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From issue: China's Global Rise: Implications for the Americas (Winter 2012)

AQ Feature

Time for a Strategic Reset

Unless the leadership in Beijing changes course, it faces increasing isolation. (video interview available)

*Watch an AQ Q&A interview with Elizabeth Economy.

Chinese foreign policy has had a good run. With a booming economy as its calling card, Beijing has pushed to the forefront of the emerging economies, negotiated wide-ranging free-trade agreements with its neighbors, and rejuvenated previously moribund economies through its demand for natural resources. Its vast foreign currency holdings have also transformed Beijing into the world’s banker. China is now the largest foreign holder of U.S. debt. It is a more significant provider of loans to the developing world than the World Bank, and is one of the few global economies capable of significant assistance in the midst of the eurozone crisis.

China’s very success, however, has bred new challenges for its foreign policy. The country’s vast economic reach means it must now be prepared to address crises far afield, negotiate difficult tradeoffs between its economic and security interests, and be responsive to the demands of the global community.

The Chinese people now openly voice their opinions, placing pressure on a traditionally opaque policy process. And when the world looks at China, it no longer sees a developing country; it sees the world’s largest exporting nation, the second largest economy and the largest population.

Commodity markets rise and fall on Chinese demand. The country’s trade and investment practices shape the way business is done throughout the world. Global climate change hinges in good measure on the future trajectory of Chinese energy policies. And no international regime—from protecting intellectual property rights, to controlling cyber warfare, to preventing nuclear proliferation—can thrive without full Chinese commitment.

For the international community, it is no longer enough for Chinese leaders to claim that China can “best help the world by helping itself.” China needs to consider how its policies contribute (or not) to the overall health and stability of the rest of the world.

Chinese foreign policy, however, has not kept pace with this rapid proliferation of demands. It neither meets its own challenges nor successfully addresses the growing demands of the international community. Instead, it is trapped by outdated foreign policy principles, ambition without accountability and, above all, by a political model that undermines the country’s potential for real leadership. China needs a strategic foreign policy reset.

Rhetoric and Reality Diverge

Over the past decade, China’s soothing “peaceful rise,” “five principles of peaceful coexistence” and “win-win” rhetoric has won it new friends and admirers.  And its focus on “safeguarding the interests of sovereignty, security and development” has seemed a reasonable objective for its foreign policy. Yet Beijing’s policies, and their impact, have left a vast gap between how China portrays its foreign policy and how it is understood by the rest of the world.

The reliance of Chinese leaders on rhetoric and principles has now become a liability. They use the principles to avoid acknowledging and addressing their foreign policy shortcomings, and the principles constrain their ability to respond effectively and efficiently in the midst of foreign policy crises.

China’s “Going Out” policy, for example, is framed as a “win-win” endeavor. China’s leaders have encouraged their country’s enterprises to invest abroad, primarily to gain access to natural resources that will continue to fuel the country’s growth. Beijing often couples this investment with broader trade and aid deals to help meet the target country’s infrastructure and other development needs. As a result, tens of thousands of Chinese enterprises and millions of Chinese workers are now deeply integrated into the economies of many resource-rich countries throughout the world.

While the benefits of Chinese overseas investment are visible in thriving mining industries, new highways and active ports across the globe, the challenges have also become evident. Environmental, labor and safety violations, corruption, and a lack of socially inclusive growth have become the hallmarks of Chinese investment.

Few outside China would now describe Beijing’s strategy as “win-win.” There have been large-scale, ongoing demonstrations against Chinese mining companies in countries as disparate as Vietnam, Papua New Guinea and Peru. In Zambia, Michael Sata won the October 2011 presidential election in large part by tapping into deep resentment over Chinese business dealings in his country. He proclaimed, “Zambia has become a province of China […] the Chinese are the most unpopular people in the country because no one trusts them.”1

Push back: Environmentalists outside the Chinese embassy in Nairobi, Kenya, protest the construction of a Chinese-financed hydroelectric dam, Gibe III. (Tony Karumba/AFP/Getty)
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Peru’s then-prime minister, Salomón Lerner, in a speech before the Inter-American Dialogue in October 2011, explicitly rejected the Chinese model of development, and pointedly noted that China must respect Peru’s more inclusive model, its labor laws and its environment.2 Even long-time ally Burma/Myanmar has taken steps to protect itself from perceived Chinese economic exploitation. In September 2011, Burmese President Thein Sein threw a wrench in China’s plans to populate the Irrawaddy River with seven more dams by announcing the suspension of the 6,000 megawatt Myitsone dam until the end of his term in April 2016. The dam would have flooded an area roughly the size of Singapore and provided energy primarily for China.3

Land-rich countries such as Brazil and Argentina, which once welcomed Chinese investment, are now tightening old laws and enacting new ones to protect themselves from agricultural land leases or purchases by Chinese companies.4

Yet Chinese officials and media appear trapped by their rhetoric and unwilling to address the backlash their policies have elicited. China’s September 2011 “White Paper on Peaceful Development” makes no mention of the country’s growing image problems, asking instead that the international community “support rather than obstruct China’s pursuit of peaceful development.”5 And the response of China’s official newspaper People’s Daily to the Zambian election was similarly obtuse: “Many African people love the Chinese people because the latter have built highways and gymnasiums and created job opportunities in Africa.”

The problems in the relationship, according to the newspaper, arise because “the traditional Chinese principle of enduring hardship and working hard usually conflicts with the Africans’ happy-go-lucky attitudes.”6

China’s reliance on its principles also contributes to a policy rigidity that is problematic in a globalized world.7 Information now travels across continental barriers instantaneously, and foreign policy must often be responsive to sudden events or crises. In the midst of such crises, China often appears uncertain or locked into a policy position that doesn’t reflect the reality of the situation.

China’s inflexible response to the civil war in Libya and the dramatic downfall of Muammar Qaddafi proved damaging to China’s image and economic interests. The situation was highly fluid and volatile; rather than begin a foreign policy discourse that recognized the complexities of the issues, Beijing relied on its standard formulation of noninterference and sovereignty. At the same time, Chinese weapons manufacturers met with members of Qaddafi’s regime to discuss weapons sales well after United Nations–imposed sanctions, although Beijing claimed it had no knowledge of such meetings.8

As Iain Mills noted in a September 2011 World Politics Review article, the Chinese media portrayed the events in their standard domestic propaganda paradigms: “The rebels were framed as destabilizing elements and the conflict itself as a cautionary tale of what happens when social harmony disintegrates.”9

China abstained in the UN Security Council (UNSC) vote on the use of force to protect civilians from Qaddafi’s troops and was highly critical of the NATO campaign. It became the last member of the UNSC to recognize the Transitional National Council as the ruling authority of Libya, thereby imperiling substantial Chinese business interests in the country. Only after it became clear that Qaddafi had lost did the Chinese state media begin to denigrate him as “The Middle Eastern Madman.”10

While once such a dramatic rhetorical shift would have been quietly accepted domestically, in today’s Internet-driven China, Chinese netizens lampooned the government for its turnabout.11 Beijing thus managed to alienate all of its potential constituencies: the Libyan people and their new leadership, the international community and the Chinese public.


 

Ambition without Accountability

Chinese foreign policy over the past several years has also been marked by a newfound assertiveness in both its economic and security initiatives. As its financial clout and military capabilities have expanded, Beijing’s growing ambition is understandable. Yet its ambition has not been matched by a commensurate transparency of intent or acceptance of responsibility. The result within much of the international community has been confusion and alarm.

Soon after the onset of the global financial crisis, Chinese leaders began to push for reform of the international monetary system. In March 2009, China’s central bank governor, Zhou Xiaochuan, announced that it might be time to move away from the dollar as the world’s global currency and develop a super-sovereign currency. Later that month, Chinese President Hu Jintao at the G20 Summit similarly called for an overhaul of the global financial system. Since then, the Chinese have continued to put forward the notion that the U.S. dollar should no longer serve as the world’s reserve currency, and have increasingly pushed for reform of the International Monetary Fund to reflect the voice of China as well as other developing countries.

Yet beyond calling for change to the current system, it is unclear what level of responsibility China envisions for managing the new system.

In the midst of the eurozone crisis, for example, President Hu remained vague concerning China’s willingness to help with the bailout effort. In his meeting with French President Nicolas Sarkozy, President Hu noted that the Europeans have the “wisdom and ability”12 to solve their problems, suggesting that China did not see a meaningful role for itself in the bailout process. Peking University’s Wang Yong offers a perspective that further hints at Beijing’s reluctance: “China will be a stabilizer for the global economy and increase its weight in the G20, but it cannot assume a particularly substantial leadership role because it is still a developing country and needs to protect its own economic growth.”

Nonetheless, he insists that from China’s perspective, “the global economy is unbalanced as a result of the role of the U.S. dollar as the main reserve currency and the worsening of European sovereign debt [...] Beijing will play a balancer role between the U.S. and EU, which will ensure the protection of China’s own interests.”13

While China’s lack of clarity in its vision for global financial management may sow confusion in the international community, its military assertiveness in the Asia-Pacific Rim elicits alarm. In 2010 Chinese officials and the media surprised the region by reportedly laying claim to the South China Sea as a “core national interest,” a Chinese term-of-art reserved for regions China claims as its sovereign territory.

Protests from other claimants to the resources of the sea, such as the Philippines, Vietnam, Taiwan, and Malaysia, were met by indifference. At the Association of South East Asian Nations (ASEAN) Regional Forum that year in Hanoi, Chinese Foreign Minister Yang Jiechi reportedly stated, “China is a big country and other countries are small countries, and that’s just a fact.”14

Just a few months later, in September 2010, China became embroiled in a dispute with Japan over its competing claims to resources in the East China Sea when a Chinese fishing boat rammed into a Japanese Coast Guard vessel. After Japan arrested the Chinese captain, China responded by demanding compensation and reportedly banning the export of Chinese rare earth minerals essential to a number of Japanese industries.

Tensions throughout the region have continued to grow. In Vietnam, protests flared for three months after the Chinese cut the cables of a Vietnamese survey ship in May 2011. China’s neighbors, including Vietnam, Japan, India, Australia, and the Philippines, have responded to this more assertive China by banding together—forging a set of new alliances and fortifying old ones.

While China and the ASEAN members met in Indonesia in July 2011 and made some progress in tamping down the tensions, little progress has been made in resolving the dispute. At that same meeting, Philippines Foreign Secretary Alberto del Rosario called Chinese claims over the entire South China Sea “baseless and a potential threat” and argued that they would be “rejected by an international court.”15

Moreover, state-run Chinese media continue to fan nationalist flames. The Global Times published an editorial that received widespread coverage in China and abroad, arguing that “countries such as the Philippines and Vietnam believe China has been under various pressures. They think it is a good time for them to take advantage of this and force China to give away its interests [...] If these countries don’t want to change their ways with China, they will need to prepare for the sounds of cannons. We need to be ready for that, as it may be the only way for the disputes in the sea to be resolved.”16

Model at Home, Model Abroad

As China seeks to define its new place in the global system, its greatest challenge may well be its own system of governance. Just as many Chinese believe their current economic model has run its course and now seek to develop an economy based on innovation and creativity, many also think China’s foreign policy model is outmoded and must evolve to confront new challenges.

Change is unlikely to come easily. An interview in August 2011 with Vice Foreign Minister Fu Ying in the German newspaper Der Spiegel suggests the challenge ahead. In answer to a comment that “The West perceives a lack of transparency and rule of law in the Chinese model,” Fu retorted, “I think at the moment it is the Western governments that are having problems. We are observing what is going on in the West. We try to understand why so many governments made so many mistakes. Why do political parties make commitments they cannot fulfill? Why do they spend so much more than they have? Has the West been stagnating since the end of the Cold War? Or has it just become conceited?”17

In 2012–2013, however, China will experience a long-awaited leadership transition and a new opportunity for change. It is understandable if at the outset China’s new leaders do not articulate a precise roadmap for their foreign policy over the next decade, or even have a clear and coherent end game in mind. Their country is in a constant state of reform and transition. However, in order to have the freedom to formulate and implement new policies without provoking a backlash or needless anxiety from the international community, Beijing needs to transform the way it does business.

Doing business differently means that China’s new leaders must first acknowledge that, whether intended or not, the country’s global footprint is vast and growing. China’s economic success has certainly brought new opportunities to the rest of the world; but it also has bred serious new challenges. Beijing may not desire a greater level of global responsibility, but the country’s impact on global affairs requires that it become more accountable.

In an October 2011 article in Project Syndicate, “China’s Troubles with the Neighbors,” Beijing University professor Zhu Feng makes clear that change along these lines is essential, noting that China’s “utilitarian, commercially driven diplomacy” is not sufficient. He argues that “unless and until China begins to provide essential public goods—not just commerce, but also full-fledged regional governance based on the rule of law, respect for human rights, and regional economic growth—ruptures such as those at Myitsone and along the Mekong18 will recur, deepening China’s sense of isolation and panic.”19

Beijing also needs to relieve itself of its outdated principles and rhetoric, while enhancing its flexibility and capacity to acknowledge mistakes. Very few—if any—countries view China as “rising peacefully” or pursuing a “win-win” foreign policy. The gap between oft-stated Chinese principles and the country’s actions on the ground undermines rather than reinforces trust within the international community. The country’s leaders will have to introduce a new level of transparency into their foreign policy if they want to build the trust necessary for the world to work with, instead of against, the country’s growing influence and ambition. As prominent Fudan University scholar Shen Dingli suggests, as Beijing develops its military capabilities, it would “do well to explain its objectives and plans more clearly to avoid any misunderstandings and misjudgments.”20

Above all, however, China’s reform in foreign policy will need to be matched by a similar transition in its domestic policy. The fundamentals of good governance—transparency, accountability and the rule of law—are rooted first in the domestic system and then practiced abroad. As journalist Ding Gang has argued, “Only with a fair and just system can a country effectively turn its wealth into national capability in order to achieve the goal of a strong country and ensure a better life for the majority of its people.” He notes that a “strong country without a fair and just system is fragile, short-lived and unsustainable.”21

China’s leaders have the capacity to address these shortcomings in their current foreign policy approach. The question that remains is whether they have the will to do so. If they don’t, China will likely find itself increasingly isolated, particularly as other large, emerging economies not only fuel global economic growth but also advance a more attractive set of political values. If, however, China’s leaders are able to adopt a new way of doing business, they will find that the rest of the world will genuinely welcome rather than work to counteract their rise. The choice is China’s.

ENDNOTES

1.    Howard French, “In Africa, an Election Reveals Skepticism of Chinese Involvement,” The Atlantic (September 29, 2011)
2.    Rachel Sadon, “China Must Respect Peru’s Development Model, Prime Minister Says,” Inter-American Dialogue (October 25, 2011)
3.    “China Reminds Burma Of Obligations,” Radio Free Asia (October 2, 2011)
4.    Alexei Barrioneuvo, “China’s Interest in Farmland Makes Brazil Uneasy” (May 26, 2011)
5.    “China’s Peaceful Development” Information Office of the State Council (September 6, 2011)
6.    Li Wentao, “West’s Zambian election coverage shows anti-china bias,” People’s Daily (September 30, 2011).
7.    Some of this inflexibility is also likely due to the proliferation and lack of coordination of foreign policy interests within the Chinese bureaucracy. (See  Linda Jakobsen and Dean Knox’s “New Foreign Policy Actors in China” Stockholm International Peace Research Institute (September 2010)
8.      Jamil Anderlini, “China confirms Libya arms sale talks,” Financial Times (September 5, 2011).
9.       Iain Mills, “China's Libya Response Reflects Fractured Foreign Policy Apparatus” World Politics Review, September 19, 2011
10.    Christopher Bodeen, “Ghadhafi goes from ‘strongman’ to ‘madman’ in China” Associated Press, October 21, 2011
11.    “China, Libya’s fair-weather friend” CNN Business360, August 23, 2011
12.    Zhang Shidong, “Hu’s Attendance at G-20 Meeting Brings ‘Fruitful’ Results, Ministry Says” Bloomberg News, November 6, 2011
13.    Wang Yong, “China in the G20: a Balancer and a Responsible Contributor,” PacNet #61, November 1, 2011.
14.    John Pomfret, “U.S. takes a tougher tone with China” The Washington Post, July 30, 2010
15.    Amando Doronila, “Strong Warning to China,” Philippine Daily Inquirer (July 26, 2011).
16.    “Don’t take peaceful approach for granted,” Global Times (October 25, 2011).
17.    “The West Has Become Very Conceited - Interview with China's Vice Minister of Foreign Affairs” Der Spiegel Online, August 22, 2011
18.    This refers to an incident in which thirteen Chinese sailors were killed in an attack on the Mekong River in October 2011. 
19.    Feng Zhu, “China’s Trouble with the Neighbors,” Project Syndicate, October 31, 2011.
20.    Dingli Shen, “Forging Trust in China-US Ties,”
21.    Gang Ding, “Guojia Caifu Yunyong, Guanjian Shi Gongping’ Huaiqiu Shibao, 2 March 2010 in Liqun Zhu, “China’s Foreign Policy Debates,” Chaillot  Papers, European Institute of International Studies (September 2010), p.50.

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