Part two
By Hussein Askary (Belt and Road Institute in Sweden)
It is impossible to separate China’s foreign policy from its economic policy. China’s role in the world has grown proportionately with its economic growth and development. However, China views its own development and stability as dependent on economic development and stability elsewhere in the world, and its trade on healthy markets and economic partners. This is rooted in China’s philosophy of governance where harmony, peace, and stability are the law of the community, not the vicious zero-sum-game struggle and the law of the jungle, or imperialist free trade at gunpoint. For the West to project upon China its own experience and practices as empires in a Hobbesian struggle of all against all would be a great mistake, a source of instability, and a danger to world peace. China is planning and is projected to become the world leader economically and in many advanced fields of science, technology, and even culture, as reported in part one of this series. However, it does not intend to replace the U.S. or any nation or group of nations as a hegemon. This should be welcomed rather than encountered with alarm. The so-called “Thucydides trap” narrative, besides being historically flawed, is the creation of the imagination of an Anglo-American mindset. It should not be projected onto the Chinese mindset. In addition, the world is not a mechanical clockwork and its ups and downs throughout history have been the result of actions based on a specific ideas and philosophies, on how a nation and its leaders perceive themselves and the world around them. Therefore, to understand China from a Chinese perspective is of utmost importance in the coming decades of what is believed to become the “Asian century” with China at its epicenter.
Conceptual framework: Community of a shared future
As we did in part one of this series on the conclusions and implications of the 20th National Congress of the Communist Party of China (CPC) held in October 2022, in which we defined some of the concepts governing China’s governance and development, it is important to explain some of the important concepts used by the Chinese leadership in expressing China’s foreign policy. One of the most used and most important of these is “a community of a shared future for mankind”. This expression was made part of the CPC official material by President Xi in his report to the 19th National Congress of the CPC in October 2017. Earlier that year, in January 2017, Xi made this expression international in his keynote speech at the World Economic Forum in Davos, Switzerland. The expression was adopted at least twice in United Nations Resolutions. First, in March 2017 during the United Nations Human Rights Council’s 34th session resolutions on the “Question of the realization in all countries of economic, social and cultural rights” according to Su Xiaohui. In the second instance, in November 2017, the First Committee of Disarmament and International Security of the 72nd Session of the UN General Assembly approved two draft resolutions on the prevention of an arms race in outer space. Both resolutions adopted the idea of shaping “a community of shared future for mankind”. The idea was written into the United Nations security resolutions for the first time.
Put simply, the concept of a “Community of a Shared Future for Mankind” means that no nation can develop and prosper in isolation, and it should not enrich itself at the expense of others. China’s prosperity can only be guaranteed if other nations are prosperous too, when global peace and security is realized, and when poverty is eliminated globally. This is also part of the Chinese traditions of considering mankind as one family.
In his report to the 20th National Congress of the CPC, Xi Jinping said: “Building a human community with a shared future is the way forward for all the world’s peoples. An ancient Chinese philosopher observed that ‘all living things may grow side by side without harming one another, and different roads may run in parallel without interfering with one another.’ Only when all countries pursue the cause of common good, live in harmony, and engage in cooperation for mutual benefit will there be sustained prosperity and guaranteed security. It is in this spirit that China has put forward the Global Development Initiative and the Global Security Initiative, and it stands ready to work with the international community to put these two initiatives into action.”
As for what is not in the interest of China and a community of a shared future for mankind, Xi explained: “In pursuing modernization, China will not tread the old path of war, colonization, and plunder taken by some countries. That brutal and blood-stained path of enrichment at the expense of others caused great suffering for the people of developing countries. We will stand firmly on the right side of history and on the side of human progress. Dedicated to peace, development, cooperation, and mutual benefit, we will strive to safeguard world peace and development as we pursue our own development, and we will make greater contributions to world peace and development through our own development.”
Forecasting China’s Foreign Policy
It is almost impossible to separate China’s foreign policy from its economic policies, both internal and external. This makes the forecasting and dealing with China’s foreign policy much easier. It is not based on any mysterious ideological fantasy, but on clear principles and methods. According to Dr. George Yeo, former Singaporean cabinet minister and Scholar at the Lee Kuan Yew School of Public Policy, (https://www.youtube.com/watch?v=DNbYXaE1FxM) Chinese foreign policy is very easy to predict, “because it is entirely rational” and is based on China’s modern history and development which is an open book for all to read.
These principles and methods, were clearly outlined in the recent 20th National Congress of the CPC. In his Report to the National Congress, President Xi Jinping stated the following:
“China is firm in safeguarding the international system with the United Nations at its core, the international order underpinned by international law, and the basic norms governing international relations based on the purposes and principles of the UN Charter. It opposes all forms of unilateralism and the forming of blocs and exclusive groups targeted against particular countries.”
China is not intending to reinvent the wheel of international relations and is not intending, as many Western analysts believe, to create a new world order designed to fit China’s own interests. The hard-won UN Charter is the basic law. This has been the traditional policy of China since the 1950s when it introduced the 5 principles of peaceful co-existence.
China’s foreign policy vis-à-vis Africa is a clear example of the concept of “peace through economic development, as we explained in an earlier article. The definition of “national self-interest” and “national security” take a completely different shape when viewed in this way.
Multilateralism not Multipolarism
Xi further said: “China works to see that multilateral institutions such as the WTO and APEC better play their roles, cooperation mechanisms such as BRICS [Brazil, Russia, India, China, and South Africa] and the Shanghai Cooperation Organization (SCO) exert greater influence, and emerging markets and developing countries are better represented and have a greater say in global affairs.”
The idea of multilateralism as expressed by China is not intended to be a world of antagonistic and rival poles or what some call multipolar world. Multilateralism implies a collective sense of responsibility and cooperation between powers, such as in dealing with matters of peacekeeping, or fighting pandemics. Bipolarity or multipolarity implies a conflict between blocks and alliances that attempt to undermine or even destroy each other. The Cold War in the post-WWII period is a good example. The world is facing such a prospect again now, as we have seen most dramatically in Ukraine.
Peace through economic development
The Chinese leadership considers economic cooperation as key to establishing peace in the world, not some agreement on certain arbitrary rules or values. President Xi said in his report: “Today, our world, our times, and history are changing in ways like never before. The historical trends of peace, development, cooperation, and mutual benefit are unstoppable. The will of the people and the general trends of our day will eventually lead to a bright future for humanity. And yet, the hegemonic, high-handed, and bullying acts of using strength to intimidate the weak, taking from others by force and subterfuge, and playing zero-sum games are exerting grave harm. The deficit in peace, development, security, and governance is growing. All of this is posing unprecedented challenges for human society. The world has once again reached a crossroads in history, and its future course will be decided by all the world’s peoples.”
In September 2021 and later in April 2022 (after the outbreak of the Ukraine crisis), President Xi launched two international initiatives in this respect: The Global Development Initiative (GDI) and the Global Security Initiative (GSI). These two can be seen as complementary to and not a replacement to the Belt and Road Initiative (BRI) launched in 2013. The Health Silk Road, which was one of the most important tools used by China in the global fight against the COVID-19 pandemic is another aspect of these initiatives.
The Belt and Road Initiative (BRI). The BRI, launched by President Xi in 2013, has been a great success in terms of bringing (by now) more than 140 nations and 30 international organizations around a concept of economic cooperation based on bridging the huge gaps in development especially financing and building infrastructure necessary for any economic development process and alleviation of poverty. The BRI addresses the three bottlenecks of development, as President Xi expressed them in the 2015 Forum on China-Africa Cooperation (FOCAC), which are shortage of capital, lack of infrastructure, and shortage of skilled labor. To resolve these bottlenecks China proposed or contributed to establishing new financial institutions such as the Asian Infrastructure Investment Bank (AIIB) with a US$ 100 billion capital, The BRICS New Development Bank with US$ 100 billion, and The New Silk Road Fund (exclusively Chinese capital of US$ 40 billion). This in addition to credits provided by Chinese policy banks in the range of one trillion US$. China also put its historically unparalleled industrial and engineering capacity in the service of building infrastructure in many parts of the world. China also increased the educational and skill capacity building programs with developing nations.
The Global Development Initiative (GDI) was presented by President Xi Jinping in his UNGA speech in September 2021 to address “steering global development toward a new stage of balanced, coordinated and inclusive growth in face of the severe shocks of COVID-19.” President Xi called for staying committed to development as a priority and strengthen the priorities of the international community but achieving them through a process of promotion of industrialization in developing nations. “The world needs to increase input in development, advance on a priority basis cooperation on poverty alleviation, food security, COVID-19 response and vaccines, development financing, climate change and green development, industrialization, digital economy and connectivity, among other areas, and accelerate implementation of the UN 2030 Agenda for Sustainable Development”, he said.
What makes the GDI special is that it elucidates the concept of development putting emphasis on the priorities of the developing nations. This differs greatly from the priorities set by the G-7, the EU and other Western-dominated coalitions, where priority is given to political changes rather than solving the urgent needs of humanity such as the elimination of poverty, hunger, lack of clean water and electricity, and lack of services. This has alienated many nations in Africa and Asia, who see the Chinese vision of development more attractive as China itself is a developing nation which successfully managed to rescue its people from extreme poverty, hunger, and economic backwardness in record time. (See our report on the meeting of the Friends of the GDI.
The Global Security Initiative (GSI) was announced by President Xi in In his keynote speech at the Boao Forum for Asia (BFA) on the 21st of April 2022. President Xi’s announcement came at a time when tension in Europe around the crisis in Ukraine was increasing, and a diplomatic solution seemed to have taken a back seat relative to military escalation with more weapons pouring into Ukraine making the situation more complicated to resolve. President Xi presented several key elements ranging from the COVID-19 pandemic, global economic challenges, sustainable development goals, and peace and security issues all as one package, calling for solidarity among all nations. “The hardships and challenges are yet another reminder that humanity is a community with a shared future where all people rise and fall together,” he said.
Concerning the importance of security and stability for economic development, Xi said: “Stability brings a country prosperity while instability leads a country to poverty,” arguing that security is the precondition for development. He further stressed: “We humans are living in an indivisible security community. It has been proven time and again that the Cold War mentality would only wreck the global peace framework, that hegemonism and power politics would only endanger world peace.”
President Xi presented the proposed Global Security Initiative transparently, consisting of these elements:
– Stay committed to respecting the sovereignty and territorial integrity of all countries.
– Uphold non-interference in internal affairs.
– Respect the independent choices of development paths and social systems made by people in different countries.
– Stay committed to abiding by the purposes and principles of the UN Charter.
– Reject the Cold War mentality.
– Oppose unilateralism and say no to group politics and bloc confrontation.
– Stay committed to taking the legitimate security concerns of all countries seriously.
– Uphold the principle of indivisible security, build a balanced, effective and sustainable security architecture, and oppose the pursuit of one’s own security at the cost of others’ security.
– Stay committed to peacefully resolving differences and disputes between countries through dialogue and consultation.
– Support all efforts conducive to the peaceful settlement of crises.
– Reject double standards.
– Oppose the wanton use of unilateral sanctions and long-arm jurisdiction.
– Work together on regional disputes and global challenges such as terrorism, climate change, cybersecurity and biosecurity.
While all these principles have been pronounced in different settings but separately, they are presented here as one consolidated package. As a good example of the connection between stability and economic development, President Xi used the example of the fantastic developments in Asia, saying: “Over the past decades, Asia has enjoyed overall stability and sustained rapid growth, making possible the Asian Miracle. When Asia fares well, the whole world benefits.” A clear indicator of this progress in East Asia is “the entry into force of the Regional Comprehensive Economic Partnership (RCEP) and the opening to traffic of the China-Laos railway have effectively boosted institutional and physical connectivity in our region,” he added.
How China deals with economic challenges
In 2008, the global economy was hit by the worst financial crisis in almost a century, and the whole Western financial and banking systems, which were overstuffed with speculative and pure gambling bets, were on the verge of total demise. Western Central banks and governments (Japan included) opted to bail out the financial and banking systems at the expense of the real economy and the wellbeing of the populations in the West. This led to a global physical economic shrinkage of great proportions. China, which was becoming heavily reliant on export of consumer goods to the U.S. and Europe, was hit hard by the collapse of these two markets. Ironically, the inauguration of the first stretch of Chinese high-speed rail from Beijing to Tianjin (a mere 120 kilometers line) took place on August 1, 2008, just before the start of the 2008 Beijing Summer Olympic Games. The financial markets of the U.S. and Europe started crashing at the same time, culminating in the famous bankruptcy of Lehman Brothers on September 15, 2008.
Learning from this hard lesson, China turned its focus on investing into the Chinese domestic economy, with very large-scale investments in especially infrastructure. In a matter of a decade, China built nearly 40,000 km of high-speed rail inside China, and China became the world champion not only in high-speed rail building, but in almost every other field of infrastructure construction such as bridge building, tunneling, and producing tools and machinery used for this purpose. With the launching of the Belt and Road Initiative in 2013, the Chinese success story went global. Within that decade, since the financial crisis, China’s economy was completely transformed into the world’s largest industrial system. A new philosophy of development was ushered by Xi Jinping assuming the leadership of the CPC in 2012, moving China from a quantity-based cheap goods exporter to a quality-based industrial power. China not only saved its own economy in the following years and advanced into a modern industrial system, but also contributed to keeping the world economy afloat. While the Federal Reserve, Bank of England, European Central Bank, and Japan’s Central Bank poured almost 18 US$ trillion into the bankrupt financial and banking markets, China injected almost as much liquidity but into physical economic investments both in China and the world through its “big four” policy banks.
But challenges and crisis keep haunting the world economy, such as continued financial imbalances, wars, pandemics, and disruptions of supply chains. So, China has to device new strategies to deal with these challenges as they come.
Dual Circulation: Although the COVID-19 pandemic is dwindling in its health effects, it still causes disruptions through sudden eruptions, especially in China where the government has moved to end three years of strict pandemic controls. But these eruptions are not thwarting China’s decision to opening up. Even restrictions on foreign travelers are set to be removed by January 8th, 2023. However, the world economy will still be reeling under the impact of the energy and food crisis caused by the Ukrainian war and sanctions imposed on Russia. China will in most likelihood put the local consumption option on a fast track. As described in part one, the “dual circulation” strategy is not a short-term tactic, but it will be pushed into high gear in 2023. First, this will have the effect of stimulating the internal production of goods and services, especially by the private sector of China which suffered greatly during the COVID-19 pandemic. Second, it will enhance the export of goods into China from other parts of the world. Thirdly, part of this policy is to attract foreign investments into China.
On December 14, a white paper was released by the Communist Party of China Central Committee and the State Council on “implementing the strategy of increasing domestic demand from 2022 to 2035. The paper stressed that “resolutely implementing the strategy of expanding domestic demand and fostering a holistic domestic demand system are essential to stepping up the building of a new development paradigm, in which the domestic market is the mainstay and the domestic and international markets reinforce each other.” This itself was one of the outcomes of the 20th National Congress of the CPC. However, the global economic situation demands a faster pace in implementing this policy, starting in early 2023.
China is rapidly becoming the world’s largest consumer market. China’s middle-class is the largest in the world, estimated to be around 400 million individuals. The Chinese People’s Political Consultative Conference (CPPCC) projects that in the coming 10-15 years 400 million more Chinese will join this middle class. This is unprecedented in the history of mankind. Such a large middle-income community has incredible demands for high-quality and secure goods and services. This is both an opportunity for China and the world, but also a big challenge.
The term “dual” refers to another direction of policy, not only building and maintaining a strong domestic market. The other direction is to keep China as the world’s largest exporter of industrial goods and technologies to world markets. But it will move to producing higher-quality goods.
New centers of economic power
China is increasingly creating or contributing to the creation of new centers of economic power in a multilateral word, both to reduce its previous dangerous reliance on the U.S. and EU as markets and as sources of investment into China. The references made by President Xi and the CPC in the 20th Congress to the BRICS (Brazil, Russia, India, China, and South Africa) and the Shanghai Cooperation Organization (SCO) as new elements of the multilateral world China wishes to see emerge, are not mere geopolitical institutions, but have emerged as powerful economic instruments in a world where the center of economic gravity is moving eastward and southward. This will contribute to a more balanced global economic growth and development. The emergence of China’s neighbors, in ASEAN (Association of Southeast Asian Nations) as new motors of growth and development is of great importance to this process. India’s growth is also contributing to the image of what some analysts, such as well-known former Singaporean diplomat Kishore Mahbubani call the “Asian Century” with China at its core. The creation of the Regional Comprehensive Economic Partnership (RCEP) free trade agreement among all of the ten ASEAN countries plus China, Japan, Republic of Korea, Australia, and New Zealand established the largest free trade region in the history of the world. THE RCEP members account for about 30% of the world’s population (2.2 billion people) and 30% of global GDP ($29.7 trillion). The interesting thing about this agreement (signed in November 2020) is that it combines the largest economies of East Asia and some of the fastest growing countries. In addition, the RCEP cuts through several geopolitical alignments and rivalries, especially between China and each of Australia, Japan, and South Korea. However, geoeconomics have the upper hand in the thinking of most of these nations who have found themselves entangled inside historically determined but artificially construed political alliances with the West.
China has been increasing its economic cooperation through the BRI with the ASEAN countries, and through trade and investments with South Korea and Japan. Only Australia has had trade issues with China in recent years. But through the RCEP, these bilateral differences might be absorbed and resolved. The completion of the China-Laos high-speed railway, officially opened in December 2021, was a milestone in China’s connection to the ASEAN countries. Likewise, was the inauguration of the China-build first Indonesian high-speed railway during the G-20 Summit in November 2022.
Another center of economic gravity is Shanghai Cooperation Organization (SCO), which during the Samarkand (Uzbekistan) summit, held on September 15-16, expanded to include Iran as a new member, making its total permanent member-state nine, with nine other nations as observers. Saudi Arabia and Egypt, two very important nations in the Arab world, applied for observer status this year. This Eurasian organization, which started as a security cooperation mechanism, has evolved into an economic powerhouse, with the BRI and other connectivity projects such as the Russia-Iran-India International North-South Transport Corridor (INSTC) as its backbone (See full report on Samarkand Summit and its resolutions).
One more center of economic and financial power that is gravitating towards China and the East is the Gulf region and Arab world. The three historic China-Saudi, China-Gulf Cooperation Council, and China-Arab summits, which were held in the Saudi Capital Riyadh on December 8-10 were a turning point in the history of this region. Not only did Saudi Arabia sign a comprehensive strategic cooperation agreement with China and up to 30-economic projects, but also President Xi presented a set of joint economic, technological, scientific and cultural cooperation mechanisms that are unprecedented in magnitude and quality in the history of contemporary relations between China and this traditionally pro-Anglo-American-sphere group of nations. These agreements ensure long-term, increased, and steady supplies of oil and gas to China traded in Chinese currency, not the US dollar, which is a major security concern for the Chinese leadership. Moreover, it includes a new industrialization process for these nations that have for far too long relied on mere export of raw oil and gas to the world to diversify their sources of income through petrochemical industries for example. These summits also consolidated the cooperation along the BRI for the 22 nations of the Arab world.
Iran, which is not a member of the Arab League nor the Gulf Cooperation Council (GCC), has solidified its cooperation with China not only through the SCO, but through a similar 25-year comprehensive cooperation agreement with China signed in March 2021. Iran and the GCC (plus Iraq) are home to almost two thirds of the world’s hydrocarbon reserves. They also harbor some of the largest sovereign wealth funds. If we add Egypt, Turkey, Yemen, and Ethiopia to a ring that includes all these nations we will have a constellation which includes more than 500 million population of mostly young adults and children, and command the continental and maritime chokepoints of the world. For China to establish an intimate and long-term cooperation mechanism with these nations is a matter of utmost importance for China’s future. China’s increasing cooperation with Russia falls into the same trend. Not only will China secure necessary supplies of energy and guarantee the security of both the Maritime Silk Route and land-based Economic Belt of the New Silk Road, but it will also create new large markets and trade partners reducing its reliance on the U.S. and the EU.
Africa, is another such future center of economic power. Through the Forum for China-Africa Cooperation (FOCAC), China has been steadily developing its practical relationship to this promising continent. The BRIX have thoroughly unpackaged this potential both in analysis and through seminars to show what that potential is and how China is relating to it (Seminar, December 2019).
Risks
In the view of the CPC leadership, China will be facing certain challenges and risks, some of which are minor and are related to its internal governance dynamics, but others are a bigger source of concern and are related to external forces and dynamics.
Internally, corruption within the ranks of the CPC, as outlined in its 6th Plenary Session of the CPC 19th Central Committee held in November 2021, is the most dangerous internal enemy and challenge to the power of the CPC. This corruption is identified in two categories: One, intellectual corruption whereby some sections of the Party lose sight of the mission and duties of the CPC vis-à-vis the Chinese people. Party members can become intellectually complacent and lazy and, being unmotivated, fall into comfort zones. They will also try to climb in rank in The Party not through hard work and fulfilling their duties but by cronyism, cheating and manipulations. Second, financial corruption within the Party and government institutions whereby Party members try to enrich themselves illegally using their power position to receive bribes, commissions, and privileges. In both categories, the CPC seems to have been vigilant and achieved massive clean out operations (such as Sky Net) in its ranks, especially since Xi Jinping assumed the leadership position.
According to President Xi, eliminating corruption is not yet accomplished. He stated in his Report to the 20th Congress: “Some Party members and officials lack a strong sense of responsibility, the capacity to grapple with tough challenges, and the readiness to get down to work. Pointless formalities and bureaucratism remain rather pronounced. Eradicating breeding grounds for corruption is still an arduous task. We have already put in place a series of measures to deal with these problems, and we must redouble our efforts to see them fully resolved.”
To imagine that the power of the CPC and its leadership can be challenged by some domestic forces or factional fights withing the CPC, especially after President Xi consolidated his power as a core leader and with the reshuffle of the top position in the Standing Committee of the Political Bureau of the CPC Central Committee, is a figment of the imagination of some Western think tanks and media.
Separatism, is another internal challenge, but is mostly fueled by foreign powers. China managed to deal with these problems resolutely in Tibet and Xinjiang, not merely through security measures but through a large-scale economic and social development campaign. This matter was thoroughly discussed in the webinar organized by the BRIX in July 2021.
Taiwan is a much more complex and dangerous issue. This was most clearly demonstrated during and after the provocative visit by the U.S. House Speaker Nancy Pelosi to Taiwan in August 2022. The fact that the Chinese People’s Liberation Army was mobilized to simulate a military campaign to take over Taiwan, shows the seriousness of the matter. With the U.S. playing a double game concerning its “one-China policy”, and has already made clear its intentions to encounter China in the South China Sea and is actively engaged with other nations in a maritime containment strategy in the Pacific directed against China, should be a major concern for not only the Chinese people and their leadership but also for the world community. Using Taiwan as a pawn in a geopolitical game against China will only lead to a major military confrontation between the two powers.
The 20th National Congress and President Xi in his report made it clear that the Taiwan question is a Chinese matter to be resolved by the Chinese themselves. While President Xi reiterated China’s traditional policy of “peaceful” reunification, the “use of force” was, however, not ruled out as an option. Here are the relevant sections of President Xi’s report:
“The policies of peaceful reunification and One Country, Two Systems are the best way to realize reunification across the Taiwan Strait; this best serves the interests of Chinese people on both sides of the Strait and the entire Chinese nation. We will adhere to the one-China principle and the 1992 Consensus. On this basis, we will conduct extensive and in-depth consultations on cross-Strait relations and national reunification with people from all political parties, sectors, and social strata in Taiwan, and we will work with them to promote peaceful development of cross-Strait relations and advance the process of China’s peaceful reunification.”
Further, he warned: “Taiwan is China’s Taiwan. Resolving the Taiwan question is a matter for the Chinese, a matter that must be resolved by the Chinese. We will continue to strive for peaceful reunification with the greatest sincerity and the utmost effort, but we will never promise to renounce the use of force, and we reserve the option of taking all measures necessary.”
The reason for this, according to Xi is “interference by outside forces and the few separatists seeking ‘Taiwan independence’ and their separatist activities”. (Read our report on the Taiwan question following the crisis resulting from Pelosi’s trip to Taiwan)
Sanctions, decoupling, and supply-chain disruptions, are probably some of the most serious risks that could affect not only China, but the world economy. In his report to the 20th National Congress of the CPC President Xi said that “China adheres to the right course of economic globalization” and promotes trade and investment liberalization and facilitation. He warned though that “China opposes protectionism, the erection of fences and barriers, decoupling, disruption of industrial and supply chains, unilateral sanctions, and maximum-pressure tactics.” It is quite obvious that he is directing his words to American leaders who have been, especially since Donald Trump became president of the U.S., pushing one new set of sanctions and regulations after the other in an attempt to slow down China’s economic rise. However, the reality shows that the U.S. and also the EU are far too reliant on China for their trade and supply of goods.
It is quite disturbing for the Chinese side to see that in spite of a nearly total interdependence between China and these nations for certain products, their leaders are advocating decoupling and imposing sanctions on China in what seems to be a suicidal move. China has also monitored the behavior of EU countries toward imports of oil and gas from Russia, upon which most of the EU citizens and industries depend, but nonetheless were put under sanctions. This kind of irrational behavior is difficult for the Chinese to comprehend. How could a country’s leadership devise policies that are clearly counterproductive and insist on implementing them even though they are proven to be so?
Another alarm bell for China and other nations tolled when the Ukraine crisis led to a global food crisis. The dependence on Ukraine and Russia for both chemical fertilizers and grains by many nations showed the fragility of the global supply system, and so-called division of labor.
There are other reasons why supply chains and trade can be suddenly interrupted. The outbreak of the COVID-19 pandemic brought the wheels of the global economy to a near grinding halt. The globalized world economy is so intertwined, it is almost impossible to produce anything all inside one nation.
Recent sanctions imposed by the White House on specific sensitive semi-conductors’ exports to China have enraged the Chinese side but raised serious concern among international industrial companies who are in their turn dependent on the Chinese industrial capacity for their own products.
Given the irrational nature of things in the world, China is developing a policy of self-reliance in many fields. “We have accelerated efforts to build our self-reliance and strength in science and technology, with nationwide R&D spending rising from 1 trillion yuan to 2.8 trillion yuan, the second highest in the world. Our country is now home to the largest cohort of R&D personnel in the world,” President Xi said in his report to the 20th National congress. He also pointed to the efforts to develop the country’s infrastructure and industrial sector to “make China’s industrial and supply chains more resilient and secure.” Identifying this issue as a national security matter, Xi stated: “We will resolutely safeguard the security of China’s state power, systems, and ideology and build up security capacity in key areas. We will ensure the security of food, energy, and resources as well as key industrial and supply chains.”
China is intending to secure the supply to China of strategic raw materials but through peaceful cooperation and trade. Contrary to the perception created by some analysts in the West about China’s intentions to build up its military capacity to use force to secure its supplies and trade routes around the world, China not only lacks such a massive military capacity, but it is contrary to its international governance policy. It is much easier and less costly to use peaceful means of cooperation and unimpeded trade to achieve such results.
The BRIX will publish a special article on the question of supply chains and China’s policy in this concern in the next week.
Conclusions
To be able to forecast where China is heading in the near and farther future, including the fate of the Belt and Road Initiative, we need a deeper and unbiased review of the process of decision making and the thought process behind it. Even if you are a rival of China, you need to know how, why, and where it is moving. We are missing a huge treasure of information and knowledge due to the negative coverage presented in short clips in Western mass-media and in stereotypical reports by think tanks concerning the People’s Republic of China (PRC) and its most important political arm the Communist Party of China (CPC). The negative coverage leads, among other things, to preventing the public, researchers, and policy makers from having a good look inside the mind of the leadership of China, especially President Xi Jinping. The original information and material are amply available everywhere, but very few people outside China reach out to read and discuss it to know what is being discussed and decided inside the corridors of power in China.
There are many issues of importance that were dealt with in the 20th National Congress of the CPC, but we selected a few of them that are of interest to our readership and those interested in China’s future economic strategy and in relationship to the Belt and Road Initiative.
What we can observe as of interest are the following key point:
– The CPC with President Xi Jinping at its core, will continue to be the designer and enforcer of policies. It will increase its power in and over the People’s Republic of China and will further centralize power at the top leadership of the CPC. The citizens of the PRC are accepting this fact not by coercion or security measures by the government, but by proving to the people that the CPC and the government it is leading is by proof of what it has achieved in the past 100 years is the best assurance to fulfill the Chinese Dream.
– No one should harbor any illusions that there are dramatic factional fights within the leadership of The Party or that President Xi could be ousted in a “palace coup”. The world must learn to live with these established facts and accept the Chinese way of doing things as long as it does not pose a threat to other nations.
– The most dangerous internal enemy and challenge to the power of the CPC is corruption within its own ranks, not some democracy or human rights movement or NGOs.
– The Chinese leadership has set clear economic goals in the next decades to reach the Second Centennial Goal in the 100th anniversary of the founding of the PRC in 2049. Nothing can change that except an external cataclysmic event such as a world war or a massive asteroid impact that could wipe out human civilization from the surface of Earth.
– China will continue to be or become the world leader in many hi-tech sectors: information and telecommunication technology, AI, engineering and construction of infrastructure, nuclear power (including fusion research), space exploration, biotech and several other fields before 2035.
– Reform and opening up will continue with additional opening up of the Chinese consumer market and investment in Chinese productive enterprises, especially high-tech fields, green technologies and biotech. This will open great opportunities for competent and innovative European and American companies. China will open its consumer market more for developing nations to export agricultural products and raw material to China.
– The Public sector and state-owned enterprises will continue to be the main pillar of the growth and development of the Chinese economy. However, many doors are being opened and incentives offered for the private sector to fuse new blood, especially in the innovation side of the economy.
– The Belt and Road Initiative will remain the main pillar of China’s foreign policy and economic cooperation. The country’s diplomatic mission is tightly intertwined with economic cooperation and assuring the expansion and secure the building of the BRI. Its basic foreign policy philosophy is “peace through economic development”.
– Concerning Foreign Policy, China will reject any redefinition of international law which is anchored in the United Nations Charter. It will reject such notions as the “rules-based order” and “responsibility to protect” which is an invention of certain power groups in the West to allow themselves to interfere in the internal affairs of other nations with disastrous consequences. China will respect nations who will respect its territorial integrity, sovereignty, and independence. This applies to the question of Hong Kong and Taiwan, where there will be no compromises on the principle of “One Country, Two Systems”. China will likewise not interfere in other nations’ internal affairs and will not attach political demands to its economic dealings with other nations.
– In judging where and how China is moving into the future, two fatal mistakes should be avoided by Western analysts:
One: To assume that China is an “authoritarian” and “dictatorial” regime led by a Communist party which many believe is a product of the twentieth century whose place is in museums and archeology departments, thinking that the CPC is detached spiritually and intellectually from the 5000-year old Chinese civilization especially its Confucian component.
Two: Projecting Western ideology and political philosophy onto China, the CPC and its political system and philosophy of governance. China is a unique country in every respect, history, culture politics, social system and norms, and economic development.
Ultimately, it is the Chinese people who will be the judge of the performance of the CPC and the government policies. That’s the meaning of a people-centered policy. The CPC and its leadership will collapse or be overthrown in one case, and that is if they lose “the mandate of heaven”, i.e., serving and protecting the interests and needs of the people of China as the main raison d’etre of the Party.
As far as we are concerned, it is important to learn to live with China as it is, not as we wish it to be. It is our recommendation that China should be studied from within these Chinese characteristics and not through the lenses of our Western history. It is equally important to study the mind and thinking of its leadership, especially President Xi.
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