Evolution of China’s Foreign Strategies in the New Century
No. 4 2015 October/December
Feng Shaolei

Professor, Dean of the School of Advanced International and Area Studies, East China Normal University

Background and Prospects

This article is a shortened version of the paper written for the Valdai International Discussion Club. Full text is available at: http://valdaiclub.com/publications/valdai-papers/valdai-paper-34-the-background-and-prospects-of-the-evolution-of-china-s-foreign-strategies-in-the-n/

Several significant changes have taken place in China’s foreign strategies in the last 50-odd years. From the beginning of the 1960s till the end of the Proletarian Cultural Revolution, China’s foreign strategies were aimed at fighting revisionism and hegemonism, spreading “left-wing extremism,” and achieving the world revolution.

China began to carry out reform and opening-up policy after the end of the Cultural Revolution in 1976. The Chinese negated the radical path, based on extreme thoughts, opting for thoroughly considered foreign strategies. China decided to open up to the whole world, learn managerial experience from more developed countries, especially the West, participate in the grand cycle of the world economy, and reform the old-fashioned and overly centralized political and economic systems. Guided by such thinking, the 30-year reform has enabled China to achieve continuous high-speed development.

In the new century, with the development of the national economy and social progress, and changes in the international situation, China has become committed to shouldering more international responsibilities, which suit its own national interests, while consistently adhering to its principles all these years. This led China onto a positive, active and progressive course in its foreign strategies. The main connotation of this course is to develop relationships between the South and the North, the East and the West, in a just, mutually bene?cial, balanced and continuous way. It also focuses on mutual coordination between internal and external policies, striving to achieve balance between learning advanced experience from the outside and establishing autonomy based on its own national conditions in order to form favorable international circumstances for modernization and prevent its vital interests from being harmed.

Such a change in China’s foreign strategies has gradually manifested itself in new characteristics of its international posture and internal development in the new century.


Firstly, the global ?nancial crisis in 2008 divided international politics roughly into two phases after 20-odd years of evolution since 1989-1991.

From 1989-1991 until the financial crisis in 2008, the so-called first phase of international relations shortly after the end of the Cold War, emerging nations and former socialist countries imitated European countries and America and carried out a large-scale political, economic and social transition, with China and Russia standing out as the most representative countries. However, since the beginning of the new century, a new tendency has arisen in these countries and regions, which have put more and more emphasis on independence of their internal transition, paying more attention to the combination of external experience and local practices.

As for external changes, against the backdrop of the inability of the world economy, dominated by Europe and America, to control the global financial crisis of 2008, the emergence of the G20 and enhanced cooperation among BRICS countries evidently indicate the rapidly increasing influence of new countries on global affairs. At the same time, the severe turbulence caused by a series of revolutions in Eurasia, the Middle East, and North Africa, let alone the refugee crisis now engulfing Europe, fully suggests an embarrassing scenario where Western countries are actually unable to uphold the “post-revolution” situation despite their willingness to advance “revolutions.”

As a result, since the 2008 global ?nancial crisis, followed by a series of changes such as the revolutions in the Middle East, North Africa, Ukraine, the post-Cold War international landscape, where the West triumphantly led the way and held the monopolistic position in world affairs, has been falling apart. Though there are no fundamental changes in the West-dominated con?guration led by the United States, a more diversi?ed world is emerging.

Secondly, the globalization process is encountering a complicated situation with unprecedented boycott, confrontation and restructuring, although it is also making unprecedented progress.

In the new century, global multilateral trade and ?nancial institutions, such as the WTO, generally have remained stagnant, except for partial progress in some individual areas, after their promotion of economic development for many years. Exactly contrary to the situation in the past 30 years the growth of global trade lags behind that of GDP, which is a rare phenomenon indeed.

On the one hand, the information revolution, accompanying globalization, is making great progress, while on the other hand, there is a sharp collision in finding a balance between traditional management modes and the impact of the huge information ?ow that transcends national boundaries, legal rights and even personal privacy.

The ups and downs of mass consumer goods, natural resources and energy prices indicate that the relationship between exporting and importing nations is becoming closer. The global economy is becoming mutually inseparable, and there exist deep-rooted structural contradictions in the development of the world economy.

With the economic growth brought about by globalization, the widening of the gap between the wealthy and the poor is causing more and more general grievances, which consequently becomes the root cause of social upheavals.

One dramatic change in the recovery period after the financial crisis is that although the expectation of future long-term growth continues, the present weak rebound in the emerging countries is not as good as the slow but relatively stable recovery in the major industrialized countries.

It is both funny and annoying that though great diversified development opportunities have been provided by the globalization process in the last decades, the whole world still has to keep a close eye on when the U.S. Federal Reserve System will end its quantitative easing policy. This is because not only industrialized countries, but also emerging ones are worrying about the giant impact that may be brought about by this policy change on their respective economies as they are opening up.

Thirdly, the development of globalization is far from being smooth, and competition and cooperation are being transferred from the global level to the regional one, which is becoming a focal point again in the international game.

In the security field, the United States is the only superpower and retains its global leadership. The Obama administration has adjusted its strategies and withdrawn troops from the Afghan and Iraqi battlefields since the global anti-terrorism war was  started by America after the 9/11 terrorist attack. Whether these measures can ensure that the conflict zones existing in these regions for many years can take a turn for the better and be out of danger always remains an intense concern for people. The continuous turbulence in these two regions and the emergence of the monster of the Islamic State are the outstanding illustrations of the complicated and intertwined contradictions difficult to overcome in these areas. It is not hard to understand why people may assume that Afghanistan will become a second new battlefield for Russia to replace the U.S. military forces after its strikes in Syria.

The turbulence that took place almost simultaneously in areas surrounding other power centers such as the European Union, Russia, and China show that the ability of the present international system to control changes in the system of doesn’t match its ambitions.

In the economic field, a conspicuous change is the accelerated creation of regional cooperation organizations with industrialized Western countries as leaders, and cooperation among developed markets as the foundation of regional divisions. Although there are various controversies in the negotiations on the conclusion of the TPP (Trans-Pacific Partnership) and the TTIP (Transatlantic Trade and Investment Partnership), the TTP framework agreement was finally reached at the beginning of October 2015. The abovementioned negotiations have been facilitated by such measures as the recent establishment of a fast-track legislative approval procedure in the United States. Without doubt, the creation of the TPP will play a leading role in guiding existing multilateral and bilateral economic cooperation frameworks in different parts of the world, but will also create challenges to them. Obviously, different regions will become starting points in this process in the long term, with different cooperation patterns competing both among and inside them.

Given the abovementioned tendency towards return to their respective regions in security and economic terms, both the expectations and ambitions of ancient civilization centers can be remembered. Although Huntington’s prophesy of “the clash of civilizations” has not been widely accepted, it is partly a refraction of the real regional situation.

Although the abovementioned tendencies belong to external factors with regard to the evolution of Chinese foreign strategies, they have profound influence on China’s diplomacy and internal changes in the current situation


Firstly, China’s economic development is closely related to its diplomatic strategies.

After almost 30 years of rapid development, the Chinese economy is decelerating amid downward cycles in both international and domestic economies, and ongoing profound transformation of its national economic structure. Although faced with big challenges, the Chinese economic development remains quite stable. In the first half of 2015, China’s GDP grew by 7 percent, gaining $700 billion to $800 billion in just a  year, equivalent to the economic aggregate of a medium-sized nation. According to the latest business report published by The Economist in Britain, China is expected to keep the growth rate of 6 percent to 7 percent until 2025. Chinese private enterprises account for two-thirds of the overall economic output, accounting for 90% of export operations, and their immense vitality will determine the future of the Chinese economy. Given the current growth rate, the aim to “comprehensively build prosperous society in all aspects” is very likely to be achieved in 2020. Upon realizing this aim, the per capita GDP will be doubled from its level in 2010 and quadrupled from 2000. By that time, Chinese economic aggregate will reach almost $17 trillion, and people’s living standards will improve significantly. This is one of the most crucial domestic backgrounds for China’s foreign strategies.

Secondly, the institutional reform is another important background that affects China’s diplomacy.

Similarly to the transformation of the Eurasian national systems since the end of the Cold War, China has also gone through two phases. It entered the first phase in the late 1970s when the Cultural Revolution ended, while the former Soviet republics did so at the end of the 1980s and the beginning of the 1990s. This was a liberal-oriented transformation process led by the Washington Consensus, which included privatization, marketization and political democratization, and is familiar to most of us. The second phase roughly began at the turn of the century. It is a phase that adjusts and corrects the consequences produced by the liberal course in the previous phase to harmonize them with the changes in the global economic situation and the elevation of national strength. Similar trends developed in such Eurasian countries as China, Russia, and Kazakhstan. National strength has increased along with economic development, state institutions have got more influence on the national economy, and national subjectivity in both internal and external affairs has gained more significance. This is a historic phase the connotation of which has undergone great changes, compared with the previous phase.

Major countries in this region are likely to enter a new period of transformation after completing these two phases and undergoing a series of significant global and regional changes. In the next phase, national macro-dominance and regulation are required to be continuously highlighted and enhanced during both internal transformation and external communication in order to improve national governance. History proves that neither transformation, nor reform, nor modernization can be continued without well-established national functions..

Another important aspect is that the need for reform is again becoming obvious. This means the basic market functions should be further brought into play, especially the role of small and medium-sized enterprises, positive factors in different areas and classes of society should be mobilized, the level of political civilization and democratic decision-making should be elevated, and the construction of the legal system should be enhanced.

This seems to indicate that a new phase different from the internal transformation in the previous phase is forthcoming. After early elections, the Kazakh president is preparing and advancing comprehensive reform in five fields. The Russian elites are actively thinking about the “crisis in political economy” caused by the Ukraine crisis, which is to test viability of development plans through further opening up and reform. Under the leadership of Xi Jinping and Li Keqiang, Chinese national development has been strengthened upon achieving national consensus. Core national interests are to be ensured and the basic functions of the market should be earnestly brought into play. Unnecessary government intervention should be reduced, and administrative practices must be streamlined and power must be delegated to the lower level. All these measures point to such reform impulses in the “new normal”.

It is not easy to both enhance national regulation and bring the forces of market and society into play simultaneously. Apart from coordinating and balancing internal development strategies, another important step is to foster mutual cooperation between both developing countries and economies in transition. The “overflow of problems” during system transformation should be avoided, and the benign international situation should be kept for the sake of internal reforms. With such “counteraction by means of opening up”, they should open up not only to the Western countries but also to the developing and transition ones, which will further advance their internal system reforms.

New phenomena are taking place in Chinese political life. Firstly, since the beginning of the new century, China has successfully and steadily undergone three successive political changes in the top leadership from Jiang Zemin and Hu Jintao to Xi Jinping, which is a phenomenon that had never happened before in China’s multi-thousand-year long political history. Secondly, the anti-corruption campaign has continued for several years in China, winning strong support from the majority of people, and hopefully will have profound influence on the improvement of the Chinese legal system and its official management. Thirdly, it is worth mentioning that all of the above changes are accompanied by the gradual opening up of the political discourse in the Age of the Internet and an unprecedentedly open discussion is taking place among both domestic elites and the Internet audience with regard to Chinese political life. This is a new political situation where young people born in the 1980s and even in the 1990s are coming to the fore. It is obvious that internal changes will help to improve, update and open up Chinese foreign strategies in various areas.

It has to be stated that neither China nor the rest of the world has previously experienced such changes in international and domestic systems that would turn everything upside down. Therefore no one dares to say that he has made all the necessary preparations for the future changes.

Chinese goods markets mostly rely on export and most of China’s foreign currency reserves are kept in the United States as government bonds. The supply of energy and natural resources, which China badly needs, heavily depend on imports from abroad. This situation forces China to use more open foreign strategies, paying more attention to international harmony.

China is an ancient country with a 5,000-year-old civilization, and it has its own remarkable history and rich experience. Nevertheless, China lags behind in terms of learning and participating in the common world history, even compared with any one of the emerging countries. This indicates that China is both a fast-growing member of the international community and the biggest developing country that can be improved in many ways. This “unexceptional” but still quite unique national development path will limit various aspects of China’s foreign strategies for a rather long time


In this article, the trends and prospects for China’s foreign strategies have been explored at global, regional and local levels.

i) China is a participant, builder, contributor, and reformer of the existing international system.

When interviewed by The Wall Street Journal before his state visit to the United States, Xi Jinping noted, “The global governance system was built together and is shared by the whole world, which can’t be controlled by a single country. China never thinks about doing so, and will de?nitely not do so. China is the participant, builder and contributor of the current international system.” President Xi also pointed out that with the development of the world and its changes, and the ever growing number of challenges, “It is a must to adjust and reform the global governance system accordingly. Such kind of reforms is not to demolish and rebuild, nor to set up a new system, but to innovate and perfect the system.” As one of the permanent members of the United Nations Security Council, China should undoubtedly make concerted efforts with other countries. In my opinion, China advocates a new model of great power relationship, which means it will develop friendship with both the United States and other developed countries, in addition to BRICS members, with global in?uence.

China’s development benefits from international cooperation, but it also has to contribute to international development. The creation of the Asian Infrastructure Investment Bank (AIIB) is a concrete example of such contribution. According to the World Bank and the Asian Development Bank, there is a shortage of $800 billion in the financing of infrastructure construction projects in Asia from 2010 to 2020. China is willing to help address this issue. To the surprise of many people, including the Chinese themselves, Germany, France, Britain, and other countries have also joined in the AIIB, which means that this initiative meets the interests of the international community. However, the AIIB is only one aspect of the solution, but not a panacea. It has to cooperate with the existing international financial institutions and welcome the participation of the United States.

The Chinese government has repeatedly said that in the next five years the country would import an estimated $5 trillion worth of commodities, overseas investments will exceed $500 billion, and the number of outbound tourists will surpass 500 million. This shows that at the critical moment of the 13th ?ve-year plan to build prosperous society in all aspects, China is willing to share the opportunities and meet the challenges together with the rest of the world on the basis of a more open attitude. In the meantime, this will provide the material foundation for the improvement of global governance and international order in the coming years, including the implementation of the new UN development goals.

International governance reform requires a series of adjustments and improvements in the existing international institutions. The most conspicuous change after the international ?nancial crisis is the transfer of the important coordination system in the global macro economy from the former G8 to the G20. China pays intense attention to cooperation with both industrialized countries and emerging economies within the G20 in order to ensure stable transformation of the global economy. China is a member of BRICS, and it earnestly hopes to promote the transformation of the global governance system through this cooperation platform for emerging countries. The BRICS Development Bank was established in Shanghai, with an Indian ?nancial expert as its ?rst president and the other member countries as vice presidents. China is willing to see the new Development Bank complementing the existing international ?nancial institutions and will seek to establish a more just, transparent, and effective system, and to contribute to the developing world together with its partners.

Bene?tting from its participation in the WTO, China has become one of the biggest trade exporters in the world. China will steadfastly support the reform and the development of this multilateral trade system. With the support of the international ?nancial system in the past, China has become a major investor and one of the countries with the largest gold reserves. China advocates further advancement of the international ?nancial and currency system and common development in the world through steady progress in reforming the voting rights mechanism at the World Bank and the International Monetary Fund, and the reevaluation of the basket of Special Drawing Rights at the IMF.

When the Chinese currency RMB became the world’s fourth global payment currency after the U.S. dollar, the euro and the British pound sterling (outdoing the Japanese yen), in August 2015, in addition to stricter RMB cross-border payment and settlement requirements, the ?rst RMB CIPS (Chinese International Payment System), established by the People’s Bank of China, formally started operation on 8 October 2015. The CIPS system was set up in Shanghai along with the pilot free trade zone. As a matter of fact, there are already 19 well-known Chinese and foreign banks directly participating in this new ?nancial “global highway” project, along with 176 large banks involved indirectly on ?ve continents. This is an important part of further RMB internationalization. Chinese people are clearly aware that this is a necessary step to ensure that the international system becomes more liberalized and open with regard to the global ?nancial mechanism and multilateral trade system reform. This will be a process of historic changes, with cooperation and competition going hand in hand well into the future.

ii) China’s position and policy towards regional cooperation

It is a signi?cant change in China’s foreign strategies since the beginning of the new century to spare no effort to learn and participate in the multilateral regional cooperation mechanism. Since the 1980s and the 1990s, numerous studies have been made in China to explore the topic of regional cooperation. At that time, the starting point in China’s foreign strategy lay mainly in striving to join the process of regional integration and promoting China’s development and reform with an export-oriented economy as its foothold. China’s strategy of participation in regional cooperation was based on the advanced experience of other regions and Europe in particular, combined with local practices.

China fosters and organizes its own regional cooperation through the Shanghai Cooperation Organization established in 2001 together with Russia and Central Asian countries. This is the ?rst regional cooperation organization where China is a founding member. However, from the very beginning, the Shanghai Cooperation Organization, with China’s participation, has clearly stated its commitment to common development and security, mutual bene?ts and shared interests. Its regional cooperation principles are not ideological and not directed against any third party.

For years, China has been participating in de facto interregional multilateral cooperation organizations, such as APEC. In the early 1990s, APEC, as an important international platform for pushing countries against tariff barriers and promoting regional marketization, used to provide inspiration and dynamics for China’s reform and opening up. China has been actively cooperating with ASEAN, a regional organization with the highest level of cooperation in Asia in the “1 plus 10” and later “3 plus 10” formats. For decades, this has been an important channel for China’s participation in maintaining common development and stability in Asia. In the new century, China-Japan-South Korea trilateral cooperation, once actively promoted by then Japanese Prime Minister Yukio Hatoyama’s cabinet, including attempts to turn the Japanese yen into the “Asian dollar,” has ceased to exist, not without U.S. assistance. In the wake of the ?nancial crisis, the Regional Comprehensive Economic Partnership (RCEP) proposed by ASEAN gained China’s full support and encompassed 16 countries, namely ten ASEAN countries plus China, Japan, South Korea, India, Australia, and Singapore.

While striving to develop regional cooperation, China is against tension caused by the expansion of exclusive regional organizations. In particular, China expresses its serious concern about the activities and orientation of military groups such as NATO, which were created during the Cold War to safeguard the strategic security interests of the West. The Chinese government once welcomed and actively supported integration within the European Union as a historical product of European political and economic processes after the end of the Cold War. China has already established strategic partnership with the EU. But China also paid much attention to the EU’s role in the upheavals in the Middle East and North Africa after the ?nancial crisis, as well as to debates on the promotion of the EU’s Eastern Partnership Program, the current refugee crisis, and public opinion ?uctuations during TTIP negotiations.

The TTP, dominated by the United States, reached a negotiated agreement in October 2015, arousing heated debates among international media and among Chinese professionals and ordinary people. Some believe that China should join the TTP, while others insist that this is an example illustrating the U.S.’s containment policy with regard to China. A spokesman for the Chinese Ministry of Commerce expressed China’s steady and broad-minded attitude, noting: “The TTP is currently one of the important free trade agreements in the Asia-Paci?c region. China is open to system construction which conforms to the WTO rules and facilitates economic integration in the Asia-Paci?c region. China hopes that the TTP and other free trade arrangements in this region will promote each other, jointly contributing to trade, investment and economic development of the Asia-Paci?c region.”

Meanwhile, all forecasts still lack a suf?cient factual basis either for China’s leading role in the RCEP (Regional Comprehensive Economic Partnership) negotiations to move towards a more extensive trade agreement, which will eventually include the TPP, or for China’s ?nal accession to the TTP or its rejection. China does not consent to join any exclusive regional agreements that destroy the existing regional cooperation pattern and attach great importance to the high TTP market standards. China, on the one hand, will promote pragmatic cooperation oriented to a market economy in accordance with the established regional cooperation framework and methods, and on the other hand, it will meet the challenge of reform and greater opening up through “reversal domestic reform.”

iii) China’s neighborhood policies in the new century

The term “neighbor” in China’s neighborhood policy does not refer to dependent small peripheral countries as opposed to ancient central kingdoms, but instead means China’s neighboring countries and regions. China’s long history has provided rich experience of dealing with neighbors, but also left various historical problems to solve. The neighboring areas provide China with very broad space for development. At the same time, it is imperative for China to construct the neighboring area by creatively working with its neighbors. China plays a special role in the Six-Party Talks on the Korean Peninsula. China supports denuclearization of the Korean Peninsula and seeks to achieve denuclearization and safeguard peace and stability on the peninsula using peaceful methods. Although the Korean Peninsula affairs have always been delicate and sensitive, Liu Yunshan, a member of the Politburo of the Communist Party of China who led a high-ranking delegation on a visit to North Korea, and Kim Jong-un were seen standing together on the podium during celebrations marking the 70th anniversary of the Workers’ Party of Korea on 10 October, apparently signaling that the situation is moving forward towards a resumption of the Six-Party Talks. As for the South China Sea issue, China has suf?cient historical and legal evidence to prove that the Nansha Islands have always been Chinese territory since ancient times. China is committed to defending its own vital interests, and is also willing to settle disputes through dialogue and negotiation with relevant parties. China has recently built lighthouses on the artificial islands in order to ensure the freedom of navigation and safety in the South China Sea. Recently, the American Navy has announced its plans to enter the neighboring area 12 nautical miles away from the island built by China, which indicates that many problems urgently need to be solved despite multifaceted cooperation between China and the United States.

China and Japan are close neighbors separated only by a strip of water. They have been friends for two thousand years and the war of aggression is only a short episode. Although there are always some disagreements and disputes between China and Japan, there may not necessarily be a war. After Abe enacted the “security law,” he faced criticism from the opposition at home and abroad, including in China. But regardless of hardships and dangers, Sino-Japanese relations still need to go forward, and the basis for bilateral cooperation has not disappeared completely yet.

Russia and Central Asian countries are China’s close strategic partners. The Sino-Russian shared commitment to close cooperation is reaffirmed by high-level political exchanges and mutual understanding during the transition, especially on controversial issues, due to economic complementarity and similar historical experiences. Sino-Russian ties are an important chapter in relations between the two great powers. They are based on a ?rm foundation, including common moral and ideological views on global affairs and regional politics, stability and international development, and serious challenges facing the international mechanism. Although China and Russia have different interests, this does not hinder the deepening and enhancement of their relations. The two countries’ manifesto regarding the integration of the “One Belt, One Road” initiative and the Eurasian Economic Union is the latest hallmark for current Sino-Russian cooperation.

As for building a security mechanism in the Asia-Paci?c region, it was once proposed that the OSCE could share its experience in this field. Indeed, the system, which has been around since the end of the Cold War, has a lot to learn from. However, due to different historical conditions, there is only a dispersed sub-regional cooperation organization and mechanism, acting as the forerunner for security cooperation in the Asia-Paci?c region. The Asia-Paci?c region is not a simpli?ed dual mechanism where “security depends on the U.S.” and “economy depends on China”. Many players, be it Japan as a single country or ASEAN as a sub-regional organization, act in the Asia-Paci?c arena, providing numerous opportunities in “rent-seeking”. The opening up of the Asia-Paci?c region to the whole world, including, in recent years, the U.S.’s “return to Asia and the Paci?c” and Russia’s “turn to Asia,” offers a variety of scenarios for future security cooperation in the Asia-Paci?c region.

The openness of the Asia-Paci?c region, its unprecedented economic development and global contribution  objectively attracts increasingly more attention worldwide. It has never experienced major geopolitical transitions or dramatic regime changes as Europe did after the Cold War. This will certainly influence the creation of the future regional cooperation mechanism.

The “One Belt, One Road” strategic initiative, proposed by Chinese President Xi Jinping in Astana in September 2013, is a focus and priority for China’s foreign strategy in the new century. Whether at home or abroad, the “One Belt, One Road” initiative has always received much attention and been heatedly discussed. What is particularly worth noting is how the “One Belt, One Road” strategy, an inter-regional cooperation initiative driven by concrete projects, will link the Eurasian Economic Union with systemic policies and institutional designs, and how it will link broader regional cooperation organizations to be created yet. This is the key to implementing the “One Belt, One Road” concept. As Chinese ancient sages used to say, “Perfect mastery works like water.” The promotion and implementation of the “One Belt, One Road” concept is like the ?ow of water going in all directions where it can. It is implemented through either speci?c cooperation projects, or FTA negotiations, or the signing of bilateral or multilateral agreements. There are always disagreements between different regional cooperation organizations or strategies within the same region and highly exclusive institutional development in particular, resulting in serious regional crises. Because of such failures, the “One Belt, One Road” initiative, supported by economic strength and focusing on linking different regional systems, may achieve remarkable results.

In the long term, it depends entirely on bilateral and multilateral requirements and the ability of the “One Belt, One Road” initiative to be linked with such regional cooperation mechanism as the Eurasian Economic Union and other regional political and economic structures. This is the most unique and long-term task for China’s foreign strategies in the new century, which could possibly achieve important progress through practice and innovation.