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China shifting strategies through 2015

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New Delhi: China, world’s most populous country, scrapped its one-child policy in 2015, a year that also saw an upswing in ties with India with Prime Minister Narendra Modi visiting the country. The yuan was devalued, sending shock waves in stock markets across the world.

The country also witnessed two major tragedies when over 450 people were killed in a ship capsize in June and over 170 died in massive explosions in Tianjin city in August.

China came down heavily on the corrupt, with its crackdown seeing over 100 high-ranking officials being tried.

In a dramatic move, President Xi Jinping announced military reforms. A staggering 300,000 troops are to be cut, a move that was described as getting a step closer to China’s commitment towards peaceful development.

Parts of China and capital Beijing were left gasping as smog enveloped the region, leaving residents worried.

As the year comes to an end, China, one of the world’s biggest economies, saw an array of events.

One of the biggest developments for the country of 1.3 billion was allowing the two-child policy in an attempt to balance population development and offset the burden of an aging population.

It scrapped the one-child policy, a part of the family planning policy, introduced in the late 1970s. However, the plan will come into effect only from March 2016. It has been estimated that it would help raise the population to an estimated 1.45 billion by 2030.

On the diplomatic front, China reached out to its South Asian neighbours, including India. In February, Indian External Affairs Minister Sushma Swaraj visited China, paving the way for Prime Minister Narendra Modi’s visit.

Modi visited China in May. He started his three-day trip from Xi’an where he held summit-level talks during which the border issue, the widening trade imbalance, connectivity issues and “strengthening trust” were high on the agenda.

While in Beijing, Modi held talks with his Chinese counterpart Li Keqiang. A joint statement called for an early settlement of the boundary issue which should be pursued as a strategic objective and said that both countries were determined to actively seek a political settlement.

With India’s neighbour Pakistan, China’s relationship took a new turn with President Xi Jinping’s visit to Islamabad where he envisaged investments worth $45 billion and signed 51 agreements.

An important meeting was between President Xi and his Taiwanese counterpart Ma Ying-jeou, a first of its kind since the end of a civil war in 1949. The meeting took place in Singapore in November.

President Xi also made a state visit to the US in September where he along with his counterpart, Barack Obama, reached a consensus on cyber-security. He also visited Britain in October.

China’s strength, its economy, took a beating when the yuan was devalued on August 11.

The next day, it faced its second devaluation. These resulted in Chinese exports getting cheaper and imports into China more expensive. Stock markets around the world, including India, were hit.

This year, China has dealt sternly when it came to corruption as part of a campaign launched by President Xi when he came to power in 2013.

The low points were tragedies. The year began with a stampede at a New Year’s Eve celebration in Shanghai where 35 people were killed and over 40 injured.

On June 1, a ship with 456 people on board capsized in the Yangtze river following a tornado. A total of 442 were killed while only 12 survived. Two are still missing and presumed dead.

On August 12, a series of explosions ripped through a container storage station at Tianjin port. Fires caused by the initial explosions continued to spread uncontrollably throughout the next few days, causing eight additional explosions. It killed 173 people including firefighters, eight still remain missing and over 750 were injured.

In September, President Xi announced a cut of 300,000 troops. A round of military reshuffle in August saw the inclusion of younger officers. These changes were parallel with the military’s anti-graft campaign, which has so far removed 40 senior officers, as well as China’s increased efforts to modernise its forces.

This year, China made giant strides in science and technology. In November, the construction of the world’s largest ever radio telescope entered the final stage. China also manufactured the world’s first electric plane, started building its largest solar plant and built the world’s largest amphibious aircraft.

The Beijing residents coughed and rasped as the Chinese capital was shrouded in smog.

On the flip side, since late January, smog levels have increased at an alarming rate, prompting the government to adopt the world’s strictest emissions standards.

And, China’s campaign of island building in the South China Sea has caused concern among other regional players. China claims most of the South China and East China seas. (Karishma Saurabh Kalita, IANS)

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China’s Economy Slows As It Tries to Diffuse Trade War With U.S.A.

The impact on China’s economy from the Sino-U.S. trade frictions are not apparent yet, Mao cautioned, adding that the nation will face more “external” uncertainties in 2019.

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A woman cleans the window at a Aston Martin luxury car dealership in Beijing, Dec. 12, 2018. Auto sales have fallen sharply in China. VOA

China’s November retail sales grew at their weakest pace since 2003 and industrial output rose the least in nearly three years as domestic demand softened further, underlining rising risks to the economy as China works to defuse a trade dispute with the United States.

The world’s second-largest economy has been loosing momentum in recent quarters as a multi-year government campaign to curb shadow lending put increasing financial strains on companies in a blow to production and investment.

The slowdown in Chinese industries has started to weigh on consumer sentiment this year, tapping the brakes on retail sales. Big-ticket items have been the first to be hit, with auto sales declining since May.

Pace of retail sales slows

Retail sales rose 8.1 percent in November from a year earlier, data from the National Bureau of Statistics showed Friday, below expectations for an 8.8 percent rise and the slowest since May 2003. In October, sales increased 8.6 percent. Auto sales fell a sharp 10.0 percent from a year earlier.

 

China
People try garments at a retail and wholesale clothing mall in Beijing, July 16, 2018. China’s economic growth slowed in the quarter ending in June, adding to challenges for Beijing amid a mounting tariff battle with Washington. VOA

 

The slump was in line with data released by China’s top auto industry association, which showed sales dived 14 percent in November, the steepest drop in nearly seven years.

The stresses on broad activity have been compounded by a sharp escalation in China’s trade dispute with the United States, which has threatened to fracture global supply chains, chill investment, exports and growth.

Pace of industrial output slows

Industrial output rose 5.4 percent in November, missing analysts’ estimates and matching the rate of growth seen in January-February 2016. Factory output had been expected to grow 5.9 percent, unchanged from October’s pace.

Over the weekend, China reported far weaker than expected November exports and imports, reflecting slower global demand and waning domestic factory activity as profit margins narrow.

With economic growth at its weakest since the global financial crisis, Chinese policymakers are ramping up spending, pushing banks to increase lending and cutting taxes to shore up businesses and ward off a more damaging slump.

USA, China, Trade War, economy
Plastic bags of fentanyl are displayed at the U.S. Customs and Border Protection area at the International Mail Facility at O’Hare International Airport in Chicago. VOA

The weaker November industrial output and retail sales growth numbers showed that downward pressure on the economy is increasing, said Mao Shengyong, spokesman at the statistics bureau.

Still on track to hit growth target

But China is on track to hit its 2018 economic growth target of around 6.5 percent, Mao told reporters.

“On balance, the latest data show an economy that is under pressure on both the external and domestic front, with policy efforts to shore up growth still falling short,” Julian Evans-Pritchard, senior China economists at Capital Economics, wrote in a note.

A temporary 90-day trade war truce agreed by the United States and China early this month may have removed some of the immediate pressure on the economy.

Also Read: The Escalating Trade War Between China And U.S. Calls A Truce

The impact on China’s economy from the Sino-U.S. trade frictions are not apparent yet, Mao cautioned, adding that the nation will face more “external” uncertainties in 2019.

Indeed, even in the unlikely event the world’s top two economies reach a durable resolution in their dispute, ebbing domestic demand, mounting household debt and a cooling real estate sector point to a further slowdown in growth next year. (VOA)