More than three decades have elapsed since China began its rapid economic growth, thanks to the reforms initiated by Deng Xiao Ping. During the past 30 years China’s economy has changed from a centrally planned system that was largely closed to international trade to a more market-oriented one that has a rapidly growing private sector. A major component supporting China’s rapid economic growth has been the growth in exports.

In 2013 the Chinese government plans to advance scientific development and to concentrate on adjusting the economic structure, ensuring the people’s well being and promoting harmony, and accelerating the transformation of the pattern of economic development. It will continue to maintain steady and robust economic growth while carrying out large-scale construction of urban low-income housing, launching old-age pension insurance for its urban residents, and expand the new cooperative medical care system.

In 2011 and 2012, the pace of international economic recovery was slow, developed countries’ economic recovery lacked momentum, and growth in international trade and investment declined. Chinese economy also faced pressing challenges such as fast price rises and greater pressure on structural adjustment and social issues. The main challenges that will be faced by the Chinese government in 2013 are the widening income distribution gap, the unbalanced economic structure, the constraints on the resource environment, and the slowing economic growth.

The financial crisis that erupted in the United States in 2008 spread to other countries and became global in scope. In 2013, the economies of most European countries remain troubled, while the US has experienced a slow economic recovery. But the world’s emerging economies rebounded quickly from the global financial crisis. As a result, these countries became the new powerhouses in international economy. Among the emerging economies, China’s economic growth has been especially impressive. It successfully shielded its economic structure from the impacts of the 2008 crisis, while still maintaining its usual rapid rate of economic growth. In 2010-2011 the expansion of the Chinese GDP accounted for about half of the growth in the overall global GDP. It was during this period that China overtook Japan to become the second biggest economy in the world after the United States.

World’s No. 1 before 2030

Overturning more than two centuries of Western global dominance, the U.S.A and European nations will no longer maintain a monopoly of power. China will likely be the world’s largest economy as Asian power surpasses that of North America and Europe by 2030, according to a U.S. National Intelligence Council report published on December 10, 2012 (http://www.dni.gov/files/documents/Interactive%20Le%20Menu.pdf). «Asia will have surpassed North America and Europe combined in terms of global power, based upon [gross domestic product], population size, military spending, and technological investment,» the report said.

The Council believes that China’s economy will likely overshadow in shadow that of the U.S.A a few years before 2030. It had previously predicted China’s rise in stature, but hadn›t predicted it would become the No. 1 economy.

In 2007-2008, amidst the global financial crisis, emerging markets such as China, India and Brazil have “amassed greater punching power” in international institutions such as the International Monetary Fund. Over the next two decades, the intelligence report said, European, Japanese and Russian economies are likely to continue in relative decline while China, India, Brazil and regional players such as Colombia, Indonesia, Nigeria, South Africa and Turkey become especially important to the global economy.

 

20% of the World

The total population in China was 1344.1 million people in 2011 and is expected to exceed 1350 million in 2013, a huge increase from 667.1 million in 1960, changing more than 100 % during the last 50 years. Historically, from 1960 until 2011, China’s population averaged 1043.7 million reaching a record low of 660.3 million in December of 1961. The population of China represents 19.48% of the world´s total population, which arguably means that one person in every 5 people on the planet is a resident of China.

 

Threatening Uncle Sam

In November 2012, a US Congressional advisory panel said China is the greatest threat to U.S. cyber-security and an expected surge in Chinese investment requires “greater government oversight” to better protect national security and domestic economic interests. The council’s most plausible worst-case simulation details a potential rise in conflict throughout Asia--including the Middle East--as Europe and the U.S. turn inward. In this case, the Euro zone quickly unravels, a U.S. energy revolution fails to materialize and global economic growth falters.

 

China and the World Bank 2013-2016

Over the past 32 years, China and the World Bank Group have forged a strong two way and evolving partnership. In the early years, the World Bank brought international experience to help design economic reforms, improve project management, and address key bottlenecks to growth. More recently, the Bank Group has helped address environmental challenges and other development priorities. The Bank Group strategy will continue to evolve as China faces new challenges in its transition from middle to high income status. This Country Partnership Strategy (CPS) for fiscal years (FYs) 2013-2016 is aligned with the challenges and priorities outlined in China’s 12th five-year plan. The CPS is also informed by the recent joint study China 2030: building a modern, harmonious, and creative society prepared by the World Bank and the Development Research Center of the State Council. Consistent with China’s priorities, the CPS focuses on three main themes: green growth; inclusive development; and mutually beneficial relations with the world. Bank Group support to China is designed to play a catalytic role through innovation and demonstration. In addition, the Bank’s Group’s engagement with China contributes to the Bank’s global knowledge and helps China share its development experiences with the rest of the world.

 

I. Finance and Economics

1. Steady GDP growth

• The Gross Domestic Product (GDP) in China expanded by 7.4% in the third quarter of 2012 compared over the same quarter of the previous year, and by 2.20% over the previous quarter in 2012.
• GDP Annual Growth Rate in China is reported by the National Bureau of Statistics of China. It is expected to exceed US$ 8000 billion in 2013.
• China’s economy is likely to grow by 7.7% this year and accelerate to around 8.5% in 2013 partly due to the nation’s pro-growth policies.
• The country’s economy will continue to be affected by many negative factors in the near future, including the faltering recovery of the global economy, strict property curbs and excessive production capacity.
• Historically, from 1989 until 2012, China GDP Annual Growth Rate averaged 9.3% reaching an all time high of 14.2% in December of 1992 and a record low of 3.8% in December of 1990. From 1960 until 2011, China GDP averaged US$ 963.6 billion reaching an all time high of US$ 7298.1 billion in December 2011 and a record low of US$ 46.5 billion in December 1962.
• The GDP value of China is roughly equivalent to 11.77% of the world economy.

The Chinese government employs macro-control policies to prevent inflation. In 2011-2012 The People’s Bank of China raised the reserve ratio by more than nine times, and raised loan interest rates more than five times. Loans increased by US$ 120 trillion in 2012 and are expected to reach US$ 130 trillion in 2013.

2. Economic reforms

In the last two decades of the 20th century, great achievements have been made in China’s economic reform. One of these achievements is that the preliminary framework for a market economy was established through reforms and “opening-up”. This was a radical change in China, and it laid an institutional foundation for China’s rapid economic growth and contributed to the rise of its economy.

Chinese economy benefits from reforms in the following ways:

• The Chinese people’s creativity and enterprise were liberated from the constraints of the rigid planned economic system. The Chinese economy was transformed by allowing private enterprises. The expansion of the private sector is the fundamental factor in the rapid growth of China’s economy.
• Inefficiencies in the use of labor and land have been eliminated. Resources are now effectively employed. Since the start of the reforms, 200 million farmers were employed in urban non-agricultural industries, significantly increasing productivity. Vast areas, which were previously devoted to marginal agricultural production have been converted to urban and industrial areas.
• The rapid expansion of foreign trade also contributed to sustaining rapid economic growth in China.

From 2012 until 2015, the Chinese government will give top priority to employment and increasing income to expand local consumption. The main challenges it will face will revolve around preserving the balance between the increase of its citizens’ income and economic growth; and in parallel, maintaining the balance between the increase of wages and the rise in labor productivity.

In 2013 China will accelerate the pace of transforming its economy with scientific and technological innovations as important supports. China will also seize opportunities to develop strategic emerging industries, transform traditional industries with modern information technology and energy conservation and emissions reduction technology, and promote industrial upgrading.

In 2013, high-end, high quality and high-tech strategic emerging industries including new energy electric cars, biomedicines, new materials, aviation and space flights will be further developed in China.

China’s industrial restructuring in 2013 will focus on

3. Tax reductions

The Chinese Ministry of Finance had announced in 2011 that loan contracts concluded by financial institutions and small and micro businesses would be exempted from stamp duty until October 2014.

China also adjusted some import and export duties and implemented lower tax rates for more than 730 commodities, the average tax rate being 4.4%. Also from January 2012, value-added tax on the distribution of vegetables was exempted.

In 2013 China will continue to implement preferential income tax policies for small and micro businesses. For small and micro businesses whose annual taxable income is less than US$ 10K, 50% of their income will be counted as taxable income, and enterprise income tax is paid according to the 20% tax rate.

In 2013, business tax in China will be replaced by value-added tax. The government will also push forward the reform of resource taxes and real-estate property tax, and promote resource conservation and environmental protection.

Producer/Consumer China

Chinese consumers love to shop. More than a third of Chinese (36%), according to McKinsey research (https://solutions.mckinsey.com/insightschina/), say that shopping with friends and family is one of their favorite activities. Retailers like the sound of that. But consider: Three years ago, that figure was 45 %.

The gap indicates an important point: For retailers big and small, foreign or Chinese, the days of wine and roses are over. The future pf retail is going to be much more difficult.

Specifically, McKinsey has taken a close look at the hypermarket model. Hypermarkets are very big spaces that combine supermarkets and department stores—and they have been a big hit in China. By 2010, the country had almost 2,400 of hypermarkets, which were concentrated in the big, prosperous Tier 1 and Tier 2 cities. Within established retail chains, hypermarkets are the dominant format. In economic terms, all this happened in a blink of an eye. In 1997, hypermarkets barely existed.

Between then and 2003, revenues grew an average of 70% a year; since then, growth has averaged about 20%. But things are about to get much tougher; the low-hanging fruit has been picked. Not only is the competition tightening, but retail dynamics are changing. To win, players need to understand the Chinese market, and then learn how to operate in a way to meet the market on its own terms.

As many retailers, particularly non-Chinese multinationals, have learned the hard way, Chinese consumers use hypermarkets distinctively, in several ways:

1 Food versus non-food: What Chinese consumers buy

2 A really big convenience store: How they use hypermarkets

3 How the retail model is different: Big stores, not-so-big sales

And there are three operational priorities:

1 Optimize category management

2 Reduce purchasing costs.

3 Improve in-store operations, particularly inventory.

 

4. Supporting Micro Businesses

Small and micro businesses in China refer to enterprises in industries with no more than 100 employees and whose annual taxable income and total assets do not exceed US$ 5 Million.

In 2013, Chinese financial policies and measures supporting the development of small and micro businesses will include:

• strengthening credit support;
• reviewing irrational financial service fees;
• lowering enterprises’ financing costs;
• expanding small and micro businesses’ financing channels;
• refining the policy of differential supervision over financial services;
• promoting small financial institutions’ reform and development;
• promoting healthy development of private lending on the basis of standardizing management and guarding against risks.

The budget for procurement from small and medium enterprises will account for more than 30% of the total budget for government procurement items.

The Ministry of Finance and the State Administration of Taxation issued a notice in 2012: for small and micro businesses whose annual taxable income is less than US$ 10K, 50% of their income shall be counted as taxable income.

 

5. RMB Exchange rates

• In 2012, The People’s Bank of China improved the mechanism for setting the RMB (Yuan) exchange rate according to the principles of initiative, controllability and progressiveness, and persisted in carrying out adjustment on the basis of market supply and demand with reference to a number of foreign currencies[1].
• In 2011, the RMB appreciated 5.11% against the US$ dollar. Back then, China’s exports and imports exceeded US$ 3.6 trillion, reaching an annual all time high. However, the trade surplus narrowed from US$184.5 billion in 2010 to US$155.1 billion, reaching a three year low. The proportion between the trade surplus and the GDP also fell from 3.1% in 2010 to about 2.3% in 2011. In the first months of 2012 China recorded a trade deficit: the volume of total exports and imports was US$533.03 billion, an increase of 7.3% over the same period of the previous year, and the accumulated trade deficit was US$4.25 billion. China reversed the year’s first months’ accumulated deficit and realized a surplus of US$670 Billion.
• The RMB exchange rate reform played a positive role for regional and global economic and financial stability. After the financial crisis in 2009 and 2010, China’s imports increased by 13.8% annually, 6.1% higher than the increase in exports. China’s demand became an important factor for many countries’ economic recovery.
• Internationally, the RMB exchange rate mechanism reform promoted the balance of international payments. The China-US trade relationship is an important trade relationship for China, however, just like the Deutsche Mark and the Japanese Yen did not solve the US’s trade deficit, RMB appreciation cannot solve the problem of imbalanced China-US trade.
• In 2013 China will continue to push forward a package of measures including the RMB exchange rate formation mechanism reform to actively promote basic equilibrium in international payments.

6. China and the World Trade Organization

The accession of China to the World Trade Organization (WTO) provided a good external institutional environment for China’s economic development. The basic principles advocated by the WTO such as non-discrimination, transparency and fair competition have integrated into Chinese laws and regulations. Market awareness, opening awareness, fair competition awareness, the spirit of the rule of law, and the concept of intellectual property are more deeply rooted in the minds of the Chinese people, promoting further opening up of China’s economy and further improvement of the market economy. The export driven grown model is constrained by restrictions on market access to a large extent. Without the WTO, China’s economic development would most probably not be ensured by a reliable system. The practices of the past 10 years shows that the accession to the WTO ensured China’s development and that China made the most out of the opportunities brought by globalization to promote its development.

II. Social Management

In 2012 China achieved progress in many aspects of social management and innovation: A socialist system of laws with Chinese characteristics was established, and the reform of public institutions based on their classification was launched. Progress on transparency was also achieved, for example, government departments publicly released information regarding their spending on official overseas trips.

1. Socialist Laws

The socialist system of laws with Chinese characteristics is an organic integration of the related laws of the Constitution, civil and commercial laws, administrative laws, economic laws, social laws, criminal laws, litigation and non-litigation procedural laws, and other legal branches.

The establishment of the socialist system of laws with Chinese characteristics is a legal reflection of the innovative practice of socialism, and a legal guarantee for the prosperity of socialism with Chinese characteristics. It is of great realistic and far-reaching historic significance.

2. Towards transparency

In 2011, the State Council decided that when reporting the final accounts, central departments should include detailed information regarding their spending on official overseas trips, and the report should be publicly released. In 2012 several departments released information regarding their funds including the local governments of Beijing and Shanghai and their departments.

In 2011-2012 99 out of 131 central departments that formulated and submitted budgets of financial appropriations for funds publicly released detailed information regarding their funds.

In 2013, the initiative for further transparency in China will expand and the number of central departments to release detailed information about their funds and spending is expected to reach more than 110.

3. Reform of public institutions

Public institutions in China are generally social organizations whose immediate objectives are to improve social welfare, meet the needs of society in terms of culture, education, science and technology, health etc. Making profit is not the immediate objective of public institutions. The result and value of the work of these institutions are not directly manifested in the form of evaluable materials or cash.

Compared with the new trends and the new requirements of economic and social development, the growth of China’s social undertakings relatively lags behind. Some public institutions have unclear orientations and inflexible mechanisms; the total supply of public services is insufficient, there is only one mode of supply, resources are not allocated rationally, and the quality and efficiency are low, policies and measures supporting public services are not sound enough, and supervision and management are weak; some public institutions’ pursuit of departmental interests and personal interests deviates from public services, the basic value orientation of public institutions.

To face these challenges, the Central Committee of the Communist Party and the State Council published “The Guiding Opinions on Pushing Forward the Reform of Public Institutions Based on Their Classification” in 2012. The Central Office of the State Council also published nine supporting documents covering various aspects of the reform such as the criteria of classification, personnel quota management, assets management, income distribution and social insurance.

The reform of public institutions based on their classification involves more than 40 million people.

The reform of public institutions will continue in 2013 however, it is not simply about cutting staff, streamlining institutions, casting burdens or making public institutions smaller, but about promoting public institutions’ return to their public nature, promoting the development of public undertakings and meeting the people’s needs.

The objectives of the reform are the following: From 2012 to 2015 complete the classification of public institutions on the basis of investigation and standardization, complete the reform of public institutions assuming administrative functions and engaging in production and operating activities, make progress in the reform of public institutions engaging in public services in terms of personnel management, income distribution, social insurance, fiscal and taxation policies and personnel quotas, make major breakthroughs in the reforms of separating management from operation and improving the governance structure, and further improve the institutional environment for nongovernmental sectors to run public undertakings and by 2020, establish a management system and operational mechanism featuring clear functions, sound governance, efficient operation and effective supervision, and form a public service system with Chinese characteristics featuring the primacy of basic services, appropriate supply, rational layout and structure and service equality.

4. Food safety

Food safety problems emerged recently in China, threatening people’s health. To curb the trend of frequent occurrences of food safety problems, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security and the Ministry of Justice issued “the notice on punishing criminal activities threatening food safety without leniency according to Law”. The notice points out that criminal activities affecting food safety seriously threaten people’s lives, health and safety.

In 2013, public security organs, procuratorial organs, people’s courts, judicial organs and administrative organs at all levels in China are expected to be more active and to attach greater importance to cracking down on criminal activities threatening food safety without leniency. In 2012, the “Strike of the Sword” operation launched by the Ministry of Public Security, in cooperation with food and drugs supervision departments, quality inspection departments and the department for industry and commerce, cracked more than 2400 cases of food crime in China, and more than 850 cases of drug crime, confiscated hundreds of millions of food and drug counterfeits and effectively curbed rampant food and drug crimes in China.

5. Law enforcement: Criminalizing drunk-driving

100 000 people are killed by traffic accidents in China every year. 60% of those accidents involve drunk-driving whereas 46.1% of the total number of drivers experienced drunk-driving incidents.

A survey conducted by “China Youth Daily” in 2012 showed that 81% of people think that China’s punishment for driving under the influence of alcohol is too light, and 70% think that the main reason why driving while drunk still happens despite enforced prohibition is that the penalty for breaking the law is too low.

In 2012 China’s police investigated 368 000 drunk-driving cases. This marked a decrease of 40% from the previous year. The number of drunk-driving cases in Beijing and Shanghai also dropped by 70%. However, law enforcement encountered problems in 2012: some people used various methods to evade drunk-driving tests.

In 2013, Chinese authorities aim at further decreasing the frequency of drunk-driving accidents and it is expected that the cases will not exceed 250 thousand in 2013. The law enforcement authorities will also introduce new technology to prevent evasion from drunk-driving tests.

6. Families and marriage

The 2011 new interpretation of the Marriage Law in China established the principle of giving priority to personal property, conducive to balancing and protecting the rights and interests of both husband and wife and their children and conducive to promoting the improvement of China’s marital property system. The new interpretation of Marriage Law includes 19 articles focusing on interpreting controversial issues such as the purchase of property with a loan before marriage, bestowal of property between husband and wife, and paternity tests. The key contents include six aspects: They specify for the first time that an administrative review or an administrative lawsuit shall be filed if one proposes canceling the marriage registration on the grounds of flaws in the marriage registration procedures. Second, the refusal of one party in a paternity lawsuit to take a test will lead to the court’s presumption that the opposing party’s claim is true. Third, for the first time the personal property of husband or wife generated after marriage is not jointly owned property. Fourth, real estate purchased by one party’s parents for their son or daughter after marriage shall be recognized as personal property. Fifth, for the first time , the real estate property purchased by one party with a loan before marriage shall be owned by the party under whose name the property right is registered. Sixth, if both parties fail to divorce by agreement, the property division agreement signed before the marriage shall be invalid.

Many Chinese misinterpret and misunderstand these new provisions because many still perceive marriage and the property relationship between husband and wife based on tradition.

In 2013, Chinese authorities will emphasize advocacy on marriage law and will ensure adequate understanding of its provisions.

[1] China began to implement a single and managed floating exchange rate regime based on market supply and demand in 1994.

 

III. Scientific Research, Education, Culture and Sports

Rapid economic growth raises the standard of people’s material life quickly and creates greater demand for science, education, culture and sports. 2013 is the third year of China’s 12th five-year plan for social and economic development. Before the end of 2015, the following projects will be completed:

• The National Plan for Medium and Long Term Education Reform and Development
• The National Plan for Medium and Long Term Science and Development
• The National Fitness Program

1. Development of Culture

The Communist Party of China and the Chinese government reached a new level of understanding cultural development and matured gradually in terms of practicing cultural theories.

Major breakthroughs were recently made in the cultural system reform in China: Among the 2102 state owned art schools, 1176 schools completed or are in the process of completing “transformation, cancellation and transfer”. Special subsidies allocated to these schools and other cultural projects by the central government amounted to around US$ 500 million. This includes funds for community level public cultural service system based on the implementation of free access to Chinese art galleries, public libraries and cultural centers.

Protection of cultural heritage in China reached a new level: The Intangible Cultural Heritage Law was passed and enforced. 191 items of cultural heritage were added to the 3rd National Catalogue, increasing the number of items to 1219. The number of cultural and ecological protection experimental areas also increased to 11.

Stage art creation strived: in 2011 more than 1000 new stage plays were created and debuted, and the overall level of stage art creation was improved.

Film and television production reached all time highs as masterpieces were produced and broadcasted.

In 2013 the Chinese government will introduce initiatives in six aspects focusing on building a country with a solid socialist culture and reaching the objectives of cultural reform and development by 2020:

• First, promote the development of the system of core socialist values, and consolidate the common ideological and moral basis of the united efforts of all party members and the Chinese people of all ethnic groups.
• Second, implement the orientation of serving the people and the principle of letting a hundred flowers blossom and a hundred schools of thought contend, and provide more food for thought for the people/
• Third, make further efforts to develop public cultural initiatives and ensure people’s basic cultural rights and interests.
• Fourth, accelerate the development of cultural industry and turn it into a pillar of the Chinese national economy.
• Fifth, deepen reform and accelerating the building of systems and mechanisms conducive to cultural prosperity and development.
• Sixth, build a vast team of cultural talents and provide support for the development of socialist culture.

2. Increased spending on education

China passed the “National Plan for Medium and Long Term Education Reform and Development” for 2010-2020 as the master strategy for reform. The plan places emphasis on the strategic role of education as a priority on the development agenda, it maps out a blue print for achieving educational modernization in the next ten years.

Pilot projects of China’s educational system reform were launched in 2012 and ten major educational development projects were implemented.

The implementation of the plan started in 2011 and will continue in 2013:

• First, the plan addresses the shortage of kindergartens in China. More than 30 000 kindergartens are currently under construction. The number of children in kindergartens is increasing by 10% per year and is expected to reach 3 million in 2013.
• Second, five private universities were approved to carry out pilot projects of master’s degree education for the first time to support the development of private education, investigate policies that are unfavorable to the development of private education, and support the development of high-level private schools.
• Third, the plan introduces improved financial aid policies for students. It raises financial aid standards and establishes a complete system of student aid policies covering all students from preschool to postgraduate students so that students from low income families would not drop out of school.

•  The central government allocated US$800 million to support the central and western regions in building and expanding more than 1000 special education schools. The government also allocated more than US$ 3.5 billion to improve the school running conditions of ethnic education and grant financial aid to students with difficulties in China.
•  Nearly 10 000 people received training in free secondary vocational education courses offered in Tibet and Xinjiang.

• Fourth, government spending on education in China increased significantly. It reached more than US$ 50 billion last year, marking an increase of 27% from the previous year. Government spending on education is expected to further increase in 2013 accounting for 4% of China’s GDP.

3. Improving nutrition in schools

Amongst China’s 130 million rural primary and high school students, there are 30 million boarding students who eat the three meals at school every day. Although most students do not live on campus, they eat lunch at school. The quality of school meals became an important matter that concerns the students’ parents and the government.

The Chinese government introduced a policy of exemption from tuition and textbook fees and grant subsidies to boarding students from poor families. Around US$ 8 billion have already been spent with total beneficiaries of around 57 million students. In 2013 these figures are expected to rise.

The plan to improve nutrition for students also covers farmland and requires active participation and coordinated action by various government departments.

4. Scientific and technological innovation

The number of original scientific and technological achievements in the field of basic scientific research will rise in 2013 and the national scientific and technological strength will increase.

In 2012 China’s spending on research and development reached more than US$ 120 Billion increasing by around 20% from the previous year. In 2013 this number is expected to increase to reach more than US$ 140 billion.

In the past two years 130 national engineering research centers and 119 laboratories were built and are now functional. China’s research and development personnel amounted for 2.8 million scientists, ranking first in the world.

The quality of scientific research in China also improved and the number of dissertation citations rose to rank 7th in the world, up two places since 2010. The number of authorizations of patents for invention reached 172,113 marking an increase of 27.4% from 2011.

“Shenzhou-8” spacecraft successfully docked with the “Tiangong-1” space module, and China became the third country worldwide to master space docking technology.

The manned deep sea submersible “Jiaolong” also made a record by reaching the depth of 5188 meters, proving that China is capable of carrying out operations in 70% of the world’s deep sea.

All computer chips in the “Sunway BlueLight MPP” supercomputer were developed independently in China, marking outstanding progress in system frameworks, information transmission and low energy consumption technology.

China also guided the development of strategic emerging industries. The broadband mobile communication project TD-SCDMA formed a complete innovation and industrial chain covering chips, terminals, systems and meters.

Basic research changed from quantitative expansion to qualitative improvement.

Chinese scientists successfully used intense laser beams to simulate the astronomical phenomenon of solar flares in a laboratory, and discovered a new mechanism of bidirectional regulation of Type I interferons. Chinese scientists also elaborated the effect of artificial selection on the evolution of species, and made important progress in quantum information and stem cell research.

By implementing the national bumper crop science and technology project, Chinese scientists have allowed for increased grain production by 486648 million tons and increased economic return by more than US$12 billion in the past five years.

In 2013, the building of the national innovation system will be accelerated. 154 innovative enterprises were recognized in 2012 accounting for a total of 356 enterprises. The Chinese government will continue to support industry technology innovation strategic alliances.

After the manned deep-sea submersible Jialong’s dive to 7000 meters was organized and implemented, and the Shenzhou-9 manned spacecraft successfully docked with Tiangong-1 space module, in 2013 the BeiDou navigation Satellite System will begin to offer test run services such as continuous passive positioning, navigation and timing accurate to 10 meters.

After completing the 28th Antarctic scientific expedition in April 2012, China will organize the 5th Arctic and the 29th Antarctic expeditions in 2013.

IV. Military Technology and International Relations

China’s foreign policy, as outlined at the 18th National Congress of the Communist Party of China last November, stresses peaceful coexistence and cooperation for win-win results. The Chinese officials maintain that China’s military advancement poses no threat to other nations and to international and regional peace.

China’s latest advancement in military technology was the landing of the J-15 fighter jet on the deck of the newly-launched Liaoning aircraft carrier. In 2013 China will start building more aircraft carriers and fighter jets. Ding Yifan, a researcher with China’s State Council’s Development Research Center, says that China is justified to develop its military capabilities to safeguard its sovereignty and protect its vast interests around the world.

China is creating its own military-industrial complex, where the private sector taking a leading role. Well funded defense groups have rapidly absorbed the technology and expertise needed to build complex weapons, freeing China from its former heavy reliance on Russian and other foreign military equipment. Beijing is also enlisting the private sector to accelerate the rise of its best defense contractors, issuing new guidelines aimed at encouraging private investment in a sector traditionally sheltered from competition and public scrutiny.

Listed subsidiaries of top Chinese military contractors now intend to buy at least US$ 3.15 billion in assets from their state-owned parents in the second half, according to their recent filings with the Shanghai and Shenzhen stock exchanges. The long term goal is to transform some of the leading contractors, such as China State Shipbuilding Corporation (CSSC), Aviation Industry Corporation of China (AVIC) and China Aerospace Science and Industry Corporation into homegrown versions of American giants such as Lockheed Martin and Northrop Grumman or Britain’s BAE Systems. AVIC, which is aiming to quadruple its sales to US$ 157.7 billion by 2020, plans to inject 80 % of its main businesses into some of its listed companies by the end of 2013.

The growth of the domestic arms industry has allowed China to steadily reduce military imports. International arms transfer figures from the Stockholm International Peace Research Institute (SIPRI) show China’s defense imports fell 58% between 2007 and 2011. In sum, China slipped to fourth place in the ranks of global arms buyers after holding top position in the five years prior to 2006.

Over the last decade, China has launched two classes of locally designed and built conventional submarines that are now the PLA’s underwater fleet. It has also built versions of the Su-27 combat aircraft and begun mass production of its J-10 fighter that some experts rank with the U.S.-made F-16 in performance. China further developed its first stealth fighter, the J-20.

Chinese factories also appear to have made rapid progress in developing a range of advanced missiles. These include up to 1000 ballistic and cruise missiles and new mobile launchers for nuclear weapons.

Even in more basic equipment, China’s arms industry appears to have made significant improvements. In little over a decade, shabby uniforms and poor quality footwear have been replaced with smart, comfortable looking camouflage uniforms, lightweight helmets and solid combat boots. Ground troops carry new assault rifles and small arms, while modern tanks, armored personnel carriers and artillery have been introduced to replace equipment derived from Soviet designs of the 1950s.

 

China’s Military Showpieces

1- JL-2 (Julang) or CSS-NX-4 Missile

Range: 8000km – Submarine launched – Length: 10m – diameter: 2m – Weight: 20 000kg

2- The KJ-2000 Early Warning and Control Aircraft (similar to the US AWAX)

Speed 600kph – Altitude 10,000m

3- J-10 Fighter Jet

Speed 1,85 Mach – Weapons: 23mm cannon & various missiles

4- Zhi-10 Attack Helicopter

Speed 270kph – Weapons: 23mm cannon & 8 missiles

5- ZTZ99 Main Battle Tank

Speed 80kph – Weapons: 125mm cannon with autoloader, 12.7mm anti-aircraft machine gun

6- QBZ-95 Assault Rifle

Caliber: 5.8mm – Capacity: 30 rounds – Range: 600m

Conclusion

“I can create anything I want using my magic power”

China’s newly-empowered fifth generation leaders headed by Xi Jinping, are not so tightly wedded to the past as their predecessors. They are pragmatic problem-solvers, not rigid bureaucrats; none are ideologues; none bear responsibility for the Tiananmen crackdown of June 4, 1989. Therefore, in 2013, Xi Jinping and his administration are likely to rule in hybrid forms of soft-authoritarian governance. This would involve relaxing restrictions on unofficial religious and social organizations; enlarging the scope of political and intellectual tolerance; legitimizing the existence of pluralistic political interests; and strengthening the autonomy of the mass media, organs of public opinion, and the National People’s Congress, the Chinese People’s Political Consultative Conference.

Meanwhile, the main emphasis will remain on economic growth and social and cultural development. The young generation in China will slowly transform to consumerism with ambitions and dreams that can go as far as “beyond the stars”. Last December, Zhang Yu1 talked with Chinese children in Shanghai about their wishes for 2023. Here are some of their quotes:

“I want to go to outer space and find out who is the mother of all the stars.” Zhao Wei, girl, 9

“I want to buy a car that can hold six passengers. It’ll take my grandma, parents, future wife, son and me to interesting places.” Han Haohao, boy, 9

“I want to become a magician. I can create anything I want using my magic power.” Chen Zhi, boy, 9




 

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1 Children’s Wishes for 2023. Published on December 30, 2012, in the Global Times
http://www.globaltimes.cn/content/753008.shtml

SOURCES













 

- The figures, numbers and information about Chinese economy, social development and technology were collected from various sources including:

- The Chinese Department of Development Strategy and Regional Economy;

- The Development Research Center of the State Council;

- The General Administration of Customs of the People’s Republic of China;

- The National Bureau of Statistics in China; and

- The China Economic Yearbook 2012.

- Further information was collected from interviews with Chinese officials, businessmen, party activists and ordinary citizens in Beijing, Shanghai and Hangzhou (Zhejiang Province).

The schedule of important conferences to be held in China in 2013 can be found on the following site: http://www.chinaexhibition.com/index.php?act=calendar&year=2013&month=04&page=2