Emerging from the Shadow

24 june 2012

China in Search of a New Foreign Policy

Vassily Kashin is Ph.D. in Political Science, is a senior research fellow at the Center for Comprehensive European and International Studies at the National Research University—Higher School of Economics. He is also a leading research fellow at the Institute of the Russian Far East.

Resume: The Chinese military calls for a transfer from the passive policy of deterring the U.S. to an active course and closest cooperation with Moscow. Russia’s foreign policy is regarded as a positive example of defending national interests and independent opinion.

China actively expanded its sphere of national interests in the first decade of the 21st century as the country transformed itself from a moderate regional state into the world’s second biggest economic powerhouse. Moreover, Chinese industrial and military complexes underwent similar changes. China made a marked technological breakthrough in both areas, which enabled it to compete with other countries, enter new markets, and acquire new military and political tools of influence.

However, the doctrinal principles of Chinese foreign policy have not changed much since the collapse of the Soviet Union. The political concept developed by Chinese leaders in the 1990s-2000s, such as peaceful development, which was proposed by Chinese President Hu Jintao at a forum in Boao, remained within the strategic vein outlined by Deng Xiaoping. In the early 1990s, Deng Xiaoping guided China’s foreign and security policy apparatus that, collectively, has come to be known as the “24 character” strategy, which stated the following: “observe calmly; secure our position; cope with affairs calmly; hide our capacities, and bide our time; maintain a low profile; and never take the lead, but aim to do something big.”

In line with this concept China was to pursue a tough line on national sovereignty, security, and territorial integrity (“secure our position”). It also implied China’s outright rejection of any possible confrontation and claims to leadership in settling international problems. It was assumed that it would be best for China not to show its influence or draw much attention to itself in the international arena. The country should pursue a multi-vector policy, mostly aimed at settling economic tasks and leaving acute political problems for subsequent generations to solve.

In implementing this concept, Beijing – hailed the world over as an emerging superpower – in actual fact remained a secondary player in the international arena; or, to be more precise, China depended heavily on interaction with Moscow. In discussing world affairs, Russia still remained the mouthpiece for the interests of the non-Western world, even when it was at its weakest in the 1990s. China moved on a majority of pressing problems after consultations with Moscow, and, as a rule, its actions tended to support Russian initiatives.

It was Russia that was at the forefront of the campaign to life sanctions against Saddam Hussein’s regime in the 1990s and the early 2000s; and it was Russia that opposed the operation to bring down the Hussein regime, even though China had more interests in Iraq. Russia played and continues to play the primary role in discussing the Iranian nuclear program, despite the fact that, for China, Iran is far more important as a supplier of fuel and is a promising market. In addition to buying oil, the Chinese are implementing a range of infrastructure projects (extending the Tehran subway, for example), and are delivering industrial equipment and technologies.

Russia, together with China, vetoed the UN Security Council’s draft resolution against the regime of Zimbabwe dictator Robert Mugabe in 2008 and repeatedly rebuffed attempts to impose sanctions on the Sudanese government. Unlike China, Russia had no particular interest in either issue. In 2011-2012, Moscow took the lead in discussing the situation in “revolutionary” countries in the Arab world. In actual fact, there was a consolidated Russian-Chinese position concerning countries where Chinese economic interests far outweighed those of Russia.

Moscow’s voice is the loudest in discussions on the U.S. strategic missile defense system, despite the fact that this system is far more dangerous to China’s weak and technically backward strategic nuclear forces than it is to Russia’s huge and high-tech nuclear potential. China has around 40 DF-5 and DF-31A intercontinental ballistic missiles (ICBMs), each carrying a single warhead capable of reaching the continental U.S. Russia still has hundreds of various strategic nuclear weapon delivery vehicles at its disposal, and it supplied 30 land- and sea-launched ICBMs to its army and navy in 2011 alone. So it is fairly clear whose deterrence potential would be neutralized first, and who would have to invest billions of dollars in building up its nuclear arsenal.

Local international issues that were of no interest to Russia or those that directly related to China’s national security (i.e. the Korean situation) were an exception to the rule “to maintain a low profile.” Such a policy was supposed to create favorable external conditions, as well as time for the country’s economic growth and subsequent strengthening of its military and political potential. These objectives have been achieved, though perhaps at a price.

Russia’s “foreign policy services” to China are certainly a weighty factor in the never-ending Russian-Chinese agreement over economic and military cooperation issues. Undoubtedly, Moscow values China’s demonstrative rejection of political rivalry with it in the former Soviet Union, although some post-Soviet leaders – Belarusian President Alexander Lukashenko, for example – would like to have Beijing involved in such policies.

However, recent years have shown that the old foreign policy concept has obvious deficiencies. Beijing has become a far too significant factor in the international arena to keep hiding in someone’s shadow.

 

A NEW REALITY

A decade ago China was merely a large exporter of industrial products to the European Union and the U.S, and a major importer of components and equipment from the neighboring developed economies of East Asia. China’s economic presence in the Middle East was mostly reduced to oil imports and very modest arms sales. In Latin America and Africa, the Chinese factor was insignificant. Chinese direct investment abroad had been negligible until the late 1990s.

At present, China is the key trading partner of African countries (trade exceeded $160 billion in 2011), Brazil, Saudi Arabia, the United Arab Emirates, and Iran. China is Argentina’s second largest trade partner, and the third largest trading partner of Latin America overall. Also, China ranks third in trade with Turkey and second in trade with Russia (after the EU).

According to China’s State Administration of Foreign Exchange, China’s investment abroad has increased from $33.2 billion in 2003 to $345 billion. The main recipients of direct investment are countries in Asia, Africa, and Latin America. Chinese companies are large contractors in global infrastructure projects: projects totaling $103.42 billion (80 percent in Asia and Africa) were completed in 2011, according to the Ministry of Commerce.

A considerable portion of investment is earmarked for strategically important oil extraction projects (in Kazakhstan, Venezuela, Sudan, Nigeria, Angola, etc.), but the Chinese have been increasingly active in the industrial development of the poorest nations, both by investing in infrastructure projects and by setting up assembly factories. Chinese car, truck, and bus assembly lines currently operate in Angola, Cameroon, and Kenya, and the Chery Automobile Company announced plans in 2011 to build a large car assembly plant in Benin.

The Chinese factor has an influence not only on the economy, but also on the domestic policies of many developing countries. For example, the theme of Chinese economic expansion and investors’ business practices was exploited during the presidential election campaign in Zambia in 2011. Criticism of Beijing’s “neo-colonialism” was a crucial tactic in the campaign of Michael Sata, who eventually won the election. However, after his victory, Sata predictably softened his stance.

The presence of Chinese companies and thousands of Chinese citizens in unstable and developing countries is already creating security problems for Beijing. In January 2012, insurgents in the Sudanese state of South Kordofan kidnapped 29 Chinese employees of the Sinohydro company. Some time later, Bedouins in Egypt took 25 workers of a Chinese cement factory hostage and used them to pressure the authorities during negotiations. The scope of Chinese interests in the economies of unstable countries in Asia, Africa, and Latin America is such that it has become impossible for Beijing to protect them while staying within the limits of the old foreign policy concept “of never taking the lead,” non-interference in the affairs of other countries, and rejection of military and political unions.

The lack of prospects for China’s current foreign policy became particularly evident during the Libyan crisis. In February 2011, when riots broke out in Libya, Chinese companies were implementing projects worth $18.8 billion, and there were 35,000 Chinese citizens living in the country. At the beginning of the Libyan crisis, it seemed that Moscow and Beijing would use their standard model to jointly protect a friendly regime from U.S. pressure, with a subsequent giveaway of prizes. However, these expectations proved futile when Russia opted not to block UN Security Council Resolution 1973, which was Russian President Dmitry Medvedev’s personal, and surprising, decision. Finding itself in isolation, Beijing had to abstain. As Gaddafi’s regime was deposed and chaos gripped Libya, Chinese construction companies incurred $16.6 billion in losses, according to the Chinese Ministry of Commerce. Taking into account the interests of Chinese investors and equipment exporters, China’s losses reached more than $20 billion. Beijing had to hastily evacuate 35,000 Chinese workers from Libya, who lost well-paid jobs there.

The new Libyan authorities promised to honor earlier contracts and even compensate China for its war-related losses, but it is unlikely they will be able to keep their word. The country’s economy is in ruins and Tripoli has no real control over the national territory. Thus, China’s reliance on political interaction with Russia and its inability to act on its own has cost it several dozen billion dollars in direct losses and thousands of jobs. The information available today shows that Libyan insurgents were on the brink of defeat on the eve of the UN Security Council vote on Resolution 1973, and a delay of one or two weeks in passing the document would have undoubtedly brought about their defeat.

The Libyan events show that economic power cannot compensate for a lack of military and political instruments in asserting influence. Military might is not very significant if there is no political will to use it.

 

IN SEARCH OF A NEW POLICY

The last two years have seen renewed discussions in the Chinese media and the academic community about the future of the country’s foreign policy. The idea of replacing the old model is becoming increasingly popular. Deng Xiaoping’s guidelines implied that the strategy was initially conceived as a temporary one (“biding our time”). In time, China would save its strength and emerge from the shadow.

Yet amid China’s economic success and favorable foreign conditions in the 2000s there was a temptation to postpone that day when China would take its place on the world stage. U.S. pressure began to increase rapidly at the turn of the 21st century, and at the start of George W. Bush’s first presidential term many people believed that relations with Beijing would take center stage in U.S. foreign policy. A serious diplomatic crisis between the two countries occurred in April 2001 when an American EP-3 reconnaissance plane collided with a Chinese fighter jet over the South China Sea.

The September 11, 2001 terrorist attacks, the war against terror, and the Iraqi military campaign pushed all other problems aside. For a decade, Washington had other things on its mind than China, while the latter was busy buying up raw material assets and establishing relations with the governments of developing nations across the world. By the time the Americans began to pull out of the Iraqi mess, China had become a global business empire. China was doing so well that it saw no need to change anything in its policies. Furthermore, giving up the concept offered by the patriarch of Chinese politics and the architect of China’s present-day welfare, which has been successfully used in the past twenty years, is fraught with political risks for any leader.

As the Chinese leadership approaches another generational change (the 18th Congress of the Chinese Communist Party will take place in November 2012), the battle is heating up for posts in the new nine-member Politburo Standing Committee, the de-facto highest institute of power. The recent political attack against Bo Xilai, a communist functionary and the party chief of the Chongqing megalopolis, who was regarded as a key candidate for a seat in the Politburo, shows just how complex and fragile the domestic political situation is in China. Arrests of Bo Xilai’s associates, officials and businesspeople connected to him continue unabated. It was reported in early April 2012 that 41-year-old billionaire Xu Ming, chairman of the board of the Dalian Shide corporation, was arrested.

In this situation, the outgoing generation of leaders, together with President Hu Jintao and Premier of the State Council Wen Jiabao, will not make any radical moves. The Chinese leadership is primarily concerned with keeping the political heritage and promoting their younger successors to the upper echelons of power. But next year will likely see lively debates about major adjustments to Chinese foreign policy. The ongoing discussion in China concerns laying an ideological and theoretical groundwork for these novelties.

The military, too, has openly called for changes. Recently, the Chinese army has promoted many influential and talented polemicists and analysts, mostly teachers from the PLA National Defense University and personnel of the Academy of Military Sciences. Among them, Air Force Colonel Dai Xu, Rear Admiral Yin Zhuo, Major-General Luo Yuan, and Major-General Jin Yinan have made the most radical comments. In addition to defense problems, the military actively discusses foreign policy, ideology, and socio-economic policy. They have criticized China’s current course for its lack of a clear ideology, for focusing on abstract macroeconomic targets, for its passive stance in the face of potential threats and expansion from the West, and for the inability to stop the moral decay of society and state officials.

Dai Hu mocked the term GDP as “a dog’s fart,” using the Chinese consonance (GDP – gou de pi) to point out that a country cannot take a worthy place in the world by exporting toys and lingerie. Jin Yinan raised the issues of government corruption and moral decay; moreover, a video of his private lecture was purposefully leaked to the Internet last year. He listed hitherto unknown facts about highly-placed Chinese officials who are working for foreign secret services, which he said was a consequence of the stratification and moral decay of society.

In foreign policy, the military has called for moving from the passive policy of deterring the U.S. to an active course and close cooperation with Moscow. The Chinese military and others regard Russian foreign policy as a positive example of defending national interests and promoting independent opinion. In September 2011, Luo Yuan said in an interview with the Renmin Wang Internet site that China’s response to hostile actions by the U.S. should be as tough as Russia’s. China should not only remonstrate against such moves by the U.S. as arms sales to Taiwan, but also put its words into action. Luo Yuan cited such effective moves by Russia as plans to deploy Iskander missiles in the Kaliningrad region in response to the construction of U.S. missile defense facilities in Poland, and the ostentatious implementation of a program to develop new strategic armaments with the capability to penetrate the U.S. missile defense system.

In January 2012, Dai Xu even called for forging a military and political union with Moscow, aimed at deterring the U.S. and supporting friendly regimes. The very fact that such sentiments are growing in China is an important sign, yet it is even more significant that Dai Xu’s article was carried by the CPC’s main newspaper Renmin Ribao. Furthermore, military leaders are demanding that China toughen its line in territorial disputes in case its rivals try to enlist the support of the U.S. For example, Luo Yuan published a bellicose article on the website of the Huanqui Shibao newspaper, stating that the Philippines has had its “last chance” to peacefully settle the territorial dispute with Beijing over islands in the South China Sea.

The academic community has been adjusting its stance too. Yan Xuetong, Director of the Institute of International Studies of Tsinghua University and a leading Chinese political scientist, wrote in his book Ancient Chinese Philosophy, Modern Chinese Power (2010) that China should build a system of alliances. Leaning on the philosophical heritage of Ancient China, he attempted to develop an ideological foundation for China’s future leadership-oriented foreign policy. In subsequent public statements, Yan Xuetong called openly for establishing alliances envisioning mutual military commitments.

Large Chinese state-run oil companies, which have invested billions of dollars in projects in unstable developing countries and which are under pressure from the U.S. and its allies, are supportive of the idea to make China’s foreign policy more assertive. The director of the Institute of Overseas Investment Climate Evaluation, Xu Xiaojie, said in an interview with Diyi Caijing Ribao after the fall of the Gaddafi regime: “The chaos that broke out in the Middle East not only affects China’s vital interests in the Arab world, but also implies a greater Chinese influence on Middle East affairs, and gives us a chance to strengthen our influence as a great power.” In Xu Xiaojie’s opinion, after the revolutions a new struggle is unfolding in the region – the struggle for oil, which will put Chinese diplomacy to the test.

Of course, supporters of the old strategy still prevail in the Chinese Foreign Ministry. Yet they have been forced into a defensive posture and cannot offer any significant arguments except to refer to the country’s successful development in the past decades and reiterate old political maxims. In 2011, China’s State Council published another White Paper on China’s peaceful development, which the world media largely ignored since it did not contain anything new, even from the viewpoint of rhetorical methods. When asked about the purpose of this publication, a Foreign Ministry official, who presented the new book, said a discussion of the country’s foreign policy had started in Chinese society and that it was necessary to remind society and the world that Chinese foreign policy “remains as written in the paper.”

Over the past few decades China has created a technical and organizational basis for changing its foreign policy. The army has been steadily building up its capability to project force in remote areas of the world. For example, China is building a Type 071 dock landing ship (Russia recently ordered several French Mistral assault ships). The first Chinese aircraft carrier is being tested, and batch production has been launched for surface-to-air missile destroyers capable of protecting naval groups operating far from the coast.

Work is in full swing on the Y-20 strategic military transport plane, which could make its maiden flight before the end of this year. Meanwhile, the Chinese Air Force is expanding the use of in-flight refueling (recently, a J-10 fighter performed an experimental flight with ten in-flight refueling sessions). China is also developing new air-transportable armaments for airborne troops, and has launched batch production of the H-6K long-range strategic missile-carrying bomber equipped with DongHai-10 cruise missiles that have a range of 2,500 kilometers.

Of course, it will take China years before the capability of its army to project force globally catches up to the West. However, it is obvious that China has already invested considerable funds in this. Chinese troops are gaining experience in overseas operations: they are participating in an international anti-piracy mission near Somalia (China keeps two to three warships in the region), and are taking part in international peacekeeping missions. According to the Chinese Defense Ministry, there were 1,620 Chinese peacekeepers in Africa as of December 2010.

China has also been building up its soft power. Its central television company broadcasts in six foreign languages, including Arabic and Russian. China is launching new English-language newspapers and is generously investing in agencies that broadcast in foreign languages, such as China Radio International. A network of Confucius Institutes, launched in 2004 as centers for the study of the Chinese language and culture, now operate in 94 countries.

The world beyond East Asia, above all developing countries, is increasingly ready to regard China not only as an economic partner, but also as a serious military power. During a visit by Chinese Defense Minister Liang Guanglie to the Seychelles Islands in December 2011, Seychelles Foreign Minister Jean Paul Adam invited China to build a naval base on the islands. The Seychelles, which is not very far from Somali pirates’ zone of operation, has no significant armed forces of its own and believes that the Chinese Navy could strengthen its security. Two weeks later, the Chinese Ministry of Defense declined the offer, saying it did not wish to damage the unique nature of the islands. However, there is no doubt similar proposals will continue to be extended to Beijing in the future, and over time China may accept them.

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