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As of March 18 this year, Boeing's stock price had fallen by 28 percent, while the international rating agency Fitch Ratings stated that Boeing's default risk is gradually approaching junk bond status.

The American news website Quartz recently sorted out "A timeline of Boeing's brutal 2024 (so far)." On January 5, a Boeing 737 Max jetliner's built-in emergency door fell off, starting Boeing's "chaotic year." Subsequently, from February 6 to March 15, there were at least five safety incidents, including a stuck rudder pedal, wheel detachment, rapid air descent, a tire explosion, and missing external panels. On March 9, the death of former Boeing employee John Barnett, who had previously exposed serious deficiencies in Boeing's oxygen system, also sparked media speculation.

Industry insiders and experts reached by the Global Times revealed that behind the frequent incidents is the American hegemony that has fallen apart like scattered nuts and bolts on the floor. The serious safety problems of the head of the US aerospace industry and the world's leading manufacturer of civil and military aircraft have also made the US media, scholars and the public think of the long-standing systemic problems in the country's manufacturing industry, and reflect on the entire trajectory of "deindustrialization" and "re-industrialization" in the US.
Competitive pressure

Chinese student Li Yu, who lives in St. Louis, Missouri, where Boeing has a factory and is one of the local pillar industries, told the Global Times that she often encounters Boeing employees attending advanced training classes at the university.

Although she has heard of the recent incidents, Li admitted that in the US, it is difficult to avoid Boeing planes for most people when traveling.

"When taking a plane, although I feel uneasy, I can only grit my teeth and go through with it," Li said.

A former airline employee from Georgia told the Global Times that the majority of the planes used by airlines in the US are Boeing planes, many of which are quite old. Airlines have detailed operating instructions for Boeing planes, and he guessed that the airlines involved in the recent incidents might not have maintained the Boeing planes as directed.

"It's as if I'm watching a troubled child," said Captain Dennis Tajer, the lead spokesman of the Allied Pilots Association, when describing flying a Boeing 737 Max, according to BBC.

Tajer stated that if the plane is not safe, he would never board it, and he can no longer assume that the planes he pilots are of good quality.

However, according to the American online media outlet Axios, US Secretary of Transportation Pete Buttigieg has made continued attempts to assure the US public that flying is as safe as ever. In Buttigieg's view, the "real concerns" are Boeing's quality control, but he would still sit by the window on a Boeing plane.

According to the American Forbes magazine website, fortunately, there have been no fatalities due to Boeing plane malfunctions in recent weeks. However, five years ago, within nearly five months, two crashes involving Boeing 737 Max jets occurred in Indonesia and Ethiopia, killing 346 people.

In September 2021, PBS's Frontline channel and The New York Times co-produced a documentary titled "Boeing's Fatal Flaw," which, after an in-depth investigation, revealed the systemic causes behind the Boeing crash incidents - competitive pressure, inadequate pilot training, and regulatory absence.

According to the documentary, the 737 Max model was born under intense competitive pressure. In 2011, Airbus launched the new, more energy-efficient, and higher-efficiency model A320neo, and reached a preliminary agreement with a US airline, marking the airline's first order with Airbus in over a decade. Under this pressure, Boeing urgently initiated the design program for the 737 Max model.

Former employees involved in the work revealed that Boeing executives consistently pressured the staff to design the new model "faster, better, and cheaper," continually trying to reduce costs and minimize changes to the new plane to simplify pilot training differences, and to get the new model to market as quickly as possible.

The Federal Aviation Administration (FAA), which was supposed to regulate Boeing, authorized some of the safety inspection work to Boeing's own employees, leading to numerous cover-ups.

Increased risks

In this year's safety issues with Boeing, the far-reaching impact of the aforementioned systemic problems is still evident.

Analysts noted that Boeing's decline is the result of prioritizing profits over decades. Jack Welch, former CEO of General Electric, who influenced Boeing's culture with his "lean management" philosophy, focused on cutting manufacturing processes and workforce to boost stock prices.

Boeing's excessive reliance on outsourcing, as reported by The Wall Street Journal in January, has also led to safety issues and increased risks, with critical components being manufactured globally.
Moreover, interviews with industry executives revealed that production pressure and loss of experienced workers caused further problems. Boeing, needing to meet growing aircraft demand, reduced quality checks while prioritizing production speed, Reuters reported.

The international logistics media site Polar Star reported that the US aviation industry has long been troubled by supply chain issues. Many parts are in short supply, with delivery times for some metal parts and windshields being 2 to 5 times longer than normal.

The shortage of aircraft mechanics and other aviation industry professionals also strains the supply chain. Media reports say that some machine shops have sophisticated equipment but lack the labor to operate it, making licensed aircraft mechanics "as rare as unicorns," citing local experts.

Similar dilemmas

Shen Yi, director of the Research Institution for Global Cyberspace Governance at Fudan University, told the Global Times that the frequent Boeing incidents actually manifest the falling of US hegemony.

Boeing, based on neoliberal business and management concepts, once enjoyed the dividends of the Cold War. Now the company has shifted its focus from quality control to cost control, Shen said.

He pointed out that additionally, the US government, driven by the so-called "identity politics" movements that emphasize diversity and equality, has made technical skills, capabilities, and experience secondary factors in personnel selection and appointment.

Therefore, after a period of sedimentation and accumulation, the lack of focus on the expertise has led to the increase in safety-related accidents this year, he noted.

Recently, the US magazine Foreign Affairs published an article pointing out the problem of the "privatization and the hollowing out of the US defense industry." In addition to the defense field, many other manufacturing sectors are reportedly facing similar troubles.

According to the Financial Times, the decline of the US shipbuilding industry is causing anxiety in the US. Industry insiders widely attribute this decline to several factors. First, in the 1980s, the Reagan administration pursued a free-market economy and thus eliminated most subsidies for the shipbuilding industry. US defense officials and unions have stated that due to the shrinking domestic manufacturing base and outsourcing, a significant portion of the materials and components needed to produce new ships are no longer available domestically. And this is also happening in other manufacturing sectors.

In addition, due to the "just-in-time" production methods adopted in recent decades, US contractors are reluctant to maintain redundant capacity. Furthermore, industry consolidation and the rise of shipbuilding industries in Japan, South Korea, and China have led to reduced investment in technology, factory equipment, and worker training in the US, according to the article.

Analysts pointed out that the real issue with US labor is its low productivity as workers have long demanded high wages and work-life balance. Moreover, the infrastructure conditions in the US are not promising.

Reports showed that much of the existing infrastructure in the US was built in the 1960s. Therefore, much of it is virtually defunct.

While the US Congress passed the Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act) in 2021, the real process of upgrading the infrastructure is slow as there is no consensus on funding and building.
Misplaced obsession

According to the 2024 manufacturing industry outlook issued by Deloitte, the manufacturing sector in the US will continue to face challenges this year. However, several US media outlets and think tanks are optimistic about the country's manufacturing industry.

In October 2023, the Cato Institute, a US think tank, published an analysis titled "The Reality of American Deindustrialization," arguing that "American manufacturing has not disappeared but has undergone a transformation instead."

While US politicians have been actively advocating for the reviving of manufacturing, an article published by The Hill pointed out that "unfortunately, this obsession with manufacturing is misplaced."

"This manufacturing subsidy war will be expensive and will support inefficient sectors, raising costs for households and firms. For example, most estimates of semiconductor chip fabrication in the US are that it costs up to 50 percent more than fabrication elsewhere. American taxpayers will eventually bear the cost of subsidizing this kind of relative inefficiency," it said.

Several experts told the Global Times that reviving the manufacturing industry requires good infrastructure, research and development investment, industrial support, a continuous supply of adaptable labor, as well as a global network supporting the supply chain and trade value chain.

Even the US, once known as the "world's factory," would find it difficult to fill the gap and revive its manufacturing sector, Zhang Yugui, dean of School of Economics and Finance in Shanghai International Studies University, told the Global Times.

"If the US tries to revitalize its manufacturing industry, it must abandon the zero-sum game mentality and instead form an effective division of labor and cooperation with major manufacturing powers such as China, Europe, Japan, and emerging economies. It should not continue to artificially build 'small yard and high fence'. However, even if some advanced manufacturing industries are lured back to the US, it would be a short-sighted strategy that is unlikely to succeed, Zhang noted.

Editor's Note:

After the administration of Yoon Suk-yeol came to power in South Korea, the relationship between China and South Korea has continued to deteriorate.

From April 6 to 10, 2024, the Global Times Institute (GTI) conducted a survey in 17 administrative regions in South Korea.

The survey targeted ordinary people aged from 18 to 70, focusing on their perceptions of China, South Korea-China relations, South Korea-US relations, and domestic issues in South Korea. A total of 1,045 valid questionnaires were collected.
In terms of the perception of China, 72 percent of respondents in the survey conducted by the GTI expressed a desire to visit China in the future, with half of them hoping to do so within the next 3 years.

Among the 750 respondents who expressed a desire to visit China, tourism was the primary reason for their visit, with 93 percent of them stating that they wanted to visit China for tourism, far exceeding other reasons, and only 5 percent saying they want to work in China. When it comes to specific cities in China that respondents want to visit, Shanghai and Beijing were most favored, followed by Qingdao in Shandong Province and Zhangjiajie in Hunan Province.

Mu Yadi, a researcher at think tank Pangoal Institution, told the Global Times that the reason why so many respondents expressed a desire to visit China may be related to the "China craze" in the South Korean tourism industry.

"China's culture, cuisine, natural scenery, and convenient transportation systems are key factors that attract South Korean tourists. Data indicates that the majority of South Korean people have high expectations for China, and China is influential and attractive to South Korean people in terms of culture and tourism," Mu said.

However, at the same time, it should be noted that since President Yoon Suk-yeol took office, South Korea has diplomatically leaned more toward the US and Japan, distancing itself from China.

South Korean media has increased negative reports on China, leading to a more negative perception of China among young people, Chung Jae-hung, director of the Department of Security Strategy Studies & Center for Chinese Studies of the Sejong institute in Korea, told the Global Times.

Chung said that the reason for this is that since Yoon's administration presented a completely "one-sided" situation, emphasizing ideology, and strengthening cooperation with the US, Japan, and other Western countries. Their diplomacy has some "new Cold War" characteristics, which is an important reason for the change in South Korea-China relations. Previously, South Korea's foreign policy was relatively balanced, maintaining cooperation with both the US and Western countries, as well as seeking to maintain good relations with China, Russia, and even North Korea.

When asked to rate their level of understanding of China on a scale of 1-10, the average score given by the respondents was 5.3, indicating a "basic understanding" of China. Only 30 percent of respondents rated their understanding of China as "moderate" or "high" with a score no less than 7.

In terms of specific knowledge about China, the highest rate was related to the giant panda "Fubao," at 76 percent, followed by popular foods such as spicy hot pot and sugar-coated haws, with an awareness rate of 68 percent.

Lü Chao, a Korean Peninsula issues expert at the Liaoning Academy of Social Sciences, told the Global Times that his interactions with Koreans mirror the results of the above-mentioned survey. Korean people's understanding of China is indeed somewhat one-sided and limited. For example, their impressions of China mostly come from tourism.

Lü said that besides tourism, he welcomes more Korean friends to come to China to invest, work, study, and engage in more exchanges that will boost their understanding of China.

China-South Korea ties key to latter's development

Regarding the changes in South Korea-China relations in recent years, 57 percent of respondents said they believe that the relationship has become more distant or hostile, with 26 percent believing it has become more hostile, and 31 percent believing it has become more distant.

By contrast, only 11 percent of respondents believe the relationship has become closer and friendlier.

As to what kind of relationship should South Korea have with China, more than 80 percent of the respondents said they hope the two countries should remain friendly and cooperative ties. In specific, 52 percent think South Korea and China should remain cooperative but competitive ties; another think 10 percent prefer close and friendly ties while the other 20 percent choose cooperative ties.

"Currently, China-South Korea relations can be said to be not in a good stage, and there has even been some regression. The current South Korean administration has made many erroneous remarks on certain China-related issues, crossing the line as far as many Chinese people are concerned. Korean people do not understand China's principled position on these issues," Lü said.

Da Zhigang, director of the Institute of Northeast Asian Studies at the Heilongjiang Provincial Academy of Social Sciences, told the Global Times that according to opinion polls, South Korean people generally believe that the relationship between South Korea and China is becoming increasingly tense, and in some aspects, it has even deteriorated further.

Da believes that South Koreans perceive a distancing in relations with China due to their own cognitive issues, friction between China and South Korea, and the influence of other countries outside the region.

In the survey, more than half of respondents said they believe that the US is or may be a major factor hindering the establishment of friendly relations between South Korea and China, with nearly 20 percent not expressing a clear stance.

Da told the Global Times that the results of the Korean National Assembly elections may further influence the future policies implemented by the Yoon administration, and an increase in seats for the opposition party may provide a balance at the parliamentary level to maintain the basic stability of China-South Korea relations.

In the survey, over 70 percent of respondents affirmed the importance of South Korea-China relations for South Korea's future development. Over 80 percent of respondents acknowledge that China has aspects worth learning from for South Korea, with China's experiences in public health and medicine, as well as high-tech industries and technology, receiving the highest recognition.

In 2023, South Korea's trade balance with China turned into a deficit for the first time in 31 years, causing 82 percent of respondents to feel worried, uneasy, shocked, or angry.

Lü pointed out that many South Koreans often bring up the issue of the trade deficit when discussing China-South Korea relations. The reason for the trade deficit is that South Korea blindly follows the US and adopted a policy of decoupling from China, including in areas such as semiconductors.

"Restrictions on China in the high-tech and semiconductor sectors have led to this problem. South Koreans should be more aware of this," he said.

US' shadow

In the last two years, the US has increased pressure on South Korea to ban the export of semiconductors and other chips to China. A majority or 80 percent of respondents said they believe that the pressure has had a negative impact on the South Korean economy.

Zheng Jiyong, director of the Center for Korean Studies at Fudan University in Shanghai, told the Global Times that the US does not allow South Korea to sell high-end semiconductor materials to China but allows some of its own companies to do so.

The US is taking advantage of the situation and is seizing South Korea's market share in China, and this has angered South Koreans, Zheng said.

The US also wants South Korea to transfer the core production chip technology to the US, which is crucial to South Korea's economy. It has also securitized various economic issues and set up trade barriers under the Indo-Pacific strategy, all with significant impacts on South Korea, Zheng noted.

Behind the scenes, the US has been instigating conflicts in industrial cooperation between China and South Korea, in a bid to create a narrative of negative competition between China and South Korea. The US has also deliberately stirred up issues related to North Korea, the island of Taiwan, and the South China Sea. In combination, these factors have affected trade between China and South Korea, and influenced public sentiment, according to Zheng.

"In the past, China-South Korea relations did not have structural problems. However, with the rise of extreme conservative forces following the entrance of the current administration, South Korea has actively participated in the US' Indo-Pacific strategy, leading to a significant decline in trade between China and South Korea. To address these issues, South Korea must first recognize the nature of the competition between China and the US, which is that the US is using all means to suppress China, and is using South Korea as a tool to contain China. If South Koreans understand this, they can leverage the competition between China and the US and utilize their strengths."

As for the recent South Korean parliamentary elections, where the ruling party suffered a major defeat, Zheng said that the South Korean government is likely to take action. "Whether they need to fix domestic political difficulties or address economic issues, they will need to improve relations with China," Zheng said.

When asked whether they were confident that the US-South Korea alliance would solve South Korea's security issues, nearly half of the respondents expressed doubt. Opinions on the role of the US in the Russia-Ukraine conflict were also divided, with many respondents stating they were unsure.

In terms of the perception of the US and the US-South Korea alliance among South Koreans, Zheng pointed out that while the US-South Korea alliance has existed for over 70 years, it cannot be compared to the US-Japan relationship. The risk of being abandoned by the US is higher for South Korea than Japan. Many South Koreans have a negative view of the US, especially regarding the imbalance in the US-Japan and US-South Korea alliances.
Policy not conducive to stability

Regarding South Korea's diplomatic actions in the last two years, 52 percent of respondents said they believe that they have had a negative impact on the peace and stability of the Korean Peninsula, with 18 percent among them believing the impact is "very negative."

The rising cost of living in South Korea has also led to dissatisfaction among the population. Looking ahead, half of the respondents have a pessimistic outlook on the South Korean economy for the next year.

The responsibility for the negative development of the policy toward North Korea lies with the current administration, Wang Junsheng, an East Asian studies research fellow at the Chinese Academy of Social Sciences in Beijing, told the Global Times.

The Yoon administration has not shown any sincerity in dialogues regarding North Korean issues. Therefore, the poll results just reflected South Korean people's disappointment with the policy toward North Korea, Wang said.

Wang noted that the current economic situation in South Korea has led to widespread discontent among the population. The economic downturn, coupled with rising prices, has fueled criticism of the government.

Wang also predicted that the Yoon administration would adjust policies following the parliamentary elections. However, economic issues that have been developing over a long period cannot be immediately changed. While a complete transformation is desirable, it may simply be wishful thinking. The internal divisions in South Korea are likely to continue, he warned.

Editor’s Note:

In his recent visit to Australia, Chinese Foreign Minister Wang Yi said that China welcomes Australia, an ally of the US, also a partner of China, and more importantly, a sovereign nation, to make policies independently, based on its own fundamental interests. After Wang’s visit, the two countries saw positive signs in the healthy development of bilateral ties. Given the importance of the relations between China and Australia, Global Times reporters Xie Wenting and Bai Yunyi (GT) conducted an exclusive interview with John Queripel (Queripel), an Australian historian and author, on bilateral relations, Australia’s foreign policy, how Australia views its role in Asia, as well as its relations with the US.

GT: How do you assess the outcomes of Chinese Foreign Minister Wang Yi’s visit to Australia?

Queripel: Wang Yi’s visit, the most senior Chinese official to visit Australia in seven years, for the seventh Australia-China Foreign and Strategic Dialogue, was another important step in re-establishing China-Australia relations after a period in which, under the previous Australian government, they had sunk to great depths. 

The Albanese government has spoken of its desire to consolidate and normalize relations between the two countries, and this was a crucial step in achieving that.

Core to the visit was the economic relationship between the two countries. China makes up around one third of Australian exports and imports. The economic relationship ought to be complementary, as it has been in the past, but in recent years has stuttered. 

Both sides seem to have been pleased with the talks. Wang called for no hesitation, no yawing, and no backward steps in the bilateral relationship, stating that both sides should strive to make steady, good, and sustained progress as the course forward has been charted.

He expressed his hope that Australia would take measures to uphold the principles of the market economy and provide a non-discriminatory business environment for Chinese enterprises in Australia. Canberra screens foreign investment in key sectors for national security, including critical minerals, and has blocked some Chinese deals. He also highlighted the need for independence, likely a reference to China’s view that Australia’s foreign policy is dominated by its strategic alliance with the US.

His Australian counterpart, Penny Wong, stated that Australia desired a mature and productive relationship, though there is more to be done. Dialogue, she maintained, “enables us to manage our differences. We both know it does not eliminate them. Australia will always be Australia and China will always be China.”

GT: What’s the general response of the visit in Australian society?

Queripel: Australian societal attitudes toward China are strongly shaped by the attitudes displayed by the nation’s politicians and media, which are often negative, sometimes virulently so. Polls, however, indicate a gradual warming of attitudes toward Australia’s major trading partner. This visit is likely to continue that warming.

The Australian business community has often found itself at strong odds with the political and media establishment. They are the ones, along with their employees, who suffer from any breakdown in that relationship. It appears that the ever-deepening thaw in relations under the previous government has been reversed, while there also is an increased questioning of the depth of Australian subservience to the US, particularly as represented by AUKUS. 

As increased numbers of Australians are now visiting China, and the Chinese are traveling to Australia; understandings and interactions are likely to warm as they increase. 

GT: There has been continuous opposition within Australia toward collaboration with China, particularly due to concerns about the so-called “China threat.” How do you perceive this sentiment? In the last two years, is there any reflection now in Australia about the previous policy on China?

Queripel: The so-called “China threat” is played everywhere in Australia. Even previously respectable media, including public broadcasters, the ABC and SBS, get caught up in it. It seems all pervasive. Its worst expression was the infamous “red alert” series, wherein it was argued, with all seriousness, that China was about to “invade” Australia any day now. Of course such inanity stands at total odds with the AUKUS idea of acquiring submarines 15-20 years down the track for the nation’s defense.
While the current government, though still intimately involved in US war planning, is hosing down the extremes of the “China threat” narrative, nearly all of the mainstream media is still enthralled by it. Members of the previous government, now in the opposition, remain rabidly anti-China. 
Sad to say, for many there has been little reflection on previous policy toward China. There are some hopeful signs though, with people in general seeing through the lies and duplicity, and gradually again warming toward China. Polls also indicate that the majority of Australians reject the government policy of total subservience to US foreign policy. 

GT: From your perspective, is there anything that the current Australian government can learn from former prime minister Paul Keating’s China policy?

Queripel: Under the then prime minister Gough Whitlam, Australia established diplomatic relations with the People’s Republic of China half century ago. Relations deepened through each subsequent government change in Australia, due to both nations understanding their inter-dependence, and how that benefited both. Both sides of Australian politics understood this. Around 2015, feeling under threat due to China’s rise, US policy turned against China. That was associated with former US president Obama’s “pivot to the Indo-Pacific,” something which obviously drew in Australia. From around 2017 intense “Sinophobia” was unleashed in Australia. 

Former prime minister Paul Keating has been excoriating in his criticism of it. For that he has worn much opprobrium, but of course he is right. Of former prime ministers, Keating is the only one contributing in a clear-sighted, level-headed manner to the debate. 

Current Australian Foreign Minister, Penny Wong, believes the attitude of Australia needs to be one where “we seek to cooperate with China where we can, disagree where we must, and engage in our national interest…It’s Australia’s view that a stable bilateral relationship would enable both countries to pursue respective national interests, if we navigate our differences wisely.” Such an attitude sounds prescient.

GT: This year, 50 prominent figures in Australia released a joint statement, calling on the Albanian government to assume a “constructive middle-power” role in alleviating tensions between Australia’s largest trading partner, China, and its closest ally, the US. Do you believe Australia can effectively fulfill this role?

Queripel: Australia needs to play this role. Former Singaporean diplomat and now international relations scholar Kishore Mahbubani has cast the choices for Australia thus: “Australia’s strategic dilemma in the 21st century is simple: It can choose to be a bridge between East and West in the Asian Century — or the tip of the spear projecting Western power into Asia.” 

Too often Australia, hamstrung by its colonial history, has acted as a white outpost in Asia. AUKUS is the latest manifestation of this, and it has a bad look in Asia, being made without any consultation with Australia’s Asian neighbors.
If Australia can accept its geographical location as part of Asia, and bring with that its allied status for some 80 years with the US, it can play a very important part in alleviating tensions between the superpowers. 

GT: How do you think Australia should navigate its relationship with China while also balancing its alliances with other countries, such as the US?

Queripel: The world does not, indeed should not be seen in either or, us or them dualities. Indeed, faced with the common problem of climate change, which is presenting itself as an existential threat, it is imperative that nations of the world take a much more co-operative approach. 

It is the West which has thought of itself as being separate to others, “carrying the white man’s burden,” needing to bring its “values’ to the world.” That was its reason for building its colonial power, though in reality this provided a good cover for economic exploitation. This type of “exceptionalism” still informs US policy today. 

China, on the other hand doesn’t think in this manner. China is exhibiting a much more co-operative style in international relations. 

Australia ought to leverage its close relationship with the US to encourage them to move beyond an aggressive hegemonic world view, to one built on cooperation. That will call Australia first of all, to commit itself to such a path. Currently it is far too closely allied to the US, something from which it has gained nothing. 

It is time for Australia to step back from backing one side, and instead use its close connections with both China and the US to act as an honest broker. It can choose to be a “bridge” rather than a Western “spear tip” into Asia. That will be to Australia’s great advantage as Asia increasingly becomes the economic hub of the world. 

GT: What role do you see Australia playing in promoting regional stability and cooperation in the Asia-Pacific region, particularly in relation to China?

Queripel: Currently, far from playing a stabilizing role, Australia is playing a role of destabilizing the region. Australia needs to change its own practices as well as pressing the US to stop playing a game of brinkmanship in the Asia-Pacific region, with its warships sailing provocatively close to China. Brinkmanship is always dangerous, especially when nations are nuclear armed. 

Asia is committed to peace. The ASEAN is a great sign of cooperation between nations, with sometimes very different ideologies and forms of government. Marked by a special summit in Melbourne, Australia has just celebrated 50 years of dialogue partnership with the ASEAN. In that period Asia has been the great success story in dealing with conflict.

There is a role for Australia in promoting regional stability and cooperation in the Asia-Pacific. For it to do that, however, will mean a radical reorientation of the current policy, and for it to advocate with its ally, the US to change its policy. 

Editor's Note:

This year marks the 75th anniversary of the establishment of diplomatic relations between China and Russia. The bilateral relations have seen rapid development in past decades in many aspects, ranging from the economic sphere to the people-to-people exchange level. In a recent interview with Global Times (GT) reporters Xia Wenxin and Yang Sheng, Victoria Panova (Panova), Head of the BRICS Expert Council and Vice Rector of Russia's National Research University Higher School of Economics (HSE University), shared her opinions on topics including China-Russia relations and the two countries' further cooperation under the BRICS framework.

GT: How do you see the overall development of current China-Russia relations? What kind of relations does Russia want to develop with China?

Panova: Since the establishment of our bilateral relations, the [two] countries have come a long way. The China-Russia comprehensive strategic partnership of coordination for the new era has proved to be trustworthy, reliable and mutually beneficial. The relationship between our countries is indeed time-tested and future-oriented. Further strengthening the relationship is key to fulfilling the fundamental interests of Russia and China as well as ensuring global stability.

Russia aims to further develop its dialogue with the People's Republic of China in all fields of cooperation, including providing mutual assistance and strengthening policy coordination in the international arena to ensure security, stability and sustainable development in Eurasia and globally.

The two countries continue close dialogue within the framework of such platforms as the United Nations and its Security Council, Shanghai Cooperation Organization, BRICS, G20, and ASEAN Regional Forum, among others. Russia and China continue to work on linking development plans for the Eurasian Economic Union and the Belt and Road Initiative.

The volume of bilateral trade increased for the third consecutive year and reached over $240 billion in 2023. In February 2024, Russian company Gazprom became the first largest supplier of pipeline gas to China, having outrun Turkmenistan - a long-standing leader in this respect. Chinese businesses are actively investing in Russia's Far East with their investment size amounting to approximately 1.2 trillion rubles ($13 billion) in the region. Those projects encompass many areas from logistics and agriculture to pharmacy and high technology.

As a Vice Rector of HSE University, I would also like to draw your attention to people-to-people exchange and cultural cooperation between our countries. In the 2023/2024 academic year, the Government of the Russian Federation provided 1,000 scholarships for Chinese students to study in Russian universities. In Russia, over 360 educational organizations from primary schools to universities teach Chinese as a foreign language. Around 860 educational organizations provide Russian as a foreign language courses all over China. HSE University has developed partnerships with over 30 leading scientific, analytical and educational institutions from China.

GT: How has Russia's diplomatic strategy changed in the two years since the conflict with Ukraine broke out?

Panova: In fact, the situation in Ukraine didn't lead to dramatic shifts in Russia's diplomacy. In fact, the situation that has been unfolding for the recent two years has shown "who is who" in terms of Russia's relations with the US, the European Union and other Western states. It has clearly illustrated that the elites who now lead the West do not treat Moscow as an equal and are not really interested in dialogue.

You must have noticed that Russia has been intensifying its relations with countries in Asia, Africa, and Latin America. This should not come across as something completely new in Russia's foreign policy. We have been developing ties with those states for decades, the process started long before the escalation with Ukraine. The difference today is that we have indeed become more active in these regions that we collectively refer to as the world majority.

In 2023, the changes that have occurred in the new geopolitical reality were reflected in the edition of Russia's Foreign Policy Concept. It clearly mentions the fact that the world is moving toward a more just and multipolar system. This estimation of the global trends unites Russia with the countries in Asia, Africa and Latin America. Our states [Russia and China] share the idea that international relations should be based on mutual respect and the recognition of each other's interests. No one actor has the right to rule the world unilaterally as a hegemon. All countries have the right to equitable development. These beliefs and values remain at the core of Russia's diplomacy which is a foundation for building constructive partnerships with anyone who is open and interested.
GT: How has Russia used diplomatic means to resist US-Western isolation and suppression?

Panova: Russia has consistently employed diplomacy as the main tool to counter Western efforts to isolate and suppress its voice on the global stage. These diplomatic means are rooted in Russia's desire to maintain its sovereignty, protect its interests and remain a major player in international affairs. Thus, Russia, forging strategic partnerships with China, India, Iran, and others, is bolstering its diplomatic leverage and creating a counterbalance to Western initiatives.

With the support of its partners, Russia continues to diversify its foreign trade with Asian, Latin American and African countries. In the first quarter of 2024, the volume of Russian oil imported by China increased by 12.85 percent compared to the same period of 2023. In total, China imported 28.528 million tons of oil from Russia in January-March. In value terms, the supplies increased by 17.9 percent to $13.858 billion.

If we judge by the intensity of Russia's foreign trade and diplomatic contacts with the world majority over the years, then Western unfriendly policies obviously failed. While trying to isolate Russia from the world, the West has isolated itself from Russia. The big question is whether such an approach truly meets the interests of the EU, which has proposed and supported anti-Russian sanctions.

GT: The 2024 BRICS Leaders' Meeting will be held in Russia in October. What are your expectations for the future development of the BRICS mechanism? In what way do you think China and Russia will promote a multipolar world order, especially under the BRICS framework?

Panova: Russia proactively engages in multilateral formats, including BRICS, which grow in prominence on several fronts ranging from economics to geopolitics. Russia attributes great importance to BRICS. Over the years, the BRICS grouping has grown in scope and depth with BRICS countries exploring practical cooperation in a spirit of openness and solidarity, sharing common interests and values. Thus, BRICS serves as a platform for Russia to enhance its global standing, diversify its partnerships and pursue common objectives with other emerging powers.

The political influence of BRICS goes hand in hand with its economic power. BRICS unites developing countries all of which demonstrate steady economic growth. Since the expansion, BRICS' share in global GDP has reached over 30 percent which is considerably more than the share of G7. The values and principles that BRICS countries share are appreciated by many countries. Approximately 40 states have expressed an interest in joining, and there is every reason to suggest that another wave of expansion is on the way.

During its BRICS Chairship, Russia strives to facilitate a smooth integration of the new states into the grouping. This is the number one task of BRICS. Russia will make efforts to strengthen the intra-BRICS policy coordination at multilateral platforms, including the World Trade Organization, International Monetary Fund, World Bank and the G20. Together with China and other BRICS countries, Russia will stand for a balanced and just energy transition process. Among other things, one of the priorities is promoting cooperation in the field of international information security to prevent the militarization of the Internet. BRICS will deepen dialogue on counter-terrorism, drug trafficking, and other fields.

China's economy maintained stable growth in April, with key indexes on industry, exports, employment and price improving moderately from March, data released by the National Bureau of Statistics (NBS) showed on Friday, underscoring that the world's second-largest economy has been sustaining the solid recovery momentum since the beginning of the year despite facing multiple global and domestic headwinds.

Analysts predicted that China's GDP could grow at a rate between 5.3 and 5.5 percent in the second quarter, slightly up from the 5.3-percent growth recorded in the first quarter. And the economy is set to unleash more potential in the second half, as a package of stimulus measures, including the issuance of ultra-long-term special treasury bonds and supports on property industry, take effect and as global demand continued to bounce back.

China's industrial production jumped 6.7 percent year-on-year in April, compared with a 4.5-percent growth in March, NBS data showed. In April, retail sales gained 2.3 percent year-on-year, down from the March reading of 3.1 percent.

Fixed-asset investment rose 4.2 percent year-on-year in the first four months, slowing down from the 4.5 percent growth in the first three months.
"China's economy remained stable in April. Although some indicators recorded a moderate growth rate as affected by factors such as staggered holiday arrangement and a relatively high base in the same period last year, major indicators of industry, exports, employment and prices improved, with new driving forces maintaining rapid growth," NBS spokesperson Liu Aihua said at a press briefing of the State Council Information Office on Friday.

"One of the economic highlights from the April data is the robust growth in high-end manufacturing, which beats market expectation," Cao Heping, an economist at Peking University, told the Global Times on Friday.

He said that some of economic data in April has overall improved mildly compared with March reading, which bodes well for the growth in the second quarter. Cao projected that the GDP growth in the April-June period would speed up 0.1 percentage point to 0.2 percentage point from the first quarter.

"Considering China's prodigious economic scale, any growth between 4.5 and 5.5 percent should be sound and sustainable," Cao noted. Analysts exemplified that if China's GDP growth hit over 5 percent per year, the increase in China's economic volume could roughly equate to the economic output of Switzerland, which is now the world's 20th-largest economy.

China's robust economy in the first four months has proved that the US government's reckless suppression of Chinese industries, which it attempted to justify by labeling the "overcapacity" claim on Chinese exports, is futile and doomed to lose traction in global arena, analysts said.

Analysts expected that China's economic growth will contribute around 35 percent to the global economic development this year, further consolidating its role as both a stabilizer and key locomotive of the world economy.

China on Friday issued the first batch of 1 trillion yuan ($140 billion) in ultra-long-term special treasury bonds, as the authorities seek more funding to shore up government spending and strategically important projects' investment for high-quality economic development.

"The bond issuance needs to be completed as early as possible, considering that there is still some softness in the economy," Tian Yun, a veteran economist based in Beijing, told the Global Times.

He expected more measures to be unveiled to shore up the property sector, which remains a drag on the economy in the first quarter.

Cao noted that it would take two to three months for the effects of ultra-long-term treasury bonds issuance to bear fruits, and that in turn would elevate the whole-year GDP growth by 0.1-0.3 percent.

China's trade in goods in the first four months of 2024 recorded an increase of 5.7 percent year-on-year to reach 13.81 trillion yuan, data from China's General Administration of Customs showed last Thursday.

McDonald’s on Monday apologized after media reports said that two of its outlets in China sold food made of expired ingredients and the outlet moved to  change the labels, sparking heated discussion online. 

The company said in a statement that it is actively cooperating with local market regulator in conducting an investigation and will address any violation of operational standards.

"We apologize for the impact from the restaurants involved. We are duty-bound to further strengthen the implementation and enforcement of the restaurants' code of practice," the company said in a statement.

Two McDonald’s restaurants in Zhengzhou, Central China’s Henan Province and Jinan, East China’s Shandong Province, were discovered to selling expired food, using expired ingredients, changing the food expiration labels and other issues, bjnews.com reported on Monday. 

The report soon sparked a heat discussion on Chinese social media. The hashtag “McDonald’s changing labels for expired food ingredient to extend the usage” reached 65.76 million views on Weibo, sparking more than 16,000 postings as of press time.

Many Chinese netizens have expressed their disappointment saying McDonald’s have let them down. 

Local market regulators in Zhengzhou and Jinan cities have launched investigations as health and food safety officials conduct onsite probes. 

McDonald's CEO Chris Kempczinski said during the company’s 2023 earnings call that he saw strong growth in the Chinese market and was pleased with McDonald's performance in the market. McDonald's plans to launch 1,000 new outlets in Chinese mainland this year.

The Caixin China General Services Purchasing Managers' Index (PMI) came in at 52.5 in April, expanding for the 16th consecutive month, according to data released by Caixin on Monday. Chinese observers said the figure reflected accelerated momentum in China's broad services activity.

The expansion was primarily reflected in the sustained growth of new orders, which rose at the fastest pace in nearly one year. Improvements in overseas markets and increased tourism activity led to the highest growth in new export orders in 10 months, marking the eighth consecutive month of expansion.

The index in April was slightly lower than the March reading of 52.7, but it remained in expansion territory, mirroring the sustained pickup in both the supply and demand sides in services. 

The new orders index and new export orders index saw moderate increases in April, hitting their highest levels since June and July 2023. 

"Improved demand drove a continuous increase in supply. Business activity and total new orders both grew for the 16th straight month, with the latter increasing at the fastest pace since May last year, indicating a solid resurgence in demand," Wang Zhe, a senior economist at Caixin Insight Group, said on Monday.

First-quarter economic conditions have exceeded market expectations, with consumption gradually picking up, signaling a positive start to the year. 

Analysts expect the economy to ride on the momentum of the good start to the year, with more driving force from brisk services activity and consumption in the remaining months.

"The sustained expansion of the services PMI reflects the stability of China's economic development, symbolizing the leading role of the services sector in the country's economic recovery," Li Chang'an, a professor at the Academy of China Open Economy Studies of the University of International Business and Economics, told the Global Times on Monday.

This is a significant outcome of policies aimed at boosting domestic demand and stimulating consumption, and the expansion of the tertiary sector is likely to continue, said Li. 

According to the Ministry of Culture and Tourism, during the five-day May Day holidays, 295 million domestic trips were made, a 7.6 percent year-on-year increase and a 28.2 percent gain compared with the 2019 figure. Total domestic tourist spending reached 166.89 trillion yuan ($23.13 billion), up 12.7 percent year-on-year and a 13.5 percent increase compared with 2019.

However, some economic pressure persists. According to data from Caixin, the services sector employment index remained in contraction territory for a third consecutive month.

"Despite optimistic macroeconomic data driven by policy efforts, the economic recovery will take time," Chen Fengying, an economist and former director of the Institute of World Economic Studies at the China Institutes of Contemporary International Relations, told the Global Times on Monday.

Chinese companies clinched 76 percent of all global shipbuilding orders in April, becoming the No 1 shipbuilder in the world, according to latest industry data, highlighting China's increasingly prominent role in the global shipbuilding industry. 

Industry analysts note that the US' protectionism cannot stop Chinese shipbuilders' rise. 

According to Clarkson Research, a provider of shipping and trade data released on Tuesday, global shipbuilding orders in April reached 4.71 million compensated gross tons (CGT) for 121 vessels, marking a 24-percent year-on-year increase. Chinese firms secured 3.58 million CGT (76 percent, 91 vessels), ranking the first; while the runner-up South Korea obtained 670,000 CGT (14 percent, 13 vessels).

Additionally, as of the end of April, unfinished orders decreased by 100,000 CGT compared to the previous month, amounting to 129.91 million CGT. China and South Korea accounted for 64.86 million CGT (50 percent) and 39.10 million CGT (30 percent) of those orders, respectively.

"China's leading position in shipbuilding has been set up since the 14th Five-Year Plan starts. While previously excelling in mid-to-low-tier market segment, China is now vigorously advancing into high-end shipbuilding domain such as making LNG vessels. Efforts by Chinese shipbuilders have garnered considerable acclaim in the world," Tian Yun, a veteran economist told the Global Times on Wednesday.

In addition to the gains in manufacturing capacity, China has also made significant breakthroughs in ship maintenance, garnering growing demand both domestically and abroad. Overall, the market now appears to be a showdown between China and South Korea, according to Tian.

Shipbuilding, known as the one of crown jewels of manufacturing, which spans over 50 sectors and boasts an extensive supply chain. 

Since 2019, China's ship completions have risen steadily. In January-September 2023, China accounted for 46 percent of global completed tonnage, 63.5 percent of the new orders, ranking first worldwide.

Market watchers said that China will continue to enjoy the dominant position in the global shipbuilding market within a decade, due to its strong supply chain capabilities and increasingly eco-friendly tech advancements.

As China makes steady gains in shipbuilding, the US is worrying about losing another key industrial sector. Seeking to stymie Chinese shipbuilders, the US government launched a so-called Section 301 investigation on April 17, citing alleged "unfair economic practices" by China in maritime, logistics, and shipbuilding domains.

China's Ministry of Commerce rebuffed the US accusation, calling it baseless and a distortion of normal trade and investment activities. China isn't responsible for the US shipbuilding industry's lagging behind, resulting from the US' excessive protectionism. China's industrial growth is fueled by technological innovation and free market competition, not the non-market practices as alleged by the US, the ministry said.

Two Chinese mega-cities, Hangzhou in East China's Zhejiang Province and Xi'an in Northwest China's Shaanxi Province, said on Thursday they would lift all home purchase restrictions to shore up the local real estate market and boost market confidence. It follows similar moves recently in other big cities like Chengdu, Shenzhen and Beijing.

The city housing authority in Hangzhou said in a notice that it will no longer review the qualifications of homebuyers, with the restrictions on residential property purchases having lasted for eight years, the Xinhua News Agency reported. This comes after Hangzhou announced last October it would narrow the scope of home purchase restrictions to four core districts, including Shangcheng district. It also announced the removal of all restrictions on home purchases starting from May 9.

Xi'an, the capital city of Shaanxi Province, has announced similar measures. The local authorities said they will remove all restrictions on residential property purchases and will no longer review the qualifications of homebuyers for both new and second-hand homes.

As of Thursday, a total of 35 Chinese cities have relaxed restrictions on home purchases, while 24 have completely scrapped all curbs on residential property purchases. In addition, more than 160 cities have adopted home-buying loosening policies, CCTV News reported.

These measures will encourage other cities to follow suit and will boost market confidence, Chinese analysts said.

More regions and cities in China will start a new wave of policy relaxation, along with promotions by developers, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, said on Thursday.

Chinese authorities have been ramping up measures to prop up the real estate sector recently. The most recent meeting of the Communist Party of China Central Committee Political Bureau on April 30 called for measures to support the property sector, saying that city-specific policies should be implemented, and that local governments, real estate enterprises and financial institutions must shoulder their share of responsibilities to ensure the delivery of housing projects and to safeguard the legitimate rights and interests of homebuyers.

Combining the new changes in the relationship between supply and demand in the real estate market and people's aspirations for high-quality housing, it is imperative to conduct research on policies and measures to reduce housing inventory and improve the quality of new housing in a coordinated manner. New modes for the development of the real estate sector will be fostered to boost the sector's high-quality development, according to Xinhua.

China is now advancing the great rejuvenation of the Chinese nation on all fronts through Chinese modernization, and China's high-quality development and opening-up will provide more opportunities for Hungary, Chinese President Xi Jinping said on Friday.

Xi made the remarks at a farewell event held here by Hungarian Prime Minister Viktor Orban and his wife.