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China Reform Monitor - No. 761
China-Russia trade collapses in first quarter;
Light shines on Beijing's plans for aircraft carrier fleet
Edited by Joshua Eisenman
May 18, 2009
Zhai Jun, China’s Assistant Minister of Foreign Affairs (MFA) responsible for Africa, has become the first Chinese official to visit Zimbabwe since the formation of the new political coalition government, the Zimbabwe’s official newspaper, The Herald, reports. MFA’s website confirms that Zhai met with both Zimbabwe’s new Prime Minister, Morgan Tsvangirai, and signed deals worth about $10 million “to boost economic and technical cooperation.” Beijing is financing the establishment of Zimbabwe’s new Agricultural Technological Demonstration Center worth 30 million yuan (about $4.3 million) and gave a $5 million cash grant to support the coalition Government. According to Tsvangari: “China has committed itself to renegotiate on financial cooperation that had been closed, we will negotiate on areas of cooperation such as energy and telecommunications among others."
[Editor’s Note: This visit could mark a notable change in Beijing’s policy towards Harare. For decades Beijing has financially, militarily and politically supported Zimbabwe’s despotic leader Robert Mugabe’s ZANU PF party. In particular, Beijing’s decision to veto a U.S. and European UN Security Council resolution to increase sanctions on ZANU-PF officials responsible for brutal attacks against Mr. Tsvangari’s opposition party was mentioned by Robert Mugabe who “express[ed] deep gratitude” for Beijing’s “support at the UN.”]
The devaluation of the ruble, security delays at the border, and deteriorating cross boarder infrastructure have led to a steep decline in Sino-Russia trade between January and March 2009. During this period bilateral trade fell 42 percent to $7.3 billion, when compared with 2008 levels. Russian exports to China shrunk 40.3 percent to $3.55 billion and imports from China decreased 43.5 percent down to $3.73 billion. Border checkpoints – including the Zabaikalsk-Manchuria checkpoint – have been closed and when open procedures can take 12-24 hours. Moscow’s 35 kilogram baggage weight limitations have also reduced Chinese imports and, in turn, Russian consumers’ purchasing power, Russia’s Interfax News Agency reports. Weak border infrastructure has also undermined Russian-Chinese trade. There are few cross-border checkpoints and railways; one railway track is not electrified another is a single railway track and there are still no bridges across the Amur River.
Chinese police have confiscated 11.93 million fake tax invoices and arrested 750 suspects in a nationwide crackdown, according to a Ministry of Public Security statement covered by the official People’s Daily newspaper. The ministry’s website reported that it investigated 461 cases involving fake invoices and infiltrated 91 locations where the forgeries were made. Fake invoice vendors are common in Chinese cities, where they offer receipts used to support tax evasion. Police have pursued 176 cases involving 336 million yuan (about $50 million) and arrested 135 suspects accused of using the fake invoices for tax evasion.
China’s Navy has moved the defunct 'Varyag' aircraft carrier that it purchased as scrap from Ukraine to the Dalian Naval Academy where it is likely to be refurbished and fitted with new engines. The Indian Navy estimates that the refurbished Soviet-era Kiev-class warship, which has been renamed the 'Shilang,' will be ready for induction into the Chinese Navy as a training platform by 2012. The carrier will be used exclusively to train Navy personnel for the three indigenous carriers that Beijing will construct over the next decade, the Indian Express reports. In September last year, China started training its first batch of fighter pilots to operate from the country's future fleet of aircraft carriers. The first batch of 50 pilot cadets were inducted at the Dalian Naval Academy to undergo training on ship-borne operations. To calm international tensions the official People’s Daily published an editorial claiming that: “China's promise of peaceful development can also guarantee that Chinese aircraft carriers will always be peacekeepers.”