era”.

In other words, Kim Jong-Un wants to renew the traditional ties with Russia to rebalance those with China – which are certainly equally important – without excluding them.

Thanks to the Western superficiality, North Korea has  excellent relations with both Russia and China and it does not want to lose them or to create preferential relations with one country or the other.

In particular, the North Korean Leader does not intend to currently neglect the old and timeless Russian ally, which is  now redesigning and reshaping the Greater Middle East – the terrestrial defensive outpost of his North Korea and, in any case, a guarantee for his land security to the North and to the West.

An important security for North Korea, at least as much as the maritime one that mainly pertains to its alliance with China.

In the almost immediate reply to the North Korean leader, Vladimir Vladimirovic Putin wrote he was ready to meet with him in the near future in Moscow.

In recent years many promises have been made to organize a Summit between Kim Jong-Un and Vladimir Putin, but they have never come true.

It is mainly the fault of the unpredictable adjustment of equilibria in the Pacific after 2006, the year of North Korea’s military and official nuclearization.

There were many secret meetings, especially in the acute phases of the 2017 missile crisis, and sometimes simultaneously with President Trump’s visits to Moscow.

Most likely, in these very confidential meetings, the discussion was also focused on the possibility of moving significant parts of the Russian Armed Forces on the border with North Korea.

At that time, the significance of these historical operations of the Russian Armed Forces in the Primorsky area was  evident: to show to the United States that the Russian Federation did not accept any threat to North Korea and that, in any case, Russia would significantly defend the North Korean territory from a joint US-South Korean action.

It was quite obvious: even today neither the Russian Federation nor the People’s Republic of China are interested  in having a country linked only to the USA, but defeated or weak,on its borders.

Moreover, while defending North Korea, Russia can currently play the role of broker and mediator between the two Koreas and control the strategic triangle between the two post-Cold War nations of the Korean peninsula with Japan.

Another centre of primary strategic interest of the Russian Federation.

In fact, in January 2017 Putin stated that Kim Jong-Un’s nuclear-missile program was “a threat to security in North-East Asia”, but he also asked South Korea to reject the anti-missile structure THAAD (Terminal High Altitude Area Defence) offered to it by the United States.

Weakening of the entire peninsula and maintenance of North Korea’s margin of attack. This is the simple, but lucid Russian strategic formula.

Moreover, since the very beginning, Russia has accepted the UN sanctions against North Korea under evident suspicion and some Russian companies have been hit just because they have not avoided trading “sensitive” goods and services with North Korea.

It is even more obvious that currently Russia does not want a North Korean State, on its land border of only eleven miles, that can accumulate potentials capable of threatening the terrestrial and Asian area to the Middle East with threats tous azimuts.

Or a State that can create – in an extremely important area for Russia – a sequence of regional crises drawing the attention of the major global strategic actors.

The strategy is to make the Korean peninsula a peripheral area and weakening its global irritant thorns.

This is the same policy of China in North Korea. In the future, however, China will also try to integrate North Korea into its Central Asian project to control the Turkmen jihad and into its policy of economic and military expansion to the Pacific region.

Moreover, it cannot be ruled out that China does not want a military contribution from North Korea in its protection of the Belt and Road Initiative to the South.

Furthermore Russia has always had a strong strategic interest in the whole Asian maritime region, in general, and in the Southern one, in particular.

In fact, Putin has always maintained that Russia’s active policy vis-à-vis the Asia-Pacific Economic Cooperation (APEC) – the 21 economies and the Korean peninsula – is essential for all the Asian projects of the Russian Federation.

Projects that, as can be easily understood, tend to offset and replace the sanctions imposed on Russia by Western countries.

Currently Russia has these primary interests in the Asian-Pacific region: to develop the Siberian area well and quickly; to integrate the Asian region into its system of trade  relations with the old Asian-Southern countries of the former USSR; to increase the Russian presence in the Asian economies, especially in medium and high-tech goods, with a view to avoiding the penetration of others into those markets and finally avoiding the jihadist radicalization of internal conflicts, especially in the framework of the confrontation between the United States and China.

Hence with these moves, which also include the Russian economic policy vis-à-vis North Korea, the Russian Federation stands as a necessary “third power” throughout the Asian-Pacific region.

Here the preferential relationship with North Korea is essential.

Therefore it is not strange that, for the next Summit between Putin and Kim Jong-Un, the possibility was considered of the next Eastern Economic Forum scheduled in Vladivostok in September.

This would have been the occasion for a series of meetings also with the Chinese and Japanese leaders, but it is exactly in September that Kim Jong-Un shall follow all the preparatory work for the 70th anniversary of the Democratic People’s Republic of Korea.

Indeed, Russia wants to meet Kim Jong-Un alone. Currently it has no interest in a friendly internationalization of the North-Korean issue.

The 70th anniversary is a date that will mark a new condition for North Korea – and this is the meaning that Kim Jong-Un wants to give to the celebrations. It is a condition of reaffirmation of the regime’s solitary power  and of new and positive openness to the world.

Furthermore the North Korean leader wants to well prepare  the bilateral meeting with Putin that will mean, above all, that North Korea does not depend on China’s interests only. Hence a tactical delay is better.

In fact, as he has already been doing for some time, Kim Jong-Un wants to implement an opportunistic policy, but without really betraying any of the two Asian and Eurasian players.

In particular, North Korea wants a share of national strategic autonomy in the future context of its admission to the Shanghai Cooperation Organization (SCO).

Hence, apart from India which, together with Pakistan, has recently followed the works of what China finds it difficult to define as the “NATO of the East”, SCO will have a vertical strategic axis between the Indian Ocean and South East Asia to the Pacific region. And it will certainly  depend on North Korea’s future military policy.

This vertical axis, however, will be the whole Korea – with the autonomous North Korea which, in Putin’s and Xi Jinping’s designs, will be partially integrated into the SCO together with South Korea.

At least Putin alone will grant to North Korea as much geopolitical autonomy as it will be necessary to the Russian Federation in order to: a) avoid any regional hegemony of the United States and its primary allies in the region; b) preserve the security of the its sea borders with North Korea; c) avoid giving a clear field to China.

China has mainly an oceanic interest in Kim Jong-Un’s Korea.

Russia, however, possibly want to create a strategic continuum between its Central Asian terrestrial region, which has its stronghold in the new Syria, and the Vietnamese coasts. Like the Krak of the Knights which, in the Syrian desert was an offensive rather than a defensive castle, as Lawrence of Arabia told us, currently Assad’ Syria is the Western bulwark of every “colour revolution” or jihad that can penetrate the post-Soviet Central Asia or the maritime corridor leading this area to the North-West borders of North Korea.

There is also the possibility – theorized by some analysts, especially from the North American school – that Vladimir Putin wants to oppose the US peripheral expansion everywhere, especially in Southeast Asia, where the US strategic defeat of the twentieth century began, so as to  eventually replace the United States as a global player.

And currently the axis mundi is in Asia, not in Europe or in other parts of the West.

We are not sure that Vladimir Vladimirovic Putin really wants to create a US global dissymmetry with respect to the China-Russia’s axis.

If this happens, it shall only be USA’s fault.

The long-term diverging interests between Russia and China are still there – and precisely in a region that closely affects  the Asian geopolitical choices vis-à-vis North Korea, namely Russia’s terrestrial Far East and Siberia.

There is the economic contrast – inevitable in the future – between the Eurasian Economic Union, organized by Russia in 2014 between Russia, Belarus, Kazakhstan, Armenia and, currently, also Kyrgyzstan, and the Chinese network of the Belt and Road Initiative. This is another  problem that Kim Jong-Un shall resolve, at least apparently, once ceased the US (and Japanese) pressure on North Korea.

With a credible project, the United States could open part of its markets to North Korean products and create –just in the territory of North Korea – a network of Foreign Direct Investments that would shield the fledgling industry from Chinese or Russian pressures.

However, this is probably a vain hope.

Moreover Chinese investment in the Russian Far East is not as much as that which had been predicted and hoped for by Russia: China has no particular interest in Russia’s Arctic North and it is rather interested in the central axis of the Belt and Road Initiative.

Furthermore, if China continues to invest in the Arctic infrastructure, together with Russia, this will only be in view of a de facto or de jure transfer of the Russian sovereignty over the North Pole areas in which currently both countries work together.

Also this balance between China and Russia is bound to greatly influence North Korea’s external political developments.

Hence, in terms of North Korea’s nuclear power, as early as 2006 – the year of the first true North Korean test -it was China that integrated North Korea into its Asian strategic project and proposed a bilateral dialogue with the United States for the solution of the North Korean issue.

This has de facto excluded the Russian Federation from the Korean games.

Russia reacted almost immediately with its support to the sanctions against North Korea within the UN Security Council, thus creating an equal-footing balance with the United States on the issue.

An opportunity that the United States did not grasp at the right time.

Sanctions, however, have not really been accepted by the Russian economic system: North Korean coal exports to Russia continue; many Asian workers have long been migrating to Russian factories near the border; the new railway networks, which should shortly connect Russia with North Korea and always end up in South Korea, are being called into question.

Currently trade between Russia and North Korea  is worth approximately 110 million US dollars a year.

Moreover, despite the letter and the spirit of the UN sanctions, Russia has not repatriated the thousands of North Korean workers it still hosts.

Furthermore, Russia still organizes many North Korean international financial and trade relations, thus supporting the operations for circumventing sanctions.

The railway line between Russia and the North Korean port of Razon is essential, but currently – also in tacit competition with China – it is the Russian Federation that provides North Korea with some Internet networks.

Incidentally, it would be good if the UN sanction mechanism – which, as some UN sources maintain, is scarcely transparent and often irrational – were radically revised: it keeps the US financial hegemony well beyond its rational limits, with dangers also for America; it unbalances financial markets that should be – at least officially – “free” and finally creates the opportunity, for the country on which sanctions are applied, to move directly to the adverse camp.

What would have happened to Italy if the sanctions of the League of Nations following the conquest of Abyssinia had not found in Nazi Germany the only, but certainly very interested adversary?

Nevertheless, in all likelihood, the turning point of the new relationship between Russia and North Korea will be the new pipeline that is supposed to transfer natural gas from the Russian Federation to both Koreas.

We will never understand the Russian strategic logic if we think it will accept the partition of the Korean peninsula as a fait accompli: Russia always thinks of both Koreas. And it would be crazy not to do so.

In the North, Russia operates to make North Korea “loyal” to the Russian strategic project while, in the South, it endeavors to curb the US and Japanese influence as much as possible.

Furthermore, there will soon be concrete signs of the  Russian interest in the large group of industries in  Kaesong, as well as the possible penetration of the Russian economy into the future North Korean automotive and mechanical industries, and finally the possible creation of an ad hoc Bank for the globalization of the Korean economy to the East and eventually to Europe.

Along the Southern flank of the Russian geo-economic security which is parallel to, but different from the Chinese Belt and Road Initiative.

North Korea’s future geopolitical choice will be between the Chinese Belt and Road lines and those provided by the Russian maritime and terrestrial continuity on its borders.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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East Asia

Predicting the course of US-China relations in the post Covid-19 era

Ayush Banerjee

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Authors: Ayush Banerjee and Dhritiman Banerjee*

The coronavirus pandemic is a natural threat to the geopolitical order. And it is needless to state that this majorly affects the currently international paradigm in a manner that the world has not seen before. Although there have been a few instances where pandemics have shaken the mortality rates, no pandemic has spread this amount of sheer panic among the public at large. This is largely due to the growing interconnectedness and the advent of the cyberspace. Just as the internet has influenced the lives of the most privileged public, data has been influential in academics and politics alike. However, this argument has its own set of problems that continue to affect public-politic relations in ways more than one.

In the same regard, one of the most strained and keenly debated relations in international politics is that between the United States of America and the People’s Republic of China. In the context of the virus itself, the virus originated in Wuhan, a province in China while the most number of fatalities have resulted in the United States of America. This idea fuelled with the new world media at the public level created an atmosphere of tension on such platforms. On Twitter notably, there were several instances of a tweet naming Covid-19 as ‘Chinese Virus’ spread like wildfire. This sparked a major controversy even at the diplomatic level. Even Donald Trump momentarily subscribed to the idea and deliberately worded his speech to use the phrase ‘Chinese/China virus’ to refer to Covid-19 at least 20 times between March 16th and March 30th 2020. The US Secretary of State- Mike Pompeo went on to accuse China of its lack of transparency, even scrapping a joint G7 statement after its members refused to refer to the virus as the ‘Wuhan virus.’ China has remained apologetic ever since. Hence, it can be rightly inferred that the relationship shared between China and USA have strained ever since the Covid-19 outbreak.

However to predict how the outbreak might jeopardise the current paradigm of world politics we must look no further than the Phase One Trade deal signed between the two countries. This deal previously ended an 18-month long trade war between USA and China. Through this deal, China committed to purchasing $200 billion additional foreign goods and services in the sectors of agriculture, energy and manufacturing. However, it is evident that in the post-Covid19 era, it will be rather implausible for China to adhere to the terms of the deal due to reasons more than one. The IMF estimated the reality of an unprecedented economic slowdown in which China is expected to grow at only 1.2% this year. Several reports suggest that investors are planning to pull out their investments from Chinese industries to fit in with the Western bandwagon.

The outbreak turned pandemic coupled with the authoritarian nature of China’s response to the entire situation has had a detrimental effect on their domestic economy creating various tremors in the anticipation of demand for various products and services. For instance, the 12 most Covid-19 affected countries account for over 40% of the Chinese exports. Nations like India and Italy that also make that list of twelve may voluntarily pull out of importing to China as they are set to gain from deferring of investments. These nations are also top suppliers of intermediate goods for the Chinese economy. The Chinese economy is quite dependent on external demand stimuli from the US and most western European states such as the United Kingdom. Therefore, until the point in time the US and EU economies completely recover from this pandemic, Chinese policymakers are bound to hold back domestic stimulus efforts as it will only have little effect if the global economy is in shambles.

The Chinese economy has crippled down considerably due to the ongoing trade war that has led to a disproportionate ratio of debt to the annual Gross Domestic Product. This ratio reached an overwhelming 248.8% by the end of March 2019 and it has only increased ever since. China has also been forced to restructure the debts of the Belt and Road initiative (erstwhile OBOR). This restructuring meant that the capital owed to China as loans by the contributing states have been readjusted to affect the projected collection considerably. As Covid-19 nearly decimates the economy of most developing nations, it is becoming increasingly difficult for these states to pay their loan back to China within the stipulated timeframes. Thus adding to the stress on the Chinese economy at large.

There has already begun a region-specific boycott of Chinese goods and industries, especially in conservative parts of USA, among the southern districts. Instances of racial abuse against ethnic Chinese communities have been on an unfortunate rise. These are all deterministic factors of public consciousness, if not, public opinion for the future that lies ahead of us. This reaction has already seen international spillovers and investors have become more anxious about investing in Chinese companies.

According to Deepanshu Mohan, the world may experience radical shifts in the global political economy post-Covid19 based on two factors namely, the relative degree of economic recovery in the affected nations and the existing domestic political scenarios in such nations. He further states that in the post-Covid19 era, protectionist trade policies are likely to increase in the developed nations who in the name of ‘supply security’ may disentangle trade relations with China which will inversely affect the current geopolitical world order. Donald Trump could also make the pandemic a focal point in the 2020 election campaign and therefore aim to capitalise on the anti-China fervour in the US and thus strain relations even further. There lies evidence for this as well. Trump recently presented his anguish towards China being categorised as a ‘developing’ state under the World Trade Organisation list and due to the low contributions of China to the World Health Organisation. Although this may seemingly appear appropriate accusations, this is far from the whole truth. The USA, themselves have cut major proportions of its funding capacity towards the United Nations especially concerning peacekeeping and security operations.

Minxin Pei, on the other hand, stated that the Covid-19 outbreak has led the average American to view the Chinese political system with chronic scepticism as Americans blamed the repressive Chinese political system for the pandemic with the Harris poll indicating widespread American dissatisfaction with the alleged Chinese cover-up of the virus. This poll also showed overwhelming support for US punitive measures on China and the removal of US investments and businesses from China. These developments could lock the two countries into a cycle of escalation that could trigger another potential international diplomatic conflict leading to numerous security issues and economic degradation. USA and China remain the two largest economies in the world. Hence, it can be inferred that this fallout of diplomatic and economic ties between the two states might amount to significant damage in the entire global political order and the globalised system of economies and markets. In the US itself, the number of jobs created since the recession in 2008 has been washed away in two weeks.

The trade war between the two economic giants had already shaken the world before the outbreak. And the prevalent fault lines will only widen in the post-Covid19 era just as a global economic slowdown is expected. Thus, it is imperative for the world economy that this US-China relation remains amicable and stable. However, the available narratives indicate a significant detour from the ideal stability that USA and China should normatively maintain to protect the global economy from crumbling down like biscuits. The USA has resorted to legislations that are actively anti-China in terms of financial relations and international trade while China has strengthened its protectionist response system both politically and economically during this outbreak.

The Covid-19 outbreak has not acted as an impediment to Chinese aggression in the South China Sea region either. China has recently renamed 44 features in the disputed region, a decision that is considered illegal under international law. This has been time and again criticised by the US Secretary of State Mike Pompeo. With increasing US-China missile competition a reality in the region post the abrogation of the INF treaty, the post-Covid19 era will likely see more prominent conflicts in the South and the East China Sea regions which is a strategically important waterway for both the countries alongside other nations such as Japan, Vietnam, Philippines and India.

*Dhritiman Banerjee is an undergraduate student at the Department of International Relations at Jadavpur University, Kolkata, India. He has recently published for the Millenniumpost, a Kolkata based newspaper as well as contributed to publications like the Geopolitics and South Asia Monitor. His interests lie in International Relations in general and Strategic Studies in particular.

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Political unrest in Hong Kong and Global Pandemic

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Things started from a murder of a girl in Taiwan ending up into an unseen scenario in Hong Kong. Rising tensions in the region of China and Hong Kong, situation is getting worse. First of all the episode of extradition bill and now becoming the series of different surprises, the advent of National Security Bill is not acceptable among the Hong Kong citizens. According to the 1984 Sino-British Joint Declaration, Hong Kong is ought to be the autonomous and free liberal region along china being constituted as a “one country, two systems.” As per this treaty, China is violating International law: which is a direct threat to its soft policy and international image.

 Secondly, the role of United States in Hong Kong is mainly concerned about the large number of U.S. Nationals working there especially at naval ports and their security. While on the national level the sustainability of democratic values and freedom in Hong Kong to whom these acts of China’s Communist party are challenging. United States being the global hegemon owns the responsibility to protect and keep the check on practice of international laws and its violation in any region of the world. Although the whole global community is concerned about the present situation of Hong Kong and its upcoming outcomes. States sign treaties and agreements on the basis of one’s predetermined political and social culture and works accordingly, so following the current scenario the Protest in Hong Kong is going to be game changing event. If the bill passed, Hong Kong will be a Chinese administered territory like another small city of Chinese Communist party but on the other hand if failed to pass this bill Hong Kong can have a victory to win the democracy and write the fate of their state in a new way.

Furthermore, the wave of global pandemic in the form of COVID 19 has already questioned the worth of human security. Millions of people are dying due to this disease originated from Wuhan, China. World is already questioning the Chinese role. Above all the differences, we all are human beings living in the world of chaos. Divisions led towards the more divisions. There is a dire need to fight collectively to this coronavirus. Being humans, we need to apply the only global value that is being human fellow. Social distancing is the new normal now but Hong Kong’s political situation is getting more anti distance campaign due to the political unrest. China needs to slow down the process. Human security needs to be the priority. Although to raise the voice of Hong Kong’s people social media can be a better platform. Let’s shake hands for peace rather than division.

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All eyes on China’s post-lockdown Twin Sessions

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Even though parts of the country are still battling a minor rebound of Covid-19 cases, the general message is clear: China has emerged from the abysmal months of lockdown and is ready to resume business. This was made clear to the entire nation on 29 April with the announcement of new dates for the “Twin Sessions” meeting, the country’s most significant annual political and legislative affair, involving the National People’s Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC).

Starting from 21 May, thousands of legislators and political advisors will gather in Beijing’s Hall of the People to discuss and vote on pressing issues facing the country. The gathering, which should have happened in early March, was postponed for more than two months this year due to Covid-19. Now its restart, reportedly cut short from a two-week event to just one week, is widely considered a reflection of the top leadership’s confidence that a level of normalcy can be restored in Chinese society.

Despite the reassuring symbolic meaning of the Twin Sessions, the social and economic landscape is bleak as China begins its slow recovery from Covid-19. The country’s economy shrank 6.8% in the first quarter of 2020, and a full recovery is far from a certainty given the ongoing nature of the global pandemic. The unemployment rate has risen in the same period. The world will be watching how the Chinese government addresses these challenges through the outcomes of the annual conference. Measures will not just shape the trajectory of the Chinese economy but also global objectives of economic recovery, fighting climate change and achieving long-term sustainability. Here are a few key items to watch for at the Twin Sessions.

Economic growth target

At every year’s Twin Sessions, the Chinese premier will make a formal report to legislators about the government’s work in the past year and, more importantly, lay out key economic and social development targets for the coming year. These targets include rates of GDP growth, unemployment, Consumer Price Index (CPI) change reflecting inflation, and poverty reduction. By the end of the meeting, legislators will vote to adopt those targets to make them binding for the executive branch. That is the order of business in a normal year.

In a year of pandemic, the severe disruption to economic and political processes have made setting the 2020 targets a contentious business. Now all eyes are on Premier Li Keqiang’s Report on the Work of the Government as the country enters the last week of May without a clear idea how the central government plans to set the speed for the economic engine this year.

This is a year of paramount importance for the Party. By the end of 2020, the country’s GDP is supposed to achieve a doubling from 2010 levels, a key political commitment made by the Party to Chinese society. The growth rate needs to hit about 5.5% this year to secure the objective. But Covid-19 has knocked the economy off track by a wide margin.

Prominent Chinese economists have weighed in. Justin Lin, a top economic advisor and former Chief Economist at the World Bank, recommended a moderate target of 3% to avoid maxing out China’s monetary and fiscal policy tools. As the economy shrank in the first quarter and is only mildly recovering in the second, China needs to achieve a 15% growth rate in the second half of 2020 to maintain the 2020 “doubling” goal. Lin argues that even if China is able to stimulate economic expansion to that level, it should opt for a slightly lower target to save some ammunition for next year. “It is totally acceptable to defer the (doubling) goal to next year,” he told the audience of a Peking University webinar on 15 May.

On the other hand, Ma Jun, chairman of China Green Finance Committee and a member of the People’s Bank of China’s monetary policy committee, has advocated for an outright abandonment of any economic growth target for 2020, citing concerns that chasing unrealistic targets will lead to massive stimulus measures in debt-driven infrastructure building that is often short-sighted and ill-considered.

A 13 May article by He Lifeng, the head of the National Development and Reform Commission (NDRC), China’s top economic policymaking body, indicates that the government may still choose to adhere to its original economic goal. “We should make sure we complete the task of building a moderately prosperous society,” he wrote. Doubling GDP by 2020 is a key component of that vision.

Stimulus package

The growth rate target is closely linked with how China determines the size of its economic stimulus package. According to the 2015 Budget Law, key components of the fiscal toolbox, including quotas for central government and local government bond issuance, must be approved by the National People’s Congress.

Liu Yuanchun, vice president of Renmin University, told Caijing magazine that to create 1% GDP growth, fiscal spending should reach 1.2-1.4 trillion yuan (US$170-200 billion).

By the end of April, the Ministry of Finance had front-loaded the local government bond issuance quota to the tune of 2.29 trillion yuan (US$320 billion), and before total annual quotas could be approved at the Twin Sessions. The majority of local government special bonds go into infrastructure projects such as railway construction and public transportation, whose carbon footprints will have implications for global efforts to address climate change.

Green legislation and planning

Covid-19 has triggered a national conversation about the relationship between humans and nature, as scientists have linked the novel coronavirus to human contact with wild animals. The conversation was quickly followed by legislative actions. On 24 February, the NPC Standing Committee passed a decision banning consumption of wild animals for food, leaving only limited exemptions for certain species commonly bred in captivity. The national legislature is expected to revamp the Wildlife Protection Law following the decision. According to a legislative plan released by the NPC Standing Committee, the law revision process will likely culminate in 2021. Therefore, this year’s Twin Sessions probably won’t see definitive progress on the Wildlife Protection law, even though legislators may use the platform to submit proposals and recommendations.

Meanwhile, deliberations on the 14th Five Year Plan (2021-2025) will start in earnest this year, ready for its delivery to the next Twin Sessions in 2021 for final approval. According to schedules released by national authorities, draft versions of sectoral 14th Five Year Plans (such as for renewable energy) should be available for comment in late 2020.  

In a critical year for China’s political and economic calendar, the pandemic has created unprecedented disruption. The coming week will demonstrate how China plans to pull itself back on track, with outcomes that will have far-reaching global consequences.

From our partner chinadialogue

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