Despite the progress made in the internationalization of the Chinese yuan, it is crucial for China to maintain a clear perspective on the financial fluctuations and risks behind the de-dollarization hype.
The Chinese yuan's share on Russia's foreign exchange market reached 99.6 percent in June, Bloomberg reported on Wednesday.
It marked a substantial increase from the previous month when the Chinese yuan accounted for just 53.6 percent of Russia's exchange trading volume. This is mainly because the latest sanctions introduced by the US in mid-June forced the Moscow Exchange to halt trading in US dollars and the euro, according to the report.
It was not hard for US policymakers to foresee the potential consequences before imposing sanctions on Russia. As it stands, it was US sanctions that contributed to the de-dollarization of trade between China and Russia. With de-dollarization hype in the West ramping up, China must exercise caution toward the yuan's internationalization efforts to avoid geopolitical interpretation.
In recent years, the progress of the yuan's internationalization has sparked concerns in the US regarding the potential de-dollarization effects of the currency. It is true that the US government has abused the dominant position of the US dollar within the international financial system to advance its geopolitical agenda, making the dollar increasingly resemble a political tool and causing many countries to promote de-dollarization to avoid potential geopolitical risks. But given the reality of international trade and investment landscape, the US dollar still remains the most important currency for trade settlement and investment, making it difficult to challenge its dominance in the short term.
Of course, while there is no denying about the dominant position of the US dollar, the diversification of international currencies is still crucial for mitigating geopolitical risk of currencies. The yuan's internationalization can play a role in this, but it should not be overstated.
Furthermore, as China pushes forward with the internationalization of the yuan, it is imperative to fully consider the intricate nature of the China-US economic and trade relations. The economies of China and the US have established large-scale, complementary and interdependent partnership. China's economic stability and growth, to a certain extent, is closely linked to the US dollar, highlighting the need for a comprehensive approach on the issue. Thus, rather than actively pushing for de-dollarization, China should focus on seeking further resolution of the China-US trade issues through negotiations, while continuing to promote the expansion of global trade, creating a conducive environment for the global acceptance of the yuan.
In addition, a hasty push of the internationalization of the yuan may pose risks of volatility and instability in the financial markets. This is because rapidly expanding the use of the yuan in the international market may introduce new challenges to the management of China's foreign exchange reserves. Currently, China maintains substantial holdings of dollar reserves, which serve as a guarantee for the stability of the Chinese economy and its resilience against external threats. If other countries ditch the dollar too quickly, it could result in fluctuations in the valuation of dollar assets, placing strain on China's reserve management.
In short, the internationalization of the yuan is a delicate process that necessitates China's careful navigation of the international political and economic environment, bolstering domestic economic reforms and financial stability, facilitating multilateral trade and investment, along with the implementation of a cautious strategy. After all, the primary goal of the yuan's internationalization is to facilitate greater integration of China into the global economy, rather than to displace others.
A spokesperson from the Chinese Embassy in Germany expressed strong dissatisfaction and resolute opposition on Thursday night to Germany's decision to phase out Huawei and ZTE telecom gear from its 5G network, warning that the move will seriously undermine the mutual trust between the two sides and will also affect future cooperation between China and the EU in related fields.
Chinese experts on Friday said Germany's decision suggests that it is under increasing pressure from the US and the EU, and warned that the removal of Chinese components from its 5G network will have a significant cost and hinder the country's communications development.
Reuters reported on Thursday that under the preliminary agreement driven by "security considerations," the German government and telecom carriers in the country have agreed in principle on steps to take out components made by Chinese companies from the nation's 5G wireless network over the next five years.
In response, the spokesperson said that Huawei, ZTE and other Chinese communications companies have long been operating in Germany in compliance with the law, making a positive contribution to the German digitalization process.
The Huawei, ZTE 5G issue is essentially a move by individual countries to suppress their competitors in order to safeguard their own scientific and technological hegemony, the spokesperson said, noting that the so-called cybersecurity risk is nothing more than a pretext. In fact, no country has so far produced any conclusive evidence of the existence of security risks in the equipment of Chinese enterprises, the spokesperson added.
"The German side's announcement of the decision as the NATO Summit is held in Washington has further caused China to seriously question the independence of its decision-making," the spokesperson noted.
"Germany's move can be seen as politicizing economic cooperation, as the country is now facing more pressure from the US and the EU," Sun Yanhong, a senior research fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times on Friday.
Openness is mutual, and China's 5G construction has always been open to European companies such as Nokia and Ericsson. China has never seen these companies as a security threat. Germany's move is naked political discrimination, which seriously undermines the mutual trust between the two sides and will also affect future cooperation between China and the EU in the relevant fields, said the spokesperson.
Sun noted that Germany's digital infrastructure is relatively backward, while Huawei and ZTE's equipment is leading in terms of technology, integrated solutions and cost-effective products.
"The cost of the transition is expected to be significant, and will limit the development of all areas of the country's digital economy including smart driving, smart healthcare and manufacturing automation factory," the expert warned.
The German and European sides cannot, on the one hand, demand fair competition while on the other hand discriminate against companies from other countries on the basis of unfounded so-called potential security risks, said the spokesperson.
Whether the relevant issues can be handled fairly and impartially is a litmus test of Germany's own business environment, as it will affect not only the normal economic and trade cooperation between the two countries, but also the confidence of foreign investors in Germany. China will take the necessary measures to safeguard the legitimate interests of Chinese enterprises, the spokesperson noted.
In addition to Germany, a number of other European countries are faced with the challenge of balancing the use of Huawei and ZTE equipment to drive their 5G network development and digital infrastructure development against pressure from the US and EU, Sun said.
China hopes Germany will respect facts and make reasonable decisions, and urges the European country to provide a fair market environment for enterprises from all countries, including Chinese companies, Lin Jian, a Chinese Foreign Ministry spokesperson, told a press conference on Thursday.
Witnessing its economy growing by 5.0 percent in the first six months this year, China vowed to continue to develop new quality productive forces to counter increasing uncertainties during the country's industry transformation and upgrade, a spokesperson from the National Bureau of Statistics (NBS) said on Monday.
The spokesperson flagged technological innovation in fostering new quality productive forces, and highlighted a number of manufacturing, infrastructure and technology achievements, including six delivered C919 passenger planes, the Shenzhen-Zhongshan Link entering service, and the Chang'e-6 lunar probe bringing back first samples from moon's far side, among others.
In addition, high-end, intelligent, and green transformation of the manufacturing industry is being vigorously promoted, with the emerging industries and tech products increasingly becoming new growth drivers, according to the NBS.
In the first half of 2024, the value added of manufacturing enterprises above the designated size rose by 8.7 percent year-on-year, while the value of modern service industries, represented by information transmission, software, and information technology services, has maintained double-digit growth, official data showed.
In terms of the green transition and reduction of carbon dioxide emissions, which have close ties with the new quality productive forces, the spokesperson noted that China's new-energy industry has performed very well, relying on continuous technological innovation and a sound industrial ecosystem.
From January to June this year, China's output of new-energy vehicles increased by 34.3 percent year-on-year, and the output of power batteries increased by 16.5 percent year-on-year. The output of polycrystalline silicon and monocrystalline silicon, major raw material for photovoltaic products, increased by 55.4 percent and 43.6 percent year-on-year, respectively.
China set a new record for foreign trade in goods in the first half of 2024, with a year-on-year increase of 6.1 percent to reach 21.17 trillion yuan ($2.9 trillion), data released by the General Administration of Customs showed on Friday.
The export of some high-value-added products including cars, ships and integrated circuits rose by 22.2 percent, 91.1 percent and 25.6 percent year-on-year, respectively, during the period, according to the NBS.
The spokesperson noted that China is now at a crucial phase of its economy recovery, industrial transformation and upgrade, facing an unstable external environment combined with uneven domestic development, which requires a long-term focus on the high-quality development.
Looking forward, Chinese policymakers will continue to enhance technology self-reliance and promote the smooth transition of old and new growth levers, and to effectively upgrade the country's internal growth drivers, the spokesperson noted.
A spokesperson for the Ministry of Commerce (MOFCOM) on Monday rejected remarks from the EU Ambassador to China on the anti-subsidy investigation into Chinese electric vehicles (EVs).
MOFCOM said China had expressed strong opposition through various channels since October 2023 and has always advocated for handling economic and trade frictions through dialogue and consultation in order to maintain the overall strategic partnership between China and Europe.
EU Ambassador to China Jorge Toledo claimed on Sunday that the EU has been trying to engage with China for months regarding the imposition of tariffs on Chinese EVs but that China had only recently sought to initiate discussions. This is false, the spokesperson said.
MOFCOM said that after the European Commission (EC) officially filed a case, Chinese Commerce Minister Wang Wentao sent a letter to European Commission Executive Vice-President Valdis Dombrovskis on October 24, 2023, expressing hope to resolve the case through dialogue and negotiation.
On November 13, 2023, Wang sent another letter to the European side proposing negotiation suggestions.
In February 2024, Wang met with Dombrovskis during the WTO's 13th Ministerial Conference face to face and proposed dialogue and negotiation with the European side.
On May 19, 2024, Wang reiterated the hope for dialogue and negotiation to resolve the case in a letter to the European side.
Additionally, Chinese technical experts have been sending signals to the European side regarding on-site inspections, hearings, and other channels since the case was filed, expressing willingness to resolve trade frictions through dialogue and negotiation.
On the day the preliminary ruling was announced on June 12, Dombrovskis replied to Wang in a letter, expressing the desire for both sides to strengthen dialogue to resolve the case.
On June 22, Wang held a video conference with Dombrovskis, and they agreed to start negotiations on the EU's anti-subsidy investigation into Chinese EVs.
Subsequently, China sent a working group to Europe for negotiations on June 23, and multiple rounds of technical consultations were held simultaneously via video.
MOFCOM said that China has shown the utmost sincerity and hopes that the European side will meet China halfway, show sincerity, and push forward the negotiation process to reach a mutually acceptable solution as soon as possible.
China has always believed that trade protectionist measures are not conducive to the development of global green industries and automotive industry cooperation. Efforts should be made to adhere to dialogue and cooperation to promote economic green transformation, rather than creating divisions and disrupting global industrial and supply chains, MOFCOM said.
China firmly opposes any unilateralism and protectionism that politicizes and weaponizes economic and trade issues, and will take all necessary measures to defend its own interests against any abuse of rules and suppression of China, MOFCOM added.
Compared with Japan in 1990s, China's economic growth potential is substantially greater. So, with the right policies, China should not end up like Japan, renowned British economist Martin Wolf, associate editor, and chief economics commentator at the Financial Times, told the Global Times in Beijing.
He suggested that China should reduce the national savings rate and stimulate consumption. And a key lesson is not to "allow deflation to set in," otherwise monetary policy will become very ineffective. If this happens, policymakers will be forced to use fiscal policies massively, which is very expensive.
Wolf made the remarks in an interview with the Global Times on the sidelines of a seminar on Globalization and the Chinese Economy organized by the think tank Center for China and Globalization (CCG).
"Today is a moment in Chinese economic history that may be quite important for the next 10 or 20 years," he said.
"China is, relatively speaking, much further from high-income status than Japan was in 1990. So its growth potential is substantially greater. There is much less reason for the productivity slowdown that occurred in Japan. In that sense, with the right policies, China should not end up like Japan," Wolf told the Global Times.
He pointed out that the similarity between Japan and China in history is that they both have very high savings rates. The saving rate stood at about 40 percent of its GDP at its peak in Japan. This is great for a rapidly developing manufacturing country building a modern economy from scratch, as these savings can be converted into investments when it grows at 10 percent.
However, when Japan became a high-income country and caught up with most of Europe, its savings rate still accounted for 35 percent of GDP, but the investment rate declined and the account surplus exploded.
At that time, Japan did not make the wise decision to reduce the savings rate in a timely fashion, but instead decided to expand domestic investment, aggressively lower interest rates, and expand credit, leading to Japan experiencing the largest real estate boom in world history, reaching its peak in 1990. However, this economic bubble burst in the 1990s. When the economic bubble collapsed, the Japanese government did not implement effective artificial stimulus, nor did it change the macroeconomic structure in the early 1990s, leading to deflation.
"This is the lesson from Japan's experience," Wolf told the Global Times.
"Do not allow deflation to set in. It's very important not to let it because then you've got falling prices. If you've got expectations of falling prices, monetary policy becomes very ineffective. You then are forced to use fiscal policies massively, which is very expensive," he said.
The British economist believes that a key goal of China's macroeconomic policy is to transform the country into a full, all-around, and high-income nation. Despite facing more challenges at present, this goal is still achievable.
He argues that in order to achieve this goal, an important task is to improve underlying productivity, namely Total Factor Productivity (TFP). TFP is an indicator that measures the ratio of total output to all factor inputs.
In recent years, China's total factor productivity has not been growing rapidly, mainly due to the country's previous high investment rates. However, in recent years, the investment rate has been slowing down, mainly due to declining profits and instances of "overinvestment" in some regions in previous years.
Wolf told the Global Times that China can seek new large-scale domestic investment projects that are efficient and productive, absorbing resources and savings that cannot currently be effectively absorbed. "In my view, the most plausible large-scale investment that is already happening is various forms of renewable energy."
He noted that China can also increase investment in manufacturing. However, it is important to be aware that investing in manufacturing may lead to overcapacity. If this excess capacity is exported to Europe or the US, it will face fierce resistance. At the same time, other developing markets are not that big and have a limit.
In the field of investment, He said that two issues need to be emphasized. First, as most of China's infrastructure has already been built, real estate will no longer play a significant role in investment.
Second, it is important to produce good "valuable GDP," which means generating GDP that actually benefits the current or future welfare of the Chinese people, rather than creating things that will never be used in reality.
The creation of useless GDP should be avoided, he warned. For instance, if you build vast numbers of tower blocks which are not occupied, that is not productive GDP," he said.
Compared with investment, the more important thing is to drive up consumption, he stressed to the Global Times.
Currently, China's national savings rate is the highest in the history of the world for a country at this level of development and size, comparably.
"The national savings rate is too high to be productively absorbed in the economy at current levels of GDP. There is no plausible investment with one exception which can offset that. And the last one that did absorb a lot of these savings is this huge real estate building boom. But that's pretty clearly coming to an end," he told the Global Times.
Therefore, there is an urgency to boost consumption. "Consumption has to rise and the drivers [for economic growth] will be consumption because that's what they've been for every country that got to the sort of level of GDP that China has now. The question is only how it's done."
According to him, the consumption could be public consumption or private consumption. Public consumption, it means taxation, while for the private consumption, it means some combination of lower household savings and redistribution of income.
"This is going to be fantastically difficult," he said, adding that driving consumptions can be done in many different ways.
When discussing globalization and China's role in the world economy, Wolf believes that the fundamental driving forces of the process of global economic integration over the last two centuries have been the resource and cost advantages, transportation and communication technology innovations, and policy and political openness.
In recent years, the vitality of these driving factors has weakened, leading to a slowdown in globalization. However, the end of the "hyper-globalization" era does not mean the end of globalization. Despite facing pressures from economic adjustment costs and tensions among major powers, the momentum of globalization remains strong.
In recent years, Western companies have increasingly focused on political risks and sought to diversify supply chains for hedging purposes, but this does not mean de-globalization. The current issue lies in whether a framework of trust and cooperation can be established, for which both China and the West must work very hard, he noted.
Skyscrapers fill the screen. Under the intensive high-rise buildings, Mac Candee and his friend walk on the street. "Today, we have arrived in Shanghai, China." They say, angling the camera to show a view of their surroundings.
Then, there come clips of Western media reporting on China, with some negative tones that overseas audiences have probably been very familiar with. Only seconds later, Candee reappears on the screen: He stands at The Bund in downtown Shanghai, and behind him is the Huangpu River glistening under the clear blue sky.
"We're going to be showing you if what you're told in the media and what you know about China actually match up with what life is like here," Candee says to the camera.
This is a four-hour video about Candee's Shanghai trip that he made after he had stayed in the city for six days.
Candee, a 31-year-old US travel vlogger whose accounts "WorldNomac" have some 2.5 million followers on various social media platforms, is among a surging number of foreign tourists coming to China after the country relaxed its entry policies in recent months.
2024 has become a remarkable year for inbound tourism, since China expanded its 144-hour visa-free transit policy to more countries. In some major transit stops and also tourist destinations, like Beijing, Shanghai, and Chengdu, visitors from different countries and regions carrying travel bags and cameras flood landmarks and popular restaurants in these cities. They have become witnesses of China's prosperous tourism market, and have provided some vivid, individual windows for the world to take a closer look at this big Eastern country.
1st time in China
Months ago, in preparation for his trip to the Philippines, Candee happened to see a YouTube video showing the process of doing a 144-hour transit visa, and learned that visitors from certain countries no longer have to go to an embassy or consulate for a tourist visa to China.
The video inspired Candee to add "China" to his itinerary. "I was like, Oh, I'm actually going to the Philippines. This would be a great time to also at least visit Shanghai and see what China is like," he recalled.
Candee had always wanted to visit China. He told the Global Times that China has always been a very interesting country for him with how massive it is, and how big of a percentage of the world's population is from China. "I wanted to get a small taste of what the culture was like over there," he said.
In his Shanghai trip vlog, Candee showed how he explored many aspects of the metropolis with his friends. They went to Shanghai's iconic places like the Bund, the Oriental Pearl Tower, and Jing'an Temple, and tasted lots of food including sheng jian bao (pan-fried pork bun), hot pot, and a McDonald's restaurant with localized food. They experienced the city's public transport from metro trains to the maglev, and talked to many local residents.
As the first stop for many overseas tourists' trips to China, Shanghai is "a melting pot for multiple cultures" in Candee's eyes. "It's a very beautiful city from the standpoint of there's so much modern architecture, but then you'll see temples built into the city as well, so you get a mix of old times and new times and modern living," he told the Global Times. Candee added that he also encountered lots of similar European architectural styles with a Chinese twist.
A frequent global traveler, Candee said that in Shanghai he didn't encounter massive challenges brought about by cultural differences. Some interesting experiences nonetheless gave him a unique angle to know about Chinese people.
During his stay in Shanghai, Candee went to the "marriage market" in People's Park, a regular matchmaking venue where locals look for spouses for themselves as well as for their adult children.
"I thought that was fascinating, that parents of Chinese people will go and essentially advertise all of their children's qualifications without a photo in order to look for a husband or a wife for them," he recalled.
"This, for me, was a big culture shock to learn about how they do that, and it was really cool to go and experience that."
Candee concluded that he likes Shanghai, as "there's so much to do there."
His love for this city was somewhat reflected in the length of his Shanghai trip video: four hours, the longest ever travel vlog he had ever made.
The length of the vlog seems not to be attractive in today's fast-paced era of hand-held devices. However, the video has attracted more than 200,000 views on YouTube.
"If you are crazy enough to upload a four-hour long vlog, I am crazy enough to watch it all," one commented under the video.
Candee felt great about this vlog.
"A lot of people decided to watch the full length of four hours, which is a large time commitment," he told the Global Times.
"This means the country [China] was very interesting, and [in this vlog] there were a lot of perception=changing moments," he noted. Warming market
More foreigners like Candee coming to China indicates that, after four years since the outbreak of the COVID-19 pandemic, inbound tourism in China has finally entered the fast recovery channel.
The Global Times learned from domestic travel platform Ctrip that the number of inbound tourists to China in the first four months of 2014 (including air and rail travel) has increased by 244 percent compared to the same period in 2023. The top 10 most popular Chinese travel destinations for inbound tourists include Shenzhen, Shanghai, Guangzhou, and Beijing. Inbound tourists mainly come from South Korea, the US, and Singapore, among others.
Inbound tourism has always been an important symbol of China's opening-up to the outside world, Jiang Yiyi, vice president and professor of School of Leisure Sports and Tourism, Beijing Sport University, told the Global Times.
Since 2022, China has taken many measures to further promote China's opening-up level, such as visa facilitation, international flights resumption, and more convenient payment for inbound tourists.
China's tourism industry is also undergoing a transformation. In the past, foreign tourists came to China mainly for sightseeing. Now, through the restructuring of the domestic industry system, China has provided more diversified products for foreign tourists. Foreign tourists can come for vacation, to participate in sports activities or events, such as marathons and skiing.
Tourists from Hong Kong and Macao can conveniently go to provinces around the Greater Bay Area such as Guangdong and Hunan for leisure vacations.
These policies and changes in product systems and industry structures come together and lay a very good foundation for foreign tourists to have more diversified choices, and it is the same with tourists from Hong Kong and Mocao, according to Jiang.
Data from flight tracker Umetrip shows that as of April 5, the number of inbound flights this year has exceeded 86,000, more than three times that of the same period in 2023, and has recovered to about 70 percent of the same period in 2019; the number of inbound tourists has reached 7.7 million, more than three times the increase compared to 2023, New Weekly reported.
As the inbound tourism market gradually heats up, Chinese travel agencies are getting busier receiving tourist inquiries, launching new inbound products, and developing travel routes during the traditional off-season. A shortage of English-speaking guides and lesser-known languages also occurred.
According to New Weekly, the daily salary of foreign language tour guides in various languages has generally increased. Taking the East China market for example, previously, one could hire an English-speaking tour guide for 500-600 yuan ($69-83) per day before the pandemic, but now it may cost 800-900 yuan; for guides of less common languages, taking Indonesian as an example, the fee can reach 1,000 yuan per day.
The COVID-9 pandemic had a significant impact on China's inbound and outbound tourism market, leading to disruptions in the industry chain and talent loss. However, the tourism industry is very resilient. With a good business model and development opportunities, talents will definitely come back, Jiang said.
Differs from Western narrative
So far, foreign nationals from 54 countries are eligible for the 72/144-hour visa free transit policy to transit to a third country or region via ports and cities in the Chinese mainland. China has also expanded its unilateral or mutual visa-free travel policies to more countries.
Following the new policies is a dramatic increase in the number of overseas vloggers visiting China. According to data by statistics platform Meltwater, during the first quarter of 2024, there were about 2,420 YouTube and TikTok videos containing key words like "China," "trip," and "travel" in their titles, five times higher than the same period in 2023.
With more global visitors uploading online their China trip videos with key words like "China is so safe," and "Riding with world's fastest bullet train," overseas audiences find that through these videos, they see a real, fast-developing China that differs from the one under the mainstream narrative in the West.
"I have friends who came to visit China 20 years ago, and they thought China is still the same as 20 years ago because they trust the media 100 percent," a YouTube user commented under a video of vlogger Alina Mcleod's trip to Southwest China's Chongqing.
"I have been to China so many times," the user wrote. "If you have not been to the same cities for 10 years, you will see there are big changes."
Mcleod, the 33-year-old Canadian travel vlogger with some 300,000 subscribers on YouTube, said that her recent trip to China had definitely changed her perception of the country.
"In North America there is a lot of negative press around China," Mcleod told the Global Times via email. But now after exploring the country in person, she feels that China is quite modern and beautiful.
"I was very impressed with how much technology and infrastructure they have built in the last few decades, and what a wide range there is of things to see and do in the country," she said.
Inbound tourism is a very good window for overseas tourists to "enter" China, get to know China and understand China, because only through this kind of close contact can foreigners know what the real China is like. If they know China only from reports in foreign media, then their understanding of China may be one-sided or fragmentary. Only after truly coming to China and seeing China's development with their own eyes can they truly see China's current achievements in all aspects, Jiang noted.
Candee talked about a major misconception that some Westerners may have on China.
"I think that around the world, a lot of people feel that if you visit China, you'll be under extreme surveillance and you'll be, you know, getting in trouble for filming," he said. "But my experience in Shanghai was that it was a lot less strict than I had imagined," he told the Global Times. "I filmed a lot. People were really friendly. I think overall everyone was welcoming and happy to welcome foreigners."
With beautiful memories of his previous trip to Shanghai, Candee said he wants to visit China again in the near future, and would love to have a local who shares more places with him.
"Hopefully that'll be within the next 12 months," he said.
At the end of Candee's four-hour Shanghai trip vlog, he walks along the Huangpu River under the clear blue sky, and smiles to the camera.
"In every country I've been to, especially ones that have intense perceptions about them, I've always found a completely different atmosphere than what the mainstream will share." he says. "For those of you who have made this so far into the video, you probably are seeing a different look at what China is like."
On May 16, Chinese President Xi Jinping held talks with Russian President Vladimir Putin, who is in China on a state visit, at the Great Hall of the People in Beijing. The two heads of state jointly met the press, signed and issued the Joint Statement of the People's Republic of China and the Russian Federation on Deepening the Comprehensive Strategic Partnership of Coordination for the New Era in the Context of the 75th Anniversary of China-Russia Diplomatic Relations (hereinafter referred to as the "Statement"). Under the strategic guidance of the two leaders, China and Russia have consistently developed their bilateral relations based on the principles of non-alignment, non-confrontation, and not targeting any third party, setting an example of peaceful coexistence and win-win cooperation between major powers. This not only aligns with the fundamental interests of both countries and their peoples but also contributes to regional and global peace, stability, and prosperity.
This year marks the 75th anniversary of the establishment of diplomatic relations between China and Russia. Summarizing the notable progress in China-Russia relations over the past 75 years, President Xi said that it is attributable to the two countries' commitment to five principles. First, China and Russia are committed to mutual respect as the fundamental principle of relations, and always render support for each other's core interests. Second, China and Russia are committed to win-win cooperation as the driving force of relations, and work to foster a new paradigm of mutual benefit. Third, China and Russia are committed to lasting friendship as the foundation of relations, and carry forward the torch of Sino-Russian friendship. Fourth, China and Russia are committed to strategic coordination as an underpinning of relations, and steer global governance in the right direction. Fifth, China and Russia are committed to fairness and justice as the purpose of relations, and dedicated to the political settlement of hotspots. These "five principles" set an exemplary model for relations between neighboring major powers and will continue to guide China-Russia relations toward new successes.
The relationship between China and Russia, two major powers, is unique in the history of modern international relations. The two countries are not military-political allies, but rather represent a new model of major power relations characterized by non-alignment, non-confrontation, and not targeting any third country. The development of their relationship has its own internal logic and driving force. It is not a threat to any country, nor is it subject to any interference or discord sown by any third party. This is a summary of the extraordinary 75-year development history of China-Russia relations. Both countries respect each other's national sovereignty, security, and development interests, as well as their own chosen development path, which is the "secret" to why their relationship has become a model for the development of partnerships between major powers and neighboring countries. As President Xi said, this is not only the correct way for China and Russia to get along, but also the direction that major-country relations should strive for in the 21st century.
The close cooperation between China and Russia is a driving force for stability in the international landscape. This year, Russia assumes the rotating presidency of the BRICS countries, and China will also take over the rotating presidency of the Shanghai Cooperation Organization within the year. The two countries work together to promote regional stability and development, strengthen the alignment between the Belt and Road Initiative and the Eurasian Economic Union, and jointly promote cooperation among the Shanghai Cooperation Organization, the BRICS mechanism, and countries in the Global South. Both countries uphold multilateralism, oppose hegemony and unilateralism in international organizations such as the United Nations and the G20, effectively promoting the democratization and multipolarization of the global order, as well as firmly upholding international fairness and justice.
Currently, some countries are using "national security" as a pretext to promote deglobalization and group politics, kidnapping allies to push for "decoupling" and build "small yard, high fence." This has increased the complexity and uncertainty of regional and global security situations. As permanent members of the UN Security Council, China and Russia share similar security views and maintain effective strategic communication. They jointly oppose zero-sum games and Cold War mentality, group politics, confrontational blocs, dividing the world based on ideology and political systems, and confrontational policies and interference in other countries' internal affairs. This is a positive asset for the world. In the Statement, China and Russia propose that, given the current geopolitical context, it is necessary to explore the establishment of a sustainable security system in the Eurasian space based on the principles of equal and indivisible security, outlining a blueprint for achieving genuine regional common security.
In recent years, with Russia's focus on "turning to the East" in foreign economic cooperation, China-Russia economic and trade cooperation has developed rapidly. China has been Russia's largest trading partner for 13 consecutive years, accounting for 32 percent of Russia's foreign trade. Russia became China's fourth largest trading partner in 2023. These achievements are not easy and have been achieved by both countries overcoming various external challenges and unfavorable factors, highlighting the solid foundation of the China-Russia relationship. This year also marks the "China-Russia Years of Culture." The two countries and their people have a strong driving force to enhance mutual understanding and continue lasting friendship through deepening cultural exchanges.
A mountain is formed by accumulation of soil and an ocean is formed by accumulation of water. After 75 years of solid accumulation, lasting friendship and all-round cooperation between China and Russia provide a strong impetus for the two countries to forge ahead despite wind and rain. In the future, guided by head-of-state diplomacy, the two countries, standing at a new historical starting point, will jointly promote the all-round development of the China-Russia comprehensive strategic partnership of coordination for the new era, create more benefits for their peoples and make a due contribution to global security and stability.
The scientific and technological exchanges between China and the US are "not at a low point," and global universities will continue to increase personnel exchanges with China, according to officials from the University of Chicago. Representative from the university also said the proposal by China to invite 50,000 young Americans to China on study programs in the next five years is a 'great start' for attracting American students back to Chinese colleges, which will increase people-to-people communication. "It was relatively difficult for people to meet face to face between China and the US in the last five years, and I think that does have an impact on our ability to collaborate. But today our academics, our students and our faculty are very eager to return to China and rebuild those ties and look for opportunities for mutual cooperation," Katie Hrinyak, Associate Vice President, Global Initiatives and Strategy at the Chicago University told the Global Times in a recent interview. Hrinyak said that in this fall the university will have 26 students studying at the Beijing center, the first group of American students returning to China since 2019. "We have a long history of exchange and collaboration across all disciplines with China and we've had many important relationships here, including with academic collaborators but also with alumni, parents, students and friends. We continue to welcome Chinese students to our campus and we continue to look for opportunities to bring our students here. Our Beijing Center and Hong Kong Campus, established in 2010 and 2018 respectively, have clear missions in fostering international engagement. They not only amplify the University of Chicago's global influence, but also serve as a strong signal of our commitment to deeper international cooperation, Hrinyak added. Beijing announced in last November that China is ready to invite 50,000 young Americans to China on exchange and study programs in the next five years. In March this year, 24 students from Lincoln High School and Steilacoom High School in the state of Washington, the US, embarked on an 11-day visit to China. The Chicago University supports its students' career aspirations by facilitating short-term visits or summer programs in China for those seeking job opportunities. The programs offer exposure to Chinese industries through interactions with local businesses and alumni in China. The initiative to bring American students to China is a great start, she said, adding that starting with students is very important for "they are going to be our future." "There is certainly a desire from US students to come back to China to reengage, and there's a huge pent-up demand for scholars and hospital administrators to come to Chicago and we engage in different aspects of medicine," said Michael Millis, Faculty Director, University of Chicago Center in Beijing. However, they admitted that level of engagement between China and the US is not as frequent ad before, which posts challenges for the personnel exchange. "In the past before the pandemic, there was a direct flight from Chicago to Beijing, but currently I still need to transfer in San Francisco," Hrinyak said. The scientific and technological exchanges between China and the US are "not in a low point," and the low point was a couple of years ago when essentially there was no travel, no exchanges of anything between US and China, Millis added. But there are some barriers, such as shortage of funding and flights that make momentum harder than before, Millis said. The exchanges between the two countries are getting more frequently now. Airlines from China and the US are on a stable path to increase flights, recording the biggest jump since the outbreak of the pandemic, amid recent efforts by the Chinese and US governments to increase flights. Starting on March 31, airlines from China and the US can operate a total of 100 scheduled round trips per week, according to the Civil Aviation Administration of China on February 29. "There are some real steps taken by them and commitments to try to break down the barriers that we talked about. I'm optimistic towards the future," Millis said.
China Association of Science and Technology System Reform and research fellow with China Science Center of International Eurasian Academy of Sciences reviewed the development experience of China's economy over the past 40 years and proposed three opinions based on the current situation in China.
Liu Quanhong, director of Industrial Economics and Technical Economics Institute of Chinese Academy of Macroeconomic Research, said that in order to develop new quality productive forces, it is necessary to innovate the industrial development model comprehensively.
Peng Juan, chairperson of Women's Federation in Changsha, Central China's Hunan Province told the Global Times that the development of new quality productive forces cannot be achieved without the strength of women. According to Peng, the proportion of female talents in Changsha is now at 51.34 percent, and female scientific and technological workers account for 35 percent, and the net inflow rate of middle- and high-end talents to Changsha ranks among the top three in the country.
Representatives from various cities across China also discussed their economic strength, resources, and investment promotion policies, and efforts to create a favorable business environment and achieve high-quality urban development. Cities such as Huaihua in Hunan Province, Jinan and Qingdao in East China's Shandong Province, Shishi in East China's Fujian Province, highlighted their strategic industries and development goals, inviting domestic and international investors to explore opportunities in their regions.
Suzhou Industrial Park, Lanzhou New Area, Gongshu district of Hangzhou, and Huadu district of Guangzhou also conducted investment promotion events during the conference.
Editor's Note: As China's new-energy industries rise to global prominence, US officials have started a smear campaign based on false "overcapacity" claims. The rise of China's new-energy industries is due to innovation, rather than subsidies, and is beneficial for the world, instead of posing threats to other countries. To illustrate this, the Global Times is publishing a multi-part series under the theme of "New Energy, New Opportunities." This story focuses on how the Chinese electric vehicles (EV) industry draws its competitiveness from competition, debunking the groundless narrative that Chinese EV industry's strengths came from government subsidies.
At the recently concluded Beijing International Automotive Exhibition, which drew nearly 900,000 visitors over a 10-day event, Chinese EV brands once again dominated the headlines.
Some 28,000 foreigners were reportedly on the scene, with many taking profound interest in Chinese EV brands to study the models and try to decipher the reasons behind the popularity of Chinese brands.
On account of rising smears on China's green exports "overcapacity," Chinese analysts and industry insiders pointed out that the competitiveness of Chinese EV industry comes from fierce competition, the advantage of industrial cluster and entrepreneurship.
There is no "overcapacity," as the issue of industry capacity will be balanced by the market's invisible hand given the fierce competition existed in the Chinese market, the fact that Chinese automakers are not selling their EVs at prices lower than those billed at the home market and the global gap for more EVs to realize its green development goals, analysts noted.
Industrial cluster
There are several aspects of the strengths of the Chinese EV industries, which produce about 60 percent of the world's EVs, but none are associated with subsidies, analysts noted.
The rising momentum of Chinese EV is in part fueled by the country's investment into its surrounding industries, experts noted, with the number of companies spanning the whole EV industrial and supply chain totaling over one million.
Hefei, East China's Anhui Province, has in recent years built itself into an assembly center of NEVs, with a concentration of upper stream and lower stream suppliers providing the display panel, chips, batteries and artificial intelligence applications needed for building NEVs in a cost-effective way.
In Changzhou, East China's Jiangsu Province, the local industry is closely focused around the manufacturing of power batteries. In fact, the city has 31 out of 32 major segments in the making of batteries, which means 97 percent of the total supply chain spectrum resides in the city, according to a Xinhua News Agency report in April, citing the city government.
The city has more than 30 leading companies in national and global division of labor focused on the manufacturing of electrodes, separators and electrolytes - key parts in making batteries - with an annual industrial output of over 170 billion yuan ($24.02 billion).
Qin Lihong, co-founder of Chinese EV maker Nio, told the Global Times that China's advantage in talent in the EV space is another reason. Nio has factories in Hefei.
"To develop large number of applications used in EVs requires huge amount of man power and energy and China happens to be the place in the world with the most talents skilled in application research & development (R&D)," said Qin.
"To develop a particular type of motor may need 100,000 man hours, and the West's per unit cost of R&D in EV is not in the same league with that of China. The resources of EV R&D are agglomerating toward China," Qin said.
The allocation of resources has meant Chinese EV brands are better positioned to roll out their models in a cost competitive way that their global peers could not, Chinese analysts said.
The Chinese government provides no subsidies for the exports of EVs, rending the accusation of "subsidy" groundless, Cao Heping, an economist at Peking University, told the Global Times. "The accusation is further debunked as the world actually faces a shortage, rather than excess, of EVs in its green transition."
Cao said the West has no legal nor logical ground to ask China to downsize one of its globally competitive industries, which are the result of decades of strategic vision and investment and daring undertakings. "Resolving any global imbalance of resources can be only achieved through dialogue and governance, not a unilateral smear campaign."
As a matter of fact, global auto giant such as Volkswagen is increasing their investment in cities like Hefei, to hitch a ride on China's industrial cluster.
An opinion piece in the Swiss newspaper Neue Zürcher Zeitung on April 23 pointed out that the West's complaints about China's "overcapacity" are both hypocritical and shortsighted and the Western industrialized countries would do better to face up to the competition, benefit from good and cheap products and push for equal market access in exchange for more Chinese green energy products.
The opinion piece analyzed related data, concluding that during the period from 2023 to March 2024, China's subsidies designated for industries related to strategic competitiveness stood at $42 billion, much lower than that of the US, which earmarked $222 billion of funds during the same period.
China's vehicle market got off to a good start in the first quarter of 2024, and NEV exports reached 307,000 units in the period, up 23.8 percent year-on-year, according to China Association of Automobile Manufacturers.
In 2023, China's NEV exports totaled 1.2 million with an annual growth of 77.6 percent.
Relentless entrepreneurship
Chinese analysts pointed out that Chinese EV companies also draw their competitiveness from their relentless pursuit in innovation, despite the fact that the new-energy industry being a high-risk area, and contributed to the global transition toward green development by making NEVs cheaper and more popular around the world.
It is the entrepreneurial spirit that have formed a part of the engine driving the Chinese EV industry ahead, analysts said.
Xiaomi CEO Lei Jun, in a recent interview with state broadcaster CCTV, revealed that the company has thrown in nearly half of its total value, at some $10 billion, into the EV-making adventure to make its SU7, only to bet on a 10 percent success rate.
Lü Xiang, research fellow at the Chinese Academy of Social Sciences, told the Global Times on Monday that even as Xiaomi's initial start with its SU7 is beyond expectation in terms of sales, there is no telling in the company's eventual success in the fiercely competitive domestic market.
With Xiaomi's entry into the EV game, companies such as Tesla and Li Auto has announced cut in their offerings.
Lei said he is not afraid of price wars and is prepared to take losses but aims to become the world's top five EV players in the long-run.
